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Author: Mei Ling Tan

  • Steel giant to manufacture containers for first time in Vietnam

    Steel giant to manufacture containers for first time in Vietnam

    Steelmaker Hoa Phat plans to manufacture 500,000 twenty-foot equivalent unit containers a year to mitigate a shortage since containers are stuck at ports after Covid-19 hit trade.

    It plans to build its first container manufacturing factory in Binh Duong or Dong Nai province and near Cat Lai Port in HCMC and Cai Mep – Thi Vai International Port in Ba Ria – Vung Tau Province.

    The southern region has an especially high demand for containers. Market research by Hoa Phat in fact found that three out of every four containers are used there.

    Nguyen Manh Tuan, vice chairman of the Hoa Phat Group, said the containers would be made of weather-resistant hot-rolled coil steel with enhanced corrosion resistance produced at its Hoa Phat Dung Quat 2 steel plant to be launched in early 2022.

    The logistics sector is suffering from a severe container shortage since many remain in various ports around the world, unable to offload their goods, while demand for containers to export to Europe and the U.S. is high.

    At the end of 2020, the Vietnam Maritime Administration had to order container shipping lines to publicly declare their freight rates and surcharges, saying it had received numerous complaints about inflated prices due to a shortage of containers and warning it would not tolerate gouging.

    Most shipping lines have hiked freight by 2-10 times in the last three months.

    In Vietnam, there is no container production.

    Tuan explained that the price of weather-resistant hot-rolled coil steel used for making containers is high, and would cause losses for companies if they have to import it.

    “Hoa Phat can produce this type of steel,” he said.

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  • DBS Names Malaysia Country Head

    DBS Names Malaysia Country Head

    DBS reshuffles several senior managers and appoints a new country head for Malaysia, effective June 1 this year.

    The Singaporean lender named Abdul Raof Latiff as the new Malaysia country head, according to a statement, succeeding Jeffrey Ling who will retire from the role.

    Ling, who joined the bank in 1995, will stay as a senior advisor to help continue engagement with DBS’s key clients in Malaysia.

    Latiff joined DBS in 2017 and was most recently its group head of digital for institutional banking and group head of global transaction services product management. Latiff has over 25 years of banking experience and he previously held senior positions in the region with the likes of Citigroup, J.P. Morgan and HSBC.

    Latiff’s existing roles will be taken over by 15-year DBS veteran Lim Soon Chong, currently group head of investment products and advisory for consumer banking and wealth management.

    The new appointments reflect our commitment to groom talent from within, and enable us to continue to provide more development opportunities to our senior team across the region, said DBS group head of institutional banking Tan Su Shan.

    As a result of our deliberate effort to build our timber from within, a large proportion of our senior leaders have also been developed internally, including over 80 percent of our managing directors.

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  • Sun Life Vietnam reveals strategy to increase insurance market share

    Sun Life Vietnam reveals strategy to increase insurance market share

    In December 2020, Sun Life Vietnam signed a partnership agreement with ACB to expand its budding bancassurance system.

    The new, 15-year partnership with ACB came into effect on the first day of 2021. ACB will distribute Sun Life Vietnam’s products at their 371 branches in 48 provinces, offering innovative and comprehensive financial solutions to millions of potential clients.

    The deal with ACB came after Sun Life’s first exclusive distribution deal with Tien Phong Commercial Joint Stock Bank (TPBank) just a year prior. The two partnerships prove what great stock Sun Life Vietnam puts into the emerging distribution channel and industry-leading collaborations.

    Larry Madge, CEO of Sun Life Vietnam, said: “We believe our cooperation with ACB and TPB will help us significantly expand Sun Life Vietnam’s client reach and enhance our position in the market.”

    Sun Life Vietnam products are now widely available to millions of TPBank and ACB customers, complementing the insurer’s extensive agency network.

    The two bank partners will also collaborate with Sun Life Vietnam on digitally enhancing their offering, client experience and training to ensure the best consultancy services.

    “The new partnership with ACB will be a powerful boost to our distribution capabilities and will enable us to scale up operations even faster. At the same time, we are accelerating the expansion of our agency network by opening new offices across the country and will also continue developing our existing partnership with TP Bank,” said Madge.

