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  • Foxconn unit receives business license for $270 mln Vietnam plant

    Foxconn unit receives business license for $270 mln Vietnam plant

    The FuKang Technology Company, a Foxconn unit, received a business license Monday to build a plant to produce laptops and tablets in northern Vietnam.

    The plant will be located in the Quang Chau Industrial Park in the northern province of Bac Giang and will annually produce eight million units, the government said in a statement on its website.

    The Taiwanese electronics contract manufacturer has so far invested $1.5 billion in Vietnam and created jobs for more than 35,000 workers and the company, formally known as the Hon Hai Precision Industry Co., plans to raise its investment by $700 million and recruit 10,000 more local workers this year, the government said.

    Last week Foxconn was also looking into investing $1.3 billion in Thanh Hoa Province, 160 km south of Hanoi.

    Last year, the company produced the first batch of display screens at its $26-million factory in the northern Quang Ninh Province.

    Foxconn, a major assembler of Apple products, including the iPhone, and the world’s largest contract manufacturer, came to Vietnam in 2007, and has been operating mainly in the northern provinces of Bac Ninh, Bac Giang and Vinh Phuc, making computers and other electronic products and car parts.

    It has said that Vietnam is its largest manufacturing hub in Southeast Asia.

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  • Mitsubishi Vietnam recalls over 9,000 cars to replace fuel pumps

    Mitsubishi Vietnam recalls over 9,000 cars to replace fuel pumps

    Mitsubishi Motors Vietnam is recalling 9,066 Outlander and Xpander cars to fix a fuel pump issue that could cause the vehicle to stall.

    They include 5,370 Outlanders manufactured in Vietnam between January 15, 2018, and July 21, 2019, and 3,696 Xpanders imported from Indonesia and assembled between August 21, 2018, and September 20, 2019.

    The company said the inflated impeller inside of the pump “might have caused it to touch the surrounding parts of the pump body and stop the pump from spinning” which could result in “the engine not starting or stalling.”

    Car owners can take their vehicles to an authorized dealership for a free fuel pump replacement which will take around one hour.

    Mitsubishi uses gas pumps supplied by Japanese company Denso, which caused similar problems in many other cars including Toyota and Honda.

    But it said this error would not occur in its other cars.

    According to data from the Vietnam Automobile Manufacturers Association, auto sales fell 8 percent in 2020 to 296,634 units.

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  • Motorbike sales slump, blamed on pandemic

    Motorbike sales slump, blamed on pandemic

    Motorbike sales fell 16.6 percent to 2.71 million units last year, according to the Vietnam Association of Motorcycle Manufacturers.

    The industry group comprises five major companies, Honda, Piaggio, Suzuki, SYM, and Yamaha, who account for most of the market.

    Industry insiders said sales fell in double digits because of the Covid-19 pandemic, which hit people’s incomes.

    Although VAMM’s report did not list each company’s sales, Honda said it accounted for nearly 80 percent.

    Other brands not included in report were VinFast, Kymco, BMW Motorrad, Ducati, Harley-Davidson, Kawasaki, and others.

    In the second half last year several companies introduced.

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  • Hanoi buses keep losing passengers

    Hanoi buses keep losing passengers

    Hanoi single-trip ticket passengers reached 63.6 percent of its annual goal, dropping 36 percent year-on-year, while monthly tickets decreased by 34.3 percent compared to 2019.

    Hanoi Transportation Corporation (Transerco) total revenue in 2020 was VND2.5 trillion ($108 million), fell 17.5 percent year-on-year, said Nguyen Thanh Nam, CEO of Transerco, at the Transerco 2020 Review Conference held recently.

    Nam said the company is struggling due to market slump. In 2020, Hanoi bus had to cut 80 percent of the trips from March 22 and stop operating from April 1 to April 22. It had no income during the said period yet still had to pay for the operating cost and other expenses.

    The reasons were social-distancing and passengers being reluctant to take the bus during the pandemic, resulting in a fall in the number of passengers and single-trip ticket sales.

