Yeah1 plans to issue shares to raise charter capital
Multi-channel media group Yeah1 has announced a plan to issue nearly 62.56 million bonus shares at the rate of 200 per cent in 2019.
Each shareholder will receive two new shares for every share he or she already owns. Bonus shares will be available to trade on the stock market after the issuance date.
The share issuance will help Yeah1 triple its charter capital to VND938 billion (US$41.2 million) from its current VND312 billion.
The value of the deal is nearly VND625.6 billion and the share issuance funding is taken from the company’s share premium recorded in its audited financial report for 2018.
As of September 30, Yeah1 had VND1.13 trillion in its share premium and VND73 billion in undistributed post-tax profit.
In the first nine months of the year, Yeah1 recorded VND1.03 trillion in revenue, up 111 per cent over the same period last year, and VND131.2 billion in post-tax profit, up 239 per cent.
Yeah1 listed more than 31 million shares on the Ho Chi Minh Stock Exchange with code YEG starting on June 26, 2018 at VND300,000 per share.
The company shares slumped 4.3 per cent to end Thursday at VND267,000 per share.
ThaiBev’s designs with Sabeco FOL
One of Southeast Asia’s biggest beverage companies will have an opportunity to have a full takeover of Sabeco after the Vietnamese brewery removes the limit on foreign ownership.
Last week the State Securities Commission approved the decision of Sabeco, Vietnam’s leading beer producer, to abolish its foreign ownership limit (FOL), which previously stood at 49 per cent. The green light came a month after Sabeco, whose board members come from Thai Beverage and the Vietnamese Ministry of Industry and Trade (MoIT), expressed their wish to remove restrictions on overseas investors.
According to experts, the decision is likely to pave the way for ThaiBev to buy 100 per cent of Vietnam’s number-one brewery. ThaiBev is already the largest shareholder, following a historic purchase last December that cost the Thai investor a whopping nearly $5 billion. It was reported that ThaiBev had to ask six banks to help it finance this investment.
It is notable that ThaiBev’s holding at Sabeco is not a straightforward matter. Specifically, to dodge the FOL in the company, the company did not register as an overseas bidder last year. Instead, it set up a new subsidiary called Vietnam Beverage and kept its ownership there at 49 per cent so it could join the auction as a Vietnamese entity. This subsidiary then scooped up 53.59 per cent of Sabeco’s outstanding shares on behalf of ThaiBev.
This strategy clearly helped ThaiBev seize control at Sabeco, but it also means that essentially they hold just 26 per cent of Sabeco’s shares – something that a number of experts believe the Thai investor may want to change. Indeed, when asked by analysts about its ownership at Sabeco, representatives replied that the company hoped to announce updates of its holding structure soon.
Besides possibilities of greater control, counting Sabeco as a wholly-owned subsidiary may also boost the business results of ThaiBev. As the MoIT’s cash cow, Sabeco has been known as a lucrative business with consistently strong sales and generous dividends, which can reach 35 per cent in cash.
In fact, according to ThaiBev in last month’s analyst meeting in Singapore, its 2018 beer sales had already spiked by 64.9 per cent year-on-year to THB94.5 billion ($2.88 billion), thanks to contributions from Sabeco. At the same time, pre-tax profit at the Thai company doubled to THB9.3 billion ($282.6 million) also thanks to Sabeco.
Researchers believed that the removal of Sabeco’s FOL is indeed designed to speed up the synchronisation of the two parties. According to Lucas Teng and Andrew Chow from UOB Kay Hian, this is considered a “positive development that allows better management control, as well as tapping into the synergistic benefits of the acquisition.”
According to analysts, Sabeco faces competition from strong players like HEINEKEN, and its management is now looking to integrate synergies in areas such as raw materials to reduce costs. Improving Sabeco’s operating margin is a major goal for ThaiBev, as Vietnam’s biggest brewery lags behind its rivals in terms of business efficiency.
Other experts, however, are not convinced that boosting ownership is the biggest reason for Sabeco’s FOL. They pointed out that the Thai brewer already calling the shots at Sabeco and boosting its stake there for further control would not be a concern right now, especially considering the huge pile of debt taken out for last year’s share purchase.
