Connect with us

Business

VIETNAM BUSINESS NEWS MAY 14

Published

on

New container terminals to be built in Hai Phong

VIETNAM BUSINESS NEWS MAY 14

A project building container terminals No 3 and 4 at the Hai Phong International Gateway Port in the Lach Huyen Port area was launched in the northern port city on May 12.

With a total length of 750 metres and a width of 50 metres, the two terminals will be able to berth 160 TEU (3,000 DWT) vessels. The project’s total area is 47 ha.

Approved by the Prime Minister on January 9, 2019, the project is scheduled to be totally completed in 2024, one year earlier than planned.

With investment from the Hai Phong Port JSC, the project has a total cost of about 6.94 trillion VND (301.02 million USD).

Container terminals No 1 and 2 came into operation in May 2018 and have served container vessels and general ships with a capacity of about 1.1 million TEU per year.

From 2020-2025, with six container terminals and three general terminals, Lach Huyen Port will be able to receive 4,000 TEU general ships and 8,000 TEU container ships, according to a plan approved under the Hai Phong international port system to 2020 and detailed planning of the northern seaport group to 2020 and vision to 2030.

Hai Phong Port handled 36.2 million tonnes of cargo last year, or more than 40 percent of the total in the city, earning revenue of over 2.19 trillion VND with a profit of 700 billion VND. In the first quarter of this year, it handled 9.3 million tonnes of cargo for 563 billion VND in revenue and 215 billion VND in profit./.

Shares subside on late selling pressure

Vietnamese shares declined on Thursday, dragged by market heavyweights as selling pressure increased significantly towards the closing minutes of trading.

The market benchmark VN-Index on the Ho Chi Minh Stock Exchange (HoSE) declined 0.56 per cent, or 7.10 points, to finish the trading day at 1,261.99 points.

It had jumped 13.05 points, or 1.04 per cent, to close Wednesday’s trade at 1,269.09 points.

The market breadth Thursday was negative as 254 stocks declined while 163 rose and 43 stocks ended flat.

The market’s liquidity was high with nearly 711.5 million shares traded on the southern market, worth VND21.6 trillion (US$931.7 million).

The market witnessed strong volatility at the end of the trading session. A series of large stocks dropped sharply, extending the decrease of the VN-Index. Vingroup (VIC) decreased by 2.5 per cent to VND57,700 per share, Techcombank (TCB) declined by 2.5 per cent to VND126,500 per share, The Vietnam Rubber Group – Joint Stock Company (GVR) decreased by 1.9 per cent to VND26,500 per share, Hoa Phat Group (HPG) decreased by 1.9 per cent to VND61,500 per share.

“The VN-Index is forecasted to test the resistance zone of 1,275-1,285 points in the next few sessions,” said Tran Xuan Bach, a stock analyst at Bao Viet Securities Co (BVSC).

“The index might face pressure to correct when approaching this zone. In general, the market is likely to continue to have cumulative sideways movements to create a new base above 1,200 in the short term.

“The 1,275-1,285 zone remains a strong resistance zone that the index needs to break to reclaim its gaining trend in the short term,” he said.

Investors should increase the proportion of shares in the portfolio to 40-45 per cent.

They should consider opening short-term positions if the market breaks the resistance zone of 1,275-1,285 points, he said.

The 30 biggest stocks tracker, VN30-Index, lost 0.72 per cent to finish Thursday at 1,370.18 points.

Of the VN30 basket, seven stocks increased while 23 decreased.

On a sector basis, 19 out of 25 sectors decreased, such as insurance, food and beverage, seafood processing, real estate, agriculture, home appliance production, logistics, construction and construction materials.

Meanwhile, on the Ha Noi Stock Exchange (HNX), the HNX-Index rose 1.66 per cent to close Thursday at 287.03 points.

The northern market index jumped 0.92 per cent to close Wednesday at 282.33 points.

During the session, over 127.7 million shares were traded on HNX, worth VND2.8 trillion. 

Soya Garden fully shuts last store in Ho Chi Minh City

Soya Garden, a soybean-based beverage chain has closed down its last store in Ho Chi Minh City during the latest resurgence of COVID-19 cases.

The flagship store is located in the six-way Phu Dong roundabout in the city’s District 1, which is the most expensive location in the downtown area. The closure of the store marks the chain’s full divestment from the municipal market during the resurgence of COVID-19 cases.

Launched in July 2019, this is the 50th store developed by Soya Garden during its aggressive expansion across Ho Chi Minh City, Hanoi, Haiphong, Danang, and Nha Trang. After this milestone, the chain started to narrow its operations and closed numerous stores.

According to the representative of Egroup, the closure is part of the chain’s restructuring plan to optimise operations and staff expenses while increasing revenue. Also, the food and beverage (F&B) sector has been hit hard by the COVID-19 pandemic as more people switch to online food ordering. Therefore, it is not efficient for the chain to maintain flagship stores in expensive prime locations.

Soya Garden was founded by siblings Hoang Anh Tuan and Hoang Thu Thuy in 2016, who believed soybean products would be a popular beverage following coffee and milk tea. The startup wrapped up VND20 billion($869,570) in investment from Egroup in Shark Tank Vietnam in 2018.

In 2019, Egroup increased investment in the chain to VND100 billion ($4.35 million). From there, Soya Garden quickly expanded its two shops to more than 30 outlets with a view to operating 300 stores in 2021.

However, the chain has shut down numerous stores since the outbreak of the pandemic. As of present, Soya Garden operates eight stores in Hanoi. In the coming time, the chain plans to change its business model to smaller stores, thereby cutting expenses for premises, operation, and staff. Soya Garden also partners with online food delivery platforms to keep the chain afloat during the challenging time.

Free trade deals facilitate fruit and vegetable exports: insiders

Free trade agreements are opening the doors for Vietnamese fruit and vegetable firms to increase export revenue this year, according to the Vietnam Fruit & Vegetables Association (VinaFruit).

With the effectiveness of the UK-Vietnam Free Trade Agreement (UKVFTA), more than 94 percent of the 547 tax lines for vegetables, fruits and products from vegetables and fruits will have the tax rate of zero percent.

There will be more market access advantages for many products that are the strengths of Vietnam such as lychee, longan, rambutan, dragon fruit, pineapple and melon in the context of competitors such as Brazil, Thailand, Malaysia, which have no FTAs with the UK on tropical fruits.

Noting that requirements in quality, food safety, quarantine and origin are becoming higher in foreign markets, Nguyen Thanh Binh, VinaFruit Chairman, held that it is necessary to strengthen linkages in all stages from production, processing, storage and selling to connections among localities and regions, creating a sustainable and effective value chain.

He said that localities and businesses should focus on large-scale production and the application of high technology as well as good production practices such as VietGAP and Global GAP, thus increasing the organic percentage in farm produce and providing a large volume of high quality materials for processing and exporting.

Meanwhile, authorised agencies should provide market information and help enhance producers and businesses’ awareness to minimise problems and risks when engaging in fruit and vegetable production and import activities, he said.

Statistics from the Ministry of Agriculture and Rural Development showed that fruit and vegetable exports in the first four months of this year hit 1.35 billion USD, up 9.5 percent year on year.

China was the largest market of Vietnamese fruit and vegetable products in the first quarter of 2021 with 64.7 percent of the market share.

From the beginning of 2021, Vietnam has increased exports to other potential markets such as Egypt, Kuwait, Ukraine and Senegal. Particularly, fruit and vegetable export revenue to Ukraine rose 7 times in the period, making it a promising market in this year and beyond./.

