BUSINESS IN BRIEF 17/10

Annual Tra fish exports expected to increase 5 percent


Earnings from Tra fish exports are expected to increase 5 percent to reach 1.6-1.7 billion USD in 2016, according to Vietnam Association of Seafood Exporters and Processors (VASEP). 

Demand for Vietnam’s Tra fish exports in the fourth quarter of 2016 and the first quarter of 2017 is forecasted to rise by 20 percent as the year-end holiday season begins in importing countries, added VASEP. 

The association also said Tra fish processors are facing material shortages, after many farmers stopped raising the fish due to falling Tra fish price and a lack of fry. 

In order to meet the projected figure, VASEP advised businesses to sign contracts with farmers to ensure stable supply and prices while helping expand fish farming area.

Latest industrial technologies on show at int’l fair in Hanoi

The 25th Vietnam International Industrial Fair (VIIF) is set to take place in Hanoi from October 17-20 with the participation of over 200 businesses. 

The VIIF is considered a prestigious industrial fair in the country and the region, Nguyen Minh Tien – Director of the Vietnam Exhibition and Fair Centre told the media on October 14. 

This year’s event, held at the International Centre of Exhibition, draws more than 100 foreign enterprises from the Republic of Korea, China, Taiwan (China), India, and Japan, among others. 

On over 4,500 sq.m. of ground, businesses will showcase up-to-date industrial products and technologies that help improve productivity and product quality such as automated welding robots, large drilling machine, air compressors, and components and spare parts in the hydraulic industry. 

Trade and investment promotion activities will also form part of the VIIF.

Agriculture – fertile land for start-ups: Prime Minister

Agriculture is a “fertile land” for start-ups, Prime Minister Nguyen Xuan Phuc told more than 1,000 young people at the launch of a programme encouraging youths’ involvement in creating start-ups in Hanoi on October 16. 

The “Start-up Youth” programme aims to persuade the young to develop start-up spirit and mobilise financial, personnel and infrastructure resources to support their start-ups. 

Under the programme, students at universities and junior colleges will be supported to realise their initiatives and start-ups idea. Young people in rural areas will be assisted in deploying their projects in agriculture-related innovation and technological application. Meanwhile, young entrepreneurs will get help in corporate administration, innovation and integration. 

In his speech, PM Phuc said the Government will continuously create favourable policies for start-ups, adding that 91,000 businesses were set up in the first nine months of 2016. The country aims for more than 600,000 firms at the end of this year and over 1 million companies by 2020.

He said young people should not be discouraged by failures and that they should dare to turn their dreams come true. They should try all-out and weather difficulties right at school or immediately after graduating. 

Their start-ups can begin with realising a business or technology idea or an idea to solve social problems such as in agriculture, poverty reduction, environment, climate change response, education or health care. 

“To succeed, being industrious is not enough, young people need to keep learning, apply science-technology and improve their skills,” he said. 

The PM also asked big businesses in Vietnam to be partners of potential start-ups so as to provide them with opportunities to join in their production networks, share experience, and make investment in those start-ups. 

At the programme launch, he and officials also fielded questions asked by young people. 

The Central Committee of the Ho Chi Minh Communist Youth Union debut a council of experts supporting start-ups. It also presented 50 million VND (2,250 USD) apiece to fund 10 start-up projects of young people.

Hanoi sees Q3 surge in mid-end apartment sales

Sales of mid-range apartments in Hanoi increased during the third quarter, a leading real-estate firm has reported. 

The third-quarter report by CB Richard Ellis Vietnam Ltd Co (CBRE Vietnam) says more than 6,800 new units were launched from 16 projects, a quarter-on-quarter increase of 14 percent, but a decrease of 38 percent year-on-year. 

Mid-range products still dominated the new launches, although new supply from high-end and luxury apartments also increased significantly, the report said. 

In particular, around 3,000 apartments from these segments were launched this quarter, accounting for 45 percent of total new launches. 

Overall, the third quarter experienced a positive market sentiment, as sales caught up fast with new launches. A total of 5,279 units were sold, an increase of 52 percent compared to the last quarter. 

The report said sales also maintained an upward trend since the beginning of this year in the high-end segment. 

In the first three quarters of 2016, approximately 14,200 units were sold, with mid-range apartments making up nearly 50 percent of this figure, CBRE Vietnam said. 

Another leading real estate firm, Savills Vietnam, also said mid-range apartments recorded the highest primary sales volume for the 6th consecutive quarter, totaling 51 percent of sales. The absorption rate decreased two percentage points q-o-q to 33 percent but the average asking price was stable, it said. 

Meanwhile, a report by the Rong Bay Real Estate Trading Floor said that in general, the domestic property market would remain stable this year-end and early next year. 