Huynh Anh Tuan, deputy director at Everest Vietnam Securities, believed that for ThaiBev, transferring ownership between itself and Vietnam Beverage may not be a priority.
“I think ThaiBev may want to scrap the foreign ownership cap so that it might later buy more shares to increase its market price,” said Tuan.
The analyst concluded that this is more likely to be a technical move than a strategic one.
Garment-textile export turnover sees highest growth in three years
The garment-textile sector has grossed over 36 billion USD in export turnover this year, up 16.01 percent against the previous year, heard a conference in Hanoi on December 14.
Vu Duc Giang, Chairman of the Vietnam Textiles and Apparel Association (VITAS), said at the conference that this is the highest rise over the past three years, compared with 12.1 percent in 2015, 4.07 percent in 2016, and 10.8 percent in 2017.
In 2018, the export turnover of clothes hit 28.78 billion USD, up 14.45 percent; while that of fabric was 1.66 billion USD, up 25.5 percent; and the export values of yarn reached 3.95 billion USD, up 9.9 percent, according to Le Tien Truong, General Director of the Vietnam National Textiles and Garment Group (Vinatex).
The sector ran a trade surplus of some 17.86 billion USD throughout the year, representing a year-on-year increase of 14.39 percent.
Giang said the VITAS has made proposals to the Government as well as relevant ministries and agencies in an effort to remove difficulties facing garment-textile businesses.
The sector has seen rosy signs for 2019, with many businesses already receiving orders for the first six months and some even the whole year, with better product competitiveness and supply chains forecast.
Besides, the new-generation free trade agreements Vietnam has joined will be put into place and are expected to exert positive impacts on the production and business activities of the sector.
At the conference, the VITAS set the target of raising the export turnover to 40 billion USD in 2019, up 10.8 percent and bringing trade surplus to 20 billion USD, in turn ensuring jobs and raising incomes for 2.85 million workers.
To that end, the association urged businesses to join hands in implementing solutions regarding investment, marketing, human resources development, and sci-tech application.
It will also better perform its role as the bridge between member businesses and the domestic and foreign markets through trade promotion and cooperation activities, as well as between businesses and State management agencies to help remove difficulties facing firms at present.
The association has proposed the State continue reforming administrative procedures, conducting inspections, and creating an open business environment for enterprises.
The State should put forth policies to support waste water treatment at garment-textiles industrial parks, increase personnel training, and admit wholly foreign-invested enterprises into the association to develop the supply chain and promote experience exchange between members, it said.
Quy Nhon Port handles record volume of cargo
Quy Nhon Port handles the 8 millionth tonne of goods this year on December 16
Quy Nhon Port in the central province of Binh Dinh handled its 8 millionth tonne of goods this year on December 16, a yearly record for the port.
The 8 millionth tonne, owned by Maersk Line of Denmark, was transported by the Panamanian vessel Future.
Huynh Van Phuc, a representative of Maersk Line in Quy Nhon city, said the firm was proud to have helped the port receive the 8 millionth tonne of cargo. Since being equitised, Quy Nhon port has upgraded equipment and facilities to raise its capacity.
Director of the Quy Nhon Maritime Administration Vu The Quang said this year, the port has received fewer vessels, but the volume of cargo handled has increased by 800,000 tonnes from 2017 and is 300,000 tonnes above the annual target.
It has helped raise total cargo volume transported through ports in Quy Nhon city to 9.02 million tonnes for the first time, he added.
Chairman and Director General of the Quy Nhon Port JSC Le Hong Thai said the port is expected to handle another 200,000 – 300,000 tonnes of goods in the two remaining weeks of 2018.
With its existing facilities, the port is able to deal with 11 million tonnes of cargo each year, he said, noting it aims to handle 10 million tonnes of goods in 2019.
Quy Nhon Port, located in Quy Nhon Bay and next to international shipping routes, is the gateway to the East Sea of the south central and Central Highlands regions of Vietnam, as well as countries in the sub-Mekong region.
Local firms prepare for CPTPP’s strict regulations
The Comprehensive Progressive Trans Pacific Partnership (CPTPP) promises great benefits for Vietnamese firms, but many regulations on technical barriers and social responsibility will have to be met in order to take full advantage of the trade deal, experts said at a conference in HCM City on December 15.