Vietnam’s rubber export value sees surge in four months

Vietnam exported 486,000 tonnes of rubbers worth 817 million USD in the first four months of 2021, up 79.6 percent in volume and 111.6 percent in value compared to the same period last year, according to the Ministry of Agriculture and Rural Development.

In April alone, the country shipped an estimated 80,000 tonnes of rubber abroad, earning 143 million USD.

China, India and the US were the largest importers of Vietnamese rubber in the first three months of the year, accounting for 64.2 percent, 5.1 percent, and 2.7 percent of Vietnam’s total export volume.

The export price of rubber reached averagely 1,660 USD per tonne in the first three months of the year, up 14.1 percent year-on-year.

Vietnam has the fifth largest rubber cultivation area in the world, but its output ranked third, only after Thailand and Indonesia.

It has exported mainly raw material of latex, accounting for about 78.4 percent. The rest (21.6 percent) has been processed products such as tires, gloves, accessories and soles of shoes./.

Belgian firm joins domestic waste treatment project in Dong Nai

The Belgian-base multinational conglomerate Menart is cooperating with the Vietnamese industrial developer Sonadezi Corporation to build a waste treatment plant in the southern province of Dong Nai’s Vinh Cuu district.

The 7.1ha plant, which turns waste into compost, was put into a trial run last year. Located at an area for domestic and industrial waste treatment in Vinh Cuu’s Vinh Tan commune, it has a daily capacity of treating 450 tonnes of waste and can operate 8 hours a day.

About 80 percent of the organic waste received will be treated as compost, while about 5 percent of plastic bags are recovered, recycled, and reused.

Menart is in charge of supplying equipment for the project and works are underway to complete the waste sorting and composting equipment, among others, serving the operation expansion of the plant. Menart equipment for the project is made in Vietnam and Belgium, with the Belgian company sending its experts to Vietnam to study the local conditions.

Menart General Director Berengere Menart said she is confident in cooperation with Vietnam in the field, affirming her wish for further technology transfer collaboration with Vietnamese partners in environment and agriculture.

Founded in 1961 with a focus on designing and manufacturing composting machines and waste sorting plants, Menart is now operating across 60 countries in Asia, Europe, Africa, and America.

The company has worked in Vietnam since the late 1990s and provided waste treatment equipment for plants in Dong Nai, Soc Trang, Kon Tum, Ha Tinh, Thai Nguyen, and Ha Nam./.

Domestic real estate market continues to see rosy signs

Vietnam now has 1,733 real estate firms, up 27.1 percent from the corresponding time last year, according to the Ministry of Construction.

The ministry said the real estate market has shown signs of recovery since late 2020, as reflected through higher transactions and prices.

The number of enterprises that suspended operation stands at only 694, it added.

In the first months of 2021, many major firms have stepped up operation, such as Vingroup with a strategy to build 25 commercial centres and Phu Long Real Estate JSC with high-end apartment building and marine resort projects.

It is forecast that the supply will increase this year as businesses are stepping up investments./.

HCM City: Over 11,000 customers access loans from bank – business connection programme

Some 11,339 customers in Ho Chi Minh City were provided loans worth a total of nearly 98 trillion VND (4.25 billion USD) in the first four months of this year within the framework of bank – business connection programmes.

According to the State Bank of Vietnam’s HCM City branch, municipal authorities have stepped up the implementation of the programme to make it easier for businesses and business households to access capital and low-interest credit policies.

In March, 115 customers in the districts of Cu Chi, Hoc Mon, Can Gio, Binh Chanh, and Nha Be were supported in borrowing a total of 582 billion VND within a similar programme.

Previously, 11 banks in the city registered to participate in a business support credit package in 2021, with capital of over 312 trillion VND. The credit package will be provided at a maximum interest rate of 4.5 percent per annum for short-term loans in VND and around 9 percent per annum for medium and long-term loans.

In addition, when participating in the bank – business connection programme, enterprises will enjoy other support such as reductions in interest rates on old loans, an increase in loan limits, and restructuring of debt terms./.

VIETNAM BUSINESS NEWS MAY 14

Measures put in place to bolster agricultural product exports

As the production and consumption of agricultural products may face certain difficulties from COVID-19, particularly near the harvest season, the Ministry of Agriculture and Rural Development has asked relevant agencies to keep a close watch on the situation and offer timely support to farmers and exporters.

The Plant Protection Department has been urged to keep track of and update plant protection bureaus on changes in China’s phytosanitary regulations to avoid congestion at border gates, while supporting localities to enhance their exports to China, Japan, and the US.

Meanwhile, the Agro Processing and Market Development Authority has been asked to hold meetings with localities and businesses to discuss measures to boost the production and consumption of lychees, longans, and other fruits and vegetables on the domestic market.

It will also hold online conferences with trade counsellors and head of the Vietnamese trade office in China to outline plans to export agricultural products to the country.

And the National Agro-Forestry-Fisheries Quality Assurance Department has been requested to identify feasible measures to ensure the smooth distribution of goods, in particular materials for agricultural production in pandemic-hit localities.

According to the Plant Protection Department, many localities have already made contact to complete procedures for shipments to China, Japan, and the US.

Production unit codes and packaging facilities have been completed in all localities, helping them be ready to ship lychees abroad.

Hoang Trung, Director of the Plant Protection Department, said that the department has asked members to create the best conditions possible for quarantine work, and has joined hands with China’s phytosanitary administration to ensure custom clearance procedures are conducted quickly./.

German firms optimistic about Vietnam’s economy

German firms have expressed their optimism about Vietnam’s economy in both mid-and long terms in a recent survey released by the Association of German Chambers of Industry and Commerce (DIHK) on May 12.

According to the survey, 66 percent of respondents said Vietnam’s economy will see significant improvements this year, as compared with only 46 percent recorded last year.

One third of them held that the economy will recover in the first half of this year, and 30 percent believed that the recovery will begin in 2022.

More than half of the firms said their business in Vietnam is running smoothly, while only 11 percent have experienced lower revenue.

Besides, 47 percent of the enterprises intend to expand their business in the country and half of them will recruit more employees in 2021 and 2022. Notably, 67 percent expect to diversify their supply chains by seeking new suppliers, change logistics goods transportation routes or increase their stockpile.

However, the survey unveiled that a shortage of skilled labourers and declining consumption have remained the biggest challenges for German firms in Vietnam, with up to 42 percent of them said they are meeting difficulties in employing high quality personnel, up from 18 percent last year.

Other issues regarding economic policy, financial approach, legal safety and infrastructure, plus border closure, consumption decline and the cancellation of exhibitions and trade events due to COVID-19 have also significantly affected their business.

The survey outcomes have demonstrated the efficiency of the Vietnamese Government’s drastic policies and guidelines to fight the pandemic and reboot the national economy.

The Government has created optimal conditions for foreign investors and enterprises to operate in the country.

The implementation of the EU-Vietnam Free Trade Agreement (EVFTA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is expected to raise the country’s GDP by 3.2 percent for 2021-2030./.

Viglacera targets over 43 mln USD in consolidated 2021 pre-tax profit

Vietnam’s leading ceramic and tile producer Viglacera has set a target of posting 750 billion VND in pre-tax profit at its parent company this year and 1 trillion VND (43.27 million USD) in consolidated pre-tax profit, increases of 2 percent and 19 percent, respectively, against 2020.

The company also expects to earn 12 trillion VND in consolidated revenue, up 27 percent, and pay a dividend of 12 percent. It will continue to inject investment capital into two main fields – real estate and construction materials.

According to deputy director general Nguyen Anh Tuan, the company continues investing in infrastructure development and supporting utilities and services at industrial parks while developing social housing, worker housing, commercial properties, and leisure real estate.