If, in the coming time, the State issues new policies encouraging people to buy property, the local real estate market would see stronger growth, this report said, noting that it was a good time for buyers because of high supply, stable prices and many preferential offers from sellers. 

The report said that in Hanoi, the western region would be “hot” and experience strong growth because of many advantages in infrastructure in the area, as also Ha Dong District. 

Large property investment firms like Vingroup, FLC and Bitexco have many projects in the area. 

The trading floor expects that the western region will provide 70 percent of the apartment supply for capital city market, with selling prices increasing by 7 percent in the near future. 

Demand for apartments and house was still high, so property transactions in “good projects” will continue to rise, said Nguyen Van Tuan, CEO of Rong Bay Real Estate Trading Floor. 

He reiterated that the region’s developed infrastructure would attract both home-buyers and property investors. 

Home-buyers are likely to choose this region because it is convenient to live, study and work here, while investors will see it as a safe investment destination with potential for higher profits, he said. 

In its quarterly report on Hanoi, Jones Lang LaSalle Vietnam Ltd Co (JLL Vietnam) said more than 11,000 new completions were expected in the last quarter of 2016, nearly 70 percent of which would be in the mid-range segment. 

It estimated new supply for the last quarter at 10,000 units, with 50-60 percent of the launches coming from existing projects. 

The company said apartment sales would also rise to new highs following expected increases in supply and greater interest among both owner-occupiers and investors. Prices would continue rising because of new launches and improved conditions, it said.

Farmers urged to speed up sci-technological applications

Deputy Prime Minister Vuong Dinh Hue urged farmers to accelerate the application of new scientific and technological advances in the context of the country’s extensive international integration.

He was addressing the first Vietnamese Farmers’ Forum themed “Global farmers: from mindsets to actions” held by the Central Committee of the Vietnam Farmers’ Association in Hanoi on October 16. 

He reiterated that agriculture, farmers and rural areas have been defined to hold a strategic role in the country’s industrialization and modernization and provide a fundamental, important force to spur sustainable socio-economic development.

Cheap labour force and abundant natural resources are advantages but the quality of labour force and low productivity are disadvantages of the agricultural sector, Hue said. 

Scientific and technological applications and market research have been carried out by many farmers and producers but still fell short of expectations, he told participants.

The agricultural sector has been dealing low productivity, high risks, small-scale production, and big markets, he noted, asking participants to brainstorm to tackle them. 

According to President of the Vietnam Farmers’ Association Lai Xuan Mon, accurate assessments of shortcomings and weaknesses in both mindsets and actions in the agricultural and rural development are needed in order to meet stricter requirements of the country’s broader international integration. 

The forum looks to enable farmers to converse with policy makers, managers, scientists, specialists, and businesses to seek solutions to the quality and safety of local farm products for local and overseas consumption, the linkages between farmers and businesses, and mechanisms, resources and investment for agriculture, farmers and rural areas.

Vinh Phuc offers support to woo investors

The northern province of Vinh Phuc is intensifying trade promotion activities and offering support to potential investors and businesses already operating in the locality. 

The provincial authorities instructed agencies and local administrations to provide detailed lists of projects calling for investment while apply the one-stop model in dealing with investment procedures and publishing administrative procedures on the province’s portal. 

Nguyen Van Tri, Chairman of Vinh Phuc People’s Committee said that the province will continue to create favourable conditions for enterprises, as their development creates more jobs. 

Since the start of 2016, the provincial authorities have held five dialogues with businesses. Starting this month, the province’s officials will meet with enterprises at the provincial People’s Committee’s headquarters every Friday afternoon, in order to understand and respond promptly to their current difficulties. 

As of the end of August, the province had 227 valid foreign-invested projects with total registered capital of US$3.45 billion. South Korea is the leading investor in the locality, with 100 projects worth over $922.7 million.

Allow raw sugar imports: VSSA

Viet Nam Sugar cane and Sugar Association (VSSA) has proposed that the Prime Minister allows importing raw sugar instead of refined sugar to save foreign currency for the 2016-17 crop.

The association sent a proposal to Prime Minister Nguyen Xuan Phuc on the sugar auction this year. It asked the PM to instruct the Ministry of Industry and Trade to officially promulgate the auction mechanism on sugar import quotas following the first successful pilot auction in September.

The ministry successfully organised the auction to import 85,000 tonnes of sugar this year as 11 firms won bids. From these, three companies won bids for import quotas of raw sugar at the price of VND1.53 million per tonne — Bien Hoa Sugar Joint Stock Company, Thanh Thanh Cong Tay Ninh Sugar and Sugarcane Company and Khanh Hoa Sugar Company — securing a total import quota of 40,000 tonnes.