Vietnam’s participation in the CPTPP demonstrates the spirit of cooperation and integration, especially in light of the rising trend of protectionism around the world, Dr. Le Dang Doanh, a member of the United Nations’ Committee for Development Policy, said.
The CPTPP includes 11 economies that are highly supportive of Vietnam’s economy and account for 13.4 percent of global GDP.
The trade agreement promises strong tax reductions, opens up export trade routes for Vietnamese firms, and reduces Vietnam’s dependence on any particular market. Despite this, competition within domestic markets will also arise, according to Doanh.
Under the terms of the agreement, prevention of corruption will be important, while less discrimination and exploitation in the work environment will be required.
Doanh noted that Vietnamese firms would also have to pay more attention to certain factors.
To be eligible for tax exemption, for example, Vietnamese goods must follow rules of origin whereby a certain ratio of goods’ materials or processing must originate from CPTPP countries.
Firms have been urged to carefully study the rules to ensure that their goods will be eligible.
Vietnamese firms will also have to satisfy technical barriers to trade such as quality specification, consumer safety standards, labour and social responsibility regulations and environmental protection standards.
Many agricultural goods and seafood firms struggle with technical barriers like food safety violations, so they need to work on brand building and improving production processes to adhere to the regulations.
In addition, firms will need to adhere to worker rights’ regulations such as no child labour and no discrimination, intellectual property rights, consumer rights protection and fair competition regulations.
Clarity and fairness in solving disputes are also required.
Many small- and medium-sized firms have limited understanding of free trade agreements and exporting regulations, according to the Association of Small- and Medium-Sized Enterprises in the South.
The association said it would work on organising more trade facilitation events, help firms acquire funding, and offer more consultancy and training programmes.
Thai Nhu Hiep, Chairman of Vinh Hiep Co. Ltd, which specialises in coffee and pepper, said that administrative procedures regarding international certifications for exports were problematic for many firms.
To take advantage of trade opportunities, businesses should network, study the CPTPP regulations carefully, and make sure they can qualify for tax exemptions.
The conference was held by the Association of Small- and Medium-Sized Enterprises in the South.
Binh Thuan welcomes 5.7 million tourist arrivals in 2018
The south central province of Binh Thuan expects to receive 5.7 million visitors for all of 2018, a jump of 12 percent from last year.
According to the provincial Department of Culture, Sports and Tourism, total earnings from tourism services are predicted to surge 18.8 percent to 12.8 trillion VND (550.9 million USD).
About 675,000 foreigners chose Binh Thuan for their holidays, with China and the Republic of Korea the top tourist sources, accounting for 28 percent and 13 percent of total international arrivals to the locality, respectively.
Meanwhile, stable growth was seen in tourist arrivals from traditional markets like Russia, the UK and France.
As local tourism has been enjoying the busiest months of the year, the department asked tourism service providers to improve quality and diversify entertainment options.
In addition, local authorities should work to ensure social order and food safety with a view to building Binh Thuan into a friendly and safe destination.
Vietnam boosts regulatory reforms to fit new trade deal
A recent review of the country’s legal documents showed that 265 legal documents must be reviewed, while seven laws will have to be amended to stay tuned with the CPTPP.
Local authorities are expediting the reviewing and amending of the country’s laws to ensure compliance with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
After the CPTPP’s ratification, the National Assembly (NA) has assigned the government, the People’s Supreme Court, the Supreme People’s Procuracy of Vietnam, and other relevant organizations and agencies to review laws and legal documents so that the authorized agencies can revise them.
“This is aimed to ensure the consistence of Vietnam’s legal system and also ensure the right roadmap in implementing commitments under the CPTPP,” the NA states in a resolution.
According to the NA’s resolution, the prime minister will be responsible for approving and directing relevant organizations and agencies at the central and local levels to deploy plans to implement the CPTPP.
A recent review of the country’s legal documents showed that 265 legal documents must be reviewed, while seven laws will have to be amended, including the Labor Code, the Criminal Code, the Criminal Procedure Code, and the laws on Anti-Corruption, Intellectual Property, Insurance Business and Food Safety.