In the field of construction materials, it plans to focus on manufacturing high-quality, value-added, and environmentally-friendly products and developing new product lines in keeping with market trends and customer tastes. It will divest from clay brick-manufacturing units posting poor business performance.

In the opening four months of this year, Viglacera’s consolidated profit reached 55 percent of the annual plan and was 91 percent higher than the figure in the same period last year.

It recorded total consolidated profit of 841 billion VND in 2020 and 736 billion VND for the parent company, 12 percent and 23 percent, respectively, higher than the annual target. Consolidated revenue stood at 9.43 trillion VND, exceeding the annual target by 14 percent.

Last month, it won the World Class Award in the 2019-2020 Global Performance Excellence Awards (GPEA), hosted by the Asia-Pacific Quality Organisation.

It was the only Vietnamese company to receive the “World Class” title in the large-scale production category at the 2019-2020 GPEA, which is the only formal international recognition of performance and business excellence.

The award is recognition of a corporation’s reputation and leading position in the field of construction material production and real estate investment and business./.

VAMA members see slight fall in April car sales

Members of the Vietnam Automobile Manufacturers’ Association (VAMA) sold 30,065 vehicles in April, down 3 percent month-on-month.

Sales included 20,398 passenger cars, down 3 percent against March, 8,887 commercial vehicles, down 6 percent, and 780 special-purpose vehicles, up 26 percent, the association said on May 12.

The number of domestically-assembled vehicles and imported completely-built-up units sold in April stood at 17,341 and 12,724, respectively, down 1 percent and 8 percent.

Hyundai topped the list of best-selling brands, followed by Toyota, Kia, Ford, Mazda, and Honda.

VAMA members’ sales totalled 101,309 units in the first four months of this year, including 71,524 passenger cars (up 55 percent year-on-year), 27,914 commercial vehicles (up 66 percent), and 1,871 special-purpose vehicles (up 51 percent).

Apart from VAMA members, other carmakers are also present in Vietnam’s auto market, such as Audi, Jaguar Land Rover, Mercedes-Benz, Subaru, Volkswagen, and Volvo, but they have not posted their business results./.

Da Nang looking to attract more Singaporean investment

An online workshop to promote investment from Singapore to the central city of Da Nang took place on May 12, offering a chance for the city to introduce its potential and strengths and seek partners.

The workshop was jointly held by the municipal People’s Committee, the Singapore Business Federation (SBF), the Asia Competitiveness Institute (ACI) under the Lee Kuan Yew Public Policy School (LKYSPP) – Singaporean National University, and the Vietnamese Embassy in Singapore, attracting the participation of representatives from nearly 300 Singaporean enterprises.

Minister Counsellor of the Embassy Le Cong Dung highlighted the increasingly fruitful development of diplomatic and economic relations between Vietnam and Singapore over the past 48 years, especially since the two countries lifted their ties to a Strategic Partnership in 2013.

The international community has evaluated both as two of the most successful countries in fighting the COVID-19 pandemic and posting positive achievements in economic development, he said.

Associate Professor. Dr. Vu Minh Khuong from the LKYSPP and member of the Vietnamese Prime Minister’s Economic Advisory Group for the 2016-2021 term, reviewed economic cooperation activities between Vietnam and Singapore and affirmed that Singapore has always been a reliable partner.

He also touched on the advantages and disadvantages as well as the prospects for economic cooperation between the two countries in general and between Da Nang and Singapore in particular.

A representative from Surbana Jurong, which is the consultant on adjustments to the master planning for Da Nang city to 2030 and vision to 2045, introduced an overview of the plan’s new features.

Douglas Foo, SBF President and Vice Chairman of the Singapore Manufacturing Federation (SMF), said he highly values Da Nang’s business and investment environment as well as its potential, while proposing municipal authorities establish an information centre at the Vietnam Connection Centre at the SMF, to facilitate connections between the city and Singaporean businesses.

Participants at the workshop were updated on the investment and business environment, preferential policies, and investment opportunities in Da Nang in the fields of high technology, information technology, and high-quality services (health, education, and logistics).

Singaporean investors operating in Vietnam also shared their experience in investing in Da Nang.

Singapore is one of the key markets Da Nang is focusing on attracting investment from. The city is currently home to 28 foreign direct investment (FDI) projects from Singapore with total registered capital of over 838.4 million USD, ranking it 2nd among more than 50 investing countries and territories and accounting for about 22 percent of total registered investment.

The country is also one of Vietnam’s most important trade and investment partners. It was the third-largest foreign investor in Vietnam last year, with 248 projects and nearly 13 billion SGD (over 9.7 billion USD) in capital./.

Exports enjoy surge despite latest COVID-19 challenges

Amid increasingly complicated developments relating to the COVID-19 pandemic, Vietnam’s import and export activities during the past four months of the year maintained their growth momentum and recorded the highest growth rate seen over the past decade, according to insiders.

Statistics released by the Ministry of Industry and Trade (MoIT) indicate that total import and export turnover over the four-month period surged by 29.5% to US$206.51 billion compared to the same period from last year, with the country posting a trade surplus of US$1.29 billion.

Most notably, 19 export items recorded an export turnover of over US$1 billion, therefore accounting for 84.5% of the country’s total export turnover, with the United States representing the nation’s largest export market.

Than Duc Viet, deputy general director of Garment 10 Corporation Joint Stock Company (Gament 10), says that despite disruption in the supply source of raw materials and a decline in the number of orders in traditional markets due to the COVID-19 pandemic, the company has pivoted to export other products. This includes selling face masks and protective clothing in an effort to fulfill the set targets for last year and the first quarter of this year.

Le Tien Truong, general director of the Vietnam National Textile and Garment Group (Vinatex), notes that the company has received enough export orders for the first half of the year, especially for the garment and yarn industries.

Moving forward, import and export activities are predicted to continue to prosper in the near future due to the implementation of various free trade agreements (FTAs) in a more comprehensive and effective manner, according to the MoIT.

In particular, it is anticipated that new-generation FTAs ​​will create more favourable conditions in which Vietnamese goods can penetrate partner markets and enjoy preferential tariffs, thereby accelerating export growth as they develop.

Furthermore, as the price of exported goods gradually increases, strong local products will become a key driving force in increasing export value.

Despite this, the MoIT have acknowledged that import and export activities face hurdles due to difficulties relating to the transportation of goods, low market demand, coupled with the high cost of logistics and imported materials. This is alongside changes in terms of trade remedies and food safety regulations which are set by import markets.

Tran Thanh Hai, deputy director of the Import-Export Department under the MoIT, has advised businesses to strictly monitor developments in the global market in order to seize upon export opportunities amid complicated developments of the pandemic.

The US is predicted to see high export growth moving forward, followed by the European market, along with both the African and Oceanian markets, Hai emphasised.

Hai therefore recommends that local firms improve their competitiveness and adaptability to overcome challenges and seize upon these opportunities in the new context, adding that the MoIT will continue to support businesses in providing information relating to the market. They will also make efforts to simplify administrative procedures for local firms whilst organising online trade promotion activities.

Japan permits Vietnamese agency to supervise lychee exports

Japan has officially authorised the nation’s plant quarantine agency to supervise lychee exports to the Japanese market this year, according to details released by the Plant Protection Department.

This move will see the Plant Protection Department send quarantine officers to localities such as Bac Giang and Hai Duong in order to examine and supervise phytosanitary measures for lychees which are destined for the Japanese market.

This comes after the Plant Protection Department inspected and examined two lychee processing facilities for export to the Far East country. In addition to the approved processing establishments in Bac Giang, two additional facilities in Hai Duong will also come under their jurisdiction later this year.

