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BUSINESS IN BRIEF 26/1
Ford continues to achieve record sales in VN, ASEAN
Record sales for the third consecutive year in Viet Nam and the Philippines helped US carmaker Ford achieve a 11 per cent increase in sales in ASEAN countries last year.
It sold nearly 115,800 vehicles in the region, marking the fourth consecutive year of record sales in the region too.
Thailand continued to spearhead Ford’s overall performance in ASEAN with sales rising 12 per cent to 40,972 vehicles.
In Việt Nam, sales rose 40 per cent to 29,011 units, led by record sales of the Ranger, Transit and EcoSport models.
With its sales outpacing the overall industry for the third consecutive year, Ford increased its Vietnamese market share by 1 percentage point to 9.5 per cent.
The company capped the year with its all-time best monthly performance in December, with sales increasing by 10 per cent year-on-year to 2,900 units.
The segment-defining Ranger remained Viet Nam’s best-selling pickup truck for the second consecutive year with sales soaring 62 per cent to 14,058 vehicles.
The popular EcoSport finished 2016 as the leader of the compact SUV segment with retail sales jumping 36 per cent to 5,413 vehicles.
The Transit remained the bestseller in the commercial van and bus segment with record sales of 6,850 units, a year-on-year increase of 22 per cent.
The sporty Fiesta saw sales increase 14 per cent to 949 units.
The US-imported, premium Explorer SUV, equipped with a 2.3L EcoBoost engine, made its local debut at the Vietnam Motor Show in October, and provided a year-end boost by selling 111 vehicles.
Ninh Binh fertilizer plant loses VND1.7 trillion in three years
Ninh Binh Nitrogenous Fertilizer Plant had incurred an accumulated loss of more than VND1.7 trillion since it went into production in 2012 to the end of 2014, according to the results of an inspection published on January 17 by the Ministry of Industry and Trade.
The project has a total investment of US$667 million and a design capacity of 560,000 tons per year, developed in Phu Khanh Industrial Park, Ninh Binh Province. The project owner is Vietnam National Chemical Group, while China’s Huanqiu Contracting & Engineering Corporation is the EPC contractor.
The project got off the ground on May 10, 2008 and was handed over to the Ninh Binh Nitrogenous Fertilizer Plant project management unit on September 23, 2012. The project management unit later temporarily transferred the whole facility to Ninh Binh Nitrogenous Fertilizer Co. Ltd. on October 15, 2012.
During the inspection, wrongdoing and irregularities involving the development and management of Ninh Binh Nitrogenous Fertilizer Plant and the operations of Ninh Binh Nitrogenous Fertilizer Co. Ltd have been detected.
Ninh Binh Nitrogenous Fertilizer Co. Ltd. constantly racked up losses between 2012 and 2015. The feasibility study estimated accumulated losses in the first three years would be nearly US$48 million, equivalent to some VND1.02 trillion based on the December 31, 2014 exchange rate.
In fact, accumulated losses from 2012 when the plant went into production to the end of 2014 was over VND1.7 trillion, or VND694 billion greater than estimated.
Vietnam National Chemical Group had approved adjustments to the project based on low financial efficiency evaluation results, which entails a lot of potential risks. The head of the project management unit had not complied with rules.
For the trial run, the project owner provided the contractor with an amount of coal that exceeded the EPC contract. After several rounds of negotiations, the project owner and the contractor have yet to agree on the value of and the responsibility of each party to such excessive coal volume.
Construction work was 420 days behind schedule, leading to additional costs, including VND527 billion in interest for the extended EPC contract.
The project owner received the plant from the contractor when specifications had not met the requirements in the feasibility study and the signed EPC contract. Operations of the production lines and equipment were unstable, with the number of operational days and capacity below the levels given in the approved feasibility study.
After more than four years of commercial operation, the project owner and the contractor have yet to endorse the acceptance and official handover of the project and as they are still busy solving the existing problems. Since they have not reached an agreement on responsibility of each party to the issues arising during the contract implementation process, the project remains unresolved.
The Ministry of Industry and Trade requires Vietnam National Chemical Group, the project management unit and Ninh Binh Nitrogenous Fertilizer Co. Ltd. to review and clarify responsibilities, and propose coping measures.