Professor Nguyen Mai, chairman of the Vietnam Association of Foreign Invested Enterprises, said that the CPTPP provides a fairly comprehensive chapter on cross-border investment, including principles relating to most-favored nation treatment, transparency and disclosure of information, the rights of investors and investment recipients, and settlement of disputes.
Vietnamese laws have already set forth quite appropriate regulations on investment, Mai said, but attention should be paid to three demanding requirements prescribed in the CPTPP: the publicity, transparency, and predictability of the legal system and changes of law; strict regulations on intellectual property rights, despite the suspension of some related provisions such as those regarding pharmaceuticals; and labor and worker rights, including the right to form independent unions.
In order to attract foreign investment, Mai suggested that it is necessary to approach the provisions of the CPTPP’s investment chapter to make necessary adjustments and supplements to the Vietnamese legal system.
Nguyen Quan, former minister of Science and Technology, indicated that Vietnam faces three major challenges when it comes to intellectual property in the CPTPP: there is no regulation that criminalizes violations of intellectual property as is required by the CPTPP; protection of medicines, especially the protection of test databases; and issues related to agriculture.
As such, intellectual property remains a big test for Vietnam, Quan said, adding that to earn benefits from the CPTPP, Vietnam needs to amend and supplement the Intellectual Property Law in accordance with the provisions of the agreement.
However, Quan said, the challenge should be considered an incentive to better implement legal documents on intellectual property protection, counterfeit, and trademark violations.
Sharing the same view, Marko Walde, chief representative of German Industry and Commerce Vietnam, said that the CPTPP, as a quite comprehensive agreement, will offer Vietnam not only trade and investment opportunities, but also a chance to modernize and bring its labor law, penal law, anti-corruption law, and the intellectual property rights policy in line with international standards.
This will certainly have a positive effect on the ratification of the EU-Vietnam Free Trade Agreement (EVFTA) next time, Walde said.
Regarding labor, experts also said that Vietnam should use this as an opportunity to modernize its labor legislation and labor relation system as the CPTPP and EVFTA are called new-generation FTAs, with a strong emphasis on labor rights, and the protection of environmental stability, in order to ensure that free trade contributes to sustainable development, while helping employees and businesses equally enjoy the economic benefits.
Debt trading market needed for the write-off of legacy assets
The development of the debt trading market hasn’t so far met the real demand as the market’s legal regulations are not adequate and consistent.
Vietnam needs to establish an effective debt trading market to better lure the participation of private investors in the market, experts said.
Pham Tien Dat, deputy director of the Ministry of Finance’s Institute of Strategies and Policies, said that legal frameworks for the establishment of the debt trading market must be streamlined rapidly to help banks resolve non-performing loans (NPLs), which will contribute to stabilizing and strengthening the nation’s financial system.
The development of the debt trading market hasn’t so far met the real demand as the market’s legal regulations are not adequate and consistent, Dat said, explaining that the current policies on debt settlement mainly mention to the participation and support of the State, but not private sectors.
In addition, Dat said, the country’s debt buyers and sellers are restricted while goods in the market aren’t diversified.
Debt buyers in the country currently include State-owned Vietnam Debt and Assets Trading Company (DATC), State-owned Vietnam Assets Management Company (VAMC) and some 20 debts and asset management companies of credit institutions (AMCs). Meanwhile, debt sellers are only credit institutions and State-owned enterprises.
Goods traded in the debt market include only NPLs of credit institutions and SOEs. Meanwhile, debts of many other sectors and enterprises, such as of bankrupt companies could be traded in the market as well.
According to Dat, although Resolution No. 42/2017/QH14 on dealing with bad debts of credit institutions and Decree No. 69/2016/ ND-CP on debt trading conditions allowed private investors to take part in the debt trading, their participation in the market remains very limited due to a lack of professional brokers and asset valuation organizations, institutional investors, and private AMCs and enterprises.
Sharing the same view, Ha Huy Tuan, Vice Chairman of the National Financial Supervisory Committee also admitted that the settlement of bad debt still has bottlenecks as there hasn’t had an effective debt trading market to attract more participants.