    The free bus passes policy for the elders also contributed to the single-trip ticket sales drop. Airport bus and city-tour bus without price support also had to cut trips as the number of passengers, mostly especially foreign tourists, dropped in 2020.

    Transerco revenue in 2021 and the next few years will hardly revive due to the Covid-19 pandemic, free bus passes policy for the elders, and traffic congestion, Nam said.

    Hanoi has set the goal of 20 percent of commuters using public transport in 2021 and 30-35 percent in 2025.

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  • December auto sales hit monthly high

    December auto sales hit monthly high

    Auto sales climbed to 47,865 units in December, the highest monthly number last year, according to the latest data from Vietnam Automobile Manufacturers Association (VAMA).

    It represented a 32 percent rise from November and 45 percent increase from the same period in 2019.

    The data shows 36,856 units sold in December were passenger cars, up 28 percent over the previous month, 10,673 were commercial vehicles, up 50 percent and 331 units were special-purpose vehicles, down 30 percent.

    Despite the late surge, total auto sales in 2020 still fell 8 percent year-on-year to 296,634 units due to deep plunges recorded in April and August after two major Covid-19 outbreaks.

    Local brand Truong Hai Auto (Thaco) retained the top spot in 2020 with a 35.5 percent share of the market as sales rose 10 percent to 100,727 units.

    It was followed by Toyota with 70,692 units, down 11 percent and Mitsubishi with 28,954 units, down 6 percent.
    Ford and Honda rounded out the top five.

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  • Vietjet eyes aircraft purchases as it relies on vaccine rollouts to revive air travel

    Vietjet eyes aircraft purchases as it relies on vaccine rollouts to revive air travel

    Budget carrier Vietjet Air plans to expand its investment in new aircraft and technical facilities this year after reporting a small profit in 2020 despite the Covid-19 pandemic.

    “In 2021, we expect to continue to receive new modern planes and will invest in maintenance and training facilities, and the investment will be higher than in 2020,” Vietjet CEO Nguyen Thi Phuong Thao said in an interview recorded on Jan. 9 and broadcast on Thursday at the Reuters Next conference.

    Vietjet said separately on Wednesday it raised $28 million via a bond issuance last month to fund its development plans in 2021. It did not provide further details about the bond sale.

    Vietnam has been successful in containing the coronavirus with a series of quarantine and tracking measures. With just over 1,500 infections and 35 deaths in total, it has resumed economic activities earlier than much of Asia.

    While all international commercial flights have been suspended since late March, domestic air travel has been subjected to few restrictions.

    Vietjet’s cargo transport in 2020 rose 75 percent from 2019, she said, adding that its overall domestic operations recorded positive growth in 2020, without giving comparative figures.

    With the early Covid-19 vaccine roll-out around the world, Thao expects the global aviation industry to recover rapidly.

    Vietjet’s Thai unit increased its aircraft fleet to 15 last year, while its market share there also increased, she added.

    “Air travel demand is extremely high for business, investment, education and healthcare purposes, and we have been actively conducting flights to repatriate Vietnamese people from overseas,” Thao said.

    She said the company is considering options to raise funds for its investment plans for this year, though she did not name an amount.

    “Our debt-to-equity ratio is 1.0, compared with over 3.0 for the aviation industry, so we have room to mobilize funds for our development,” Thao said.

    The airline continued to take delivery of Airbus SE narrow- body jets last year despite some supply chain interruptions at the manufacturer but Boeing Co did not meet its delivery schedule, she said.

    Vietjet has 200 737 MAX jets on order, according to Boeing, but the plane has not yet returned to service in Asia following a near two-year global grounding.

  • Viettel profits grow despite pandemic

    Viettel profits grow despite pandemic

    Telecom giant Viettel managed to shrug off the effects of the Covid-19 pandemic and achieve its revenue and profit targets in 2020.

    The military-owned firm reported revenues of VND264 trillion ($11.47 billion), up 4.4 percent from 2019, and pre-tax profit of VND39.8 trillion, up 4.1 percent.