Inspector says Lee&Man has taken remedial measures
Tran Phong, director of the Southern Agency of Environmental Protection under the Vietnam Environment Administration and head of a team charged with inspecting Lee&Man Vietnam, said this company had already taken remedial steps.
Talking to the Daily on the phone on January 17, Phong said site examinations had recently been carried out and inspectors found Lee&Man Vietnam had added almost all components that the inspection team had required earlier.
“There are now only some procedures and paperwork left before the job is done. Probably, they (Lee&Man Vietnam) will start a trial run to see if it is qualified or not, and if they meet regulations of Vietnam, they can be up and operating,” said Phong.
Earlier, an inspection conclusion issued on October 25, 2016 by Nguyen Van Tai, director general of the Vietnam Environment Administration, revealed several irregularities at the projects run by Lee&Man Vietnam in Hau Giang Province’s Chau Thanh District, including the projects of Lee&Man Vietnam Pulp Mill Co. Ltd. and Lee&Man Vietnam Paper Manufacturing Ltd.
Specifically, the inspection team has discovered that the government of Hau Giang Province had approved two environment impact assessment (EIA) reports in a single decision, with Lee&Man Vietnam Paper Manufacturing Ltd. undersigning and as an independent legal entity from Lee&Man Vietnam Pulp Mill Co. Ltd. This is said to be legally inappropriate and makes it hard to clarify legal accountability on the event of an environmental incident.
Also, the fact that Lee&Man Vietnam Pulp Mill Co. Ltd. drew up three EIA reports for the three components including a thermal power plant, a dedicated port and a wastewater treatment facility is described as legally inconsistent and making it impossible to assess the overall impact of the project on the environment.
At the time of inspection, Lee&Man Vietnam Paper Manufacturing Ltd. was implementing a number of other components, including a repair and maintenance workshop and a mechanical warehouse (30% complete), a petroleum tank (50%), a paper roll production line and an additive mixing station (60%). The company even looked to add some other components such as a washing and garbage separating line, the second paper production line with an annual capacity of 420,000 tons and a toilet tissue line capable of churning out 250,000 tons a year, without any EIA report approved according to law yet.
As per the inspection conclusions, the thermal power plant of Lee&Man Vietnam Paper Manufacturing Ltd. had installed a cloth bag filter system to handle dust in the air under the approved EIA report. However, the report does not mention the device to treat NOx, the specific pollution parameter of a power plant.
Notably, Lee&Man Vietnam Paper Manufacturing Ltd. has been found adopting outdated technology fueled by poor-quality 6B coal or imported coal that generates a lot of fly ash and bottom ash in the course of operation.
For the dedicated port, at the time of inspection, Lee&Man Vietnam Paper Manufacturing Ltd. had yet to arrange a settling tank to separate rubbish for the rainwater drainage system at the coal wharf, and to map out a plan to collect and treat wastewater from ships as prescribed.
At the time of inspection, the company had installed a wastewater treatment facility with a capacity of 20,000 cubic meters per day, but its technology was different from the EIA report approved in 2008, and it lacked an intermediate settling tank, a fenton reaction tank and an ecological pond.
Oxfam stresses Vietnam’s growing income disparity
Vietnam has reaped outstanding achievements in terms of growth and poverty reduction, but the income gap between rich and poor has been widening, putting sustainable development at stake.
According to a report released by Oxfam, the income disparity between the richest and the poorest in the country has increasingly widened.
What the richest person in Vietnam earns a day is greater than the sum the poorest earns in 10 years. In an hour, the nation’s richest person could earn from their assets nearly 5,000 times higher than what the 10% poorest people spend a day on their basic needs.
In addition, annual income of a group of 210 super-rich people can help lift 3.2 million people out of poverty, Oxfam added.
The income disparity has made the poorest suffer from disadvantages as they are not able to ensure sufficient education for their children and have no opportunities to get access to medical services compared to those with high income.
According to Oxfam, the rising inequality is making inroads into the country’s development gains in the past decades. The organization proposed that the Government should adopt effective policies on governmental administration, tax system, public spending, public services, and the rights of laborers in an effort to reduce the widening rich-poor gap.
