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BUSINESS IN BRIEF 25/2
Can Tho strives to become
The Mekong Delta city of
It aims to further raise the share of industry and
trade-services in the economy to 48.8 percent and 47.9 percent, respectively,
reducing agriculture’s share to only 3.3 percent, according to
The city will also work towards becoming the socio-economic,
education-training, science-technology, health, culture, and sports centre,
as well as the key domestic and international transport connection, of the
Mekong Delta region, he added.
Chairman of the city’s People’s Committee Le Hung Dung said in
order to realise the goals, the city will focus on measures for intensive
development.
It will improve its investment climate to attract more
domestic and international funding while expanding its connection with
Priority will be given to trade promotion activities to expand
its consumption market both locally and internationally.
Over the past 15 years, the city has made significant
achievements in socio-economic development.
The production value of industry, trade and agro-fishery
reached 181.5 trillion VND (8.4 billion USD) last year, a ten-fold increase
from 2000, raising the annual income per capita to 3,298 USD; the highest
level in the Mekong Delta region, according to Dung.
Director of the municipal Department of Industry and Trade
Nguyen Minh Toai said Can Tho has worked with
As a result, total investment capital of the city exceeded
38.5 trillion VND (1.78 billion USD) with 868 million USD in foreign capital,
166 times that of 15 years ago. Total export values from the city hit 1.35
billion USD, Toai said.
The substantial economic growth has fuelled improvements in
education, healthcare facilities, and other social services, reducing the
local poverty rate to 2.8 percent, down from 11 percent in 2000.
Investment promotion targets specific sectors
The country's investment promotion activities this year will
focus on infrastructure development, support industries, agriculture, and
high-tech industries, according to baodautu.vn.
These activities are expected to make best use of the imminent
free trade agreements (FTAs) and the potential Trans-Pacific Partnership
agreement, the site reported.
Top priority for investment promotion will be given to several
key partners such as Japan, the Republic of Korea (RoK), Taiwan (China) and
Singapore and to European countries such as Spain, Germany, the United
Kingdom and France, as well as Italy, the online newspaper quoted Do Nhat
Hoang, Director of the Ministry of Planning and Investment's Foreign
Investment Agency, as saying.
For
Exploitation of investment opportunities with RoK businesses
after the signing of the Vietnam-RoK FTA, which was slated to be effective as
of the first half of this year, would also be included in these plans, Hoang
told the newspaper.
Attracting investments from small- and medium-sized
enterprises was also a point of focus, besides attracting large-scale groups,
as these firms would make effective contributions toward fostering the
development of domestic support industries, not only through manufacturing
and supplying products for domestic and export markets but also by helping to
bolster local enterprises' capacities via partnerships and business
alliances, he noted.
Statistics from the agency showed that
The RoK led the 60 countries and territories investing in
FDI in
Experts said that licensed projects worth billions of dollars
had so far helped
Footwear sector takes steps into New Year
A successful 2014 and the promise of bigger export
opportunities has given the domestic leather and footwear industry the
confidence to set a 14 billion USD export target for this year.
Phan Thi Thanh Xuan, General Secretary of the Vietnam Leather
and Footwear Association (Lefaso), told Vietnam News that the new target
marks a year-on-year increase of 15 percent.
She said last year was a successful year for the industry,
with its presence in 47 global markets seeing the total leather, footwear and
handbags exports rise 22.5 percent over 2013 to 12.74 billion USD, accounting
for 8.5 percent of the nation's total export turnover.
Impending Free Trade Agreements (FTAs) and the Trans-Pacific
Partnership (TPP) will attract new investments into
"We think the agreements will create remarkable growth in
export turnover in the coming years," Xuan said, explaining that the
ensuing reduction in tariff barriers will make it easier for
When the TPP comes into effect, the current taxes of 3.5 to
57.4 percent will be slashed to zero percent, which will support exporters
looking to expand production and make better products, experts said.