    Since the beginning of 2020, Sun Life Vietnam has been steadily increasing its charter capital while boosting investment in technology, branding, products, and services to meet changing client needs and adapt to new trends and a new working environment.

    For example, as Covid-19 was a complete game-changer for the entire industry, Sun Life Vietnam had to roll out several new solutions to adapt to the new landscape.

    The insurer developed Sun Fast, a solution where their advisors and clients could conduct virtual meetings and the entire consultation and purchasing process digitally. They can fill out and sign applications virtually, without face-to-face interaction, so they are not left without protection even during social distancing.

    In December, Sun Life Vietnam also introduced a new QR payment method to improve convenience.

    According to Vietnam Report, there will be more large-scale collaborations between banks and insurance businesses, with an increasing proportion of insurance revenue generated through bancassurance. Deals between FWD and Vietcombank or Sun Life Vietnam, ACB and TPBank all point in this direction.

    The insurance market is still looking at excellent growth potential due to the low number of insurance policyholders in the country, while the middle-class ranks proliferate.

    Remarkably, bancassurance has been growing even more substantial and now contributes nearly 30 percent of total life insurance sales. The annual average growth rate in 2016-2019 was 30 percent, and while the segment was hit hard by Covid-19, it still grew by 19 percent throughout 2020.

    Madge commented: “The Vietnamese economy has been growing steadily by 6-7 percent in recent years, and with the great job the Vietnamese government has done to manage Covid-19 while maintaining the economy, we have high hopes this rapid growth will continue.”

    “Currently, the Vietnamese insurance market is underpenetrated and only accounts for 1.4 percent of the GDP. Simultaneously, the global average is 3.4 percent.”

    Bancassurance deals offer benefits to all three sides – the insurance company, bank, and clients. It provides an efficient distribution channel to the insurance company, increasing its market reach, revenue, and potential client base.

    Meanwhile, it brings significant investment to the bank partner and improves relations with clients via a comprehensive set of products and services. The client can also enjoy improved protection from daily risks through insurance products while accessing flexible services from both the bank and insurer.

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  • Groupe Renault And Faurecia Collaborate On Hydrogen Storage Systems

    Groupe Renault And Faurecia Collaborate On Hydrogen Storage Systems

    Faurecia and Groupe Renault today announced their decision to collaborate on hydrogen storage systems for hydrogen light commercial vehicles. Starting at the end of 2021, Faurecia will supply hydrogen storage systems for a first fleet of light commercial vehicles. These systems will be developed and produced at its global centre of expertise in Bavans, France. As volumes, increase production will be extended to a new plant dedicated to hydrogen storage systems that Faurecia is building in Allenjoie, France.

    Faurecia will supply hydrogen storage systems for a first fleet of light commercial vehicles.

    Mathias Miedreich, Executive Vice President of Faurecia Clean Mobility said, “Fuel cell electric vehicle technology is set to become significant in the powertrain mix by 2030, and as such Faurecia is dedicating important resources to accelerate its deployment.”

    This collaboration on hydrogen storage systems is embedded in Renault’s strategy to offer market-ready H2 solutions for light commercial vehicles and target over 30% share of this market in Europe.

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  • Japan’s top energy company to increase Petrolimex stake

    Japan’s top energy company to increase Petrolimex stake

    Japanese oil giant ENEOS Corporation has registered to buy 25 million shares of fuel distributor Petrolimex on the Ho Chi Minh Stock Exchange.

    The transaction, to be completed in March, if successful, will see ENEOS increase its stake in Petrolimex to 2.94 percent. It had acquired a 1 percent stake last September.

    Petrolimex’s PLX shares closed at VND57,300 on February 24, and at this price the deal will cost ENEOS around VND1.4 trillion ($62 million).

    The company’s subsidiary, JX Nippon Oil & Energy Vietnam Consulting and Holdings Company Limited, owns another 8 percent stake in Petrolimex.

    ENEOS is the largest oil company in Japan with a 47 percent market share.

    In 2020, due to the impact of Covid-19, Petrolimex saw revenues fall 34.5 percent to VND123.9 trillion. Its net profit was VND1.2 trillion, a 73.6 percent fall.