Babeth Ngoc Han Lefur, country director of Oxfam in Vietnam, said the country’s economic model has successfully generated high growth rates after decades of reform, helping a majority of poor people escape poverty. However, the current policies are not feasible enough to handle the growing inequality in the country.
Vietnam focuses on long-term G-bond sales
The Government’s finance agencies will concentrate on selling long-term government bonds to mobilize VND340 trillion (over US$15 billion) this year, the Vietnam News Agency reports.
Of the figure, the Government will set aside VND184 trillion to finance the budget deficit and VND156 trillion for debt service.
The central bank has issued Circular 06/2016/TT-NHNN revising and supplementing some articles of Circular 36/2014/TT-NHNN on safety ratios at credit institutions and foreign bank branches. Therefore, foreigners have shown more interest in the local G-bond market, said the State Treasury.
In recent times, the State Treasury has offered G-bonds with diverse tenors from three to 30 years, focusing on papers having terms of five years or longer to reduce debt service pressure in the near term.
According to a report of the Finance Ministry, G-bonds of five years or longer accounted for 91.1% of total sales in 2016, higher than the minimum level required by the National Assembly at 70%. Bond yields averaged out at 6.49% per annum.
At the end of 2016, domestic debt accounted for 59% and external debt 41%, meeting the Government’s goals. The nation also reduced dependence on foreign loans.
Last year, the agency issued nearly VND282 trillion worth of G-bonds, mobilized VND55 trillion from social insurance premiums, while disbursement of official development assistance (ODA) loans and other kinds of aid reached US$1.9 billion.
Seafood exports to U.S. must bear origin labels
Vietnamese seafood products exported to the U.S. from the beginning of next year will have to carry labels that make clear origins of goods, and production and processing facilities.
Herb Cochran, executive director of the American Chamber of Commerce’s (AmCham) HCMC chapter, said the regulation would apply to all products from any nations shipped to the U.S. This means Vietnam’s key export products like shrimp and tra (pangasius) fish would be no exception.
He said the U.S. would grant labels on origins and manufacturing process for seafood products. This would be a prerequisite for exporters to ship their products stateside.
A recent study showed that 25% of commercial seafood products on the world were found with labeling fraud. The actual figure may amount up to 40%, according to Cochran.
In a recent conference on fish sauce and rice in HCMC, he said food monitoring in the U.S. is quite complicated. The U.S. government has to set up a control alliance, and the President has a task force to combat fishing and seafood fraud.
The U.S. Food and Drug Administration (FDA) will assist the Vietnamese Ministry of Health in enhancing the management of food and drugs in the short run.
Besides, FDA will offer training courses for Vietnamese management agencies and manufacturing firms, as it has done so for other nations. This is how the government has been implementing to improve the quality of products shipped to the U.S., as around 80% of seafood and 50% of fruit consumed there are imported.
Enterprises wishing to join the global supply chain which helps ship products to the U.S. must meet two compulsory conditions, namely obtaining the data universal numbering system (DUNS) code and the electronic data interchange system (EDI) number.
CBRE: Infrastructure should be one step ahead for property sector
Experts of CB Richard Ellis Vietnam (CBRE Vietnam) told a recent conference that zoning plans for infrastructure development should be drawn up before the implementation of real estate projects.
The conference on Asia-Pacific’s property market: opportunities and prospects for the Vietnamese market was held by CBRE Vietnam over the weekend.
Duong Thuy Dung, director of research and consulting at CBRE Vietnam, said master zoning plans for infrastructure development in a province or city are an important basis for businesses to carry out realty projects.
For instance, a master zoning plan must clarify construction and population density to help enterprises know which area will have a large number of office and commercial buildings, and infrastructure must be developed first.
“Infrastructure must be developed before property projects are executed. Demand for homes has surged but State governance in the housing market remains weak in Vietnam. A number of apartment buildings are under construction in districts 7 and Nha Be despite underdeveloped infrastructure in certain areas there,” Dung said.
She said there should be rules to force investors, developers and homebuyers to follow master zoning plans.