The eight winners for import quotas of refined sugar at a price of VND1.69 million per tonne were URC Viet Nam, Puratos Grandplace Viet Nam, Perfetti Van Melle and Coca Cola Viet Nam, as well as Nestle Viet Nam, Vinamilk, Sanofi Synthelabo Viet Nam and a member of the Trung Nguyen Group.

Viet Nam must import 85,000 tonnes of sugar this year, following its commitment to the World Trade Organisation. The commitment consists of 40,000 tonnes of raw sugar and 45,000 tonnes of refined sugar.

VSSA said the auction results have been highly appreciated due to the transparency and publicity in managing the sugar import quota.

Accordingly, the association submitted the proposal to the PM to organise the auction for 2017 in the first quarter to facilitate relevant ministries and agencies to manage sugar supply and demand, while allowing importers to be able to prepare their import and production plans.

In particular, VSSA proposed to import all the raw sugar. The reason is that the country has 40 sugar factories with designed capacity of 155,000 tonnes a day, of which, half of the factories’ produce refined sugar.

In recent years, some sugar plants have imported raw sugar to produce refined sugar, creating jobs for labourers.

The organisation said several countries have also imported raw material to produce refined sugar instead of importing refined sugar.

This could help the Government save foreign currency and increase the State budget.

The pilot auction this year brought VND138 billion to the State budget. If the above 45,000 tonnes was raw sugar, the country would save $4.5-5.4 million due to the difference in price of raw and refined sugar.

In addition, the Government could collect taxes from the sugar factories for importing raw sugar.

The country is expected to produce some 1.5 million tonnes from the 2016-17 crop, plus there is a stock of 200,000 tonnes from the 2015-16 crop, along with the import quota and that imported from Laos under the Viet Nam-Lao trade treaty, as well as smuggled sugar. Sugar supply will, therefore, be enough for the country’s production and consumption.

Vietnamese fruit exporters look for State support

Viet Nam has shown strong growth in fruit and vegetable exports in recent times, but for the sustainable development of exports more support from the State and enterprises is required.

Viet Nam’s star apple fruit have been licensed to enter the US market since the last quarter of this year, after Bac Giang’s lychee was shipped to Australia.

The local fruit industry expects to ship mangoes to the US in the near future, following dragon fruit, rambattan, longan, lychee and star apples being approved.

In addition, Vietnamese fruits have been marketed in other countries, such as New Zealand, China, Japan, Russia and South Korea.

According to the Viet Nam Fruit and Vegetables Association, the export value of Vietnamese fruit in the first nine months of the year reached US$1.8 billion, close to the total export value for 2015, and exceeded the export value of rice for the first time.

The fruit and vegetable sector was in third place in the list of the top nine agro-forestry-fishery products by export value. The export value of fruit and vegetables was expected to reach US$2.5 billion for the whole year, said the association.

Phan Thi Dieu Ha, deputy head of the Ministry of Industry and Trade’s Import and Export Department, said the fruit and vegetable sector achieved the highest growth rate in export value among all agro-forestry-fishery products.

Meanwhile, international integration would bring more chances for Viet Nam to export fruit and vegetable products, Ha said. However, integration would also make Viet Nam’s exports of fruit and vegetables face more technical barriers in export markets, including quarantine conditions and food safety regulations.

In addition, the Ministry of Industry and Trade said the production of fruit and vegetables in Viet Nam was still at a small scale and had unstable quality levels. The production has not been planned neither, so the management of production and of investment into production infrastructure has been difficult.

Relations between production and consumption were not close enough, leading to high inventories for middle crops and losses for farmers and enterprises .

Pest and disease control according to GlobalGAP and VietGAP standards have not yet been widely applied. Areas of safe vegetable production have reached 8-8.5 per cent of the total vegetable growing area nationwide.

Exports of fruit and vegetables still have many weak points including the signing of contracts, transport, export procedures, food hygiene and safety, and international payments. Local enterprises do not have the ability to implement large contracts, while foreign companies have been afraid of investing in vegetable production.

According to Dao Tran Nhan, Viet Nam’s trade counsellor in the US, to enter strict markets like the US, fruit and vegetable products must undergo strict standards of control systems, including standards for the growing regions, irrigation and custom inspections at ports.

To promote fruit and vegetable exports, the Ministry of Industry and Trade said Viet Nam should review plans for growing fruit and vegetables for export. Initially, the State would concretise the general plan for agricultural development by 2020 and towards 2030. Under the plan, the development of fruit and vegetables would be implemented closely in advantageous regions with each province developing one or two major types of fruit trees. Production would be expanded, with the growing of some trees to meet the demands of importers and also to provide material for export processing factories prioritised.