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  • TikTok parent settles lawsuit over its collection of minors’ personal data

    TikTok parent settles lawsuit over its collection of minors’ personal data

    TikTok parent ByteDance has agreed to settle a class action suit for $92 million. The popular short-form video app allows users to take 15-second or one minute videos (by stringing together four 15-second clips). Popular with teens, content usually includes pranks, lip syncing, dancing, and more. According to the lawsuit, TikTok “infiltrates its users’ devices and extracts a broad array of private data including biometric data and content that defendants use to track and profile TikTok users for the purpose of, among other things, ad targeting and profit.” In other words, the court documents accuse ByteDance of using TikTok to collect user data from its teenage users.

    The settlement still requires approval from the court. In a statement, TikTok said, “While we disagree with the assertions, rather than go through lengthy litigation, we’d like to focus our efforts on building a safe and joyful experience for the TikTok community.” The settlement was reached after “an expert-led inside look at TikTok’s source code” according to the motion presented to the court in an attempt to get the settlement approved. The settlement of the class-action suit, filed in the U.S. District Court for the Northern District of Illinois, could end arguments over whether the app illegally collected personal data from minors including facial scans. The suit was a collection of 21 separate class-action suits that were filed for teen TikTok users and those even younger. The youngest plaintiff was 8 years old.

    The plaintiff’s attorneys argued that by collecting personal data, ByteDance was able to collect biometric data allowing it to deliver more precisely targeted ads and content recommendations. In the state of Illinois, collecting this data without consent could expose ByteDance to serious punishment. As an example, last year Facebook settled a case under the same Illinois’ biometric privacy law for $650 million. The plaintiffs also charged ByteDance with storing personal data in China which might have allowed the Communist Chinese government to view it.

    Last year, the Trump administration tried to force ByteDance to sell part of TikTok to U.S. companies such as Microsoft, Twitter, Walmart, and Oracle. The plan called for the creation of a new American company that would be owned by ByteDance and some U.S. firms. Among those stateside companies that showed an interest in TikTok were Microsoft, Twitter, Walmart, and Oracle. When Joe Biden won the presidential election on November 3rd, former President Donald Trump seemed to give up interest in going after TikTok. On November 12th, the U.S. Commerce Department said it would no longer enforce its order that would have forced TikTok to shut down in the states by banning American companies from hosting the site and delivering content to the app. The anti-TikTok hysteria started last summer when then Secretary of State Mike Pompeo first mentioned a possible U.S. ban to the media.

    As of the first week of this month, TikTok is estimated to have 80 million monthly users in the United States according to Wallaroo. 60% are female, 40% are male. Those age 16 through 24 make up 60% of stateside TikTok users while 26% are 25 through 44 years old. 80% of users fit in the range of 16 to 34 in age while 60% of American TikTok users are Gen Zers. The app reportedly grossed $500 million from the U.S. alone last year.

    Globally, an estimated 1.1 billion people use TikTok each month. Sensor Tower states that the number of downloads of the TikTok app world wide is 2.6 billion. Last month, the app generated 62 million installs globally; just a year earlier, TikTok set a record for an app during a quarter with 315 million downloads. Allegedly, the app has been paying influencers $500 to open an account.

    With a new administration in place, things look rosier for TikTok in the states even though President Biden has not commented on whether he will continue to treat Chinese tech firms as national security threats.

  • Vietnam beats global average in sustainable lifestyles

    Vietnam beats global average in sustainable lifestyles

    Vietnam is ahead of the global average in adopting healthy and sustainable lifestyles, a survey has found.

    Forty seven percent of respondents in Vietnam said they had supported a socially responsible company last year, against a global average of 33 percent, the survey by research company GlobeScan and digital payment firm Visa said.

    Eighty two percent said they had sought out information related to healthier lifestyles last year, well above the global average of 56 percent.

    The survey, which polled 27,000 people in 27 countries and territories, also found that people in Vietnam are taking proactive steps towards healthier and more sustainable lifestyles.

    Ninety percent said they had made changes to their lifestyles last year to be more environment-friendly, and 87 percent made changes to be healthier.

    Vietnamese also display a high interest in environment-friendly lifestyle choices, with 81 percent saying they had sought out information about them last year against a global average of 47 percent.

