BUSINESS IN BRIEF 7/11
Vietnam Expo 2016 to be held in HCM City
The 14th Vietnam Expo will take place at the Saigon Exhibition and Convention Centre in HCM City from November 30 to December 3.
It is expected to draw the participation of businesses from more than 20 countries and territories, including Indonesia, the Republic of Korea (RoK), China and Taiwan.
According to the Ministry of Industry and Trade, with the sponsorship of Mobifone, the event will provide a platform for businesses to meet, expand and promote trade and investment.
Indonesia is the country of honour at this year’s expo, sending over 60 businesses to display modern technology products at the event.
The RoK’s state businesses and provincial trade organisations, such as the Bucheon Chamber of Commerce and Industry, and representatives of Incheon, Suwon and Daejeon authorities will be among those present.
Nearly 100 RoK businesses will introduce their latest technologies, services and products at the expo.
The event will also see the introduction of hardware tools and eco-friendly technologies.
Environmental issues and solutions for the manufacturing industry will also be discussed at those booths.
The organising board said during the past 13 Vietnam Expos, various agreements and projects have been signed.
80% of Vietnam’s small businesses ‘invisible’ on the internet
A wave of digital technology has swept across Vietnam in recent years, but many Vietnamese companies have refused to sign up for the revolution.
Tammy Phan, strategic partnership manager at Google, said that Vietnam currently has about 44-45 million internet users, and that figure is forecast to reach 82 million in 2020.
These are good conditions for enterprises to apply digital technologies to expand their businesses, she was quoted by the Saigon Times as saying.
However, small and medium enterprises (SMEs) are still reluctant to join the online trading network.
Phan reportedly said only 20% of Vietnamese SMEs sell their products on the internet while the rest remain invisible as they do not have websites or digital marketing solutions to promote sales.
Some businesses explained they haven’t entered the online market due to fear of data breaches and additional costs. Others are more comfortable with traditional forms of advertising like distributing fliers and advertising in newspapers.
Matthew A. Heller, head of Google’s Channel Sales in Asia Pacific, advised Vietnamese SMEs to join the digital trading environment to approach more consumers, which, in return, can help push up their revenues by four times.
Technology is changing people’s lifestyles. Consumers are spending more time shopping on the internet, from buying movie tickets to ordering food, the Saigon Times cited him as saying.
Data from Google revealed that 70% of Vietnamese consumers use a search engine to look for information before buying any item, and 75% will pick one to three local businesses before deciding where to make their purchases.
A third of the population will be buying goods and services over the Internet by 2020, according to the Vietnam E-Commerce and Information Technology Agency.
The Vietnamese government has set a target that by 2020, 50% of local enterprises will have online stores and 80% will be doing business through e-commerce platforms.
Truong Thanh Furniture racks up heavy losses
The Truong Thanh Furniture Corporation (TTF) has released its 2016 third quarter financial statements, revealing dismal business results and a net loss of nearly VND1.5 trillion ($67.5 million) for the first nine months of the year.
It recorded a loss of nearly VND399 billion ($17.9 million) in the third quarter. Total assets as at September 30 stood at VND3.2 trillion ($144 million), down VND1 trillion ($45 million) compared to the start of the year.
Cost of goods sold reached VND130 billion ($5.8 million), administrative expenses increased significantly, to VND281 billion ($12.6 million), and financial expenses were VND81 billion ($3.6 million).
Net revenue in the third quarter fell by a substantial 75 per cent year-on-year, to VND103 billion ($4.63 million). In the first nine months its revenue was VND986 billion ($44.3 million), down 44 per cent year-on-year with net losses at nearly VND1.5 trillion ($67.5 million).
As at September 30, short-term receivables stood at VND640 billion ($28.7 million), including other receivables of VND222 billion ($9.9 million) and provision expenses for short-term receivables of VND508 billion ($22.7 million). Inventories as at the end of September were recorded at VND2.01 trillion ($90 million), down VND460 billion ($20.6 million) compared to the start of the year.
TTF’s shares fell dramatically after the Tan Lien Phat Company, a subsidiary of Vingroup, suddenly announced in mid-July the suspension of its loan to TTF of VND1.2 trillion ($53.8 million) in exchange for 69 million TTF’s shares, after finding serious discrepancies in data relating to inventories and questionable debts.
In August, the Ho Chi Minh City Stock Exchange (HoSE) put TTF on its special control list. In September, Ernst & Young Vietnam (EY Vietnam) expressed doubts about the ability of the Truong Thanh Furniture Corporation (TTF) to continue as a going concern.
TTF’s cumulative losses as at June 30 increased by a further VND130 billion ($5.8 million) to VND1.2 trillion ($53.8 million) due to VND127 trillion ($5.7 million) in stock found to be missing.
Moreover, short-term debts had exceeded current assets by VND425 billion ($19 million) as at June 30. “Those conditions reveal that uncertainty exists and raises substantial doubts about the entity’s ability to continue as a going concern,” EY Vietnam wrote in its report.
EY Vietnam was appointed to review TTF’s interim consolidated financial statements since December 31, 2015. The company therefore could not confirm the calculation of TTF’s inventory as at December 31, 2015 and inspections have also not provided EY Vietnam with appropriate evidence to clarify the level of inventory as at that date.