    Viettel attributed the results to its digital transformation and switch from being a telecom services provider to a digital services provider. In 2020, the platforms it developed included digital infrastructure, solutions, content, and finance, and cybersecurity.

    Its 10 overseas markets reported a 25 percent increase in profits to VND5.6 trillion in the first nine months of 2020, while at home it remained the leader in mobile services and fixed broadband with a 54.2 percent market share.

    By manufacturing 5G equipment and trialing 5G services, the company made Vietnam one of only six countries in the world to master the technology.

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  • Think tank forecasts some growth for Vietnam

    Think tank forecasts some growth for Vietnam

    A government think tank has pegged economic growth at 6.46 percent this year thanks to the country’s success in containing the Covid-19 outbreak and maintaining stability.

    Vietnam is one of the fastest recovering economies in Asia, the Central Institute for Economic Management (CIEM) said in a report.

    In the best-case scenario, credit growth would be 13 percent against 10.1 percent last year, it said.

    But it also warned of risks that could hamper growth, like the unpredictable global economic situation as the pandemic situation remains severe in many countries and possible anti-dumping and countervailing investigations by the U.S. and other countries.

    Several international organizations have forecast a strong recovery for Vietnam this year, with lender HSBC forecasting growth of 7.6 percent. The International Monetary Fund and Asian Development Bank have forecast 6.5 percent and 6.1 percent growth.

    The government has set a target of 6.5 percent.

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  • Vietcombank targets 12 procent profit growth

    Vietcombank targets 12 procent profit growth

    State-owned lender Vietcombank has announced credit growth and pre-tax profit targets of 12 percent and VND25.2 trillion ($1.09 billion) for 2021.

    The 12 percent credit growth target matches the target set for the banking industry as a whole, the lender said.

    In 2020 Vietcombank’s profit was VND23 trillion, the same as the previous year. It also targets keeping non-performing loans at under 1 percent and achieving a net profit margin of 3.1 percent.

    Last year, non-interest income accounted for 50 percent of total income, up 10.7 percentage points from 2019. Income from treasury operations and investment accounted for 21 percent.

    In April 2020, Vietcombank became an exclusive bancassurance partner of FWD, the insurance arm of Hong Kong billionaire Richard Li’s investment firm Pacific Century.

    Its income from bancassurance was VND1.87 trillion, or 18 percent of non-interest income.

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  • Rice exports rise despite stockpiling amid pandemic

    Rice exports rise despite stockpiling amid pandemic

    Vietnam’s rice exports grew by 9.3 percent last year to $3.07 billion though it stockpiled the grain to ensure food security after Covid-19 broke out.

    But volumes were down 3.5 percent to 6.15 million tons since the country stopped exports for over two weeks in March and April to ensure adequate domestic supply amid the pandemic.

    The average price rose by 13.3 percent from the previous year to $499 per ton, the highest in years, the Ministry of Industry and Trade reported.

    Vietnamese farmers and exporters are focusing on quality and getting higher prices by meeting import standards in markets like the E.U., South Korea and the U.S., it said.

    Eighty-five percent of the country’s exports last year were considered to be of high quality, according to the General Statistics Office.

    In 2019, Vietnam was the world’s third-largest rice exporter behind India and Thailand with shipments of $2.81 billion. Its biggest buyer was the Philippines.

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  • The great banking profit paradox of Covid-hit 2020

    The great banking profit paradox of Covid-hit 2020

    Banks made huge profits in 2020 although the economy grew at the slowest rate this decade and 70 percent more companies shut down than in 2019.

    VietinBank, Vietnam’s third largest lender by assets, reported a 40 percent increase in profit. Vietcombank reported profits of around $1 billion, the same as the previous year. Tien Phong Commercial (TPBank) and Vietnam Maritime Commercial Joint Stock Bank saw their profits increase by 11 percent and a scarcely believable 90 percent.

    State-owned VietinBank attributed the jump in profits to a surge in non-interest income and reduction in operation costs.