At present all facilities are ready to fumigate and sterilise batches of lychees for export to the Japanese market, while lychee planting areas and packaging facilities are poised to export lychees to various markets globally.

Moving forward, the Plant Protection Department will continue to contact businesses to co-ordinate alongside localities to register growing area codes for export.

As part of efforts to meet the stringent requirements for exporting lychees to Japan, the Bac Giang Department of Agriculture and Rural Development has co-ordinated with various districts to expand lychee growing areas for export to the Japanese market. This includes 30 growing area codes which have an expected harvest date between May 20 and July 10.

To facilitate the export of fresh lychee to the Japanese market during this year, the Department has also proposed that the Plant Protection Department arrange experts to supervise lychee growing areas, the fumigation and sterilization process, along with other phytosanitary measures in Bac Giang province throughout the harvest period.

Hoa Phat leads “one-trillion-dong profit club”

Twenty-two companies have entered the “one-trillion-dong profit club” for January-March, despite the economy being ravaged by the COVID-19 pandemic.

Leading the group is steelmaker Hoa Phat Group (HPG), replacing the former champion of Q1 last year – residential real estate firm Vinhomes JSC (VHM).

Hoa Phat Group (HPG), for the first time, surpassed many other local large corporations such as Vinhomes (VHM), Vietcombank (VCB) and VietinBank (CTG) with more than VND7 trillion (US$302.9 million) in post-tax profit in the first quarter of 2021, tripling the profit achieved in the first quarter of last year.

This is also the 7th consecutive quarter that Hoa Phat has witnessed profit growth compared to the previous quarter. HPG share prices have also increased strongly by 52 per cent since the beginning of 2021.

Hoa Phat was followed by Vietcombank (VCB) and VietinBank (CTG). Vinhomes, after many quarters of being in the top position, suddenly slid to 4th place with VND5.48 trillion in post-tax profit, down 28 per cent year-on-year.

Banks still accounted for the largest proportion in the club. From the first quarter of this year, the banking sector contributed 12 names. Many of them didn’t appear in the first quarter of last year.

In the banking group, the winner of Q1 this year was Vietcombank (VCB) with more than VND6.9 trillion in post-tax profit, climbing over 65 per cent compared to Q1 last year.

VietinBank (CTG) ranked second in the banking group with VND6.47 trillion in post-tax profit, up 169 per cent year-on-year. TechcomBank ranked third with VND4.48 trillion, more than doubling the figure of the same period last year.

Compared to the first quarter of last year, there were four new banks joining the “one-trillion-dong profit club”, including Vietnam International Bank (VIB) with VND1.45 trillion in profit after tax, an increase of 68 per cent year-on-year, and Ha Noi-Sai Gon Bank (SHB) with VND1.33 trillion in post-tax profit, an increase of 116 per cent compared to Q1, 2020.

TienphongBank (TPB) reported a 40.6 per cent increase in profit, reaching VND1.14 trillion. Ocean Bank (OCB) reported VND1.01 trillion, while in the same period last year, after-tax profit was VND886 billion.

In terms of ordinal numbers, the first quarter of this year witnessed many changes in the banking group.

VietcomBank still maintained the first position, but the second position was taken by Vietinbank (CTG) this year after Techcombank (TCB) held it last year.

Despite the impact of the COVID-19 pandemic, the banking sector saw strong growth in profits, of which the strongest increase belonged to ViettinBank (CTG) with a growth rate of 169 per cent. It was followed by Sai Gon-Ha Noi Bank (SHB) with 116 per cent and Military Bank (MBB) with 100 per cent.

On the stock market, Techcombank (TCB) shares rose 49 per cent from the beginning of the year, VPBank (VPB) increased 89 per cent, VIBank (VIB) gained 81 per cent, Asia Commercial Bank (ACB) rose 28 per cent and Sai Gon-Ha Noi Bank (SHB) was up 58 per cent.

There were also other familiar names that were regularly present in this prestigious club, including dairy company Vinamilk (VNM) with nearly VND2.6 trillion in after-tax profit, down 6 per cent year-on-year, PVGas (GAS) recording a profit after tax of more than VND2 trillion, down 12 per cent compared to last year.

IT company FPT and mobile retailer Mobile World Group (MWG) also joined the club. MWG gained VND1.3 trillion in after-tax profit, up 18 per cent year-on-year, while FPT reported a profit of VND1.15 trillion, up 23 per cent.

The rubber industry witnessed the participation of one member – the Vietnam Rubber Group (GVR) with VND1.21 trillion of post-tax profit, 3.6 times higher than the profit achieved in the first quarter of last year.

Engine and Construction Machinery Corporation (VEAM) announced a profit of VND1.45 trillion, up 9 per cent. Most of VEAM’s profits come from its associates.

BInh Son Petrochemical Refinery (BSR) was among the most notable names. While it reported a loss of more than VND2.35 trillion in Q1 last year, it earned a profit of VND1.85 trillion in Q1 this year. This was also the 5th quarter in a row that Binh Son Refinery’s profit grew compared to the previous quarters. 

Credit institutions asked to tighten loans in “overheating” sectors: SBV

The State Bank of Vietnam (SBV) has requested local credit institutions and foreign banks’ restrict lending concentration for real estate and construction, Build-Operate-Transfer (BOT) and the consumption sector.

After an investigation, potential risks have been found in several credit institutions that have provided lending to investment and trading in real estate and/or securities, according to SBV.

It reports that non-performing loan ratios of some credit institutions are higher than previous years.

The credit for the real estate sector accounts for a large ratio in the non-performing loans. Investment in corporate bonds for the use of real estate development and trading also accounts for a high proportion of loans.

The State Bank requires all credit institutions to strictly oversee loan use purpose and the disbursement of credit for large-scale real estate projects. In addition, commercial banks must strengthen supervision and risk prevention measures. They are asked to carefully consider providing loans for real estate projects in “overheating” areas with potentially high risks.

Regarding lending for the needs of daily life, the SBV asks all credit institutions to carefully review those who are eligible for loans to avoid creating risks and strengthen supervision of the use of loans.

Credit institutions must also arrange capital sources to offer borrowers for the demands of their daily life and monitor lending quality for consumption purposes and strengthen activities of internal audits.

Concerning lending for securities, commercial banks must control the growth rate of outstanding loans for securities investment and trading to avoid risks. Banks are required to comply with regulations on credit granting criteria and trading of shares, corporate bonds and other related legal regulations.

For Build-Operate-Transfer (BOT) and Build-Transfer (BT) projects, credit institutions must balance their capital flow and use loans for medium and long-term projects to limit liquidity risks and continue to strictly comply with the instructions of the SBV.

The State Bank also requires credit institutions strengthen inspections and supervision of the use of loans and corporate bond issuance to ensure the proper use of investment capital and regularly monitor and uncover any unusual signs.

The State Bank is asking commercial banks to continue improving credit quality and actively handle bad debts and implement classification of assets, levels and method of setting up of risk provisions, and use of provisions against credit risks in the banking activity of credit institutions, and foreign banks.

THACO exports of semi-trailers to US market gather steam

Vietnamese conglomerate THACO shipped another 50 semi-trailers to the US earlier this month, its second batch to the market after a first comprising 69 units in 2020.

THACO expects exports this year to the US to be five times last year’s number.

In February last year, it signed a memorandum of understanding for manufacturing and distributing semi-trailers with PITTS Enterprises, one of the 15 largest manufacturers of the product in the US.

Dorsey Intermodal, a subsidiary of PITTS, is THACO’s representative in the US, and distributes and warrants its products and provides it with technical advisory and components.