However, in upcoming years, the sector might have to face
stiff competition from
Other experts have also pointed out that when the market
opens, foreign footwear makers will utilise
The US market, which was Vietnam's largest footwear importer
last year, will set up more non-tariff barriers, mainly on product safety
standards, aiming to protect its own sector when the TPP is signed, the Thoi
bao Kinh te Vietnam (Vietnam Economic News) quoted Nguyen Hong Duong,
Deputy Director of the American Market Department under the
Ministry of Industry and Trade (MoIT), as saying.
Duong advised firms to continuously update themselves on policies
and market information so that they can protect themselves better. They
should express their concerns through Lefaso to the Government and seek
solutions, he said.
Leather and footwear exports last year saw a year-on-year
growth in most of its markets. The
Xuan attributed the growth to many leading footwear brands
shifting orders from
Space remains for local retailers in domestic market
Thai billionaire Sirivadhanabhakdi’s retail conglomerate Berli
Jucker last year announced its plan to buy all 19 supermarkets of
In late 2014, the Central Group of
Over the past decade, Vietnamese consumers have also become
familiar with big names from other countries such as Big C from
A survey released in November 2014 by market research firm
Kantar Worldpanel showed that 68 percent of
Chairwoman of the Association of Vietnam Retailers Dinh Thi My
Loan said nearly all FDI businesses have poured their money into modern
retail facilities such as super- and hyper-markets and shopping malls. These
mega-facilities account for just 25 percent of the retail sector, leading to
strong competition between domestic and foreign firms in this channel.
She added that rural areas are a largely untapped market,
though a number of domestic retailers have recently been working to increase
their presence in rural areas.
Meanwhile,
Local businesses such as the Saigon Union of Trading
Cooperatives (Saigon Co-op), the Saigon Trading Group (Satra), and the An
Phong
Investment Joint Stock Company (the owner of Maximark
supermarket chain) are currently dominating the city’s market. They also plan
on spreading their reach to rural areas across
For example, the Saigon Co-op has initiated a plan to extend
its operations with 28 supermarkets in
It has also cooperated with
The General Statistics Office estimated total retail sales and
customer service in 2014 at 2,945 trillion VND (over 140.2 billion USD), an
annual increase of 10.6 percent.
FTAs provide plentiful opportunities for agriculture
An array of free trade agreements (FTAs) coming into effect
this year will open up a wide range of new blindingly bright opportunities
for the agricultural sector leading to improved investment opportunities
along the entire value-chain, reported The Voice of Vietnam (VOV).
A more perplexing dilemma however, is determining the best
business model and strategy to lift agriculture from the production of low
value staple food commodities higher up the value chain to make the best of
the opportunities.
It was not by chance that the 45th World Economic Forum (WEF)
held recently in Davos (
This fact clearly shows the increasingly important role that
food producers and suppliers play and most notably highlight
However, despite being one of the world’s leading
agro-forestry-fishery exporters, Vietnam's agriculture reveals weaknesses—
low value products at cheap prices, inefficient use of land and natural
resources, limited agricultural investment and poor hygiene and food safety.
With the current status of productivity and quality of
agricultural products, Vietnamese farmers and businesses are in a pickle to
take advantage of the coming golden opportunities absent extensive investment
and renovation. Thus, opportunities could be missed and leave
Investors from the
If Vietnamese farmers are off the mark in negotiating these
agreements they could find themselves simply working as farm labour for
foreign investors, or in other words – they will just be employees on their
soil.
In the face of limited agricultural investment, foreign direct
investment (FDI) inflows in agriculture are invaluable. Therefore it is
critically important that these agreements be structured in a manner that
enables local farmers and agro businesses to team up with foreign investors
on an equal partnership basis.
On a positive note, in recent times, a series of big
enterprises across many fields have shifted their investment in the
agricultural sector to large-scale agricultural projects based on high-tech
models which have brought higher efficiency.
The expanding capital inflows into the agricultural sector
show that sufficient resources to restructure the sector are available – it’s
just a matter of sitting down at the negotiating table and working out the
details.
