Tag: Vietnam

  • Alibaba, partners invest US$400 million in retail arm of Vietnam’s Masan

    Alibaba, partners invest US$400 million in retail arm of Vietnam’s Masan

    Chinese e-commerce giant Alibaba Group Holding and partners have invested $400 million in the retail unit of Vietnamese conglomerate Masan Group, Masan said on Tuesday.

    The consortium, which includes Alibaba Group and Baring Private Equity Asia, has paid for a 5.5 percent stake in Masan’s retail arm, The CrownX, the company said in a statement.

    The CrownX, founded in 2019, is valued under the deal at $6.9 billion, equivalent to $93.50 a share, the statement said. Parent company Masan will hold 80.2 per cent of retail units.

    The deal will expand Alibaba’s presence in Southeast Asia after its $4 billion investment in e-commerce firm Lazada in 2018.

    “The CrownX will work closely with Lazada to accelerate our digital transformation into an ‘all-in-one platform to serve consumers both offline and online purchases,” Masan said in the statement.

    The company said it was in talks with other investors on an additional investment of between $300 million to $400 million in The CrownX with that deal expected to close in 2021.

    Masan shares opened up 5.57 percent on Tuesday to 110,000 dong after the announcement, giving the company a market capitalization at $5.3 billion.

  • E-mart set to quit Vietnam

    E-mart set to quit Vietnam

    South Korean supermarket chain E-mart is to exit its Vietnam business, with reports suggesting it will be sold to local car manufacturer Truong Hai Auto Corporation (Thaco Group).

    According to The Korea Times, E-mart announced earlier this week that it will sell E-mart Vietnam to Thaco Group. However, a spokesperson of Thaco said the group has not signed any agreements with the South Korean firm.

    E-mart has spent five years trying to establish a footprint in Southeast Asia, but in Vietnam had managed to open only one store, a second suspended due to local licensing setbacks.

    A South Korean media report said E-mart would take royalty fees from Thaco Group and its supermarket will be run as a franchise.

    “Our strategic alliance with Thaco will not only pay us royalties for using the E-mart brand in Vietnam, but also give us the opportunity to export our private-brand products,” an E-mart employee told The Korea Times.

    Predictions that the South Korean supermarket chain would exit Vietnam arose last year. However, its representative then denied the news and said it was looking into other options such as a strategic alliance or business partnership.

    Thaco Group’s commercial-services arm includes managing and operating mix-used business models including shopping malls, hotels and developing business lines such as supermarkets, food courts and cinemas.

    The group is currently operating businesses at Yangon Myanmar Center Complex in Myanmar and building its Socar Sala mixed-used complex in Ho Chi Minh City’s District 2.

  • Vietnam sees 480 pct surge in cars imported from China

    Vietnam sees 480 pct surge in cars imported from China

    Vietnam imported 6,633 completely built-up (CBU) cars from China in the first four months, a 480 percent surge over the same period last year.

    Industry insiders explain the increasing popularity of cars imported from China to good designs and modern features.

    Despite the major increase, however, China remained the third-largest CBU car supplier for Vietnam in the first four months behind Thailand and Indonesia.

    Thailand dominated auto imports with 25,732 vehicles, a 74 percent year-on-year increase, according to the General Department of Vietnam Customs. It was followed by Indonesia with 13,873 units, up 4.7 percent.

    The two countries together accounted for 79 percent of April’s CBU imports.

    Thailand and Indonesia have led the list of Vietnam’s car suppliers ever since the ASEAN Trade in Goods Agreement (ATIGA) took effect in 2018, owing to the zero import tariffs.

    Vietnam’s total car imports in the first four months marked a 56.5 percent year-on-year growth at 50,161 vehicles.

    The nation’s auto sales in the first four months surged 58 percent year-on-year to 101,309 units, signaling a recovery from last year’s pandemic blows.

  • Alibaba invests in VinMart operator The CrownX

    Alibaba invests in VinMart operator The CrownX

    A consortium led by Chinese e-commerce giant Alibaba will invest $400 million in the subsidiary of conglomerate Masan Group that operates retail chain VinMart.