Henry Chin, head of research at CBRE Asia-Pacific, told the conference that Vietnam’s property market needs transparent information and legal system. Foreigners planning to invest in Vietnam must come to the country to get information, but in many cases such information may be inaccurate. Meanwhile, they can get adequate information about other markets such as Singapore on the Internet.
He said Vietnam’s office-for-lease market would hold strong potential in the coming time. Rents are high now due to limited supply and high tenancy. In 2016, the respective vacancy rates for Grade A and Grade B office space were 4% and 2.8% in HCMC.
CBRE forecast the vacancy rate would remain at the current level when the market absorbs new supply of Grade A and Grade B office space in 2017-2020. The occupancy rate will stand at an average of 86% of total new supply in one year.
Given robust growth of startups, demand for co-working and serviced offices will edge up.
Lean-meat stimulant Cysteamine banned in livestock farming
The Ministry of Agriculture and Rural Development has issued a circular prohibiting the use of cysteamine, a substance used in livestock farming.
Cysteamine, a sulfhydryl amine that is part of coenzyme A, has been added to the list of chemicals and antibiotics prohibited from import, production, trading and use in livestock and poultry feed in Vietnam.
Many debates have centered on whether cysteamine should be put on the list or not.
The substance under the form of cysteamine hydrochloride is added to animal feed as a growth stimulant for pigs, cattle, sheep and poultry. However, based on relevant materials of its practice in many countries, the substance should not be
permitted as an additive for animal feed production, according to a specialized document prepared by Professor Vu Duy Giang at the Vietnam National Institute of Agriculture.
Therefore, the ministry has decided to add the substance to the list. This means that animal feed makers will not be allowed to put it into their products.
Earlier, the ministry added lean-meat stimulant Salbutamol and diarylmethane dye Auramine O to the list. This created a legal framework, facilitating competent agencies to further control the rampant use of banned substances in the livestock farming sector.
US$3 billion worth of lottery tickets sold in southern Vietnam in 2016
That did not include sales of Vietlott, a newcomer that has shaken the market with an American-style jackpot game.
Around 856 million lottery tickets were sold in southern Vietnam last year, worth a total of VND66.68 trillion (US$2.9 billion), up 8.1% from 2015, according to media reports.
The region's 21 lottery firms spent nearly half of that on prizes for winners and sent VND22.35 trillion to the state budget. Their combined profit was estimated at VND8.79 trillion.
These company, selling the so-called "traditional" pre-printed tickets, have been facing a tough competition from Vietlott, a state-run company with an American-style jackpot game that has shaken the market in recent months.
In a meeting of the Southern Lottery Council on January 17, the lottery firm from Bac Lieu Province proposed raising the top prize to a whopping VND12 billion, from VND2 billion currently, to at least match the minimum prize offered by Vietlott. The council has already raised their prize from VND1.5 billion.
Traditional tickets still dominate the market for now. In comparison, Vietlott said its sales last year reached VND1.6 trillion, with VND1.3 trillion coming from the southern region.
But the company is expanding.
The Mega 6/45, launched in July last year as part of an exclusive 18-year contract with Malaysian conglomerate Berjaya, is in fact its very first foray into the market. In the American-style game, players select six numbers from 1 to 45 and win the jackpot, starting at VND12 billion (US$538,000), by matching all six winning numbers from the draw. Each ticket costs VND10,000 (40 cents).
The jackpot prize will keep growing with time and with more players, until there is a winner. The odds of winning are extremely low, believed to be around one in 8.14 million.
The southern lottery council has complained that instead of letting players choose their own numbers, Vietlott also sold pre-printed tickets, to unfairly compete with other companies. Vietlott has also been accused of overcharging.
Local authorities have not responded to these accusations.
Vietnam bans gambling among its citizens but lottery tickets are popular nationwide.
Vingroup to invest in HCM City sports complex
HCM City’s People’s Committee had given Vingroup Joint Stock Company (Vingroup JSC) the go-ahead to invest in a sports and entertainment complex in District 2’s new Thu Thiem urban area.