Bui Huy Son, head of the Ministry’s Trade Promotion Agency, said some kinds of fruit have received brand protection certificates in Viet Nam, including Nam Roi Hoang Gia pomelo, Chin Hoa durian and Lo Ren star apple.

In the future, Viet Nam should promote brand building for high quality fruit and output to improve their competitiveness on the global market, Son said.

Adaptation of shrimp farming to climate change

The Mekong Delta is Vietnam’s largest shrimp farming area, accounting for 94% of the total raising area and 81% of the shrimp production. Currently, the region’s aquaculture is facing difficulties due to the impact of climate change and saline intrusion.

Shrimp are a key Vietnamese seafood product, accounting for half of seafood export revenues. 700,000 hectares are devoted to shrimp cultivation. In 2016 shrimp export turnover is projected to reach US$3.2 billion and is likely to fetch as much as US$8 billion by 2025.

Vietnam’s two main types of shrimp are prawn and white-leg shrimp. The Mekong Delta has developed a model to raise red tiger prawns and semisu catus shrimp, which can adapt to saline intrusion.

Dr. Nguyen Van Sang, Director of the Research Institute of Aquaculture No II, said “The most important things are planning, irrigation, and organizing production for shrimp raising areas. With high saline intrusion, shrimp farming must follow one of two directions. The first is to continue the current model to shrimp-rice farming. The second direction is to expand shrimp cultivation. Some areas which do extensive farming in a reformed way can combine intensive or semi- intensive cultivation. It’s also necessary to improve farming techniques, create food, and control environment and diseases.”

Mekong Delta provinces should promote the application of science and technology in shrimp farming to attain high economic efficiency. The Ministry of Science and Technology will soon unveil a program dedicated to shrimp farming, which can protect the environment while ensuring that products can be traced back to their origin.

Dang Quoc Tuan, Deputy Director General of the Vietnam-Australia Seafood Corporation, one of the largest shrimp spawn producers in Vietnam, said “The corporation now owns a number of source technologies which, in shrimp the farming value chain, include breeding, food, cultivation, and processing to turn out final products toward ensuring sustainable development for the industry. We are using poly-greenhouses, re-circulating-aquaculture systems, and biofloc technology from Israel. The technology can control the environment in terms of temperature, salinity, alkali rate, and bio-safety.”

A number of marine or freshwater shrimp farming models adapted to climate change and saline intrusion in the Mekong Delta have been deployed and are proving effective.

adaptation of shrimp farming to climate change hinh 1 The dual rice-shrimp farming model is effective and sustainable due to its simple techniques, low production costs, reduced risks, environmental friendliness, and high product quality. The indoor intensive farming of white leg shrimp, which is widely deployed, has resulted in productivity of up to 40 tons per hectare.  

According to Dr. Nhu Van Can, Head of the Aquaculture Department of the Directorate of Fisheries, The models or technologies used to cope with climate change are environmentally friendly solutions. Two noteworthy solutions are to develop disease-resistant shrimps and high-tech shrimp farming methods.

Vietnam is one of three countries using an advanced technology in producing feeds for shrimps, which involves using marine organisms as shrimp feed to replace fishmeal. This speeds shrimp growth, lowers production costs, and reduces the risk of shrimp diseases.

In the context of saline intrusion, shrimp farming provinces are stepping up research on shrimp spawn and diversification of shrimp farming models adapted to climate change.

Private enterprises are important drivers of growth

Over the past 30 years of economic reform, enterprises of all forms of ownership, including private enterprises, have made significant contributions to economic recovery and government income.

In a report of the 11th Party Central Committee presented to the 12th Party Congress, the private sector has been determined as a key driver of the economy.

The growth of Vietnam’s business community has come along with the gradual refinement of the socialist-oriented market mechanism, which includes the introduction of and improvements made on a wide range of laws such as those on enterprises, investment, land and bankruptcy to facilitate enterprises to do business. 

Other laws on ownership, tax and the environment have also been updated on the basis of the 2013 Constitution to gradually phase out monopolisation and attract all resources for development.

From the one subject to regulation, the business community has become a participant in the process of law making as evidenced by the attendance of representatives from the Vietnam Chamber of Commerce and Industry and the Central Institute of Economic Management in a recent law-making government meeting, something which had never happened before. 

Also never before have the business community’s contributions to law formulation been extended through to the final round, equal with those contributed by government ministries and agencies.

These examples illustrate the government’s determination to realise its commitment to act for the sake of enterprises. 

The formation of the relationship between the state, enterprises and employees, in which the state’s role as a referee who determines the rules is both clearer and achieving greater consensus. 

Trade associations have also participated in policy consultation and strategy formulation in a more effective manner.

At the same time, the army of enterprises has also seen significant growth to meet the demand of international economic integration. National pride has become a major factor in the running of businesses.