To this end however, businesses need the support of the
government and more incentives to help entice foreign investors to fund land
and infrastructure purchases as well as acquire the necessary technologies to
revamp the agriculture sector.
To call for more agricultural investment, the Vietnam Ministry
of Agriculture and Rural Development (MARD) has been working hand in hand
with multinational groups to implement the public–private-partnership (PPP)
model.
Additionally, the MARD, last year, drafted a strategy for
attracting FDI in the agro- forestry- fisheries sector until 2030 for
submission to the Prime Minister for approval.
Agriculture is the biggest advantage of
Successful restructuring will not only enable Vietnam to
become an agricultural power, but also serve as a promoter of the industry
and service sectors in furtherance of transforming into an industrialised and
modern nation by 2020.
Companies to battle for top talents in 2015
Companies in
The survey showed that employers will have difficulty with
recruitment because of the shortage of candidates resulting from the
availability of job opportunities in multiple sectors. Therefore, firms have
recently turned their focus to attracting Vietnamese professionals working
overseas, giving them an advantage over local candidates.
Jon Whitehead, Country Manager of Robert Walters Vietnam, said
that compared with other countries,
"Their international exposure, diverse skill sets and bilingual
abilities can create a dynamic workforce for
Whitehead noted that there will be more job opportunities in
"The market is not the only thing that I have seen growing
in
Figures from the survey indicate that employees who switched
jobs last year could command an average salary increment of 10-25 percent.
The trend is likely to continue in 2015, mainly in accounting and finance,
human resources, and pharmaceutical sectors.
This year has also seen a rising demand for information
technology specialists in cloud computing, mobility engineering, big data,
business intelligence and information security.
Besides this, there is a rising demand for procurement, supply
chain and engineering professionals due to expansions of factory operations.
Meanwhile, firms tend to hire replacements more often than
they recruit for new roles in the fast-moving consumer goods (FMCG) sector.
Last year,
Vietnam-UK trade slightly decreases in 2014
Trade between
GBP; garments at 373 million GBP; footwear at 362 million GBP;
wood and wooden products at 168 million GBP; computers and spare parts at 117
million GBP; and aquatic products at 101 million GBP.
Automobiles and pharmaceuticals accounted for the majority of
To further develop trade between the two countries in 2015,
the Vietnam Commercial Office suggested domestic stakeholders organise
market-relevant trade promotion events to connect potential partners,
especially at the Vietnam-UK Joint Economic and Trade Commission
(JETCO)’s eighth session to be held in
New free trade agreements are opening up promising avenues for
the Vietnamese business community to expand their operation but also present
numerous challenges, forcing domestic enterprises to take a new approach,
Nhan dan (People) newspaper reported.
The Vietnamese economy experienced a year full of difficulties
and pressures in 2014 but thanks to the efforts of the Government to pursue a
consistent economic regulation policy, figures have revealed a brighter
picture regarding the performance of the Vietnamese economy.
The positive outlook is further underlined by a recent survey
by company data firm Vietnam Report suggesting that only 7.1 percent of
enterprises are pessimistic about their revenues in 2015, compared with 9.1
percent seen in 2013 and 21.9 percent in 2012. So what are the grounds for
such confidence? First and foremost, the optimism comes from their
performance in 2014.
One of the most impressive sets of data is the revenue of
Enterprises’ confidence in their accelerated growth reflects
great opportunities and likely leads to a boom for the Vietnamese economy in
2015.
In the other direction, an economy with promisingly higher
growth will also be the cornerstone for enterprises to fare better in an increasingly
competitive market.
The year of 2015 is anticipated with optimistic forecasts,
particularly open opportunities from international integration.
Former Deputy Prime Minister Vu Khoan emphasised that this
special moment for the Vietnamese economy, when various trade pacts will come
into effect this year, will be a moment that has never been seen before. The
commencement of the ASEAN Economic Community will create a common market with
enormous potential. Enterprises are waiting for the expected opportunities of
a larger market and sharp reduction in input costs, product prices and
intermediary costs when all markets in the regions are unified. The new
appeal of investment destinations in the region has been expected to create a
new hub to attract the world’s investment flows.