Meanwhile, Nguyen Tien Dong, VAMC’s Chairman said that bad debt resolution is an urgent requirement to ensure a safe and sustainable development of the banking system. Statistics from the State Bank of Vietnam, NPLs, including those at VAMC and credit institutions, were at VND486 trillion (US$20.77 billion) by the end of June, accounting for 6.67 percent of total outstanding loans.
For the debt trading market to be buoyant, Dat proposed that it is necessary to formulate policies to encourage and attract private investors, which will help increase the competitiveness and improve business performance of debt trading companies.
At the same time, authorities should study to establish a debt trading platform to develop the secondary debt trading market, Dat said, adding that regulations on debt trading market should be also legalized to create more capital mobilization channels for the local market, which will help firms to reduce their dependence on bank loans.
According to Dung, the debt trading platform, which will introduce and provide the most trustworthy information about debts to investors, will help increase the transparency and publicity of the market.
The debt trading platform, which may be under the management of the Ministry of Finance, will be responsible for developing transaction infrastructure, setting standards for posting debt information, managing and developing intermediaries for market creation, and establishing regulations on supervising and protecting investors, Dung said.
In addition to diversifying goods in the debt trading market, Dung also suggested that there is a need of a system of rating agencies for creditors and independent asset valuation institutions, thereby helping the buyer and the seller to determine the market value of the debts.
Customs budget collection reaches US$12.14 billion in 11 months
The customs sector collected over VND284.2 trillion (US$12.14 billion) in taxes as of November 30, a year-on-year rise of 7.27%.
The figures were revealed by the General Department of Vietnam Customs at a press conference in Hanoi on November 5.
The outcomes were attributed to the surge in import-export turnover which hit US$439.96 billion, up 13.3% against the same period last year.
Of which, the export earnings reached US$223.76 billion, up 14.5% year-on-year. Meanwhile, the import value was US$216.2 billion, a year-on-year rise of 12.1%.
As of November 30, 2018, the customs sector collected and handled tax arrears worth more than VND1.4 trillion (US$59.8 million).
The department has signed cooperation agreements with 39 banks, including 24 which are piloting e-tax payment systems.
As a result, by the end of November 2018, the customs sector collected over VND269.9 trillion (US$11.5 billion) of taxes through the banking system.
Le Manh Hung, Deputy Director of the Foreign Trade Agency under the General Department of Vietnam Customs, revealed that 3,235 businesses have so far conducted e-tax payments.
The implementation of e-tax payment systems is to supplement current payment channels to facilitate enterprises making payments to the State budget, as well as to support enterprises to open more accounts at foreign banks and large businesses, he added.
Phu Tho revokes licence of giant Dream City project
Local authorities in the northern province of Phu Tho have decided to revoke the investment licence of the Tam Nong Sport Eco-tourism Urban Area (Dream City) project due to weak capacity of the investor.
The Dream City project was reported to have investment capital of about US$1.5 billion, provided by Viet Han Trading, Advertising, Construction and Real Estate JSC.
The provincial People’s Committee has assigned relevant departments to co-operate with the investor to implement the decision and report the results to the province.
The project was designed to be an urban complex containing eco-tourism and entertainment areas matching international standards. It has a 336-hectare golf course, two areas of hi-end villas covering 562ha, a 350ha resort, a 152ha urban centre, a 105ha park, a 146ha sports complex, a 107ha casino and a 144ha horse racing ground.
The project covers a total of 1,050ha and was licensed in January 28, 2010. It was seen the largest project of Phu Tho Province by that time.
Eight years after receiving the licence from the province, the investor has committed to carrying out the project but in fact has conducted site clearance on only a small part of the area worth tens of billions of dong. No work has been done on most of the site so many local residents have planted vegetables on this area.
Viet Han Company was established in 2006 with a registered capital of VND320 billion, which was increased by five times to VND1.6 trillion. The company’s Chairman, Dinh Truong Chinh, owed a 49 per cent of stake, while Ha Tay Development Investment JSC held 39 per cent. The remainder was held by other individuals.
The company mainly consults foreign partners, mostly South Korean businesses that want to invest in Viet Nam.
ABB opens first robotics service centre in Viet Nam
ABB inaugurated its Robotics Technical and Service Centre – the first of its kind in Viet Nam – on Wednesday with the aim of serving global and local manufacturers operating in the northern region of Viet Nam.