In recent years Vietnam has secured free trade agreements with numerous countries and economic unions under which the tariffs will be reduced to 0% on transactions with 80% of the world market, opening up greater opportunities for Vietnam to participate in global value and supply chains.

Advantages aside, deeper integration means tougher competition and stricter technical and environmental standards, which pose great challenges to Vietnamese enterprises. 

How should businesspeople – the captains of their companies – steer their ships in the face of giant waves?

Along with the rapid advances of science and technology, which has sharply reduced the time from research to application, Vietnam’s once highly valued advantages such as cheap labour and non-renewable energy are being eroded. 

The country now has to compete with its peers within ASEAN in terms of cheap labour and advanced economies in attracting high-end manufacturing companies.

Therefore, in order to prepare for successful integration, enterprises, particularly their leaders must attach importance to enhancing corporate management. 

Moreover, entrepreneurs should be proactive in learning about international economic integration issues including free trade agreements and technical requirements so that Vietnamese products can penetrate new markets. 

The government, for its part, should establish trade promotion centres in promising markets and operate them with state funds for two to three years, after which such centres will be run with funding from enterprises.

Entrepreneurs should carry out their social responsibilities by complying with the laws, protecting the environment, ensuring food safety and improving the living standards of their direct employees. 

They should also uphold national pride to support one another and form value chains that benefit the Vietnamese business community.

This is a way that can help them to foster sustainable development and increase their value.

On the path of development, the business community also needs support from government agencies in removing difficulties in capital, technology and market access. 

The government’s commitments should be realised by refining relevant laws designed to provide maximum support for small and medium-sized enterprises, which make up 97% of Vietnam’s total enterprises, and which are also the factors that help to create flexibility and diversity in the business community.

For the private sector to be an important driver of the economy, Vietnam needs not only political determination, but more importantly the involvement of all players: the state, enterprises and employees.

Foreign fashion brands outdo local apparel in Vietnam market

While domestic fashion brands are still struggling to gain ground in their home market, the recent arrival of international brands in Vietnam has quickly received a heartened welcome from customers.

Fashion brands that were once only available to Vietnamese customers via ‘carry-on’ sellers, those who re-sell items they had bought overseas and brought into Vietnam as hand luggage, are now having their share in the US$3 billion fashion market of the Southeast Asian country.

It was at lunch break on a weekday, but the Zara store inside Vincom Center in District 1, Ho Chi Minh City, was already packed with customers from all walks of life: foreign tourists, white-collar workers, and even a handful of customers who had flown over 1,000 kilometers from Hanoi just to visit the outlet.

To buy a piece of fashion at the store, customers must queue their way through every stage of the purchase, from picking, fitting, to paying.

The Spanish budget clothing and accessory retailer opened its first and only store to date in Vietnam in September, but the initial hype for the brand has not seemed to die down just yet even more than a month after their arrival.

Trang, a customer from Hanoi, said she was buying clothes not only for herself but also for her friends and colleagues, so she had been spending a lot of time and energy picking the right style and size.

Prior to Zara, many other moderate and budget fashion brands such as Mango, GAP, and Topshop had already landed in Vietnam and are opening new stores on a regular basis.

In contrast, many stores of domestic designers are struggling to attract and retain customers despite affordable prices and regular promotions.

Nhung, an experienced ‘carry-on’ seller, said there is clear segmentation of consumers’ fashion in Vietnam, as a younger generation of Vietnamese with an interest in fashion and a good income are more inclined to opt for international brands.

At VND500,000 (US$22) to VND2 million (US$89) per item including tax and shipping fees, clothes of such budget brands as Zara, H&M, or GAP are reasonably priced considering their trendy designs, Nhung said.

According to Sean T. Ngo, CEO at VF Franchise Consulting, most international brands are opening stores in Vietnam through franchising, or granting the right to use a firm’s business model and brand to a local partner.

However, apparel franchising requires much higher standards than its food and drink counterpart, according to the CEO.

Apart from experience, franchisees are required to have a zero-loss business record and must be able to convincingly present their business development plan to the franchisor during the bidding process, which explains the success of international brands in Vietnam, Ngo said.

Swedish budget apparel retailer H&M has also finished the paperwork to open their first store in Vietnam in 2017, according to insiders’ knowledge.

Meanwhile, Japanese casual wear designer, manufacturer and retailer Uniqlo is also looking for a local franchisee to enter the Vietnamese market in the near future.

With apparel products targeting all ranges of customers, men, women, teenagers and children alike, gathering at one single retailing area spanning thousands of square meters, such brands are posing tough competition against local retailers, the director of a local fashion brand remarked.

“These brands introduce between 5,000 and 10,000 new designs every year on average so they appeal to a very wide base of customers. This has pushed Vietnamese brands to the outskirts of Ho Chi Minh City and other provinces to find customers,” the director said.