The complex would be located on 31.39 hectares, and the People’s Committee has approved a district planning scale of 1/ 2,000, the city’s department of planning and architecture (DPA) said on Monday.
The project would require an estimated total capital of VND6.77 trillion (US$305.1 million), excluding compensation for site clearance.
So far, 99 per cent of the land in Thu Thiem urban area had been cleared, with 382 hectares set aside for residential purpose and another 334 hectares for commercial purpose. Once Thu Thiem had been developed, it would be able to house 150,000 residents and attract 220,000 workers.
Vingroup JSC had acquired approval to build the complex as part of the second functional area in Thu Thiem and An Loi Dong wards, Disctrict 2. The total construction is expected to take 36 months; the project utility period would be 50 years.
Vingroup JSC’s sports complex would have infrastructure so it could be used as a multifunctional sporting halt and an amusement park. It is considered to be one of the key high-value projects in the planning of Thu Thiem urban area.
Recently, many domestic and foreign investors had expressed interest in putting money into housing, commercial and office projects in Thu Thiem. — VNS
Vocarimex approves Kido’s acquisition
Foodstuff producer Kido Corporation (KDC) has finally been given the go-ahead to raise its stake in Vietnam Vegetable Oil Industry Corporation (Vocarimex), paving the way for the group to penetrate deeper into the vegetable oils market.
In the latest filing to the Ha Noi Stock Exchange, Vocarimex agreed to Kido’s offer to raise its stake from 24 per cent to 51 per cent.
The transaction will be conducted through negotiation, bypassing the obligation of making a public bid to purchase shares.
The move is necessary for Kido to become the parent company of the oil vegetable oil manufacturing company.
Vocarimex’s shares are trading on the Unlisted Public Market Company (UPCoM) for about VND28,000 (US$1.24) per share. At this price, Kido is estimated to spend almost VND921 billion ($40.7 million) for the purchase.
The deal is expected to occur in the first quarter of this year.
Apart from Kido, the State Capital Investment Corporation (SCIC) and VP Bank Securities Co (VPBS) are other two major shareholders of Vocarimex, each holding 36.3 per cent and 8 per cent of its capital, respectively.
In a related development, Vocarimex also accepted the VPBS’s proposal to divest its holdings ahead of schedule.
Vocarimex is one of the largest local vegetable oil firms where Kido has aimed to seize a controlling stake to penetrate into the food and spice markets after its withdrawal from the confectionery sector.
Besides Vocarimex, in November 2016, Kido spent more than VND1 trillion to buy a 65-per-cent stake in Tuong An Vegetable Oil Joint Stock Company (TAC)
Kido reported total revenues of VND2.24 trillion and net profits of nearly VND1.2 trillion by the end of 2016, up 43.2 per cent in revenues but down 77.8 per cent in net profits compared to the previous year.
Frozen food remained the biggest contributor to the company’s total revenues with sales of more than VND1.3 trillion, up 30 per cent year-on-year. According to Euromonitor International, Kido holds 36.9 per cent of the domestic ice cream market. – VNS
Vietnamese furniture makers hit by dwindling timber supplies
Many Vietnamese furniture makers are struggling to win large orders from global retailers due to a significant shortage of wood.
It is estimated that local furniture firms use about 30 million cubic meters of solid wood and wood-based board materials each year, which translates as about 2.2% of all wood used commercially around the world.
About 67% of wood used in Vietnamese products is domestically sourced, mainly from defunct rubber plantations, while the remaining 33%, translating into around 10 million cubic meters, must be sourced from overseas.
In the meantime, data released by the Agriculture Ministry showed that last year Vietnam exported 8 million cubic meters of solid wood to neighboring China.
This clearly presents a supply problem.
Vietnam’s furniture exports have been growing steadily by 10%-15% in recent years, said To Xuan Phuc, an industry expert from non-profit organization Forest Trends.
“Last year, Vietnam exported more than US$7 billion worth of wood products, while global demand was estimated at US$400 billion. There is potential for more growth,” said Duong Phuong Thao, a senior official from the trade ministry.
However, given the continuing high demand for timber, local furniture companies are faced with a significant shortage of materials.
