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Local enterprises lack materials due to China’s ‘Zero COVID’ policy

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Tân Phú Plastic Company produces safe products to serve the local market. The Zero COVID policy in China means many Vietnamese producers lack input materials. — Photo courtesy of the firrm

HÀ NỘI — While many exporters and producers had orders for 2022, they are worried about a possible shortage of production materials because of supply disruptions from China.

The worst sufferers were the electronics, wood, textiles, and footwear industries. According to the Ministry of Industry and Trade (MoIT), China was an important market for the export and import activities of Việt Nam as it provides the majority of input materials for Việt Nam’s production, especially electronic components, machinery parts, fabrics and chemicals.

MoIT said from 50 to 55 per cent of raw materials and accessories for the textile, garment, and footwear industries originated from China.

The country was currently implementing the “Zero COVID” strategy, which forced many factories there temporarily stop production to fight the pandemic. The import-export activities in the neighbouring country were affected a lot by the shortage of containers at ports.

Phan Thị Thanh Xuân, deputy chairwoman and general secretary of the Việt Nam Leather, Footwear and Handbag Association, said businesses in the industry had to slow down export deliveries because their Chinese partners lacked empty containers for transporting raw materials and accessories.

She added the supply of raw materials from China also decreased because many factories had to suspend operations.

Nguyễn Đức Minh, director of Đức Minh Rubber Company and chairman of the HCM City Rubber Plastics Association, said: “The Việt Nam’s rubber industry depends on up to 70 per cent of raw materials, especially chemicals. 

“However, the supply from this market is being blocked due to the Chinese side’s implementation of Zero COVID. If the supply from this market continues to be interrupted, enterprises are forced to import from the Japanese and Korean markets at 15-20 per cent higher prices. With this input material price, enterprises are at risk of not being profitable, making their products difficult to compete in the world market.”

Phan Anh Tuấn, general director of Tân Phú Plastic Company, said besides the Zero COVID, the escalating fuel prices forced the plastic materials prices to go up, influencing his firm’s input source.

Tuấn said though operation costs were also put higher due to higher logistic prices, the Tân Phú company still kept prices of all products stable to support consumers.

Tuấn said: “We keep modernising the production process to improve products and cut costs the most.”

The company also aimed to use safe and high-technology materials so that the consumers could reuse them to protect the environment and avoid more consumption of plastic.

Tuấn said they organised a campaign called “Live green, live Japanese style” to encourage customers to exchange the old products for the new ones instead of buying new products.

While the plastic company seemed to find a way to fix its problem, the textile and garment, an industry with a lot of imported materials, was still struggling.

Local media reported that Đáp Cầu Garment Corporation, specialising in garment processing for major markets and imports up to 80 per cent of raw materials from China, got orders until September, but it also had to postpone the delivery of many orders due to the lack of raw materials.

The company’s leader said: “For orders that do not have enough materials, we have to renegotiate the delivery time. However, the delivery time cannot be too slow because that makes businesses face many payment risks.”

In this case, the MoIT asked local enterprises to adapt to an appropriate strategy.

“The most important task of enterprises at this time is to restructure production soon, find alternative sources of supply to offset the shortage of the current raw materials and outdated equipment. Enterprises also need to promote linkages, support and use made-in-Việt Nam products in production and business activities to reduce dependence on external resources,” the MoIT said.

The ministry asked them to find new sources of supply outside of China besides negotiating with partners to share risks and extend the delivery time, but Nguyễn Đức Thắng, head of Đáp Cầu Garment Company, said: “It’s not an overnight issue because China is the world’s factory, supplying many raw materials and accessories at reasonable prices. In addition, most of the raw materials Đáp Cầu company imports are pre-assigned by partners.”

Vũ Đức Giang, chairman of the Vietnam Textile and Apparel Association, said that it was necessary to effectively promote the role of foreign trade counsellors to strengthen the search for markets to supply raw materials along with supporting them to access to a reliable source with good prices.