After the first shipment found acceptance among customers, THACO and Dorsey signed larger contracts in 2021. But this year logistics difficulties due to the impact of the Covid-19 pandemic have delayed exports by many months.

THACO now expects to export 475 units in June and the third and fourth quarters.

According to Dorsey, the tie-up with THACO has helped the company increase supply capacity, diversify sources of supply and further meet customer needs.

Besides the US, Asia is a potential market that THACO targets, especially Japan, Thailand and Myanmar, with more than 100 trailers expected to be exported to these market this year, bringing the total export volume of semi-trailers to the US and Asia in 2021 to 630 products.

The export of semi-trailers is considered a great success for THACO, which has also been exporting cars of all kinds and spare parts (exports worth nearly 50 million USD last year).

THACO makes a range of semi-trailers that meet the specialized requirements of each partner, with the main products including 20 feet slider semi-trailers, 40-feet gooseneck semi-trailers, and flatbed semi-trailers.

They have all been certified as eligible to operate in traffic in the US, Japan and ASEAN countries. Besides, with semi-trailers from Vietnam not taxed, the company has a huge competitive advantage and opportunity to penetrate deeply into the US market as well as the chance to participate in the global supply chain.

THACO Special Vehicles Manufacturing Limited Company, or THACO SV, invests in upgrading technologies and machinery and equipment to expand its production capacity. It also studies the characteristics and needs of each market, quality standards and conditions so that its products can participate in their traffic as a basis for its R&D activities and feasible exports.

In addition to enhancing exports of semi-trailers, THACO is planning to export more than 1,500 vehicles of various kinds (including Kia cars, buses and trucks) to its existing markets in 2021, and enter new markets in Africa, West Asia, South Asia, and Australia./.

Conference to promote Hai Duong’s lychee set for May 18

The People’s Committee of the northern province of Hai Duong will organise a conference on May 18 to promote local lychee and other agricultural products. 

Organised in coordination with the Ministry of Industry and Trade and relevant agencies, the conference will be held both online and in-person and be connected to sites at home and abroad such as the UK, Australia, Belgium, Germany, the Netherlands, the Republic of Korea (RoK), Hong Kong (China), the US, Japan, France, Singapore, and China. 

Participants will look at the production and consumption of lychee and other agricultural products in Hai Duong last year and orientations and forecasts for this year. 

Representatives from management agencies and scientists from major markets will also brief the conference on demand in and the requirements set by these export markets. 

Notably, representatives from major e-commerce platforms like Alibaba and Lazada as well as VinCommerce – the owner of the largest Vietnamese retail chain – and other businesses and processors will discuss cooperation opportunities. 

There will also be a ceremony to kick-off a programme promoting Hai Duong lychee and other agricultural products on e-commerce platforms, and a signing ceremony for cooperation agreements between Hai Duong and Alibaba and Lazada. 

Lychee and a number of other agricultural products in Hai Duong are to be harvested soon. The province has 9,186 ha of lychee this year, of which 1,000 ha have been granted VietGap certification and 50 ha GlobalGap certification. 

Thanh Ha district, dubbed as the “lychee capital” of Hai Duong, has 3,328 ha of the fruit with total output estimated at 50,000-55,000 tonnes. Some 155 ha have received area codes for export to the US, Australia, the EU, Japan, and Singapore./.

HCM City: Retail market benefitting from many growth drivers

An influx of foreign investment, the rise of e-commerce, and the sound containment of COVID-19 are believed to have driven growth in Ho Chi Minh City’s retail sector despite the considerable impact of the pandemic, according to the Cong Thuong (Industry & Trade) newspaper.

Total retail and service revenue in the southern economic hub has bounced back compared to the same period last year, though has yet to return to pre-pandemic levels.

The city recorded more than 366.23 trillion VND (15.8 billion USD) in total retail and service revenue between January and April, up 7.9 percent year-on-year. Retail sales of key commodities such as food, garments, household appliances, and automobiles rose some 10 percent year-on-year.

Despite certain difficulties regarding space supply, its stable and diverse retail network and booming e-commerce have become growth drivers for the service sector in the city and the country as a whole.

Tu Thi Hong An, Director of Commercial Leasing at Savills Vietnam, said the pandemic has created numerous difficulties for retailers, noting that a number of businesses have been forced to shut down or scale down their operations, but added that this is normal.

However, she went on, HCM City’s retail market is seeing a steady inflow of foreign investment, with several food and fashion chains opening new outlets, indicating that international brands have spotted the potential Vietnam’s retail market possesses.

In early March, Uniqlo opened its fourth shop in HCM City, at the Van Hanh Mall in District 10, while Decathlon opened its second store at the Thao Dien Mega Mall in Thu Duc city. Other international fashion brands, from the mid- to high-end segments, such as Balenciaga and Tiffany & Co, are also planning to make inroads into Vietnam, the newspaper reported.

An predicted that in the time ahead, clothing and accessory brands will continue to be the main lessees of retail space at shopping centres in the city’s outlying areas. In populous areas, meanwhile, food and convenience stores are expected to develop further.

Total retail sales will continue to rise as more e-commerce and international brands enter the market, she added.

Echoing this view, Lai Viet Anh, Deputy Director of the Vietnam E-Commerce and Digital Economy Agency at the Ministry of Industry and Trade, said the ongoing growth in e-commerce will continue to support the retail market, especially in major cities like Hanoi and HCM City.

With 67.6 points, HCM City retained its leading position in the Vietnam E-Business Index 2021, released by the Vietnam E-Commerce Association (VECOM), followed by Hanoi with 55.7 points.

The Trading Economics platform, meanwhile, forecast that retail sales in Vietnam will grow 11 percent this year, outpacing other Southeast Asian countries, and household spending up 9.6 percent, which will contribute to growth in the retail market./.

HCM City budget collections bounce back

Ho Chi Minh City brought in more than 140.3 trillion VND (6.06 billion USD) in budget collections during the January – April period, a 15.76 percent increase year-on-year and fulfilling 30.45 percent of the annual target.

According to Nguyen Thi Hong Ha, director of the municipal Department of Finance, the figure comprised close to 101.49 trillion VND in domestic collection and 38.8 trillion VND in taxes from import-export activities, up 14.47 percent and 19.39 percent, respectively.

The department attributed the growth amid COVID-19 to the prompt local implementation of Government policies such as exemptions, reductions, and extensions on tax payments, debt restructuring, and loan interest rate exemptions and reductions. Such policies helped taxpayers address the difficulties they were facing over the closing months of 2020 and recover their production and business, which enabled a recovery this year.

Rising consumption demand also contributed to the higher figure, it added.

Echoing this view, Le Duy Minh, head of the municipal tax department, said the recovery in budget collections was the result of prompt local assistance to businesses and taxpayers.

In the first three months of this year, collections of special consumption tax rose 18.9 percent year-on-year, with beer and wine posting volume and value increases thanks to rising demand during the Lunar New Year holiday in mid-February. Sales of motor vehicles of less than 24 seats manufactured and assembled in Vietnam also rose due to the positive impact of a policy last year on reducing registration fees by 50 percent until December 31.

Land use fees unexpectedly soared 86.79 percent under the impact of Decree No 79/2019 concerning land use levy collections, which put limits on who owes such a levy.

Despite the recent growth seen in e-commerce, related collections are facing challenges from tax avoidance.

At a recent conference, Nguyen Thanh Phong, Chairman of the HCM City People’s Committee, acknowledged that the e-commerce industry is developing too quickly and that State management has yet to keep up with its pace of development, and this is the main cause of related tax losses./.