Vietnam currently has 4,000 furniture makers and exporters and 93% of them are small-and medium-sized companies. These companies have struggled to fulfill large orders from retailers in the US, the European Union and Japan,” said Huynh Van Hanh, vice chairman of Ho Chi Minh City’s Association of Handicraft and Wood Businesses.
Only 7% of Vietnamese furniture makers have managed to win large orders from global retailers, Hanh added.
Local companies believe that the government should throw its considerable weight behind a plan to develop a sustainable forestry system that can be expanded as demand for wood continues to grow.
Vietnam may hike tariffs on solid wood exports to 30%–35%, the same level Cambodia and Thailand apply, to promote better forest management, end deforestation and help with timber supplies, said Huynh Kim Bau, assistant to the general manager of Saigon Furniture.
The Agriculture Ministry plans to develop 200,000 hectares of certified sustainable forests this year, and it is forecast that Vietnam will have 500,000 hectares of certified forests by 2020.
A shortage of solid wood and wood-based materials is not the only problem facing Vietnamese furniture exporters.
Local firms mainly do outsourcing works for foreign furniture suppliers, most of which are Chinese, Hanh said.
Official statistics show that a third of foreign-invested companies in Vietnam’s furniture industry are Chinese.
In an attempt to dodge anti-dumping tariffs imposed by the US, Chinese furniture companies are flooding into Vietnam, relocating their manufacturing facilities and exporting to the US from here.
Since 2015 the US has imposed import tariffs on Chinese-made furniture including beds, nightstands and other wooden wares in an attempt to protect its domestic manufacturers from Chinese “dumping”, or the export of goods at unfairly low prices.
Ngo Sy Hoai, vice chairman of the Professional Association of Timber and Wood Products (Vifores), said the US is currently imposing a tariff of between 55% and 120% on Chinese furniture, but there is no tariff on furniture imports from Vietnam.
Local woodwork factories in Vietnam are concerned that their businesses will suffer if they act as a shield for Chinese furniture companies from US anti-dumping actions.
The fact that Vietnamese manufacturers may come under the radar of American anti-dumping investigators is obviously unwelcome as the US has become Vietnam’s largest buyer. Vietnam’s furniture exports to the US have reached more than US$2 billion per year, equivalent to 30% of all exports.
Vietnam’s steel imports hit record high in 2016
Vietnam’s steel imports increased 18.4% to a record high of 18.4 million tons last year, while its steel exports soared 36% to 3.5 million tons, customs data showed.
Vietnam’s steel imports increased 18.4% to a record high of 18.4 million tons last year, while its steel exports soared 36% to 3.5 million tons, customs data showed.
Accordingly, its steel trade deficit widened to 14.9 million tons or US$6 billion in 2016.
The trade ministry estimated the country will spend US$15 billion annually on steel imports by 2020 to meet rapidly rising domestic demand. The ministry also forecast Vietnam will be short of 15 million tons by 2020 and 20 million tons by 2025.
Statistics show that Vietnam’s steel imports so far meet up to 60% of the market demand.
Faster economic growth means more steel is needed to make everything from cars to buildings.
Given gross domestic product growth of 6.2% last year, the country’s rising steel demand will boost production by 10%-12% in 2017.
Vietnam’s per capita steel consumption could grow further in the next few years from just below 300 kilograms today, said industry experts.
“The country has ample reserves of iron ore but its manufacturing sector, arms industry and shipbuilding businesses are fully reliant on steel imports,” said Truong Thanh Hoai, a senior official at the trade ministry.
The Southeast Asian country plans to put as many as 10 steel projects into operation this year in an attempt to reduce its high dependence on Chinese steel imports.
More than half of Vietnam’s total steel imports in 2016 came from China. Customs data showed that the Southeast Asian country imported 10.85 million tons from its neighbor last year, a 14.3% increase from the year before, with a value of US$4.45 billion.
Nguyen Van Sua, chairman of the Vietnam Steel Association, said this year the steel industry will remain under mounting pressure of cheap steel inflows mainly driven by Chinese overcapacity.
He said the government should continue to shield domestic steel makers from a detrimental surge in steel imports by imposing safeguard duties.