He said: “This not only increases competitiveness for local enterprises but also minimises the risks of dependence on a supply market.” 

A representative of the MoIT’s Department of Industry emphasised that in the long term, there must be solutions to develop supporting industries and several important primary material industries in order to minimise dependence on imported raw materials, components and input accessories. —

Source: https://vietnamnews.vn/economy/1253947/local-enterprises-lack-materials-due-to-chinas-zero-covid-policy.html

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CapitaLand Ascott’s gross profit in Vietnam up 31% to $10 mln in 2022

CapitaLand Ascott Trust, the management agency of five Somerset hotels in Vietnam, posted a revenue of S$27.6 ($20.63 million) from its Vietnam operation in 2022, up 33% year-on-year.

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Amid the country’s post-Covid-19 reopening, the revenue per available unit (REVPAU) grew 52% year-on-year to S$62 ($46.3) per day. The agency also attributed the growth to the acquisition of Somerset Central TD Haiphong City on November 30 last year.

As a result, the group earned a gross profit S$14 million ($10.46 million) in Vietnam, up 31% year-on-year.

On a global scale, CapitaLand Ascott recorded a revenue of S$621.2 million ($464.21 million) in 2022, up 58% year-on-year, with a REVPAU of S$120 ($89.67) per day, up 74%. Gross profit increased 63% year-on-year to S$282.8 million ($211.33 million).

CapitaLand Ascott Trust now manages five hotels in Vietnam, namely Somerset Hoa Binh Hanoi and Somerset Grand Hanoi in the capital city, Somerset Chancellor Court Ho Chi Minh City and Somerset Ho Chi Minh City in the southern economic hub, and Somerset Central TD Haiphong city.

The total valuation of the five hotels with 893 available units reached S$221.9 million ($165.82 million) as of end-2022, according to CapitaLand Ascott.

Source: The Investor

Source: https://e.nhipcaudautu.vn/companies/capitaland-ascotts-gross-profit-in-vietnam-up-31-to-10-mln-in-2022-3351413/

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Bamboo Airways has new investor

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Bamboo Airways is negotiating a deal with a new investor, showing its latest move one year after former chairman Trinh Van Quyet was arrested in March 2022 on charges of stock market manipulation, a representative of the airline told Tuoi Tre (Youth) newspaper on Thursday.

The air carrier and the new investor are in the process of completing a part of investment procedures. Who the investor is remains unclear.

The airline has found a new investor to replace former chairman Trinh Van Quyet and some relevant shareholders, said Bamboo Airways CEO Nguyen Manh Quan.

The air carrier also actively helped the investor with relevant procedures of stake acquisition. The transferred stake was mortgaged at banks from 2020 by old shareholders.

Apart from the stake purchase, the new investor agreed to take responsibility for all payments for the previous loans taken out by the old shareholders who used their stakes in Bamboo Airways as collateral at banks.

Over the past few months, Bamboo Airways has faced financial distress due to the COVID-19 pandemic and upheavals in senior personnel. As such, the airline has cried for help from major investors to relieve the hardship.

Him Lam Corporation lent Bamboo Airways VND8 trillion (US$338 million). Him Lam is a real estate firm run by Duong Cong Minh, who is a senior advisor to Bamboo Airways.

The airline’s recent moves are considered a solution to its restructuring and operation stabilization.

Speaking at its annual general shareholder meeting in early March, Le Ba Nguyen, chairman of FLC Group, said that the firm was considering selling its stake in Bamboo Airways.

FLC Group’s total investment in the air carrier stands at VND4.015 trillion ($170 million), or a 21.7-percent stake.

In 2021, Bamboo Airways missed earnings, so FLC made a provision for its investment of over VND373 billion ($15.7 million). The provision jumped to VND3.64 trillion ($154 million) in 2022.