    Vietcombank said it owed its profits to bancassurance. In the first nine months, profits had been down 17 percent, but they recovered rapidly in the last three months, increasing by 30 percent, to claw back to the previous year’s levels.

    VPBank and Techcombank were two of the most profitable lenders. They have yet to announce full-year figures, but in the first nine months their profits rose by 30 percent and 20 percent, respectively.

    VPBank managed to cut costs while its income remained steady, while Techcombank saw interest income increase by 28 percent and non-interest income by 65 percent.

    They benefited from a particular segment auto loans. The 50 percent cut in car registration fees in the second half of the year sparked a rush to borrow to buy vehicles. VIB’s interest income in the third quarter was up 38 percent, and the fourth quarter saw probably more of the same. Income for the first nine months rose by 30 percent. TPBank’s interest income too rose by almost 30 percent.

    “Banks’ results are not as we expected,” SSI Securities researchers said in a note. They had forecast in April that banks’ profits would fall by 11 percent in 2020, but in the first nine months, they rose by 11 percent.

    They said the rising profits were due to a surge in non-interest income and improvement in net interest margin (NIM).

    For the banks SSI researched, non-interest income was up by 15 percent in the first half and almost 60 percent in the third quarter, with private joint stock banks providing a major boost.

    “Payment services, trade finance, bancassurance, and remittances revived in the third quarter after social distancing in April and May suppressed demand,” SSI said.

    The second quarter saw NIM plunge due to interest rate cuts and loan restructuring, but it recovered in the third quarter, in fact, reaching a three-year peak as deposit interest rates fell sharply and lending interest rates gradually rose back up.

    The third quarter saw a 9 percent rise in interest income and 31 percent increase in non-interest income.

    It is estimated that for the full year banks’ net profits would rise by 10.2 percent, while that of non-financial companies would fall by over 21 percent, financial data company Fiingroup said.

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  • Viettel revamps as it eyes to enter Cuba

    Viettel revamps as it eyes to enter Cuba

    Viettel Group, Vietnam’s largest mobile network operator, which is wholly owned and operated by the Ministry of Defense, has plans to expand to sister socialist countries Cuba and North Korea, both of which are in the early stages of building up mobile phone networks. Earlier plans to expand to Venezuela have been put on hold owing to the dismal economic state of the latter nation.

    According to Viettel executives, the company is seeking to hold negotiations with the two countries in order to gain a foothold in their underdeveloped wireless markets.

    In Cuba, the company is waiting for a decision by Empresa de Telecomunicaciones de Cuba, the state-owned telecom provider and operator of the sole mobile network Cubacel whether it would grant Viettel a license.

    In North Korea, where Koryolink, a joint venture between the North Korean state and Egypt’s Orascom Investment Holdings, has reached millions of subscribers since its 2008 launch, Viettel had sought permission to build a mobile network as early as in 2010 but is still waiting for sanctions to be lifted and for the country to open its market to foreign investors.

    Viettel in its international expansion has set sights on a number of otherwise overlooked destinations. It began its global expansion by setting up a joint venture in Laos in 2008 and became the largest mobile phone operator in Cambodia after launching operations there in 2009. Since that time Viettel has expanded its operations to Burundi, Cameroon, East Timor, Haiti, Mozambique, Peru, Tanzania and eventually Myanmar.

    Between 2015 and 2017, the company invested over $2.23 billion or its foreign expansion strategy and by 2017, Viettel’s international operations covered an area of more 350 million potential subscribers. The company has invested in heavily in infrastructure in Myanmar where it is seeking to double its five million-subscriber base by the end of this year.

    The company has said that it will stop investment in the African market where the company has struggled to make a profit due to poor economic growth. According to telecommunications industry insiders, Viettel is in talks to buy stakes in existing telecommunication firms in Indonesia and Malaysia and a 20% stake in an unnamed European mobile carrier. Plans are to expand further in Bangladesh, Nepal, Belarus and Ukraine in the near future.