    The consortium, including Baring Private Equity Asia, one of the largest private equity firms in Asia, has signed an agreement to acquire a 5.5 percent stake in The CrownX, a deal that values the company at $6.9 billion.

    Masan will own an 80.2 percent stake in the company after the deal.

    With Alibaba on board, The CrownX will partner with its Southeast Asian e-commerce company Lazada to accelerate the offline to online market in Vietnam.

    VinCommerce, the subsidiary of The CrownX that operates the VinMart supermarket and VinMart+ convenience store chains, will be the preferred grocery retailer on Lazada in Vietnam, and its outlets will be used as pick-up points for online orders.

    “The transaction marks a shared vision … that The CrownX has the potential to establish Vietnam’s first tech-enabled consumer ecosystem and expand its reach to serve consumers nationwide,” Masan said in a statement.

    It is also in discussions with other investors for a further strategic investment of $300 – 400 million in The CrownX, and they are expected to close this year.

  • Citizens, businesses hurt as rising prices raise inflation concerns

    Citizens, businesses hurt as rising prices raise inflation concerns

    Experts say the government will find it difficult to rein in inflation this year as surging food and materials prices hurt citizens and businesses.

    Loan and her husband in HCMC’s District 5 spent around VND120,000- 200,000 ($5.22-8.70) per day last month on feeding their family of three, almost double that of the same time last year. They say the prices of vegetables and meat have been increasing since the beginning of the year.

    Hoa, another HCMC resident, has seen her spending on family meals increased by 65 percent to VND5 million per month. She says the prices of cooking gas and many ingredients she needs have been rising.

    “The prices of some products have doubled since the beginning of the year. I’m spending out of my savings.”

    Ngoc Chau, head accountant for a construction company in Tan Binh District, has seen prices of a bowl of noodle soup rising nearly 20 percent to VND65,000 the past few months.

    “I have been reluctant to eat out these days.”

    In the first four months of this year, the prices of materials and ingredients have risen by 4.64 percent year-on-year, with the surge strongest in the agriculture, forestry and fisheries sector, up 6.77 percent, according to the General Statistics Office.

    The GSO has cautioned that although inflation was 0.29 percent in the first quarter, the lowest in 20 years, keeping it under the targeted 4 percent this year won’t be easy as many economies including the U.S. have introduced economic stimuli to boost recovery.

    The Ministry of Agriculture and Rural Development said that animal feed prices have surged 30 percent since the beginning of the year and is set to rise further in the second quarter.

    Fuel prices, meanwhile, have increased by 19 percent since the beginning of the year.

    Do Van Khuoi, director of supplies at Saigon Food, said that prices have been rising due to the limited supply of goods domestically and shortage of materials globally.

    There are signs that some suppliers are increasing their reserves to indulge in speculative pricing, he added.

    “Disrupted supply chains due to difficulties in transporting goods amid the pandemic have also pushed up prices.”

    Khuoi said that in recent months, the prices of spices have risen by 5-10 percent, rice and seafood by 5-20 percent and material for plastic production by 15-70 percent.

    A spokesperson for food processor Vissan also said that many food companies were facing “headaches” because of rising material prices. Some suppliers have requested a 15 percent increase starting this month.

    Most businesses say they are trying to look for alternative sources of materials and ingredients to lower prices.

    Authorities have also been working to stabilize prices.

    Pham The Anh, head economist of the Vietnam Institute for Economic and Policy Research (VEPR), said that Vietnam and many other economies face high risks of rising inflation this year as prices of some products like steel and fuel have been surging at around 20-30 percent.

    Economist Nguyen Duc Thanh said that authorities are facing difficulties in controlling inflation, as keeping prices low will hurt businesses that are already hit by the Covid-19 pandemic, while allowing prices to rise will hurt low-income people.

    The domestic department market under the Ministry of Industry and Trade said it has been working with businesses to ensure adequate supply to keep prices from surging suddenly.

    It has also been working with customs and agriculture authorities to ensure the stable delivery of goods, especially between localities with a high number of Covid-19 cases.

    Deputy Prime Minister Le Minh Khai has also ordered relevant government bodies to take keep fuel prices stable.