    “It is encouraging to see that consumers in Vietnam are already taking concrete steps to lead healthy and sustainable lifestyles,” Dang Tuyet Dung, Visa country manager for Vietnam and Laos, said.

    Asked what companies could do to help them live healthily and sustainably, Vietnamese listed a desire for new products that are better for both people and the environment as a top priority.

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  • Vietnamese banks continue to ascend global brand rankings

    Vietnamese banks continue to ascend global brand rankings

    Nine Vietnamese lenders, five of them state-owned, have risen up the list of the world’s 500 most valuable banking brands.

    State-owned Agribank, one of the ‘Big 4’ state-owned lenders, jumped 17 places to 173th in the annual ranking put out by U.K. consultancy Brand Finance.

    Fellow state-owned lenders Vietcombank and VietinBank rose 27 and 61 spots to 180th and 216th.

    BIDV was at 246th and MB at 374th, up 30 and 12 spots.

    Of the private lenders, VP Bank rose 37 places to 243rd and the country’s private player, Techcombank, jumped 57 spots to 270th.

    Sacombank and ACB rose 30 and 23 places to 392nd and 397th.

    The report said VietinBank was one of 10 fastest-growing banks globally last year.

    “Vietnam’s banking sector has seen the greatest year-on-year brand value growth of any nation in the rankings with 23 percent,” the consultancy said.

    “Vietnam’s ability to effectively control and constrain Covid-19 has allowed it to buck the sector-wide trend of declining brand value.

    “Internal reforms have strengthened accountability in the Vietnamese financial sector, which has had the knock-on effect of boosting not just revenues, but brand reputation and trust.”

    Vietnam’s banking sector has recorded cumulative brand value growth of 753 percent in the last five years, the second-highest rate in the rankings.

    “Since the Vietnamese government introduced its strategy to boost accountability and the strength of the banking sector, including more stringent capital requirements and greater transparency, customer perception has improved,” Brand Finance said.

    China’s ICBC was the world’s top bank brand.

    Chinese banks maintained their dominance in the rankings, accounting for 33 percent of total brand value and seven of the 10 top climbers.

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  • Vietnam Airlines to invest $430 mln to offer ground services at Long Thanh airport

    Vietnam Airlines to invest $430 mln to offer ground services at Long Thanh airport

    Vietnam Airlines plans to invest VND9.9 trillion ($430 million) in the under-construction Long Thanh International Airport to become a provider of ground services and in-flight meals.

    It plans to provide aircraft maintenance services, supply jet fuel and meals, serve passengers in lounges, and set up duty-free shops, the carrier said in a proposal to authorities.

    These are services the state-owned carrier already provides at major airports in the country.

    It will bring in 30 percent of the amount from its own resources and borrow the rest.

    Its subsidiaries can either set up facilities at the airport or joint ventures with the Airports Corporation of Vietnam (ACV), which oversees the construction and would operate the airport, the proposal said.

    It hopes to get a dedicated area at the airport to build hangars for aircraft maintenance and in the terminal to prioritize its customers.

    Construction of the first of three phases of Long Thanh International Airport in the southern province of Dong Nai, 40 kilometers east of Ho Chi Minh City, began in January.

    The $4.6-billion first phase of the airport is set to be completed by 2025 when it will be able to handle 25 million passengers and 1.2 million tons of cargo a year.

    The final phase will be completed by 2040, when the airport will have four runways and four passenger terminals. It will have a capacity of 100 million passengers and five million tons of cargo.

  • Workers in high demand as factories expand production

    Workers in high demand as factories expand production

    Several localities have reported demand for thousands of workers as manufacturers seek to scale up production.

    In some industrial parks in the southern provinces of Dong Nai and Binh Duong, hundreds of companies have put up hiring notices this week.

    South Korean textile firm Taekwang Vina in Dong Nai is looking for 3,000 workers as it plans to establish four more production chains this year.

    The company offers a minimum monthly salary of minimum VND7 million ($304). Anyone with basic literacy can apply.

    Another South Korean textile firm in the province, the Chang Shin Vietnam Company, which has 35,000 workers, is also recruiting an unspecified number of new workers as the number of orders received by the end of this year has already exceeded capacity, prompting it to build two new workshops.