Tan Lien Phat became a major shareholder in TTF in May this year after acquiring 72 million shares. TTF then saw some instability in its senior personnel. On August 12, founder Mr. Vo Truong Thanh was dismissed from his duties as Chairman of the Board of Management after not taking sufficient responsibility as Chairman given TTF’s tough times. His was replaced by Vingroup’s Deputy Managing Director Ms. Vu Tuyet Hang.
Tan Lien Phat now is the investor of major projects under Vingroup, with the most prominent being Vinhomes Central Park Tan Cang in Ho Chi Minh City.
Mr. Vo Truong Thanh was born in 1958 in central Binh Dinh province. In 1993, he and his colleagues established the Truong Thanh Wood Co., He and his company have gone through many ups and downs, even bankruptcy, but he had gradually restructured the company.
Vietnam the first stop for European agri-food enterprises
Vietnam is considered the first stop in ASEAN for European agri-food companies and will become a distribution hub for European goods in the region thanks to the opportunities presented by the EU-Vietnam Free Trade Agreement (EVFTA), which is expected to take effect in 2018, Mr. Phil Hogan, Commissioner of the EU Commission for Agriculture and Rural Development, told a meeting with local media on November 3 during his visit to Vietnam along with 41 European food and beverage companies seeking opportunities in the country.
He also said that not only are Vietnamese people increasingly interested in European agri-food products but also growing numbers of European consumers are keen on discovering Vietnam’s exotic offerings.
“The recently concluded EVFTA offers tremendous opportunities for both Vietnamese and European producers to find growing markets for high quality EU produce,” he added.
The impressive growth of Vietnamese products in the EU over recent years, as shown by the nearly 20 billion euro ($22.1 billion) trade surplus it recorded last year, much of which was in agriculture, best demonstrates Vietnam’s enormous potential, which will be fully optimized by the FTA and the complete dismantling of tariffs beginning in early 2018.
EU-Vietnam trade totaled over 3.84 billion euros ($4.2 billion) in 2015, with 29.9 billion euros ($33.1 billion) of Vietnamese exports and 8.4 billion euros ($9.31 billion) in EU imports into Vietnam, ranking it 21st among the EU’s trading partners.
The EU was Vietnam’s second largest trading partner after China and the second largest overseas market for Vietnamese products after the US. Vietnam also became the EU’s second largest trade partner in ASEAN after Singapore and ahead of Malaysia.
Key export items to the EU include telephones, electronic products, footwear, textiles and clothing, coffee, rice, seafood, and furniture. EU exports to Vietnam are dominated by high-tech products such as electrical machinery and equipment, aircraft, vehicles, and pharmaceuticals.
Mr. Hogan is in Vietnam from November 2-4 and leading a high-level delegation of agri-food businesses. As Commissioner he is responsible for managing the EU’s Common Agricultural Policy for the 500 million citizens of the 28 EU member states.
His mission is to increase links between the EU and Vietnam in the area of agri-food trade, building upon the recent conclusion of negotiations over the EVFTA.
During his visit he also met senior Vietnamese officials, addressed the opening of a seminar on the EVFTA on November 3 in Hanoi, and will join a business forum on November 4 in Ho Chi Minh City.
2016 Vietnam International Jewelry Fair to open next week
Vietnam International Jewelry Fair – VIJF 2016 will be held at Phu Tho Stadium in Ho Chi Minh City’s District 11 on November 9-13.
The event is expected to attract around 200 display booths of local and international enterprises from Italia, Hong Kong (China), Thailand, India, Turkey.
Vietnamese booths are famous brands like SJC, DOJI, SBJ, Diamond World, Loc Phuc, Nhan Khang and others.
The show will be divided into two areas, including fashion jewelry and accessories zone; machine and equipment technology sector.
The largest annual Gem and Jewelry show of its kind in the country is an opportunity for domestic and international jewelry and precious gemstones enterprises to look for partners and showcase their collections of fine jewelry and gemstones.
The event is orgaizned by the Saigon Jewelry Joint Stock Company (SJC) with the support of the People’s Committee of Ho Chi Minh City, World Gold Council (WGC), Vietnam Gold Traders Association (VGTA) and Saigon Jewelry Association.
Vietnam Summit 2016 opens in HCM City
The Vietnam Summit 2016 under the theme “Smooth Sailing Ahead” opened in Ho Chi Minh City on November 3.
The annual conference co-organized by the Foreign Ministry and the UK’s The Economist magazine, aiming at giving a deep knowledge of Vietnamese business and investment environment to international enterprises, especially long-term investors.
The Vietnam Summit 2016 includes six main discussions: Vietnam in the global economy, the future of manufacturing industry, Feeding Vietnam, business breakthroughs building Vietnam Inc and The World If… Geopolitics.