  • Vietnam seeks to stabilize steel prices

    Vietnam seeks to stabilize steel prices

    The government has asked steelmakers to implement several steps to control rising steel prices that are hurting construction contractors.

    Deputy Prime Minister Le Minh Khai has asked the Ministry of Industry and Trade to push for increased domestic steel production towards stabilizing prices. Steel production in Q1 reached 7.6 million tons, a year-on-year increase of 34 percent, according to the Vietnam Steel Association (VSA)

    He also said the export of steel should be lowered to ensure that local demand is met. Steel exports in Q1 rose 59.5 percent year-on-year to 1.6 million tons, according to the VSA.

    Meanwhile, VSA has asked its members to prioritize using raw materials for steel production from local producers instead of imported them at high prices so that their operating expenses and selling prices are lowered.

    Steel prices in Vietnam have experienced a 40-50 percent surge since the beginning of the year, according to the VSA, forcing construction contractors to suffer losses and turn down contracts.

  • Ministry says no to cuts in auto registration fees

    Ministry says no to cuts in auto registration fees

    The Ministry of Finance has rejected a proposal to reduce auto registration fees by half, saying it is not necessary for the current setting.

    The proposal was made by the Vietnam Automobile Manufacturers Association (VAMA), seeking support for manufacturers amid the Covid-19 pandemic.

    However, the Ministry of Finance said that the government had already implemented different measures to support businesses and citizens last year, including extending the deadline for payment of taxes and land use fees and incentives on special consumption tax for cars manufactured or assembled locally.

    “After reviewing the proposal, the Ministry of Finance sees that lowering registration fee is not suitable with the current setting,” it said.

    Last year, the government had provided a 50 percent discount on the registration fees for cars produced domestically.

    The move lowered the government’s revenues by VND6 trillion ($260 million).

    The Ministry of Finance also denied VAMA’s request to lower the production of cars under an import tax incentive program.

  • Banks dominate Vietnam’s profit makers list

    Banks dominate Vietnam’s profit makers list

    Seven banks are in the list of Top 10 most profitable listed companies in Q1, recording increases in pre-tax profits.

    Topping the list are two state-owned lenders Vietcombank and VietinBank. The former recorded VND8.6 trillion ($373.9 million) in pre-tax profits, up 65 percent year-on-year, while the latter posted VND8 trillion, up 171 percent.

    Another state-owned bank, BIDV, made it to the list at eighth place, with pre-tax profit surging 87 percent to VND3.4 trillion.

    The surge for the three state-owned banks follows very low figures recorded in the same period last year as a result of the onset of the Covid-19 pandemic.

    Of the four private banks in the top 10 list, Techcombank ranked fifth with a 77 percent surge in pre-tax profits to VND5.5 trillion. It was followed by MBBank and VPBank, posting 108 percent and 38 percent rises in pre-tax profits to VND4.58 trillion and VND4 trillion, respectively.

    Private lender ABC was in tenth place with pre-tax profits rising 61 percent to VND3.1 trillion.

    Like the state-owned lenders, the four private banks experienced an increase in net interest income as well as non-interest income well above the growth in operating costs and provision for doubtful debts.

    Brokerage Rong Viet Securities Corporation (VDSC) has forecast the banks will continue to see profit growth in the next three quarters. However, growth would not be as high as the 50 to 100 percent-plus rates of Q1.

    Steelmaker Hoa Phat Group was the most profitable non-bank enterprise on the list, ranking third, up from the eighth place in the same period last year.

    It was the only non-bank enterprise in the top 10 that saw a growth in pre-tax profit, which tripled to VND7.7 trillion.

    The steel giant has benefited from surging steel prices that have lifted its revenue for the period by 60 percent year-on-year to VND31 trillion.

    The other two non-bank enterprises in the list, real estate giant Vinhomes and diary giant Vinamilk, both experienced a drop in profits.

    Vinhomes reported VND7 trillion in pre-tax profits, down 30 percent, to rank fourth on the list.

    Vinamilk’s pre-tax profits fell 6 percent to VND3.15 trillion as it finished Q1 as the ninth most profitable listed firm.