Tatsu Yano, director at the Singapore branch of Japanese department store chain Takashimaya, asserted that customers’ demand for high-end fashion in Vietnam is still high, considering the young population and the rise of the country’s middle class.

A stable economy and government incentives to attract foreign investors are also playing a part in the big picture, the director said.

Vissan to trade on UPCom

The Vietnam Meat Industries Limited Company (Vissan) has been given permission to trade on the Unlisted Public Company (UpCOM) market under the code VSN, with a total of 80.91 million shares and a registered stock value of more than VND809 billion (US$36.2 million).

Founded in 1970, Vissan is among the country’s leading producers and exporters of fresh meat, poultry and processed food. It possesses many advantages from a distribution network covering about 130,000 markets and more than 1,000 supermarkets and convenience stores.

On March 7 its initial public offering (IPO) was held with a total of 11.32 million shares for sale, equal to 14% of its charter capital and with an initial price of VND17,000 (US$0.76).

The IPO caught much attention, attracting 142 investors with purchase registrations totaling 63.6 million, or six times higher than the amount of shares available. The highest bidding price was VND102, 000 (US$4.57).

All 11.32 million shares were sold to five investors at an average price of more than VND80,000 (US$3.58) per share, earning Vissan VND907 billion (US$40.66 million).

On March 24 Vissan also held an auction for 11.32 million shares, or 14% of its charter capital, for strategic shareholders: the Agriculture International Company (Anco), the Producing Animal Feeds JV Co. (Proconco), and South Korea’s CJ CheilJedang Company (CJ).

CJ offered to buy the shares for VND120,600 (US$5.4) each while Proconco offered VND125,000 (US$5.59). Anco, though, went even higher, to VND126,000 (US$5.64), and secured the purchase. Vissan acquired VND1.427 trillion (US$63.91 million) from the auction.

Though Anco won the auction, the Masan Group picked up 53% of Proconco and 70% of Anco in April last year after buying 99.99% of the Sam Kim Co., which had these shareholdings.

In July Vissan officially became a joint stock company with charter capital of more than VND809 billion (US$36.2 million), which has remained the same since equitization. There are currently some 11.39 million shares of Vissan that cannot be sold under equitization rules, owned by strategic shareholder and the company’s labor union.

As at August 25 Vissan has 1,199 shareholders, with the two largest being Satra, holding 67.76%, and Anco, holding 24.94%. Satra is Vissan’s parent company.   

Vissan is the leading company in providing packaged sausages, holding a 65% share of the domestic market and its sausages are also exported to Laos and Cambodia. As at early March its products were available in 223 supermarkets, 703 convenience stores, 59 showrooms and a wide range of distributors and agents in Vietnam.

Masan is one of the largest private enterprises in Vietnam, with market capitalization of about US$2.5 billion, and owns many brands familiar among Vietnamese consumers, such as Chinsu sauce, Tam Thai Tu sauce, and Omachi noodles. Other foreign investors have poured capital into Masan previously, such as Kohlberg Kravis Roberts (KKR) and Mount Kellett Capital Management.

Economic growth combined with environmental protection

Vietnam has defined economic growth and environmental protection as a primary target in selecting investment projects. Environmental protection should be included throughout Vietnam’s development process.

The environment in Vietnam is under great socio-economic pressure. More than 280 industrial zones discharge 550,000 cubic meters of waste water every day and night. Only 5% of Vietnam’s industrial zones have adequate waste water treatment. 

Thousands of businesses involved in mining, building materials, and handicraft products have polluted the environment. The use of biological resources has led to shrinking ecosystems.

At a recent national meeting, Prime Minister Nguyen Xuan Phuc confirmed a ban on productions using backward technology that might pollute the environment. 

Deputy Minister of Natural Resources and Environment Vo Tuan Nhan said Vietnam intends to develop its economy without destroying the environment. Vietnam wants to attract and creates favorable conditions for investment projects that are technologically modern and meet environmental protection standards. 

Mr Nhan said “We encourage investment in hi-tech projects. In the near future, each province will adopt an environmental protection plan. Projects viewed as environmentally-harmful should be prohibited.

We demand high tech projects that meet Vietnam’s criteria and are in appropriate locations. These considerations will be included the plan.”

Deputy Minister Nhan said Vietnam’s policy of economic growth combined  with environmental protection matches the regulations of the new trade deals Vietnam is about to participate in. But he called for a more coordinated technological infrastructure in Vietnam.

“The national meeting on environmental protection chaired by the Prime Minister delivered a message of “economic growth parallel with environmental protection” and included it in Vietnam’s program of action.