Credit institutions asked to tighten loans in “overheating” sectors: SBV

The State Bank of Vietnam (SBV) has requested local credit institutions and foreign banks’ restrict lending concentration for real estate and construction and consumption sectors, and Build-Operate-Transfer (BOT) projects.

After an investigation, potential risks have been found in several credit institutions that have provided lending to investment and trading in real estate and/or securities, according to the SBV.

It reports that non-performing loan ratios of some credit institutions are higher than previous years.

The credit for the real estate sector accounts for a large ratio in the non-performing loans. Investment in corporate bonds for the use of real estate development and trading also accounts for a high proportion of loans.

The State Bank requires all credit institutions to strictly oversee loan use purpose and the disbursement of credit for large-scale real estate projects. In addition, commercial banks must strengthen supervision and risk prevention measures. They are asked to carefully consider providing loans for real estate projects in “overheating” areas with potentially high risks.

Regarding lending for the needs of daily life, the SBV asks all credit institutions to carefully review those who are eligible for loans to avoid creating risks and strengthen supervision of the use of loans.

Credit institutions must also arrange capital sources to offer borrowers for the demands of their daily life and monitor lending quality for consumption purposes and strengthen activities of internal audits.

Concerning lending for securities, commercial banks must control the growth rate of outstanding loans for securities investment and trading to avoid risks. Banks are required to comply with regulations on credit granting criteria and trading of shares, corporate bonds and other related legal regulations.

For Build-Operate-Transfer (BOT) and Build-Transfer (BT) projects, credit institutions must balance their capital flow and use loans for medium and long-term projects to limit liquidity risks and continue to strictly comply with the instructions of the SBV.

The State Bank also requires credit institutions strengthen inspections and supervision of the use of loans and corporate bond issuance to ensure the proper use of investment capital and regularly monitor and uncover any unusual signs.

It is asking commercial banks to continue improving credit quality and actively handle bad debts and implement classification of assets, levels and method of setting up of risk provisions, and use of provisions against credit risks in the banking activity of credit institutions, and foreign banks./.

Hai Duong to host teleconference to promote Thanh Ha lychee consumption

The Ministry of Industry and Trade are set to join with the Hai Duong People’s Committee to co-host a teleconference on May 18 aimed at promoting the consumption of Thanh Ha lychees and various other typical agricultural products from the province.

The purpose of the teleconference is to connect with potential buyers across hundreds of locations in the UK, Australia, Belgium, Germany, the Netherlands, the Republic of Korea, Hong Kong (China), the United States, Japan, France, Singapore, and China.

It is anticipated that event will attract the participation of numerous representatives from relevant ministries, businesses, Vietnamese trade offices based abroad, foreign importers, major e-commerce platforms, international representative agencies, along with various foreign embassies.

During the course of the occasion, relevant stakeholders will be given the opportunity to discuss the sustainable development of consumption markets and value chains for Thanh Ha lychees and other typical farm produce from Hai Duong province.

Furthermore, representatives of management agencies and scientists will share practical information relating to market requirements and import demand for lychees originating from Hai Duong province.

Moreover, representatives of large e-commerce platforms such as Alibaba, Lazada, Vincommerce’s supermarket chain, and other businesses will have a chance to share prospects ahead for co-operation when introducing the locality’s lychees and agricultural products both domestic and international markets.

Most notably, participants at the function are expected to witness a ceremony which will launch a scheme that hopes to bring Hai Duong lychees and other agricultural products to e-commerce platforms.

Experts have expressed their confidence that local firms will enjoy preferential tariffs due to the nation’s participation in several new-generation free trade agreements (FTAs), such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Vietnam Free Trade Agreement – EU (EVFTA).

Despite gaining entry to several significant markets, the implementation of these FTAs will see local firms face technical barriers and other requirements regarding product quality and design.

Thanh Ha district is now home to 17 lychee growing areas which have been granted planting area codes for export to other markets, such as the US, Australia, the EU, Japan, and Singapore.

Cassava exports rise sharply, prices surge

Exports of cassava and cassava-based products were estimated to be worth US$443 million in the first four months of the year, a year on-year increase of 23.9 per cent, according to the Agro Processing and Market Development Authority.

China was the biggest buyer, importing them to produce feed and ethanol.

Export prices are expected to remain high due to falling supply and high demand from China.

In the domestic market, cassava prices have reached VND3,400 per kilogramme, the highest in many years, which has encouraged farmers to take better care of their crops.

Nguyen Dinh Xuan, director of the Department of Agriculture and Rural Development of Tay Ninh Province, which has the largest area under cassava in the country, said at current prices farmers could earn over VND70 million (US$3,030) per hectare per crop.

Last year the province harvested over 3.7 million tonnes, he said.

In the 2020-21 crop it has 33,340ha under the crop.

Tay Ninh has 65 factories that process cassava starch with a total annual capacity of 6.4 million tonnes of tubers.

With local supply of cassava unable to meet their demand, they import from Cambodia or buy from other provinces, Xuan added.

In Gia Lai Province, fresh cassava has fetched high prices this year. The Gia Lai Tapioca Starch Factory, for instance, buys from farmers at VND3,100 per kilogramme, VND1,000 higher than a year ago.

Cassava is one of the main crops in Gia Lai, with 13,000ha under it, mainly in the east and south-east.

Quang Ngai Province has more than 16,000ha under cassava and produced more than 311,000 tonnes last year, according to its Department of Cultivation and Plant Protection.

Farmers have planted more than 14,200ha, but more than 2,400ha are infected with leaf mosaic disease, it said.

Meagre profits for some lead to longer-term hopes

Vietnam witnessed a growth of import-export activities in the first four months of 2021, hitting a 10-year record high despite the pandemic, but profits have been eaten away by high logistics and raw material costs.

One of the world’s largest producers of basa fish, Vinh Hoan JSC, saw its sales rise in all its major markets in the first quarter of the year, with gross profits hitting $11.8 million, up nearly 27 per cent on-year. However, it posted a 14-per-cent loss in profit after tax despite the gross profit gain.

Company chairman Tran Le Khanh explained that the US market’s consumption is focused on restaurants, while in Europe consumption occurs mostly in supermarkets. Therefore, as restaurants gradually reopen in the US, so do exports. However, Vinh Hoan reported that its profit only amounted to $5.7 million.

According to the General Statistics Office (GSO), Vietnam’s exports reached an on-year increase of nearly 5 per cent to an estimated $103.9 billion in the first four months of this year, in which domestic companies earned $25.76 billion, rising 12.8 per cent on-year and making up 24.8 per cent of the country’s total export earnings. Meanwhile, exports of foreign-invested firms hit $78.14 billion, up 34.4 per cent, taking up 75.2 per cent of Vietnam’s total export turnover.

However, the high costs of logistics due to the shortage of shipping containers and other factors troubles exporting businesses in Vietnam.

The PAN Group reported that its shrimp exports, although seeing revenue increase by 36 per cent, only cashed in for an after-tax profit of $1.34 million, a decrease of 23 per cent on-year. The group expressed concerns about the increase in transportation costs – the main input cost of many enterprises.

Meanwhile, general director of Song Hong Garment JSC Bui Viet Quang said that his company plans to return to growth on 2019 levels this year, based on the recovery of the company’s key customer segments.

According to the latest GSO data, the price of raw materials, fuels, and other means of production in April increased by 0.37 per cent over the previous month and by 4.47 per cent on year. For the agro-forestry-fishery sector, the latter’s increase even amounted to 7.82 per cent. Other sectors like industrial production and construction saw increases of 4.95 and 1.95 per cent, respectively.