The centre will act as a bridge connecting customers’ manufacturing goals with ABB’s global domain expertise, cutting-edge robotics technologies and strong local service team capabilities.
Located within the premises of the Viglacera Vocational College at Yen Phong Industrial Park in northern Bac Ninh Province, the centre has an area of approximately 500sq.m housing four main areas. A service workshop will offer a full package of repair, maintenance, overhaul and refurbishment for robots with a five-tonne overhead crane running the length of the workshop.
To support the workshop, a warehouse will store spare parts to support round-the-clock operations together with a demo and robot application solution development space and an office area.
With a fast-growing economy and young population, Viet Nam is shifting to a global manufacturing base. Although the need for robots is estimated to reach a million in 2020, most local industrial production firms are still lagging behind, with 61 per cent of enterprises still untouched by Industry 4.0 and 21 per cent just having started preparatory activities, according to a recent survey by the Ministry of Industry and Trade.
While striving to gain knowledge on new manufacturing technologies, businesses are facing a shortage of skilled workers in digital fields. The centre will support customers not only in implementing projects, but also in facilitating the adoption of advanced technologies in their plants.
“We are pleased to open the new Robotics Technical & Service Centre to support our customers with easier project implementation and to address the market need for advanced manufacturing technologies,” said Dr. Brian Hull, Country Managing Director of ABB in Viet Nam. “This investment reinforces ABB’s focus on strengthening its presence in Viet Nam and supporting the ongoing commitment to take local manufacturing to the next level.”
Employing a pool of around 30 engineers experienced in robotics technologies, the facility will develop robotics solutions to address users’ specific needs through ABB Connected Services, which features a wide range of Industry 4.0 compatible portfolios such as conditioning monitoring and diagnostics, fleet assessment, asset optimisation and back-up management. This will also ensure faster reaction times, higher efficiency and better service technician preparation for on-site calls and support, ultimately helping to keep robotic systems running at optimal performance.
In the near future, the centre will serve as a training facility to help lecturers and students of engineering universities to gain hands-on experience with advanced robotics technologies.
ABB’s robots are widely used in Viet Nam’s automotive, electronics, animal feed, food and beverage, chemicals and metal and brick fabrication industries. The company recently supplied around 3,000 robots to an electronics manufacturer and more than 1,000 to VinFast – the first Vietnamese automobile maker.
Businesses look to sustainability
Businesses involved in complex ecosystems of global supply chains are looking to sustainability to unlock new financial benefits, according to an HSBC survey.
The HSBC survey of more than 8,500 companies in 34 markets, “Navigator: Now, Next and How for Business”, found that businesses were making sustainability changes in their supply chains to improve their bottom line.
Ethical and environmental sustainability were seen as very important to both goods and services businesses in Viet Nam, according to the survey’s results.
Ninety per cent of businesses said they had monitored their supply chains for environmental and ethical standards.
Only a minority of respondents (9 per cent) reported that supply chain sustainability was not a focus for their business.
For both goods and services businesses, making sustainability and ethical changes to improve revenues and financial performance (96 per cent for goods/100 per cent for services) were marginally the most important, followed by making changes to support cost efficiencies (94 per cent for both goods and services).
On a global level, almost a third (31 per cent) of companies worldwide said they planned to make sustainability-related changes to their supply chains over the next three years.
Of those making ethical or environmentally sustainable changes to their supply chains, cost efficiencies (84 per cent) and improved revenues and financial performance (also 84 per cent) were the main motivating factors.
This trend comes as companies face increasing pressure from customers to be more sustainable and transparent about their sourcing.
Winfield Wong, country head of wholesale banking of HSBC Viet Nam, said Vietnamese businesses were integrated into international ecosystems.
“To grow in this competitive landscape, companies are now aware of the need to place environment, society and governance at the heart of their operations,” he said.
As for goods firms in Viet Nam, when asked about top changes that they plan in their supply chains over the next three years, close to half (46 per cent) of respondents plan to do business in new markets and locations, while around one-third (32 per cent) plan to select suppliers based on their sustainability practices.