And beyond the region, the Trans-Pacific Partnership with
negotiations expected to finalise in 2015, will generate large flows of
commodities and money between continents. Therefore the year of 2015 is
expected to create an unlimited area for development and boundless
opportunities for the Vietnamese business community.
Kangaroo Group President Nguyen Thanh Phuong has been
preparing for opportunities in 2015 for the past several years.
He said when trade barriers are removed, the reduced time for
cargo traffic only is a win for enterprises, especially those exporting to
ASEAN countries.
Phuong added he has seen the future in 2016 when domestic
enterprises make a breakthrough in the ASEAN market with products labelled
Made in
There is a clear trend that if the whole market was to be
viewed as a cake, it would be currently divided into large portions rather
than cut into small pieces. The positive side is that enterprises of a large
enough scale can join the global production and distribution chain in a more
convenient way. But this uneven division has presented a considerable
challenge for the entire business community.
A survey by the Vietnam Chamber of Commerce and Industry shows
that among Vietnamese enterprises currently in operation, large and
medium-sized companies only account for 2 percent respectively, while the
remaining 96 percent are small and extra-small businesses.
The number of extra-small enterprises, defined as having less
than ten employees, accounts for up to two thirds of total enterprises. If
household businesses are included, the percentage of extra-small enterprises
can amount to 99.9 percent.
With such a small scale, there are very few Vietnamese
enterprises capable of taking part in global production networks. Therefore
it is not easy to connect with larger enterprises to share bigger portions of
the cake. Moreover, there is not a whole lot of change to the fact that
enterprises are becoming smaller and smaller.
According to the World Bank’s update on
“Domestic private firms are clearly being impacted by the
constrained access to finance, subdued domestic consumer demand and an uneven
playing field”, Nhan Dan quoted the World Bank as saying.
The above-mentioned shortcomings make it difficult for
domestic enterprises to move up the value chain, creating two groups of
enterprises with separate operations, namely domestic enterprises and foreign
direct investment (FDI) enterprises.
From a comprehensive view, there are increasingly less
opportunities to acquire market share when one of the economy’s greatest
challenges is the decreasing size of enterprises. Looking at it in another
way, the lack of enterprises capable of taking part in the global value chain
has led to the domestic supply chain becoming broken and fragmented. The risk
here is that potential investors will not come to
Nevertheless, instead of taking on a pessimistic outlook for
domestic enterprises, many analysts say that this is the golden moment for
enterprises to shift from the position of dealing with difficulties to
adapting to changes.
Former Deputy Prime Minister Vu Khoan made the comment that
macroeconomic stability plus numerous laws on business activity, investment
environment and market mechanisms coming into effect will force enterprises
to be more proactive in their integration plan rather than simply managing to
work around difficulties such as what happened more than a year ago.
There have been numerous institutional changes in recently
adopted laws with a greater emphasis on the role of market forces. However,
the gap between laws and their implementation remains a formidable barrier to
an improved business climate in
Grape growing contributes to Ninh Thuan’s development
The central
Grapevines cover 3 percent of Ninh Thuan’s farming land and
provide 13 percent of the province’s total agricultural production value.
The local government has taken steps to encourage farmers to
grow grapes along with other plants, establish big vineyards, and apply
advanced technologies as part of the province’s new rural development.
Thanks to the local authorities’ financial and technical
support, Nguyen Van Moi from Phuoc Thuan commune, Ninh Phuoc district, who
has been growing grapes for more than 30 years, now owns big vineyards
providing the market with grapes and grape products.
In addition to a 1.5 ha vineyard that follows
"VietGap represents the current trend of the grape
industry. Once farmers apply the VietGap model, they will no longer suffer
from market fluctuations. Application of the VietGap model protects both
consumers and producers," Moi told VOV.
He has also helped other local households involved in grape
growing to apply the latest planting technologies and find stable outlets for
their products.
Farmers in Ninh Hai district have applied the VietGAP model in
growing grapes since 2014.