According to Ministry of Industry and Trade, amid the pandemic, the lack of empty containers, increasing shipping rates, and the incident at the Suez Canal and related rising transportation costs, Vietnam’s import-export activities since the beginning of the year recorded positive results. However, these factors also mean that profits for many exporting businesses remain meagre.

Nevertheless, equal growth in important export industries like electronics, textiles, machinery, and agriculture in major markets such as the United States, China, the EU, South Korea, Japan, and ASEAN is forecast and may promise higher profits in the long run.

Lenders on course to reach 2021 targets

Favourable legislation from the Vietnamese government, stronger demand for credit, and more affordable cost of capital after policy rate cuts have provided a shot in the arm for banks’ profit.

HDBank recorded a rise of 68 per cent in on-year profit figures for the first quarter of 2021. Photo: Le Toan
Public health challenges have thrown the whole economy into wild gyrations, but banks operating in Vietnam still reported a stellar performance in this first quarter of this year.

As of March, the OCB reported a 15.3-per-cent increase in its pre-tax profit, equivalent to 23 per cent of the whole year’s target. Its total assets reached over VND160.4 trillion ($7 billion), up 5 per cent compared to December.

Trinh Van Tuan, chairman of OCB said, “Our performance last year has been a remarkable milestone in our 5-year-development plan, with total asset increase of 2.4 times, a charter capital increase of 2.73 times, total equity increase of 3.7 times, and profit increase of nine times.” Tuan added that prime focus will be specifically placed on retail banking, priority banking services, and digitally-led products. “We aspire to rise higher in the sector and aim to be among the top five privately-held commercial lenders in Vietnam,” Tuan told VIR.

Another Ho Chi Minh City-based lender, HDBank, recorded VND2.1 trillion ($91.3 million) in net profit in the first quarter, up more than 68 per cent on-year.

Some major state-backed lenders also reported strong performance. Vietcombank has steadily led the way for years, with the bank garnering net profit of over VND10 trillion ($438 million) in the first quarter, up 12 per cent on year.

According to fresh data from FiinGroup – a provider of financial data and business information, 19 out of 27 listed banks have released their quarter financial report, with their average profit after tax increasing 86.7 per cent on-year, whilst their revenue recorded an increase of 30.2 per cent on-year.

The driving force for these figures mainly comes from the bank’s better net interest margin, coupled with income from diversified services and reduced provision cost.

A total of 16 out of 19 listed banks noted that their average profit after tax is expected to increase by 24 per cent on-year in 2021. In the first quarter alone, local banks have completed 31 per cent of their after-tax profit plans on average for the year.

On April 2, the State Bank of Vietnam (SBV) officially promulgated Circular No.03/2021/TT-NHNN, announcing additional conditions for debt restructuring and extending the roadmap for restructuring debts provisions until 2023. Specifically, the SBV enables credit institutions to reschedule debt repayment terms for debts incurring repayment obligations from January 23 to the end of this year.

FiinGroup believed that regulations in Circular 3 have alleviated pressure on lenders’ provision cost. It also stated that banks’ 2021 profit targets are not impossible to reach, as the circular will help banks to avoid provision pressure.

In the same vein, VNDIRECT also believed that Circular 3 will release the pressure regarding provisions for commercial banks over the period of 2021-2023. The SBV also maintains the regulation that the period to restructure the repayment term does not exceed 12 months from the date the credit institution implements the restructuring process.

The debt payment rescheduling will be executed until December 31, which means the deadline for all the restructured debts to expire will be at the end of 2022.

“Regarding debt classification, Circular 3 stipulates that those restructured debt will maintain its debt categories instead of applying general rules for overdue debts,” said Nguyen Thi Phuong Thanh, financial analyst at VNDIRECT.

However, to avoid a “profit shock” at the end of the restructuring period, banks are required to start making provision in accordance with the nature of those outstanding loans, according to Devendra Joshi, equity strategist for ASEAN and Frontier Markets at HSBC. Joshi noted that corporate profitability is increasing as companies recorded higher growth in terms of revenue and profits in the first quarter of this year, up 24.8 and 51.8 per cent on-year, respectively.

Joshi also told VIR, “Banks in Vietnam are benefiting from increasing credit demand from their clients, and the gap between lending and deposit rates also contributes to higher interest rate margins.”

According to Infrastructure Asia, as Vietnam is rapidly moving to the next stage of development, the country is estimated to need around $480 billion for infrastructure development through to 2030.

“Thus, this pressing need for solid infrastructure in Vietnam also acts as an impetus for credit demand. Last but not least, the cheap cost of capital after policy rate cuts in 2020 is also a compelling force buffering lenders’ income,” Joshi emphasised.

“Banking is one of the best performing sectors. Liquidity remains high, putting downward pressure on deposit rates. At the same time, credit growth was up 12.7 per cent on-year in February,” he added.

Strong credit demand and low deposit rates help profitability, and net profit grew 65.1 per cent on-year in the first quarter. The sector is also benefitting from rising return on equity – which was 16.8 per cent in April – a level last seen in 2012. Non-performing loans remained low at 2.1 per cent.

Over 1,300 autos sold each day in April

April alone saw over 1,300 automobiles sold each day, with members of the Vietnam Automobile Manufacturers Association (VAMA) delivering over 1,000 vehicles a day to buyers.

A report released by VAMA on May 12 indicated that over 30,060 cars of all types found buyers in April, down 3% month-on-month and up 155% year-on-year. The numbers of passenger, commercial and special-use vehicles sold were some 20,400, over 8,880 and 780, respectively, down 3% and 6% and up 26% month-on-month.

The number of imported completely-built-up autos sold declined by 8% month-on-month to 12,720 while that of locally assembled vehicles inched down by 1% to 17,340, according to the report.

Among the non-VAMA members, TC Motor, which distributes Hyundai vehicles in the local market, reported sales of some 6,540 vehicles in April, while the consumption of VinFast cars reached some 2,720.

A total of 39,320 vehicles, including cars sold by VAMA members and VinFast and Hyundai autos, found buyers in April, equivalent to over 1,310 cars delivered to customers each day.

In April, the Hyundai Accent car priced at VND425-540 million dominated the local auto market, with sales of 2,150 units, up 56 cars month-on-month, making it the most popular vehicle in a month in 2021 for the first time.

The Toyota Vios came second in consumption, with 1,950 vehicles sold in April, down 20 units month-on-month, followed by VinFast’s Fadil car, with the consumption reaching 1,560 units, up 247 cars month-on-month.

Between January and April, VAMA members sold a total of 101,310 vehicles of all types, while non-VAMA member TC Motor recorded auto sales of 22,424 over the past four months and VinFast delivered 9,566 cars to customers.

Auto traders and experts predicted that due to the resurgence of Covid-19, the local auto market would face several difficulties.

Source: VNA/VNS/VOV/VIR/SGT/Nhan Dan/Hanoitimes

Source: https://vietnamnet.vn/en/business/vietnam-business-news-may-14-734548.html

Business

Phuc Long tea chain to open first US store

Published

on

Phuc Long tea chain to open first US store

An artist’s impression of the first Phuc Long store in California, U.S. Photo courtesy of Phuc Long.


Phuc Long beverage chain will open its first store in the U.S. next month, following in the footsteps of other Vietnamese coffee brands that have branched out to other markets.

The store will be located in Garden Grove, California, the company said in a Facebook post.

Phuc Long has over 80 stores in Vietnam. It had recently signed a deal with conglomerate Masan Group to establish Phuc Long kiosks in over 2,200 VinMart+ conveniences stores.

Last month, TNI King Coffee chain opened its first store inside a mall in California.