    Two enterprises in Q1 2020 top 10 list, have fallen out – the state-owned Petrovietnam Gas Corp (PV Gas) and main airport operator Airports Corporation of Vietnam (ACV).

    PV Gas saw its pre-tax profits fall 10 percent due to surging selling expenses and operation costs. The ACV, meanwhile, saw its pre-tax profits fall to half that of the same period las year as the pandemic hit the aviation industry particularly hard, slashing deeply the number of flights and passengers.

  • Launch of direct Vietnam-US flight routes a challenging journey

    Launch of direct Vietnam-US flight routes a challenging journey

    Acquiring flight slots at U.S. airports is only the beginning of a challenging journey to making the Vietnam-U.S. direct route a reality, experts say.

    Private carrier Bamboo Airways recently acquired slots to operate regular direct flights from Ho Chi Minh City to San Francisco and Los Angeles starting September.

    The airline plans to begin charter flights starting July and regular flights in September with four flights a week.

    The flights would be operated using the long-haul Boeing 787-9 Dreamliner aircraft. The carrier said it was rushing to complete the final steps in the process of building its personnel apparatus, including pilot and flight crew training, to get ready for operating direct flights to the U.S.

    While the latest development stirs new hopes for direct flights between the two countries, something that airlines and officials have been discussing and working on for nearly two decades, there are still many hurdles to overcome.

    Aviation expert Nguyen Thien Tong said that apart from flight slots, each Vietnamese airline will need to acquire various safety permits from U.S. agencies before getting the go-ahead for direct flights.

    Vietnam Airlines, with decades of experience in the industry, seems to be the most promising candidate to secure these permits, while Bamboo Airways, having operated for only two years, might face stiff challenges in proving its capability to conduct such long direct flights, he told VnExpress International.

    Last September, national flag carrier Vietnam Airlines had became the first Vietnamese airline to secure permits from the U.S. Department of Transportation for direct flights to the U.S.

    The airline last month received licenses from the Civil Aviation Authority of Vietnam (CAAV) to operate the Airbus A350 aircraft to the U.S. It had already acquired a permit for the Boeing 787.

    Last year, Vietnam Airlines conducted over 20 charter flights between the two countries.

    But, for regular flights, various permits are needed from the Federal Aviation Administration (FAA), the Transportation Security Administration (TSA) and the U.S. Customs and Border Protection (CBP).

    The TSA is one of the toughest obstacles with its stringent requirements. It will send experts to examine Vietnamese airports before proceeding further.

    A CAAV official told local media that the current fleet of Vietnam Airlines and Bamboo Airways with their Boeing 787-9 and the Airbus 350 won’t be able to fly directly to the U.S. at full capacity (over 300 seats).

    For long direct flights, the Boeing 777x and Airbus A350-1000 are needed, but the two carries do not own such jets, he said.

    Apart from concerns over technical challenges, experts have also questioned the profitability of Vietnam-U.S. direct flights.

    Vietnam Airlines CEO Le Hong Ha said the carrier might have to bear a loss of $30-50 million a year in the first five years of operating direct Vietnam-U.S. flights.

    Bamboo Airways chairman Trinh Van Quyet had earlier calculated that the airline could earn VND8 billion ($346,700) a month from direct flights with return ticket prices of around $1,300.

    But it is difficult to confirm those figures, especially as U.S. airlines, such as United Airlines and Delta Air Lines have launched and suspended direct flights to Vietnam after making losses, Tong said.

    There are currently no direct routes between the two countries, and passengers have to transit through Hong Kong, South Korea or Taiwan, taking 18-21 hours in all. A direct flight would shorten the travel time to 15-17 hours.

    Tong also said that with the ongoing Covid-19 pandemic it is unclear when a regular direct route will be established.

    Americans are among the top foreign visitors to Vietnam, with 687,226 arrivals in 2019, and an ethnic Vietnamese population of over 2.1 million in the U.S. is also expected to be a steady source of travel demand.