The event is a chance for the Vietnamese Government, enterprises, experts and scholars to learn about the country’s most pressing issues, discuss opportunities and challenges which Vietnam is facing, and seek answers for the country’s development, Jons Fasman, Southeast Asian bureau chief for The Economist, said
Deputy Prime Minister and Foreign Minister Pham Binh Minh stressed that the Vietnamese Government committed to create the best working condition and a favorable environment to ensure an equal and fair playground for enterprises. It has also asked the localities to attract foreign investment, especially in the industries using high technology and local human resource effectively, contributing to the sustainable development and environmental protection.
Vietnam’s economy shows satisfactory signal, said experts at the summit. Moreover, it is expected to benefit from a number of impending trade deals, including the Trans-Pacific Partnership (TPP). This 12-country pact involves the United States and Japan, which are already two of Vietnam’s most important trading partners.
Hiep Phuoc support industry park serves SMEs
Hiep Phuoc Industry Park Joint Stock Company introduced small land plots for lease at Hiep Phuoc support industry park to small and medium enterprises (SMEs) in HCMC on November 3.
Specifically, the company announced land plots of 750 square meters besides those measuring 1,518-2,700 square meters which have been offered to lease for the last one year in Nha Be district.
So far, 20 hectares of the 200 hectares park have been rented by investors of 34 projects from mechanics, medicine, cosmetics and logistics fields.
Programme brings greater recognition of domestic goods
The “Vietnamese use Vietnamese products” campaign has helped increase recognition of domestically-made goods and change consumers’ purchasing habits towards local products, said Deputy Minister of Industry and Trade Hoang Quoc Vuong.
At the closing ceremony of the second “Vietnamese Goods Identification-Proud of Vietnamese Goods” programme in Hanoi on November 6, the Deputy Minister cited statistics as showing that 60 percent of Vietnamese consumers said they prefer domestic products. In Hanoi and Ho Chi Minh City, made-in-Vietnam goods make up 90 percent of commodities in distribution channels.
The “Vietnamese Goods Identification-Proud of Vietnamese Goods” programme, launched in September 2016, has contributed to further spreading the message of the Vietnamese use Vietnamese products” campaign, Vuong said.
According to him, the programme has helped participating businesses introduce their goods to consumers, improve their competitiveness, expand the market and seek partners.
The organising board said the programme has received the enthusiastic response of many cities, provinces, associations and enterprises nationwide, especially in major cities like Hanoi, HCM City, Da Nang, Hai Phong and Can Tho.
Truong Thi Ngoc Anh, Vice President of the Vietnam Fatherland Front Central Committee, said the Steering Committee of the “Vietnamese give priority to using Vietnamese products” campaign aims to have all consumers and businesses know about the campaign by 2020.
All centrally-run cities and provinces, ministries, agencies and organisations are also expected to set up their own media channels to promote Vietnamese goods, she said, adding that all the cities and provinces will set up permanent outlets for Vietnamese goods.
Nghe An to have new high-tech pig farm
Construction began on a high-tech pig-breeding farm invested by Masan Group in Ha Son commune, Quy Hop district, the central province of Nghe An, on November 5.
Covering an area of 223 hectares, the 1 trillion VND (45 million USD) Masan Nutri-Farm is the largest pig farm in the province. It is expected to employ 350 local labourers and contribute about 1 trillion VND to the local GDP once it is operational.
According to Masan Group Chairman Nguyen Dang Quang, the farm is designed to raise 240,000 pigs a year in line with the Vietnamese Good Agriculture Practices (VietGap).
It is scheduled to become operational in the first quarter of 2017 and supply pork for the market one year later, he said.
Addressing the ground-breaking ceremony, Chairman of the provincial People’s Committee Nguyen Xuan Duong said he hopes the farm will help boost socio-economic development in the northern mountainous commune of Quy Hop and Nghe An in general.
On this occasion, Masan Group presented 150 million VND (6,750 USD) to Ha Son pre-school in Quy Hop commune and gifts to 10 farming households in the commune.
Masan Group is one of the largest private-sector companies in Vietnam. Its subsidiaries include Masan Food and Masan Resources.
Hanoi Promotion Month offers great buys for consumers
The Hanoi Promotion Month was launched in Hanoi on November 4 with the participation of nearly 500 enterprises, offering wide-scale discounts at 1,000 sale locations.
Right after the ceremony, a three-day ‘tourism promotion festival’ is being held at Ly Thai To Park in city downtown with 60 booths from nearly 40 well-known tourism brand names, offering discounts up to 50 percent for domestic and international tours in the last months of the year.
The programme is followed by the traditional “Golden Days” on November 12 and 13 which is an occasion for shoppers to get discounts up to 50 percent across the board at 32 major supermarkets and shopping malls across the city.
Commercial banks will join supermarkets, trade centres, convenience stores and transport companies in a three-day “Credit Festival” from October 18-20, encouraging customers to get credit cards and pay in cards instead of cash.
A Golden Discount Fair will mark the end of the annual promotion month. Held in the Quan Ngua stadium, the fair will feature over 200 booths offering quality goods at lowered prices.
Hanoi organizes the Promotion Month every year with the aim of boosting consumption and helping firms approach customers.
Conference on inter-regional links in Mekong Delta region
A conference on the role of Municipal and Provincial People’s Councils in promoting inter-regional links in the Mekong River Delta opened in Ben Tre province on November 5.