“Chinese steel imports mainly came from manufacturing facilities along the southern coastal provinces,” said Thanh Hoai, explaining that as Chinese steel imports are transported by sea, lower transport costs make Chinese steel more competitive than Vietnamese products.
Vietnam courts Japanese high-tech manufacturing
Vietnam is courting high-tech Japanese investment in manufacturing, Dr Vu Tien Loc, chair of Vietnam Chamber of Commerce and Industry, said on January 24 during a business forum in Hanoi.
Japan is the second-largest foreign investor in Vietnam, a manufacturing hub in Southeast Asia seeking to expand exports from apparel and agriculture to high-value goods like electronics and automobiles.
Transnational companies operating in Vietnam have become fierce competitors to those operating in regional neighbours like Thailand, Malaysia, China and Taiwan, especially in hi-tech manufacturing, said Dr Loc.
He added that the globe’s electronic giants like Panasonic, Samsung, Foxconn and Intel have all made significant investments and now the country is desirous of attracting more Japanese based companies.
Ties between Tokyo and Hanoi have warmed over recent years, and currently the world’s No. 3 economy has invested heavily in Vietnam. Japanese companies are currently involved in more than 3,000 ventures worth roughly US$42 billion in Vietnam, principally in the manufacturing sector.
Members of the Vietnam business community welcomed the push toward high-tech at the forum, which was attended by representatives of several Japanese transnational giants including Mitsubishi, Canon and Fukuyama Transporting.
Vinacomin targets 5.5-6 percent growth in revenue
The Vietnam National Coal – Mineral Industries Holding Corporation Limited (Vinacomin) strives to achieve an annual average revenue growth of 5.5-6 percent in the 2016-2020 period.
According to Vinacomin’s five-year business production and investment plan approved by the Prime Minister, the company aims to produce 42 million tonnes of coal and reduce the loss rate of coal exploited from underground mines by 5-20 percent by 2020.
It will also work to satisfy the domestic demand and ensure national energy security.
The company plans to import nearly 8-9 million tonnes of coal to serve economic sectors at home, especially electricity generation.
It moves to put into operation thermal and hydropower coal plants with a total output of 10.2 million kWh, accounting for over 4-5 percent of the country’s total electricity.
Vinacomin will reform production technologies in the chemical industry to supply industrial explosive material and drilling and blasting services for coal and mineral production, as well as improve the production capacity at mechanical factories.-
M&A deals in Vietnam's real estate sector forecast to take off in 2017
Mergers and acquisitions in Vietnam's real estate market are expected to jump in 2017 as foreign investors look for local partners rather than starting their investments from scratch.
President Donald Trump has pulled the US ouf of the Trans-Pacific Partnership, a deal from which Vietnam, was expected to gain the most. Even so, Vietnam will be viewed no less attractive as an investment destination than it could have been with the TPP, said Stephen Wyatt, general manager of property consultancy firm Jones Lang LaSalle.
He forecast Vietnam’s strengthening real estate market will lift the number of mergers and acquisitions (M&As) to a new record in 2017.
m&a deals in vietnam's real estate sector forecast to take off in 2017 hinh 0ietnam has emerged as a potential investment destination that can generate an annual return of between 20% and 25%, said Than Thanh Vu, chief executive of an M&A consulting company in Ho Chi Minh City.
Investors’ interest is fuelled by the Southeast Asian country’s annual economic growth, which has been above 5 percent on average since 1999, Vu said.
There are many factors driving the inflows of foreign investments into Vietnam’s real estate market, including its fast-growing economy, accelerated urbanization and expanding middle-class population with higher incomes.
Foreign property developers want to tap into Vietnam’s growing population because it will lead to a rapidly expanding demand for housing.
Global investors are increasingly entering the local market through M&As, Vu said , explaining that they prefer gradually acquiring stakes in local property developers so that they can gain a better understanding of local demands.
Besides, M&A deals also allow foreign investors to quickly gain a foothold in the market as they can skip the massive amount of paperwork required to enter the real estate sector.
The number of announced M&As in 2015 increased by 40% from 2014 with total value of US$4.3 billion, according to data released by the Institute of Mergers, Acquisitions and Alliances.