  • Vietravel eyes stake sale in new airline

    Vietravel eyes stake sale in new airline

    Vietravel is seeking to sell an unspecified stake in its new airline which began flying earlier this year.

    The travel giant will seek shareholders’ approval at the annual general meeting at the end of this month to sell the stake. Vietravel Airlines is wholly owned by Vietravel.

    It began operating on several domestic routes amid the Covid-19 pandemic with three aircraft and is not expected to break even for at least a few years.

    Last year Vietravel reported a loss of VND90 billion ($3.9 million), twice the profit it earned in 2019.

    It made a loss of VND70 billion in the first quarter of this year.

    But it targets a pre-tax profit of VND10 billion this year.

  • Vietnam rejects five new airport proposals

    Vietnam rejects five new airport proposals

    Aviation authorities have rejected the proposal of five localities to build their own airports and suggested that only one be added to the current master plan.

    Airport proposals by the northern provinces of Ha Giang, Bac Giang and Ninh Binh as well as the central provinces of Binh Phuoc and Ha Tinh have been rejected by the Civil Aviation Authority of Vietnam (CAAV).

    The CAAV has proposed to the Ministry of Transport that the number of airports in the country stays at 28 by 2030, and just one more airport in the northern province of Cao Bang be built by 2050, bringing the total nationwide to 29.

    Vietnam has 22 airports operating at present and six more approved for construction by 2030, including the Long Thanh International Airport in the southern province of Dong Nai and Sa Pa Airport in the northern province of Lao Cai.

    Officials and experts have expressed concern over an airport glut in the country.

    Nguyen Anh Dung, deputy head of the Department of Planning and Investment under the Transport Ministry, said that all airports with annual traffic of under two million passengers a year are recording losses.

    Airports built within 100 kilometers of each other are likely to result in low efficiency, according to case studies done in other countries, he added.

    Aviation expert Nguyen Bach Tung said that some of the proposals have been rejected because of unsuitable topography, like the mountainous terrain in Ha Giang and the vast rice fields in Ninh Binh that are the main source of livelihood for the locals.

    Other proposals have been rejected because the airports would be too close to existing ones. For instance, residents of Ha Tinh and Ninh Binh can use the Vinh International Airport or the Tho Xuan Airport, respectively, because these two are within 100 kilometers of the localities.

    Pham Van Toi, deputy chairman of the Vietnam Association on Aviation Science and Technology, said that many proposals have been made without a thorough examination of their merits and demerits.

    Ha Giang, for example, proposed an airport for both military and civilian purposes, even though it has limited land and airspace, he said.

    The CAAV has also identified a possible land area for a second international airport in the northern city of Hai Phong, which had been planned by the government in 2011.

    The airport is set to be located in Tien Lang District, around 120 kilometers to the southeast of Noi Bai International Airport, and will serve to absorb overflow at the Hanoi’s airport and the existing Cat Bi International Airport in Hai Phong.

    Tung said that Tien Lang has a land fund of 4,000-6,000 hectares available for building an airport with a capacity of up to 100 million passengers a year, which is four times that of the Noi Bai airport in Hanoi.

    This location is also within 100 kilometers from four other northern provinces – Ha Nam, Thai Binh, Nam Dinh and Hai Duong, he said.

    Toi also said that Tien Lang was a suitable location because it has good road connectivity with Hanoi, while the existing Cat Bi airport cannot be expanded as it is located near a river.

    A spokesperson for construction company Tedi, which is advising authorities on the construction of the Tien Lang airport, said existing airports in the north can still meet demand from now until 2040, and authorities should take a call on whether the airport is needed later.

  • Vietnamese lychee to be sold online for first time

    Vietnamese lychee to be sold online for first time

    Lychees grown in Hai Duong Province will be sold on e-commerce platforms Voso, Sendo, Lazada, and China’s Alibaba on Saturday, according to the Vietnam Trade Promotion Agency.

    It would be the first time that the fruits are sold online, and the agency said the biggest hurdle to this is farmers’ lack of knowledge of e-commerce, online marketing, selling and customer support, and quality control.

    It has collaborated with the northern province’s Departments of Agriculture and Rural Development and Industry and Trade to provide training to lychee farmers and traders in setting up and operating stores on the four e-commerce platforms.