A flight attendant is at work on a Bamboo Airways plane. Photo: Cong Trung/ Tuoi Tre

A flight attendant is at work on a Bamboo Airways plane. Photo: Cong Trung/ Tuoi Tre

Bamboo Airways has sought for a new investor for more than one year, as aviation is a highly competitive industry and is regarded as a ‘cash-burning industry’ in airspace.

The airline has a fleet of 30 planes. For its strong growth, the carrier is set to expand its fleet to 100 aircraft.

Other local airlines, Pacific Airlines and Vietravel Airlines, are also looking for investors to make their financial health better to overcome market challenges.

FLC Group set up Bamboo Airways in late May 2017, with its initial charter capital of VND700 billion ($29.6 million).

In April 2022, FLC became the airline’s largest shareholder, with capital contribution totaling over VND3.58 trillion ($151.4 million), or a 51.24-percent stake in the air carrier.

FLC former chairman Quyet poured over VND2.8 trillion ($118.4 million) into the airline, or a 40.03-percent stake, while other shareholders injected more than VND610 billion ($25.8 million), an 8.73-percent share.

In its recent financial statement, FLC’s ownership in Bamboo Airways fell to 21.7 percent of the latter’s total charter capital of VND18.5 trillion ($782.3 million).

Bamboo Airways’ board of directors has five members, including Nguyen Ngoc Trong, chairman of the airline; Doan Huu Doan and Le Ba Nguyen, vice-chairs of the carrier; Le Thai Sam; and Nguyen Manh Quan.

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Bamboo Airways is negotiating a deal with a new investor, showing its latest move one year after former chairman Trinh Van Quyet was arrested in March 2022 on charges of stock market manipulation, a representative of the airline told Tuoi Tre (Youth) newspaper on Thursday.

The air carrier and the new investor are in the process of completing a part of investment procedures. Who the investor is remains unclear.

The airline has found a new investor to replace former chairman Trinh Van Quyet and some relevant shareholders, said Bamboo Airways CEO Nguyen Manh Quan.

The air carrier also actively helped the investor with relevant procedures of stake acquisition. The transferred stake was mortgaged at banks from 2020 by old shareholders.

Apart from the stake purchase, the new investor agreed to take responsibility for all payments for the previous loans taken out by the old shareholders who used their stakes in Bamboo Airways as collateral at banks.

Over the past few months, Bamboo Airways has faced financial distress due to the COVID-19 pandemic and upheavals in senior personnel. As such, the airline has cried for help from major investors to relieve the hardship.

Him Lam Corporation lent Bamboo Airways VND8 trillion (US$338 million). Him Lam is a real estate firm run by Duong Cong Minh, who is a senior advisor to Bamboo Airways.

The airline’s recent moves are considered a solution to its restructuring and operation stabilization.

Speaking at its annual general shareholder meeting in early March, Le Ba Nguyen, chairman of FLC Group, said that the firm was considering selling its stake in Bamboo Airways.

FLC Group’s total investment in the air carrier stands at VND4.015 trillion ($170 million), or a 21.7-percent stake.

In 2021, Bamboo Airways missed earnings, so FLC made a provision for its investment of over VND373 billion ($15.7 million). The provision jumped to VND3.64 trillion ($154 million) in 2022.

A flight attendant is at work on a Bamboo Airways plane. Photo: Cong Trung/ Tuoi Tre

A flight attendant is at work on a Bamboo Airways plane. Photo: Cong Trung/ Tuoi Tre

Bamboo Airways has sought for a new investor for more than one year, as aviation is a highly competitive industry and is regarded as a ‘cash-burning industry’ in airspace.

The airline has a fleet of 30 planes. For its strong growth, the carrier is set to expand its fleet to 100 aircraft.

Other local airlines, Pacific Airlines and Vietravel Airlines, are also looking for investors to make their financial health better to overcome market challenges.

FLC Group set up Bamboo Airways in late May 2017, with its initial charter capital of VND700 billion ($29.6 million).