A third of Vietnam’s top 10 largest mergers and acquisitions over the past two years have involved real estate companies.
The market has been spurred on by foreign buyers from Japan, the Republic of Korea and Singapore who are interested in large-scale mixed-use developments comprising apartments, serviced apartments, and retail and office space in Hanoi and Ho Chi Minh City.
For instance, a large number of Japanese property developers including Sumitomo, Sanyo Homes, Daiwa House, Aeon and Toshin have pledged to invest up to US$2 billion in the country.
In its biannual Global Real Estate Transparency Index 2016, Jones Lang LaSalle Vietnam ranks 68th out of 109 markets, but far below other countries in the region such as Singapore in 11th and Thailand at 38th.
According to the index, transparency across Vietnam’s real estate markets has steadily improved in recent years with better access to market information, increased availability of market data, and improved enforcement of planning and land use regulations.
Jetstar Pacific offers 111,000 cheap fares for TET
The low-cost airline Jetstar Pacific announced on January 24 it will offer 111,000 cheap tickets priced from VND11,000 on domestic flights to mark the Lunar New Year festival (TET).
The discount program is scheduled to run from 11pm on January 27 till the end of February 5. The cheap tickets are for flights departing in the period between February 25 and April 26.
The airline also offered cheap fares on international flights. The ticket for flight from Hanoi/HCM City to Guangzhou is priced at VND68,000, Hanoi/HCM City to Bangkok at VND118,000, Da Nang to Taipei at VND188,000, Hanoi/Da Nang to Hong Kong and HCM City-Singapore at VND288,000 and HCM City-Hong Kong at VND388,000. These prices exclude tax and surcharges.
A representative from Jetstar Pacific said the airline has met the travel demand of 22,000 passengers per day during TET festival. Jetstar Pacific Airlines has also implemented its web and mobile check-in service to allow passengers to get boarding pass without lining up at check-in counters.
Ryan says he'll seek re-election as speaker
MOSINEE, Wis. (AP) — Speaker Paul Ryan said Friday he will seek re-election to the top job in the House if Republicans hold onto their majority, an outcome widely expected in next week's elections.Ryan's comment comes as some House Republicans — hard-right conservatives and backers of GOP presidential candidate Donald Trump — have discussed trying to oust him from his post. He became speaker only a year ago after conservatives pressured his predecessor, John Boehner, R-Ohio, into abandoning the… chat_bubble_outline Read More...
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—Police officers wearing riot gear have started removing hundreds of people protesting a controversial crude oil pipeline at its construction site in North Dakota on Thursday. More here—Ammon Bundy and six other co-defendants were found not guilty Thursday of federal conspiracy and weapons charges stemming from their armed takeover of a federally owned wildlife sanctuary in Oregon earlier this year. More here—An Alaska lawyer has accused Justice Clarence Thomas of groping her at a dinner party… chat_bubble_outline Read More...
Metro Vietnam plans to merge with Thailand’s Big C
Chairman of TCC Holding, the owner of Metro Cash & Carry Vietnam, Charoen Sirivadhanabhakdi has created a storm by announcing a planned merger between his company and Thailand's Big C. Mega Market Vietnam, the new name of Metro Vietnam since July this year, is planning to penetrate the Thai market using Vietnam’s strong wholesale network and Metro’s 19 wholesale centers. The Thai billionaire plans to merge Metro Vietnam with Big C Thailand. Photo from Reuters Berli Jucker, under TCC Holding,… chat_bubble_outline Read More...
Protesters agree to end blockade of western Libya oilfield pipelines: officials
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Man City's Guardiola relishing Chelsea showdown
Burnley (United Kingdom) (AFP) - Pep Guardiola had barely savoured Manchester City's 2-1 victory at Burnley before he was considering preparations for a more sumptuous Premier League feast against pacesetters Chelsea.The former Barcelona manager, still adapting to life in the English fast lane, will have a whole week to get ready for the Etihad Stadium clash that will pit together two likely title contenders.That will seem almost luxurious after eight days that encompassed demanding games at… chat_bubble_outline Read More...