    Hai Duong harvested 43,000 tons of lychee last year and exported half of it, including 1,600 tons to Japan, Australia, and the U.S. It expects to harvest 55,000 tons this year, and export half to China.

    In nearby Bac Giang Province, the director of the Department of Industry and Trade, Tran Quang Tan, estimated 180,000 tons of lychees would be harvested this year, with half of it exported to China, 10 percent to Japan, and another 10 percent to the U.S., the EU, and Australia.

    The harvest will take two months starting May end.

    Around 300 Chinese merchants have registered to visit Vietnam to buy lychees in Bac Giang.

    Local authorities will arrange transportation for them at the border, test them for Covid-19 and quarantine them for 14 days.

    The northern provinces of Bac Giang and Hai Duong are Vietnam’s lychee growing hubs, with the former having the largest area for lychee cultivation, which was 28,000 hectares last year, according to Bac Giang Portal. Hai Duong province came in second with 10,000 hectares.

  • Gojek shifts gears to introduce car rides in Vietnam

    Gojek shifts gears to introduce car rides in Vietnam

    Indonesia-based ride-hailing company Gojek will start offering car rides service in Vietnam in the next few weeks and allow cashless payments later this year.

    Gojek Vietnam CEO Phung Tuan Duc said Wednesday that the new service will be called GoCar.

    He did not mention a specific date for the launch but said the service will comply with all pandemic prevention measures.

    Duc said that although Gojek is a latecomer for its GoCar service, “the ride-hailing market and on-demand services will continue to flourish, with lots of space for other ride-hailing players to develop. So we have confidence in expanding the business.”

    Administrators of Gojek drivers’ official group on Facebook announced that car drivers introduced to Gojek by transport cooperatives can become the riders for the GoCar service. A total of 17 transport cooperatives have been working with Gojek.

    Gojek entered Vietnam in August 2018 as GoViet. The company became Gojek Vietnam last year. It offers three services at present – motorbike rides (Gojek), delivery of goods (GoSend), and food delivery (GoFood). Other ride-hailing companies like Singapore’s Grab and Vietnam’s Be have all these three services plus car rides.

  • Ferrari Vietnam recalls cars over faulty airbags

    Ferrari Vietnam recalls cars over faulty airbags

    Ferrari Vietnam is recalling 24 cars for airbag faults that can cause severe damage in the event of a crash.

    The recall covers five models: 458 Speciale, 488 GTB, 488 Spider, California T, and F12 Berlinetta. The recalled cars were produced between March 2014 and July 2017, according to a statement submitted by the automaker to the Vietnam Register.

    The front passenger airbags in these vehicles are produced by Japanese auto parts producer Takata Corporation. It has been found that humidity can penetrate and damage them. In some crashes, activation of the airbag can break the inflator inside into pieces and push them through the inflated airbag, causing serious damage to users

    Customers can bring their vehicles for a free replacement of the faulty parts at Ferrari’s only showroom and service center in HCMC. The replacement should take one to three hours. The recall will run in one year from May 7, 2021.

    Ferrari opened its first showroom in HCMC’s District 7 in 2019 to sell old cars and provide maintenance service. Recently, it started to sell new Ferraris in Vietnam, but is yet to make a sale.

  • Rice exports cross $1 bln on higher prices

    Rice exports cross $1 bln on higher prices

    Vietnam has exported $1.01 billion worth of rice in the first four months of 2021, up 1.2 percent year-on-year, thanks to higher rice prices.

    The volume of rice exports during the period dropped 11 percent year-on-year to 1.9 million tons, according to the Ministry of Industry and Trade.

    However, as the average export price rose 13.4 percent year-on-year to $534 per ton, its value topped that of last year.

    The Vietnam Food Association has forecast that the nation’s rice export value will continue to rise because of higher selling prices.

    Vietnam plans to produce 43 million tons of paddy and targets exporting 6.5 million tons of rice this year, according to the Ministry of Agriculture and Rural Development.

    The nation was the world’s second-largest rice exporter last year at 6.25 million tons.