Participants discussed policies and mechanisms to exploit and promote the potential of the Mekong Delta region.
In her address, National Assembly (NA) Vice Chairwoman Tong Thi Phong urged Municipal and Provincial People’s Councils, who serve as a bridge between the Party, State and the people, to further contribute to promoting links between localities in the region.
“People’s Councils need to increase coordination between localities in the region and review their socio-economic situation.
The issuance of a Resolution on People’s Council needs to take into account the relevance of local and regional socio-economic development plans,” she said.
Investment in agriculture and rural areas encouraged
A draft resolution revising and supplementing the resolution on exempting and reducing the agricultural land use tax is receiving attention from lawmakers at the ongoing National Assembly (NA)’s second session.
It is hoped that the document will encourage organizations, households, and individuals to invest in agriculture and agricultural restructuring toward greater industrialization.
Exemption and reduction of the agricultural land use tax is a form of direct support for farmers, freeing capital for re-investment in production which will boost farmers’ standard of living, ease rural economic difficulties, and raise farmers’ morale.
Under current regulations, only a small number of people pay agricultural land use tax.
They include organizations and individuals who use agricultural land in excess of the regulated limit, civil organizations, and military organizations who rent agricultural land.
Under the draft resolution, these people will be exempt from the tax until the end of 2020.
The exemption will encourage independent farmers and organizations to invest in the agricultural sector.
Nguyen Van The, NA deputy for Soc Trang province, said, “By not charging land tax, businesses and people can be encouraged to invest in expanding production. Those who don’t have land become laborers or start offering services. It means a shift from farm labor to non-agricultural labor. This will make farming more efficient.”
Exemption from the agricultural land use tax will only reduce state revenues by about US$1.5 million.
NA deputy Nguyen Van Canh of Binh Dinh said, “When people have to pay a land use tax, they do their best to use the land to justify the money they have spent. But if they are exempted from the tax, they lose this motivation, so the revised resolution should stipulate that the amount of the exemption must be re-invested in land improvement. “
Some deputies want the Government to monitor how the policy on agricultural land use tax is implemented and improve it in order to ensure a cconsistent tax policy for both agricultural and non-agricultural land.
New rural development and agricultural restructuring
Agriculture restructuring and new rural development are the two keys to Vietnam’s industrialization and modernization.
In the next five years, agricultural restructuring will be the key elements of Vietnam’s new rural development program.
The national target program of new rural development is a long-term, comprehensive rural socio-economic development program that was begun in 2011.
Based on its achievements over the past years, Vietnam aims to continue the program for another five years.
In 2003, the Prime Minister approved a program of agricultural restructuring toward increasing added values and sustainable growth.
The program focuses on the economic, social, and environmental aspects of restructuring agriculture.
In five years of implementing new rural development program, drastic changes have been made. More than 47,000 km of roads have been built and more than 80% of communes have fulfilled the criteria of the program.
Living conditions in rural Vietnam have improved. More attention has been paid to commodity agricultural production.
Many locales have enlarged their fields, re-designed their irrigation systems and prepared for field mechanization.
Dang Hoang Tuan, NA deputy for Long An province, said, “This is one of the Party and State’s inclusive programs and an important solution to realizing the Party resolution on agriculture, farmers and rural areas. It plays an important role in improving people’s material and spiritual lives.”
Since it debuted in 2013, agricultural restructuring has accelerated the national target program of new rural development, increased incomes, reduced poverty, restructured farm labor, and generated jobs for people in rural areas.
However, there remains a big gap in program outcomes between localities and between regions.
In the next five years, Vietnam intends to have 50% of all communes achieved the criteria of the new rural development program; complete the infrastructure necessary for production – transportation, electricity, water, schools, and clinics; create production models to help stabilize people’s lives; and increase 2015 incomes 80%.
To achieve these goals, new rural development needs to combine with agricultural production, applying scientific and technological advances to improve productivity and competitiveness.
Doan Van Viet, deputy for Lam Dong province, said “We need to apply science and technology, especially bio-technology, to the agricultural growth model and increase revenues per ha. In Lam Dong province, just 16% of the agricultural production area uses high technology but its revenue accounts for 30% of the total.”
“Farmers in Lam Dong earn an average of VND150 million per ha compared to VND78 million per ha nationwide. By applying high-technology, vegetable production can generate VND400 to 500 million per ha per year and flower production from VND800 million to 1 billion,” he added.
Getting enterprises of all economic sectors, particularly the private sector to invest in agriculture and rural areas is a key to the new rural development program, said Nguyen Tuan Anh, NA deputy of Binh Phuoc province.
He said, “We need to improve the agricultural sector and rural areas by attracting investment from enterprises. Enterprises will help them find new outlets, improve product quality and quantity, and tap the advantages of each region. To do so, the new rural development program needs to focus on resolving land problems.”
Vietnam Mentors Initiative to liven up start-up scene
On November 3, a multitude of organisations mentoring start-ups in Vietnam signed a strategic cooperation agreement to establish Vietnam Mentors Initiative (VMI) with the aim to connect mentors with Vietnamese start-up founders in Vietnam and over the world.