Vietnam’s membership in a new generation of free trade deals means international integration, which requires better public awareness of environmental laws and more efforts on the part of businesses to abide by the laws.

This is a challenge, but also an opportunity for Vietnam’s sustainable development”, said Mr Nhan. 

BRG, SeABank, Coca-Cola sign MoU

The South East Asia Commercial Joint Stock Bank (SeABank), the BRG Group, and Coca-Cola Vietnam recently signed a memorandum of understanding (MoU) on comprehensive cooperation.

The MoU aims to exploit and develop advantages in business, matching each side’s business strategy towards being strategic partners into the future.

“All parties will benefit from the cooperation,” a member of the Public Relations Department at SeABank told VET. “SeABank will provide financial services and banking products to Coca-Cola and Coca-Cola in return will supply beverages to BRG’s hospitality network.”

Each side commits to using the other’s products and services and to increase opportunities for cooperation to exploit potential, bring business effectiveness, and contribute to increasing the position and competitiveness of each party.

Coca-Cola prioritizes SeABank as the provider of financial and banking solutions to the company and its distributors and contractors and commits to supporting BRG’s Intimex supermarkets to become important customers, backing the Group’s environmental protection activities at hotels through using recycled packaging, and giving preference to the products and services of BRG’s subsidiaries.

SeABank will consult and provide professional and prioritized financial and banking services and products to Coca-Cola’s employees, partners, distributors and contractors, such as payment accounts, payroll accounts, products and services for individuals, credit, and savings, etc. BRG Group will use Coca-Cola as the supplier of its subsidiaries.

“The MoU will be an important base for BRG, SeABank and Coca-Cola to exploit each side’s potential for effective business activities,” said Ms. Nguyen Thi Nga, Chairwoman of the BRG Group.

According to Mr. Vamsi Mohan, CEO of Coca-Cola Indochina and Myanmar, the MoU marks a big step in committing to expand sustainable investment, building a complete value chain in the business and supporting the social activities of Coca-Cola in Vietnam. By sharing such values with BRG and SeABank, Coca-Cola believes it will contribute to promoting the business activities of all sides and bring benefits to customers.

“SeABank continually strives to diversify its products and services, improve its service quality, expand its distribution channels, and cooperate with major partners for mutual benefit,” said Mr. Dang Bao Khanh, CEO of SeABank. “At the same time, all sides will build cooperation programs to develop brand credibility and increase benefits to customers.”

Established in 1993, BRG is a multi-sector economic group meeting domestic and international standards, providing services in real estate, hotels, resorts, golf courses, trade, retail, and manufacturing, with famous brands such as Intimex Vietnam, the Hilton five-star hotel chain, and a series of real estate projects and resorts in major cities in Vietnam.

SeABank has been founded in 1994. It has foreign strategic partner, Société Générale, holding 20%.

A group of ‘so called experts’ is encouraging farmers in Vietnam to plant crops such as corn and soybeans for use as animal feed in lieu of rice because it will increase gross revenue for the nation collectively.

farmers urged to plant corn, soybeans in lieu of rice hinh 0 According to these experts, in the first nine months of 2016 the agriculture segment collectively exported 3.7 million tons of rice valued at US$1.69 billion but imported 7.0 million tons of corn and soybeans for use as animal feed valued at US$2.46 billion. 

First, these experts go so far as to allege that the US$2.46 billion is a waste of Vietnamese dong by the government. 

However, they are the ones that fail to recognize that the ‘wasted dong’ that went to purchase feed was incorporated into the cost of the livestock.  Assuming the livestock was subsequently sold at a profit, then all the dong that went to purchase the feed was recuperated on the sale.

Thus, there is no loss of dong, and in fact, there is an increase in Vietnamese dong resulting from the profits and their allegations that the dong are being wasted is completely meritless and baseless.

Secondly, these so-called experts’ analysis is void in its entirety of any reference to profits.

One would logically think that any responsible analysis coming from ‘so called experts’ suggesting the nation’s farmers switch to raising corn and soybeans from rice would include a detailed analysis of profits and opportunity losses.

Apparently, profits are not important to these ‘so called experts’.  

There may be some legitimate basis to the claim that it might be more profitable for a limited number of farmers to raise corn or soybeans in lieu of rice but no one could ever tell from the faulty analysis that these experts have put forth.

Nor did these experts even begin to address the question of cost to convert from rice to the alternative crops in terms of machinery and equipment, technology, costs to convert small farms to larger farms.

These ‘so called experts’ simply just made up their whole argument out of thin air.

Vietcombank locks multiple cards over ATM theft risks

Vietcombank, Vietnam’s largest lender by market capitalization, has locked a number of bank cards in a move to help protect their clients from possible theft at ATM machines.

Many cardholders reported that they could not use their cards at some ATM machines, which notified them that their cards had been locked.