Other Vietnamese coffee chains that have branched out to foreign markets include Cong Ca Phe with six stores in South Korea and two in Malaysia, and Trung Nguyen E-Coffee with a store in Laos.

Source: https://e.vnexpress.net/news/business/companies/phuc-long-tea-chain-to-open-first-us-store-4298686.html

Continue Reading

Business

Private enterprises lack internal strength and driving force to develop

Published

on

How will Vietnam overcome challenges to realize its development plans? Nguyen Dinh Cung, former head of Central Institute for Economic Management (CIEM), shares his perspective with VietNamNet.

Private enterprises lack internal strength and driving force to develop

One of the great successes of economic reform in Vietnam since doi moi (renovation) is the establishment of a community of businesses from different economic sectors with many ownership modes. Vietnamese enterprises are operating under similar legal forms as in other market economies.

High in quantity, small in scale

In terms of quantity, enterprises in the private sector account for the overwhelming proportion, 97 percent, while SOEs (state owned enterprises) account for 0.38 percent and FIEs the remaining.

The enterprises employ 16 million workers. The workers in SOEs account for 7 percent, private enterprises nearly 60 percent and 33 percent in FIEs (foreign invested enterprises).

In terms of total assets, SOEs account for 28 percent, private enterprises 53 percent and FIEs 29 percent.

In terms of stockholder equity, SOEs account for 20 percent, non-state owned enterprises 56 percent and FIEs 24 percent.

In terms of net revenue, SOEs account for 14.5 percent, non-state owned 57 percent and FIEs 28.5 percent.

In terms of pre-tax profit, SOEs account for 21 percent. The figures are 36 percent for non-state owned enterprises and 43 percent for FIEs.

If considering financial efficiency, the ROE (return on equity) is 9 percent for SOEs, 4.5 percent for non-state owned enterprises and 15 percent for FIEs. Meanwhile, the profit to sale ratio is 5.6 percent for SOEs and FIEs, while it is just 2.4 percent for non-state enterprises.

The figures show that while private enterprises account for the overwhelming proportion, they mostly have small and micro scale, with very few enterprises having medium scale. They have low technology and low competitiveness.

Lacking inner strength and driving force to develop

This is attributed to several reasons:

First, the ratio of profit to revenue and to assets is too low. Stockholder equity is not high enough for re-investment and development. Therefore, most private enterprises have to rely on working capital from relatives and friends. Only a small part of the enterprises can access bank loans.

Most private enterprises lack capability to innovate and receive technology transfer, and lack the driving force to research, develop and renovate technology. In other words, private enterprises lack inner strength and motivation for development.

Second, one part of private enterprises doesn’t want to expand investment to become large enterprises.

This is attributed to unclear and overlapping laws which can be understood and implemented in different ways by different state management agencies. The bigger that enterprises become and the more business fields they cover, the higher legal risks they face, which may cause big losses or loss of all of their assets that had been created over decades.

While private enterprises account for the overwhelming proportion, they mostly have small and micro scale, with very few enterprises having medium scale. They have low technology and low competitiveness.

In this situation, there is no reliable and effective tool and institution, especially independent courts, capable of protecting their rights and benefits.

Third, another part of private enterprises wants to grow but cannot, because they cannot access resources for investment and development. Surveys have found that capital costs are too high. The inability to get enough capital and access land are the big barriers for private enterprises in this group.

Fourth, some of the hundreds of thousands of private enterprises are crony enterprises. The number of these enterprises is not high if compared with the total number of operating enterprises, but they appropriate significant resources and deprive business opportunities from authentic investors and businesses.

The enterprises of this kind contribute to creating an unfair business environment which lacks transparency; distort the allocation of national resources; and distort the value and constrict the business motivation of genuine businesses.

It is the enterprises of this kind that make it difficult for other enterprises to access resources and business opportunities. This is a major obstacle for the development of private enterprises.

Large private groups vulnerable

Vietnam now has some large-scale private enterprises, called economic groups. There are some similarities and differences between the economic groups and groups in some Asian economies prior to 1979 as follows:

The similarities include investment in multi business fields; reliance on bank loans; lack of transparency in administration and business; and relatively friendly relations with the government. They are big if compared with the size of the economies, and so they are not allowed to collapse.

Regarding differences, some foreign economic groups specialized in manufacturing, developed strong R&D (research and development), and expanded their business across the region and the world. They have had specific products and strong brands. Meanwhile, Vietnamese private economic groups mostly target the domestic market, focusing on real estate and consumer services. They still cannot develop and master technologies in their fields and don’t have global competitiveness.

It is obvious that Vietnam’s private economic groups are not as powerful as Asian private economic groups before 1979, and they are vulnerable. If the businesses collapse, it will take a longer time to recover them and the collapse may cause bigger losses to the national economy.

Therefore, developing the private sector, including economic groups, in a balanced, effective and sustainable manner must be a top priority task in the coming time.

It is necessary to amend unreasonable policies to help private enterprises increase their strength and overcome obstacles so they can feel secure to expand investment for development.

The 13th Party Congress Resolution has set specific goals for Vietnam’s socio-economic development.

By 2025, Vietnam would become a developing country with industry going towards modernization and income surpassing the lower average level.

By 2030, Vietnam would become a developing country with a modern industry and higher than average income.

By 2045, it would become a developed country with high income.

Nguyen Dinh Cung

Source: https://vietnamnet.vn/en/feature/private-enterprises-lack-internal-strength-and-driving-force-to-develop-former-head-of-ciem-748432.html

Continue Reading

Business

Excited but anxious: Hanoi business owners reopen

Published

on


Though they eagerly reopen after being closed for 27 days due to the Covid-19 outbreak, many Hanoi businesses are also worried about changing consumer behaviors.

Closed restaurants inside a shopping mall in Ha Dong District, Hanoi, June 20. Photo by VnExpress/Duc Minh.

Closed restaurants inside a shopping mall in Ha Dong District, Hanoi, June 20. Photo by VnExpress/Duc Minh.

After Hanoi authorities announced that indoor dining and hairdressing can resume on Tuesday, Bui Quang Hung, co-founder of barber shop chain 30Shine, showed his excitement with a post on social media saying, “see you Hanoians on Tuesday morning.”

He said the shops would open from 7.30 a.m. until late night to clear a backlog of almost a month.

“Men have to visit the barber once every three weeks on average because they feel irritated if their hair is one to two centimeters too long.”

There would be two or three times the usual number of customers for two weeks, he said based on his experience from previous waves.

But some other businesses are less hopeful.

Trieu Nguyen Quan, owner of the Goofoo Gelato chain of ice cream shops, does not expect many customers for 10 days after reopening since people are afraid of the pandemic.

Hoang Tung, CEO of fast-food restaurant chain Pizza Home, said the outbreak could cause him to lose a number of customers since people have adopted a new habit of eating at home.

To survive the stop-start nature of their business amid the pandemic, many have sought to improve their business model. Tung said Pizza Home has closed some stores that were not doing well but has expanded into home delivery and apps.

“The restaurants have to operate both online and offline, and must be prepared for the worst, which is closure, amid the pandemic.”

Goofoo Gelato too has managed to pull on thanks to online sales.

Quan said he plans to increase the number of outlets but only after vaccination. He said vaccination is the only way to make him feel secure and the ultimate solution for businesses to open and the economy to revive.

Around 2 percent of the population has received the first shot, and 0.1 percent has received both.

Vietnam has received delivery of around three million vaccine doses so far, and is expected to get over 120 million this year.

It seeks around 150 million in all to cover 70 percent of its population.

Source: https://e.vnexpress.net/news/business/industries/excited-but-anxious-hanoi-business-owners-reopen-4298384.html

Continue Reading

Trending