In April 2022, FLC became the airline’s largest shareholder, with capital contribution totaling over VND3.58 trillion ($151.4 million), or a 51.24-percent stake in the air carrier.

FLC former chairman Quyet poured over VND2.8 trillion ($118.4 million) into the airline, or a 40.03-percent stake, while other shareholders injected more than VND610 billion ($25.8 million), an 8.73-percent share.

In its recent financial statement, FLC’s ownership in Bamboo Airways fell to 21.7 percent of the latter’s total charter capital of VND18.5 trillion ($782.3 million).

Bamboo Airways’ board of directors has five members, including Nguyen Ngoc Trong, chairman of the airline; Doan Huu Doan and Le Ba Nguyen, vice-chairs of the carrier; Le Thai Sam; and Nguyen Manh Quan.

Like us on Facebook or follow us on Twitter to get the latest news about Vietnam!

Source: https://tuoitrenews.vn/news/business/20230318/bamboo-airways-has-new-investor/72149.html

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Eximbank forecasts $212 mln profit in 2023

Eximbank is aiming for a pre-tax profit of VND5 trillion ($212 million) in 2023, up 35% year-on-year, according to a document to be released at its 2023 annual shareholders meeting.

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The meeting is scheduled to be held on April 14 at the GEM Center Convention Center, Ho Chi Minh City. 

In 2023, Eximbank targets total assets of VND210 trillion ($8.9 billion), up 13.5% year-on-year. Capital mobilization is expected to increase by 11% to VND165 trillion ($7 billion), and outstanding loans (including corporate bonds) to increase by 12.3% to VND146.6 trillion ($6.22 billion).

At the meeting, Eximbank will also present to shareholders a plan to increase charter capital. Specifically, the bank plans to issue 265.5 million shares to pay dividends, increasing its charter capital to more than VND17.47 trillion ($740.77 million).

Eximbank, listed on the Ho Chi Minh Stock Exchange (HoSE) as EIB, reported an after-tax profit of VND2.5 trillion ($106.78 million) in 2022, a three-time increase year-on-year.

The bank’s net interest income reached VND5.59 trillion ($238.47 million), up 59% year-on-year, while profit from service activities hit VND514 billion ($21.92 million), up 19%.

Profit from foreign exchange business increased by 54% to VND606 billion ($25.84 million), and the figure from other activities, mainly debt collection and settlement, rose by 68% to VND428 billion ($18.25 million).

Eximbank’s total operating income was VND7.23 trillion ($308.45 million), up 53.6% year-on-year. Operating expenses increased by 36% to VND3.42 trillion ($145.84 million), meaning the cost to income ratio (CIR) improved significantly, down from 53% to 47%.

Notably, the bank’s risk provision expense in 2022 was only VND103 billion ($4.39 million), down 90% over the same period last year.

By December 31, 2022, Eximbank’s total assets had reached VND185.05 trillion ($7.89 billion), up 11.6% compared to the end of 2021.

Outstanding loans increased by 14% to VND129.2 trillion ($5.51 billion), and customer deposits increased by 8.2 % to VND148.61 trillion ($6.34 billion).

Eximbank’s bad debt was VND2.35 trillion ($100 million), up 4.4% year-on-year, an increase much lower than the credit growth rate. The bad debt ratio improved, decreasing from 1.96% to 1.8%.

On January 14, Japan’s Sumitomo Mitsui Banking Corporation (SMBC) sold 134 million Eximbank (EIB) shares, equivalent to 10.8% of the bank’s charter capital, for VND3.421 trillion ($146 million). 

On March 18, 2022, the Japanese financial institution officially announced in writing the termination of its strategic alliance agreement with Eximbank. In September, a representative of SMBC in Eximbank, Vo Quang Hien, left as a member of its board of directors.

On the HoSE, Eximbank closed Monday’s session at VND18,750 ($0.79).

Source: The Investor

Source: https://e.nhipcaudautu.vn/companies/eximbank-forecasts-212-mln-profit-in-2023-3351414/

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