Nguyen Thi Thanh Hang, director of Vietcombank’s card division, confirmed that the move was made because those ATM machines were vulnerable to identity and information theft.

The bank has risk management systems to track customer transactions every day, she said. “In these cases we assessed that the information security was vulnerable, so we have informed our cardholders beforehand through text messages, and locking the cards was not a sudden decision,” said Hang.

She added that Vietcombank has also recommended the cardholders to change their PIN code.

The bank has detected many cases where thieves attached an ATM skimming device, typically a small plastic piece containing electronic chips, to steal card information, Hang said.

Mini cameras may also steal information from clients who forget to cover the keypad when entering their PIN, which is a recommended practice, she said.

Vietcombank suggested that those who received the message or are unable to withdraw money from ATM machines should contact the bank’s customer service center to unlock the cards. Customers may also request to have their current card replaced free of charge.

The tricks of increasingly sophisticated hackers have become more difficult for ATM users to detect, forcing local banks to look for better preventive measures.

At a recent conference on banking security, the risk of hackers using ATM skimming devices has been warned by the police.

Last year the police requested that the central bank order commercial lenders to test and install anti-skimming devices at their ATMs. But many machines are still not fitted with such devices, according to the police.

HCM City to build US$4,500 apartments for low-income workers

Ho Chi Minh City will follow the neighboring Binh Duong Province, a major industrial hub, to develop its own affordable housing program for low-income workers.

Le Van Khoa, deputy chairman of the city People’s Committee, has confirmed the plan, adding that each apartment of about 70 square meters is expected to cost only VND100 million (about US$4,500).

To put that in persepctive, most apartments of similar size in the city now cost at least VND1 billion.

It is not immediately clear how many affordable units will be built in the city, but such projects are likely to be developed near industrial parks.

Local authorities in Binh Duong last year launched 5,000 apartments in its housing program for low-income people and has started construction work on another 10,000 units.

According to the Ministry of Construction, Vietnam currently has 2.2 million people working in industrial parks but only 20% of them have their own homes.

Vietnam farmers, consumers stand to benefit from GI tagging

A good place to start in developing an understanding of a geographical indicator (GI) is to recognize that for all practical purposes it is simply a trademark, said experts at a recent conference in Hanoi.

Trademarks are ubiquitous in the business world, serving as indicators of a specific source of goods or services to which they are applied. Products the likes of Vinamilk, Vietnam Airlines, Samsung, Kentucky Fried Chicken and Coca-Cola are all fixed in the public’s mind as goods that come from a specific source. 

Trademark laws protect consumers by identifying the source of the goods. If a consumer values a certain brand they can utilize the brand’s trademark to identify the goods that they want to purchase.

Additionally, trademark laws protect consumers by indicating quality. In the consumer’s mind, each trademark represents a certain level of quality expected from all goods bearing the same trademark.

Lastly, trademark laws protect the huge investment dollars that companies spend in branding or creating the goodwill among consumers for their trademarked goods and services.

Trademark laws grant trademark owners the right to stop unauthorized use of the trademark by other companies as well as prevent them from using confusingly similar trademarks.

Without such protections, consumers might mistakenly purchase goods they do not want and the trademark owner’s reputation could be damaged by the presence of similarly marked, lower quality goods selling on the market.

A GI tag is virtually identical to a trademark where a product is named after the geographical region it comes from. The EU, said the speakers, has instituted laws that protect three classes of geographical indicators.

The first class is protected geographical indication (PGI) (which covers agricultural products and foodstuffs closely linked to the geographical area). The second class is protected designation of origin (PDO) and the third is traditional specialty guaranteed (TSG).

A speaker from the Ministry of Science and Technology said the EU currently has agreed to protect 39 GIs of Vietnamese goods once the Vietnam-EU Free Trade Agreement (EVFTA) comes into existence.

All the protected GI tags fall into the PGI category and relate principally to agriculture and food commodities such as fruit and vegetables while a more limited number are applicable to industrial and seafood products.

Two specific examples cited at the conference were the Cao Phong Orange of Hoa Binh Province and Dien Bien Rice. Although they both have been accorded GI protection from the Vietnam Government, the GI is not currently enforceable in the EU.

Consequently, the Cao Phong Orange and Dien Bien Rice suffer from ongoing unhealthy competition and counterfeiting in the EU market, said Nguyen Quoc Thinh, a lecturer from Hanoi Commerce University.

Mr Thinh suggested that more Vietnamese farmers and other companies in the agri-food segment of the economy seriously consider registering for GI tags for their products.

GI tags are invaluable, he noted, and registering them will reap the trademark holders, tremendous benefits when the Vietnam-EU free trade agreement comes into effect as early as 2018.

VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR

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