Under this model, they receive financial and technical support
to ensure product quality prior to harvest. With this model, their vineyards’
productivity has increased 25 percent, earning them a profit 30 percent
higher. This model also helps them cut costs by replacing fertilisers and
pesticides with compost, which is more efficient and environmentally
friendly.
To promote the high economic values of grapes, the Ninh Thuan
provincial People's Committee approved a plan on safe grape cultivation until
2020. It hopes to have a grape producing area of 2,200ha with an annual yield
of 40,000 tonnes by 2015, and 2,500 ha with an annual yield of 60,000 tonnes
by 2020.
According to Chau Thang Long, Deputy Director of the
provincial Department of Agriculture and Rural Development, to fulfill this
target, the province will continue to expand grape cultivation areas, invest
in new grape varieties, and improve all the old grapevine trellises.
The province will also boost trade promotion of Ninh Thuan
grape products, Long said.
Dong Nai province takes steps to attract Japanese investors
The southern
According to the provincial Department of Planning and
Investment,
Director of the department Bo Ngoc Thu said the capital inflow
from
Between 2011 and 2014, the province attracted 102 new
projects, accounting for 55.7 percent of the total Japanese investment
projects and 37.4 percent of the total FDI projects nationwide. Thus far this
year, it has attracted nearly 1,500 FDI projects from 35 nations and
territories worldwide with a combined capital of 25.5 billion USD.
The substantial increase was attributed to provincial efforts
to improve industrial park and transportation system infrastructure.
Additionally, the province has concentrated on green
production by increasing the proportion of energy-saving and
environmentally-friendly hi-tech and support industries since 2012.
Local authorities have also devoted attention to reforming
administrative formalities, taxes, and customs to improve the investment
climate and focus it towards the one-stop-shop model at the district level,
according to Vice Chairman of the provincial People’s Committee Tran Minh
Phuc.
Jingi Osamu, Chairman of the Daikan Limited Company in Bien
Hoa city, said the local favourable business environment led his company to
plan for future operation expansions.
Dong Nai is now home to 80 training facilities capable of
providing tens of thousands of skilled labourers annually. The province has
also worked to ensure social order and security for businesses and design
specific regulations and incentives to facilitate business operations.
Eateries, coffee shops and supermarkets reopen early
After nearly a week sampling Tet dishes, Nguyen Hong Mai's
family in District 1 decided to return to their familiar eatery for breakfast
on Sunday, the fourth day of the Lunar New Year.
There were no empty seats so they chose another eatery, which
was also full. Finally, they took their seats at a pho eatery in District 5.
Lan, owner of the small shop, had decided to keep her stall
open since the second day of the New Year, and it had been full every day.
Like Lan's shop, many eateries resumed their service from the
second or third day of Tet, with many of them overloaded with customers.
Many coffee shops and restaurants have also been crowded.
Hung, owner of the Milano coffee shop on
He was short of staff as many of his helpers had returned to
their hometown to enjoy Tet, he said.
To meet the purchasing demand of consumers, many supermarkets
have resumed their operations from the second day of the New Year.
Prices of goods at supermarkets remained stable, with fresh
food and vegetables the bestsellers.
Co.opmart stores in
Vo Hoang Anh, marketing director of Saigon Co.op, the owner of
the Co.opmart chain, said the supermarket opened early to meet customers'
demand for fresh foods such as vegetables, seafood, animal and poultry meats.
Prices of commodities were the same as normal days, with beef
ranging from VND150,000 (US$7) to VND300,000 ($14) per kilo, chicken about
VND87,000 ($4) and fish VND30,000-VND120,000 a kilo. Price-stabilised goods
sell for lower than market prices.
Besides offering discounts of 10 to 20 per cent on fresh food,
the supermarket prepared more than 100,000 red envelopes to present to
shoppers from Sunday to today, Anh said.
Cashew crop sets record
This made it the world's top cashew exporter for the ninth
straight year.
The Vietnam Cashew Association (Vinacas) reported that roughly
306,000 tonnes of locally produced cashew kernels were shipped abroad in
2014, generating more than $2 billion and representing an annual increase of
17.4 per cent. Annual revenue grew by 21.9 per cent.