Planned changes to supply chains are largely being implemented to increase their profits and revenues (79 per cent).
Local companies join industrial supplier group
Korean firm Doosan Heavy Industries Viet Nam (Doosan Vina) has inked Memorandums of Understanding (MoUs) with 11 local suppliers to establish Doosan Vina’s Supplier Association with the aim of sharing international expertise and networking with Vietnamese companies.
The long-term partnership agreement, which was signed on December 3, will share technical, management and operational procedures among Doosan Vina and Vietnamese industrial suppliers working in the fields of electrical, mechanical, steel, construction and engineering.
The agreement will help promote incentives for the suppliers maximise their investments and help grow and stabilisze their businesses by becoming more efficient and competitive.
As planned, the association’s members will be offered opportunities to expand their businesses through introductions to other business-to-business (B2B) firms that work with Doosan Vina. The association will promote co-operation on mutually beneficial Corporate Social Responsibility (CSR) programmes.
Kang Sanghyung, Director of the Procurement Division at Doosan Vina, said reputable local suppliers have helped Doosan Vina create many high quality Made-in-Vietnam products that are available in 33 countries around the world.
He said he hoped the establishment of the association will be a milestone that marks the beginning of a long-term relationship that will help maximize profits, promote economic growth and promote Vietnamese products in both the domestic and international market.
Last month, Doosan Vina and Samsung Engineering Company (SECL) also signed a framework agreement for a major project in the Middle East.
In 2017, Doosan Vina signed a Memorandum of Understanding with five partners from Korea to help them enter the Vietnamese market.
Doosan Vina, situated in the Dung Quat Economic Zone in Binh Son District of the central province of Quang Ngai, is a high-tech industrial complex with nearly 2,500 employees, supplying mega infrastructure products for thermal power plants and desalination plants, and cranes and chemical processing equipment for export.
It manufactures boilers for thermal power plants, desalination plants for sea water, cranes and structural steel for buildings and infrastructure developments.
To date, the company has exported products with a total value of US$2.4 billion.
VN needs to prepare for economic slowdown despite unlike global crisis
A global financial crisis was unlikely to happen in the next few years but Viet Nam needed to prepare itself for a slowing global economy, former Deputy Prime Minister Vu Khoan said.
Khoan told a conference on Viet Nam’s reform and development there had been no signs of a depression among the world’s big economies though they had shown signs of slowing recently.
“After the last global financial crisis in 2008, the world has developed defensive tools against the risks. The world predicted another crisis on a 10-year cycle, but it is unlikely another will happen in 2018,” he said.
“In the next 12 years, there will be no certainties that the world won’t undergo any crises as what we are encountering now are trade competitiveness and monetary tensions, which could be volatile and unpredictable,” Khoan said.
“We hope for the best scenario that there is no trade war because Viet Nam, with other economies, would suffer a lot.”
Trade competitiveness, which referred to tensions between China and the US, would go up and down over the next few years and would be shaped depending on each country’s security, political and geographical conditions, Khoan added.
Global economies would have to mix between competitiveness and co-operation, between bilateral and multilateral relationships, in order to develop a win-win situation, he said.
Viet Nam, as well as other nations, must be ready for that scenario and minimise its vulnerability by increasing inner strength and making the best use of foreign capital, while working with the international community towards a free-trade world, and adapting to any possible changes, Khoan said.
“It’s a must for Viet Nam to transform its economic growth model as technological advancements mean fewer job opportunities for low-cost labour and its natural resources are running out.”
Viet Nam should utilise policies to “mitigate short term vulnerabilities through better fiscal policies, deepen reforms to enhance competitiveness on trade and investment policies, build skills by improving access to post-secondary education, and promote inclusion by expanding employment services and broadening access to digital technologies,” said Sudhir Shetty, chief economist for the East Asia and Pacific Region of the World Bank.
Global growth was estimated at 3 per cent for 2018 but it would be growing slower by 2020 at a rate of below 3 per cent, Sudhir said.
A similar scenario was also expected for the world’s gross domestic product (GDP) growth, and the main reason for the global economic slowdown was due to slower growth of the Chinese economy, Sudhir said.
Potential risks to the global economic growth included “an escalation in global protectionism and heightened financial market turbulence,” he added.