    In Binh Duong, official data shows local companies are looking for nearly 40,000 workers in several sectors including textiles, wood processing and household products manufacturing.

    Companies are sending recruiters to sit near main roads to increase the chances of contacting candidates.

    “Businesses are struggling to find workers even though they are offering high salaries of VND7-13 million a month plus benefits,” Nguyen Kim Loan, chairwoman of the Binh Duong Labor Federation, told local media.

    In the northern province of Bac Ninh, where many multinational manufacturers have set up plants, the demand for workers is estimated at 15,000.

    Foxconn, a major supplier for Apple, is hiring 1,000 workers in Bac Ninh and the neighboring province of Bac Giang. It received a license in January to build a $270-million plant produce laptops and tablets in Bac Giang.

    Nguyen The Quyet, chairman of the union of workers at industrial parks in Bac Ninh, said that many companies were unable to complete orders last year due to disruptions caused by the Covid-19 pandemic and were seeking to make up now.

    Another reason is a surge in new orders this year from many countries, pushing factories to expand production and employ more people, he added.

    Recruitment demand was highest among electronics and vehicle parts producers, he said.

    Vietnam’s industrial production index rose over 22 percent year-on-year in January as the economy recovered from Covid-19 impacts, according to the General Statistics Office.

    The country’s GDP growth could hit 7.5 percent this year, compared to 2.9 percent last year, according to credit rating company Fitch Ratings.

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  • Vietnam, New Zealand to expand fruit trade this year

    Vietnam, New Zealand to expand fruit trade this year

    Vietnamese limes and pomelos could be exported to New Zealand soon, following a commitment made Wednesday during the first agricultural dialogue between the two countries.

    The virtual dialogue was co-chaired by Ray Smith, Chief Executive of the New Zealand Ministry for Primary Industries, and Dr Le Quoc Doanh, Vice Minister of Vietnam’s Ministry of Agriculture and Rural Development (MARD).

    A New Zealand embassy press release said the two leaders had confirmed their shared commitment to finalizing new fruit access for each other this year, so consumers can enjoy New Zealand strawberries and squash in Vietnam and Vietnam’s limes and pomelos in New Zealand.

    The two sides signed an Agriculture Cooperation Arrangement (ACA) after the dialogue.

    The ACA will enable both sides to advance their key agricultural interests in enhancing bilateral trade, reducing agricultural greenhouse gas emissions, promoting food safety, utilizing agriculture research and technology, and fostering rural development, the release said.

    The New Zealand Ministry for Primary Industries is already supporting agriculture cooperation with MARD through activities in plant health, veterinary epidemiology and electronic certification.

    These activities complement New Zealand’s ongoing development program in the country, which has a number of agriculture projects including one on premium fruit development in the southern province of Tien Giang, another on rural dam safety project in central Vietnam, and yet another on safe vegetables in central Binh Dinh Province.

    Smith and Doanh affirmed that the strategic partnership between the two countries has created a solid foundation for increasing bilateral agricultural cooperation and connections.

    Vietnam is New Zealand’s 14th largest trading partner, with two-way trade valued at over $1.4 billion as of September 2020.

    Vietnam has received licenses to export fresh mango, dragon fruit and rambutan to New Zealand so far. It imports apple, kiwi fruit, kiwi berry, blue berry, cherry and persimmons.

  • StanChart Profits Plunge and Miss Estimates

    StanChart Profits Plunge and Miss Estimates

    Profits at Standard Chartered more than halved in 2020 and miss analyst estimates, according to its latest annual results.

    Standard Chartered posted $1.61 billion in pre-tax profits for 2020, a 57 percent plunge compared to 2019’s $3.71 billion.

    It also missed the average forecast of $1.85 billion, according to analyst estimates compiled by the bank.

    Credit impairments increased from $1.4 billion to $2.3 billion.

    According to the bank, the impact of global interest rates will cause income levels in 2021 to be similar to 2020, though credit impairments are expected to decrease.

    The bank also forecasts annual income growth of 5-7 percent to return in 2022.

    Returns in 2020 were clearly impacted by higher provisions, reduced economic activity and low-interest rates, in each case the result of COVID-19,» said Bill Winters, Standard Chartered group chief executive.