Including the export of by-products, such as shell oil and
other value-added products, total industry revenue reached $2.2 billion,
Vinacas said, noting that the cashew export price averaged $6,553 per tonne
in 2014, up nearly 3.8 per cent from the previous year.
Vietnamese cashew is currently exported to 50 countries.
Thirty per cent of total exports go to the
Domestic enterprises also imported around 700,000 tonnes of
raw cashew to ensure supplies for processing and export, raising the total
volume of processed cashew kernel last year to 1.2 million tonnes, the
association said.
Such high figures make the cashew a staple agricultural export
of
However, Vinacas chairman Nguyen Duc Thanh forecast an array
of difficulties in 2015, such as the depreciation of some foreign currencies
which would probably affect exports,
To further expand markets, Vinacas plans to step up
promotional activities in the
It targets 350,000 tonnes of cashew kernel exports and $2.5
billion in revenue in 2015.
Ta Quang Huyen director of Hoang Son Limited Company in
However, because of currency depreciation in those countries,
this year importers in these markets have ordered less.
Investment promotion targets specific sectors
The country's investment promotion activities this year will
focus on infrastructure development, support industries, agriculture, and
high-tech industries, according to baodautu.vn.
These activities are expected to make best use of the imminent
free trade agreements (FTAs) and the potential Trans-Pacific Partnership
agreement, the site reported.
Top priority for investment promotion will be given to several
key partners such as
For
Exploitation of investment opportunities with South Korean
businesses after the signing of the Viet Nam-South Korea FTA, which was
slated to be effective as of the first half of this year, would also be
included in these plans, Hoang told the newspaper.
Attracting investments from small- and medium-sized
enterprises was also a point of focus, besides attracting large-scale groups,
as these firms would make effective contributions toward fostering the
development of domestic support industries, not only through manufacturing
and supplying products for domestic and export markets but also by helping to
bolster local enterprises' capacities via partnerships and business
alliances, he noted.
Statistics from the agency showed that
FDI in
Experts said that licensed projects worth billions of dollars
had so far helped
Companies draft strategies to increase 2015 earnings
After ending last year on a high note, many listed companies
have started to plan for more profit growth in 2015.
TMT Automobile Company (TMT) expressed high hopes for 2015
that are reflected in its ambitious financial targets. The company expects to
sell nearly 7,900 vehicles this year, almost triple its 2014 sales of over
2,900.
Revenue is also projected to more than double from last year,
rising from VND1.38 trillion (US$64.5 million) to nearly VND3.1 trillion
($144.1 million). Its 2015 net profit prospect climbed from VND62.2 billion
($2.9 million) in 2014 to VND150 billion ($7 million) by this year-end.
Tan Tao Investment Industrial Company (ITA) posted impressive
performance last year with pre-tax profits expected to reach VND108 billion
($5 million), a rise of 20 per cent over its yearly goal. This year, the
company aims to double or triple revenue and profit, in addition to achieving
dividend payouts of 12-15 per cent.
The company has completed negotiations with partners from
HCM City Infrastructure Investment Company (CII) has also
approved its 2015 business plan, which sets a revenue goal of nearly VND3.15
trillion ($147.2 million) and aims for VND462 billion ($21.6 million) in
after-tax profit.
At the end of 2014, the infrastructure developer expected to
earn VND380 billion ($17.8 million) in after-tax profit, surpassing its
yearly target of 63 per cent, and predicted paying at least 20 per cent in
dividends this year.
Imexpharm Corporation (IMP) hiked its 2015 revenue growth by
around 16 per cent, rising from over VND907.5 billion ($42.4 million) to
VND1.05 trillion ($49 million). Its pre-tax profit is expected to hit VND130
billion ($6 million).
Last year, the pharmaceutical company reported net profit of
VND85.5 billion ($4 million), an increase of 41 per cent over the target.
Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR
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Thứ Ba, 24 tháng 2, 2015
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