VMI was launched by Start-up Vietnam Foundation, a foundation that funds start-ups in the field of science and technology. VMI’s mission is to become a wide and effective network of mentors supporting the new generation of Vietnamese business people.
“It would be great if a young person starting a company got help from a person with experience. In reality, there are many successful leaders that want to give back and mentor new leaders but they do not know where to begin looking. On the other hand, many of the young bloods think the old ones are unapproachable. VMI aims to connect them,” said Pham Duy Hieu, SVF’s director.
At the moment, many organisations already mentoring start-ups, such as the SVF, Hatch! Ventures, Danang Business Incubator (DNES), KisStart-up, SME Mentoring, Saigon Hi-tech Park’s incubator, BK Holdings, and the French Alumni Vietnam Start-up Network (FAVSN) have joined VMI.
In 201,6 VMI aims to connect at least 40 mentors with 40 mentees. They will first focus on start-ups already funded by some of the member organisations before expanding to other start-ups next year.
VMI is a non-profit initiative funded by the Swiss government’s entrepreneurship programme SECO EP and the Mekong Business Initiative.
Impressive Q3 for Sabeco as listing on horizon
The Saigon Alcohol Beer and Beverages Corporation (Sabeco) recorded impressive growth during the third quarter of 2016 as it nears a possible listing on the Ho Chi Minh Stock Exchange (HoSE) in the fourth quarter.
In early October its CEO, Mr. Le Hong Xanh, said the beer giant may be listed on HoSE in late November or early December, according to Reuters.
“The listing could be in late November or early December, according to the consulting contract and agreement, but how fast it is depends on many other factors, like transparency in management and other conditions like tax,” he was quoted as saying.
Along with the Hanoi Beer Alcohol and Beverages Corporation (Habeco), Sabeco has been equitized before, with the State selling 5 per cent to Dutch brewer Heineken in 2008. The State still holds 89.59 per cent, other shareholders 5 per cent, and its strategic investor Heineken 5 per cent.
The Ho Chi Minh City-based beer giant is one of the last profitable State-owned assets in which the government expects to divest its entire holding by 2017, worth an estimated $1.8 billion.
The government has said it wants to list Sabeco before selling 53.59 per cent this year and the remainder in 2017, but Mr. Xanh said all options for divestment are being considered and the government has yet to approve any particular course of action.
Net operating revenue reached VND7.64 trillion ($342.2 million) in the third quarter, up 3.6 times year-on-year, with gross profit at VND1.13 trillion ($50.6 million), up five times year-on-year, its third quarter financial statement revealed.
During the July-September period, revenue from financial activities were down 50 per cent, mainly because of lower dividends and attributable profit, to nearly VND541 billion ($24.2 million). Cost of goods sold increased significantly, from VND73 billion ($3.3 million) in the third quarter of 2015 to VND119 billion ($5.3 million) in the third quarter of this year.
Administrative expenses also increased 21 per cent year-on-year, to nearly VND69 billion ($3.1 million). During the July-September period, after-tax profit reached more than VND1.23 trillion ($55 million), up 6 per cent year-on-year.
Total revenue stood at VND22 trillion ($985.44 million) with after-tax profit at VND3.2 trillion ($143.3 million), up 6.4 per cent year-on-year. Its assets totaled VND11.13 trillion ($498.5 million) as at September 30. Cash and cash equivalents were nearly VND5.76 trillion ($258 million), short-term financial investments more than VND3.09 trillion ($138.4 million), and accounts receivable VND1.99 trillion ($89.1 million).
Sabeco is a non-borrowing enterprise. Its short-term payables stood at VND4.06 trillion ($181.85 million) as at September 30 and mainly comprised trade creditors and provisions for payables.
Several major foreign brewers have been eyeing Sabeco since the government first earmarked it for equitization, but potential partners keen to exploit changing lifestyles and a fast-growing middle class have faced repeated delays.
Foreign brewers from Europe and Asia, including Japan’s Kirin Holdings and Asahi Group Holdings, Thai Beverage, and Heineken had previously expressed an interest in the stake sale. But Mr. Xanh said the process has restarted and interested buyers would have to bid again, declining to name any specific investors, according to Reuters.
Sabeco is owned and under the authority of the Ministry of Industry and Trade (MoIT) with brands such as Saigon Beer and 333 Beer. With a leading 43 per cent share in Vietnam’s beer production, net profit jumped 27 per cent in the first half of 2016 to VND2.39 trillion ($107 million), and its CEO forecast that full-year profit may grow 14 per cent.
TTC sets targets for M&A deals
The Thanh Thanh Cong Group (TTC), a Vietnamese company in the local sugarcane industry, has recently announced merger and acquisition (M&A) plans for two of its subsidiaries, Thanh Thanh Cong Tay Ninh JSC (TTCS) and Bien Hoa Sugar JSC (BHS).
“We are implementing M&A deals in order to increase our competitiveness with foreign rivals,” Mr. Pham Hong Duong, Chairman of TTC’s Sugar Segment, told its recent annual shareholders meeting.