According to Ousmane Dione, World Bank Country Director for Viet Nam, the private sector was key to driving the Vietnamese economy by increasing productivity and creating more added value.
One solution to empower the local business community was to resolve existing issues in the regulatory system that were preventing companies from reaching their full potential, he said.
Corporate governance quality should get better and foreign capital must be used to improve technological backgrounds and added value for local firms so they could link together and join the global value chain, Ousmane said.
Viet Nam had been trying to achieve a developed private sector that could provide a buffer for the country’s economic growth, according to deputy minister of planning and investment, Le Quang Manh.
“A developed private sector is one of the four major drivers for the Vietnamese market economy, along with lean policy apparatus, human resource management and modern infrastructure,” Manh said.
According to McKinsey senior consultant Rich McClellan, the private sector accounted for 80-90 per cent of GDP in developed economies while the figure was lower in developing economies.
In Viet Nam, the private sector involves the official business sector (those that have a business registration) and the unofficial business sector (households). While the official business sector contributes less than 10 per cent of total GDP, unofficial businesses accounted for one-third of the total GDP, Rich said.
Therefore, it was important for Viet Nam to make the unofficial businesses register, continue reforming State-owned enterprises (SOEs) and improving the business environment for foreign direct investment (FDI) companies, he added.
To lift the performance of the private sector, innovation was required among local companies to create more added value, raise productivity and modernise production.
Huynh The Du from Fulbright School of Public Policy and Management said there was a big gap in innovation between Viet Nam and developed parts of the world though the nation had made great achievements.
There was little desire and demand from local companies for innovation that was preventing them from climbing to the next levels and ignoring opportunities to join the global value chain, he said.
Local companies were not generating much added value for the economy, so many businesses and individuals had turned to speculating in assets and neglected production, Du said.
That’s why it was essential for the private sector to innovate and develop policies to protect their assets and intellectual rights, Du added.
According to deputy minister of science and technology, Tran Van Tung, Vietnamese companies should purchase modern technologies and improve professional skills to raise productivity.
He urged the Government to focus on private companies and support them with scientific research.
“Viet Nam should reform its economic growth model, improve the economy’s competitiveness and promote public-private partnership (PPP) programmes to help local businesses absorb modern technologies from overseas suppliers.”
Hoa Sen Group to focus exclusively on steel business
Giant steel maker Hoa Sen Group said recently it has taken a number of measures to overcome the difficulties it is facing like the rest of the steel industry and expand its business domestically and abroad.
It said steel makers are facing many difficulties as prices are unpredictable and more importing countries are adopting protectionist trade measures, affecting exports.
Besides, a lot of cheap steel is imported, causing a supply overhang, it said.
One of the solutions is to stop investing in the property and tourism sectors since returns in them are below expectations.
The company told Viet Nam News there would be no more investment in the Van Hoi eco-tourism project in the northern province of Yen Bai and Hoi Van hot spring tourism project in the south-central province of Binh Dinh.
It also sold lands it had planned to develop in Do Xuan Hop Street in HCM City’s District 9.
Pulling the plug on property investments is just one of several measures it will take to resolve its financial problems.
Another is to cut interest costs by keeping inventories to a minimum.
Other costs have also been cut by restructuring the distribution system and temporarily not opening more branches, the company said.
Besides, it is simplifying human resources and installing an enterprise resource planning (ERP) system to cut down the spending on human resources. HSG said these changes had already helped reduce loans by over VND3.1 trillion (US$136 million) since the end of June to VND12.7 trillion ($557 million).
In 2017-18 the company produced 1.8 million tonnes of steel and earned revenues of VND34 trillion ($1.5 billion), respectively up 13 per cent and 32 per cent from the previous year.
The revenues jumped both in the domestic and foreign markets, the company said.
Profit after tax was VND410 billion ($18 million).
The company holds over 35 per cent of the steel sheet market and 18 per cent of the steel pipe market, the first and second highest share in the country respectively.
It has 11 steel plants in the country 500 outlets. HSG also manufactures plastic products and aims to become among the top three manufacturers in the country. It produces 5,000 tonnes of three kinds of plastic pipes per month and sells them all over the country.
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