  • AirAsia Japan closure has cost group $80 million so far

    AirAsia Japan closure has cost group $80 million so far

    AirAsia Japan’s closure has cost the Malaysia-based AirAsia Group nearly $80 million over three quarters.

    AirAsia Group owns 48.9% of the joint venture carrier, which ceased operations in October and filed for bankruptcy in the following month.

    AAJ commenced bankruptcy proceedings by a court order issued on 24 February, AirAsia Group said in a same-day Bursa Malaysia disclosure.

    As a result of the proceedings, the low-cost airline group recognized a loss of over $74 million in the second half of 2020, “due to financial assistance [to AAJ] in the form of intercompany transactions and loans being written off as these amounts were deemed to be irrecoverable”.

    AirAsia Group also incurred nearly $5.2 million in expenses related to aircraft de-registration, in the fourth quarter of 2020 and the current quarter, to move three aircraft from Japan to Malaysia.

    The group states: “Further announcement(s) will be made in due course on the particulars of claim and financial impact to AirAsia Group, if any, under the bankruptcy proceedings.”

    AirAsia Group last stated in a 25 August disclosure that it provided AAJ with financial assistance totaling $6.27 million during the second quarter of 2020.

    In 2019, the group gave AAJ a $12 million loan in November that year, as well as loans of Y1 billion ($9.4 million) and Y2 billion in January and March, respectively.

    Further back, AAJ received a Y500 million loan from the group in the third quarter of 2017.

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  • HSBC Expands China Private Banking Footprint

    HSBC Expands China Private Banking Footprint

    HSBC continues to voice its ambitions to pivot to Asia with plans to extend its onshore private banking services to ten mainland cities in the coming five years.

    Days after securing $3.5 billion in investments for its wealth unit over the next five years, HSBC reiterated its ambitions in Asia, home to nearly half of the bank’s $1.6 trillion of wealth balance and 65 percent of group revenue.

    Regional head of wealth and personal banking Greg Hingston set out plans for the mainland market during this five-year period including the extension of private banking to ten cities onshore and the doubling of its client base for Jade – a segment targeting clients with a $1-5 million in investable assets (the private bank targets clients with $5 million or more), according to a statement.

    Hinston said the bank also aims to double its Jade client base in Singapore and become a lead foreign bank for non-resident Indians.

    The bank also reiterated its hiring goals with plans to add more than 5,000 client-facing wealth-related roles in the next five years. These roles include relationship managers, investment counselors and specialists to support clients in Hong Kong, Singapore, and mainland China.

    The bank also underlined its intention to improve its distribution in the three markets; digital and platform capabilities in the broader region; and product development, especially for high and ultra-high net worth clients.

    We have a bold but achievable ambition, to be Asia’s leading wealth management provider by 2025, said Nuno Matos, HSBC’s chief executive for wealth and personal banking.

  • StanChart CEO Signals He Will Stay on the Job

    StanChart CEO Signals He Will Stay on the Job

    Despite rumors of Bill Winter’s potential exit, the 59-year old chief executive said he would stay with Standard Chartered following a 2020 that saw profits miss analyst targets and plummet 57 percent.

    Although rumors of an exit emerged earlier this year with investment and commercial banking chief Simon Cooper reportedly named as a potential successor, Bill Winters publicly reassured of his stay with the British lender.

    Don’t let the grey hair fool you,» said Winters, during a media call for the bank’s 2020 financial results. «I came here to do a job – the job is not yet done.

    Winters was named group chief for Standard Chartered in 2015 and will celebrate his sixth full year with the bank in June this year.“

    That job is a mandate to return to growth after pre-tax profits in 2020 plunged 57 percent to $1.61 billion, missing analyst estimates of $1.85 billion while returning just 3 percent on tangible equity (ROTE), well below its longer-term target of 10 percent.

    While the bank noted that low-interest rates will likely cause 2021 to yield similar income levels as last year it was confident that it would reverse momentum quickly with plans to achieve 5-7 percent income growth from 2022 onwards. The is done with the aim of achieving 7 percent ROTE by 2023 to meet its longer-term target of more than 10 percent ROTE.

    The bank highlighted its refreshed strategic priorities which focus on four areas: leveraging its network, maintaining its affluent business, scaling up its mass retail business and capitalizing on opportunities in sustainability. a

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