In early October, the Hoang Anh Gia Lai Group (HAGL) confirmed with local media that it has been in negotiations with TTC over the acquisition of its sugar refinery in Laos by TTC. TTC made no further comment on the deal when contacted by VET.
TTC acquiring the HAGL sugar refinery would create a large sugar production company worth around $450 million. HAGL has good raw material resources and the M&A would become an important link in completing TTC’s value chain and help cut the domestic sugarcane price so it can compete with sugar from Thailand, Mr. Duong told local media.
At the meeting, TTCS announced a target for consolidated revenue in fiscal year 2016-2017 of $180 million, with pre-tax profit at $14 million and a dividend payout of 6 to 10 per cent.
Net revenue from sales and services at TTCS reached $180 million, exceeding the plan by 22 per cent, according to the consolidated financial statement for fiscal year 2015-2016. Pre-tax profit was over $14 million, 41 per cent more than the plan. Earnings per share therefore reached $0.07.
TTCS partnered with TP Bank and VIB in May this year to issue a bond package valued at $45 million that aims to optimize its financial structure, increase capital efficiency and prepare financial resources to help it implement its projects in the 2016-2020 period.
In August, TTCS increased its charter capital by 30 per cent. It now has 253,188,268 shares, for charter capital of $114 million.
In order to ensure the company’s competitiveness and sustainable development in the future, three strategies were raised by the TTCS’s Board of Management at the meeting: increasing market share and creating high added value products, reducing costs through controlling material areas, and expanding by M&A deals.
The company’s RE and RS sugar products account for about 18 per cent of the sugar market, with RE having the largest share.
Over the next five years the company will focus on industrial customers while seeking more niche markets and increasing retail sales. It also plans to export sugar candy to Singapore through its newly-established subsidiary. To reduce costs, the company’s policy is to increase investment so that the sugarcane yield can compete with Thailand by 2020.
TTC is the leading company in the sugar industry as it holds the controlling stake in many large sugar companies, including TTCS, BHS, Gia Lai Hydropower Sugar (SEC), Ninh Hoa Sugar (NHS), and Phan Rang Sugar.
In the latest move, TTC has merged SEC with TTCS and NHS with BHS. TTC will still hold the advantages TTCS and BHS possess: advanced technology, experienced staff, strong brands, and a large retail network.
Foreign investors strong net buyers of bonds in 10M
Foreign investors net sold on Vietnam’s stock market by VND4.53 trillion ($202.89 million) while net buying government bonds by VND19.38 trillion ($868.03 million) in the first ten months of this year, according to a report released recently by the National Financial Supervisory Commission (NFSC).
Bond purchases by foreign investors stood at VND22.67 trillion ($1.01 billion) in the first ten months, with strong net selling during October of VND3.29 trillion ($147.35 million) viewed as profit taking and portfolio reallocations, the NFSC report stated.
Their trade on the stock market was neutral for most of this year until strong net selling in August, of VND1.63 trillion ($73 million), and in September of VND3.1 trillion ($138.84 million), saw the market at its most volatile for the year, analysts from Maybank Kim Eng Securities (MBKE) wrote in a report released at the end of October.
In general, there were positive signs from investors about the recovery in the national economy, with market capitalization representing 38 per cent of the country’s GDP, analysts at NSFC said.
Even though the trading value of foreign investors on the stock market remains modest, at about 20 per cent of daily trade, many local investors follow their movements.
“In August and September foreign investors strongly net sold on Vietnam’s stock exchanges and were then more balanced in October,” according to analysts at MBKE. “If foreign investors end their net selling and net buy for the remainder of 2016, the indexes will be in better shape.”
The VN-Index has increased 16 per cent so far this year, representing a better return on investment compared to other investment channels. Since July, however, the index has fluctuated around 670 points and any positive prospects depend largely on it moving up from this level, MBKE wrote. “Depending on how the VN-Index reacts at 670 points, the next wave will be either bearish or bullish under two different scenarios.”
In the positive scenario, if the VN-Index can return to the momentum seen previously this year, when it closed at the upper line of the channel line four times, it may reach 720 points by the end of the year.
If it fluctuates under 670 points and closes under 665 points for two days in a row then it may slip to 630 points over the remainder of the year. MBKE, however, believes the positive scenario is more likely.
CBRE Vietnam to manage Viettel Tower
CBRE Vietnam has been officially selected by the Viettel Real Estate Company to manage its latest project, Viettel Tower, at 285 Cach Mang Thang Tam Street in Ho Chi Minh City’s District 10, where many commercial activities converge and with direct transport connections to Districts 1, 3, and 5.
It will provide management services for the entire complex to bring the best service quality to occupiers and deliver smooth operations.
Viettel Tower is a large, modern complex, comprising two towers and a total leasable area of approximately 65,000 sq m of office space and a further 8,000 sq m of retail space, which will help meet demand for commercial space in District 10 and surrounding areas.
“After carefully considering all the options, we decided to outsource our property and facilities management to CBRE Vietnam due to our confidence in the strong experience and professional ability of its property management team,” said Mr. Ha Quang Huy, Director of the Viettel Real Estate Company. “We believe that our staff, visitors and future tenants will experience the highest standards of services provided during their time working here.”
“CBRE is honored to have been appointed to provide management services for Viettel Tower, a unique project in a central location in bustling District 10,” said Mr. Marc Townsend, Managing Director of CBRE Vietnam. “I strongly believe that thanks to our long years of experience and professional approach, we will contribute to maximizing the experience of occupiers, which we hope leads to their commercial success while working at the Viettel Tower.”
CBRE Group, Inc., a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s commercial real estate services and investment firm. The company has more than 70,000 employees (excluding affiliates), and serves real estate investors and occupiers through more than 400 offices (excluding affiliates) worldwide.
It offers a broad range of integrated services, including facilities, transaction and project management, property management, investment management, appraisal and valuation, property leasing, strategic consulting, property sales, mortgage services, and development services.
HG Travel rebranded as Asia DMC for regional expansion
HG Travel, a major tour operator in Southeast Asia, has rebranded itself as ASIA DMC as it moves forward to become one of the dominant B2B players in the region through a considered expansion plan throughout Asia.
The growth plan will see offices opening across Asia to give ASIA DMC additional on-the-ground operations to its already-established presence in Vietnam, Cambodia, Myanmar, Laos and Thailand, adding Indonesia, Malaysia, the Philippines, China, India and Sri Lanka over the next 12 months.
Launched 20 years ago in Vietnam, the rebranding demonstrates how far the company has come by specializing in travel to Indochina and developing a renowned track record for quality, service excellence, and experiential travel delivered to 50,000 inbound arrivals from global source markets per year.
“The transition from HG Travel to ASIA DMC represents our growth from a local destination management company to expanding into Indochina over the last five years when we opened in Cambodia, Laos, Myanmar and Thailand and now to a continental player offering innovative, new products throughout Asia,” said Mr. Tran Thanh Nam, ASIA DMC’s CEO.
He added that the change of name is also a consolidation of the company’s commitment to the B2B model over the last two decades. “It is now time for us to grow and bring our excellence in service to the world,” he said.
ASIA DMC remains deeply committed to retaining the original DNA that established the reputation and success of HG Travel.
“We are absolutely committed to continuing to offer the holistic service culture, attention to detail, and personal touch that have defined our company since the beginning,” said Mr. Armand Cheveux, ASIA DMC’s Director of Business Development. “How we research originality in our programs for our clients and how we take to heart their needs to have a competitive offer is what we thrive on.”
In addition to office openings to support the management of travel programs in Asia, ASIA DMC will also open a sales and marketing office in the US on the west coast for its North American clients.
To mark the rebranding, ASIA DMC is also launching a non-profit foundation called “People of Asia”, which is the cornerstone of the company’s commitment to sustainable tourism. People of Asia will embrace a philosophy demonstrating that a combination of social progress and ecological balance will deliver sustained economic growth, bringing together tourism partners for the benefit of local communities.
ASIA DMC has been in business for 20 years and in 2015 handled over 50,000 arrivals to Vietnam, Laos, Cambodia and Myanmar managed by its offices and on-the-ground expertise in each country. It currently welcomes guests from international destinations from around the world, with leading source markets being the UK, Europe, the US, China and Australia.
Quang Tri to develop island tourism
The government agreed on October 31 to a tourism route being opened to Con Co Island off the coast of central Quang Tri province, after a proposal from its People’s Committee.
It also asked the province to work closely with the Ministry of Defense, the Ministry of Agriculture and Rural Development, and related agencies to prepare the investment and construction plans.
Con Co Island boasts a diverse ecosystem, where visitors can swim, look at coral, visit primeval forests and the lighthouse, and enjoy local food. They can also visit a building with historical artifacts and documents from the last 55 years.
The island is 30 km from Cua Tung Port in Vinh Linh district and has a forest coverage of 73 per cent. It was established as an island district in 2004 and its population is about 400 people. Despite receiving investment to build a power station, a shortage of electricity and water are its two biggest disadvantages.
It will form a tourism triangle in Quang Tri: Cua Tung Port – Cua Viet Port – Con Co Island. Though it has much potential to develop tourism, it attracts few tourists.
The island’s natural conditions make it suitable for resorts and ecotourism destinations. Its beaches are wide and clean with a water temperature that never falls below 21C. There are 113 species of hard coral, 56 species of seaweed, 46 species of benthic zone, 87 types of coral reef fish, 164 species of phytoplankton, and many other rare species of dolphins and turtles.
It is also a historical place, as from 1965 to 1973 it was a transit point for transporting over 2,500 tonnes of goods to the battlefield in the south of Vietnam.
To encourage tourism investment, provincial leaders have set in place favorable conditions to help investors access priorities in the province’s investment policies, regarding land, investment liberalization, taxes, immigration, and human resources.
Quang Tri faces many difficulties in infrastructure to serve living standards and promote tourism. Roads, airport and ports are evaluated as not being able to meet demand in tourism, especially international visitors. Water and electricity only meet short-term demand and in the long term require significant investment.
Con Co has retained its wild beauty, but to develop tourism provincial leaders need to adopt particular strategies to ensure sustainable development.
European F&B companies come knocking
European Commissioner for Agriculture and Rural Development Phil Hogan is leading a business delegation of 41 European food and beverage companies to visit Vietnam and sound out business opportunities.
Vietnam is the first leg of the delegation’s Southeast Asia tour that also takes in Singapore and Indonesia. The visiting businesses are scheduled to attend seminars and business forums in Hanoi and HCMC from November 2 to 4.
This visit comes at an opportune time since the European Union (EU) and Vietnam have concluded negotiations for a free trade agreement (FTA) and expect to sign it soon.
The delegation on November 3 introduced a wide range of farm and F&B products such as fresh fruits and vegetables, meat, poultry, processed food, milk and other dairy products, and wine and spirits. In addition, they discussed a range of topics, including food safety, investment, distribution, licensing of F&B products and business opportunities. They also visited retail outlets run by local and foreign firms to gain first-hand insights into the local market.
In HCMC, Hogan and his encourage will be attending a seminar on quality food concepts such as Geographical Indications (GIs) and business opportunities in Vietnam on November 4. A business forum is expected to provide the delegation with information about market access, local laws and regulations, and Vietnamese consumer trends.
Side meetings will also take place between the European firms and their potential Vietnamese partners including importers, distributors and retailers.
In 2015, EU-Vietnam trade in goods total over 38.4 billion euros, with 29.9 billion euros in imports from Vietnam into the EU, and 8.4 billion euros in exports from the EU to Vietnam.
Vietnam’s key export items to the EU include phones, electronics, footwear, textiles and clothing, coffee, rice, seafood and furniture. The EU’s exports to Vietnam include high-tech goods including machinery and equipment, aircraft, vehicles, and pharmaceutical products.
At present, Vietnam enjoys EU trade preferences through the Generalized System of Preferences (GSP).
No electricity price hike this year
The Government, concerned about the possibility of core inflation surging, has ordered the Ministry of Industry and Trade to find ways to keep electricity retail prices from rising until the year-end.
The ministry said that to keep core inflation at 1.81% to below 2%, the Government has told ministries to carefully consider any price adjustments in the two final months of the year.
As consumer demand traditionally rise strongly during the New Year and Lunar New Year buying sprees, prices of food, foodstuff and fuels will shoot up.
In addition, the implementation pace of State-funded investment projects is normally accelerated at year-end to realize yearly capital disbursement targets, thus piling some inflationary pressure on the economy.
Therefore, Deputy Prime Minister Vuong Dinh Hue has told the Ministry of Industry and Trade to shelve any plan to raise power tariffs. Therefore, power retail prices have stayed at VND1,622 per kWh since March last year.
Wholesale prices of electricity which Vietnam Electricity Group (EVN) sells to its power distribution corporations rose by 1.9-5.7% in May over the previous year, but the change did not affect retail prices.
Taxman names 35 corporate tax debtors
The HCMC Tax Department has publicized the names of 35 enterprises with tax arrears amounting to a combined VND220 billion by the end of August.
These tax debtors are active in production, trade, tourism, pharmaceutical and building material sectors.
Thang Long Steel Company in Binh Thanh District is the biggest debtor with more than VND41.5 billion, followed by Binh Huong Seafood Processing and Trading Company in Binh Chanh District with VND29.1 billion and M.K Construction Trading Transport Company with VND22.1 billion.
Meanwhile, five companies have yet to pay some VND10-20 billion in taxes, including Thien Phuc Loc Manufacturing and Trading, Nam Viet Trading, TOA Paint Vietnam, Nhan Van Construction Trading Service and Tapbo-Lung Lo Joint Venture.
There are 28 other firms owing some VND3 billion in taxes each.
The department said a thorough review of the tax debtors had been done before their names were made public. This is the second time the taxman has named the names of tax debtors after the first one in June.
The department made this announcement at the request of the General Department of Taxation as a measure to compel the tax debtors to fulfill their obligations.
Meanwhile, the Hanoi Tax Department has released ten lists of tax debtors in the year to date.
Recovering tax arrears is a vital task or the target for budget revenues from domestic sources cannot be achieved. The General Department of Taxation has assigned its local tax offices to keep tax arrears at less than 5% of total annual tax revenues. Tax arrears have dropped in many provinces and cities.
An official told the Daily that irrecoverable and recoverable tax debts must be made clear and that in reality irrecoverable debt is huge.
The department has several times proposed the Ministry of Finance seek permission from the Government and the National Assembly to write off tax debts owed by many businesses but to no avail.
First shopping center opened at EPZ in HCMC
Linh Trung 1 Export Processing Zone (EPZ) in Thu Duc District, HCMC has become the first such zone to open a shopping center to primarily serve workers there.
Sepzone – Linh Trung Ltd invested VND70 billion (US$3.14 million) to build Joy Citipoint center with three levels covering some 5,820 square meters. In addition to retail space, there are other facilities like food court, entertainment area, fitness center, and cinema.
Joy Citipoint is aimed at meeting shopping and recreational needs of workers, according to the management of the HCMC Export Processing and Industrial Zones Authority (Hepza).
Linh Trung 1 EPZ has more than 40,000 workers but the neighborhood has no more places of interest. The opening of the center can meet their shopping and entertainment demand.