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  • Vietnam’s retail sales see lowest growth in nine years

    Vietnam’s retail sales see lowest growth in nine years

    This year’s retail sales growth was much lower than 9.5 percent seen in 2019 and was also the lowest rate in the 2011-2020 period due to the significant impact of the COVID-19 pandemic.

    Revenue from retail sales of consumer goods exceeded 3.9 quadrillion VND, up 7 percent year-on-year or accounting for 79 percent of the total. Especially, revenue increased by 10.7 percent for food and foodstuff; 7.5 percent for the group of household appliances, tools and equipment; 3 percent for garments and 1 percent for cultural and educational services.

    Meanwhile, revenue from accommodation and catering services dropped by 13 percent year-on-year to 510.4 trillion VND, making up 10 percent of the total. Last year, the revenue from these services saw a yearly increase of 9.8 percent.

    Other services also experienced a slight revenue decline of 4 percent to 535 trillion VND in 2020.

    However, VNDirect Securities forecast that the nation’s retail sales growth would bounce back to pre-COVID-19 levels next year, reaching 8.5-9 percent year-on-year.

    The projection was made on the back of the country’s successful containment of COVID-19, which was a major contributor to the economic rebound in the third quarter that saw unemployment fall 0.23 percent against the previous quarter to 2.5 percent.

    VNDirect also predicted that consumer confidence would likely recover soon, against a backdrop of COVID-19 vaccines expected to be available in 2021.

    With the rapid growth of the middle class and rising per capita income, domestic consumption remained the main growth driver of the retail industry, even during COVID-19.

    The Ministry of Industry and Trade expected the domestic trade sector’s added value to contribute 13.5 percent to GDP by 2025 and total retail sales of goods and services to grow around 9-9.5 percent annually over the next five years.

    The ministry forecast that total retail sales would reach nearly 350 billion USD by 2025.

    The market’s recovery offers huge opportunities for retailers to expand their distribution networks.

    Saigon Co.op is targeting to add at least 2,000 stores to its chain over the next five years, with revenue rising 8-10 percent annually.

    Major Japanese retailer Muji, which sells a wide variety of household and consumer goods, has opened its first store in Vietnam, in HCM City, and is planning to open another in Hanoi, it added.

    Inflation forecast to be controlled less than 4% in 2021

    Many essential goods prices are forecast to fluctuate in 2021, thus the Consumer Price Index (CPI) will rise more sharply than in 2020. However, the average price hike for the whole year is projected to be less than 4%, as the target set by the National Assembly (NA).

    This comment was proposed by experts at a seminar held by the Academy of Finance on January 5 to discuss price fluctuation in 2020 and forecast for 2021.

    Nguyen Anh Tuan, Director of the Price Management Department, said that both objective and subjective impacts have made the Government and ministries and branches’ task of stabilizing the macro-economy, promoting growth, and controlling inflation face great challenges. Therefore, the department had built and set up a price management scenario for this year, closely following the NA target of controlling inflation at below 4%.

    In that context, price management has been directed by the Government and the Prime Minister to implement a prudent point of view, closely coordinating to ensure the harmonization of common goals.

    It was difficult to predict prices of commodities this year, so the Price Management Department would continue to work closely with ministries, agencies and localities to drastically and effectively implement the public management, administration and price stabilization under market mechanisms to control inflation according to set targets, said Tuan.

    At the same time, it would continue to implement the market price roadmap for public services and essential goods.

    Economic expert Ngo Tri Long said that 2021 is still very unpredictable, so price management should be operated in a prudent, flexible and proactive manner. Fiscal policy should coordinate closely with monetary policy and other macroeconomic policies in order to control inflation in accordance with the set targets; at the same time, contributing to supporting and removing difficulties for production and business, and the lives of people affected by the COVID-19 pandemic.

    According to Nguyen Duc Do, Deputy Director of the Institute of Economics and Finance, in 2021, when the disease is better controlled thanks to vaccines, and the world and domestic economy recovers; inflation compared to the same period last year tends to increase again.

    Da Lat aims to welcome 4 million tourists in 2021

    Da Lat city greeted more than 58,000 visitors during the 2021 New Year holiday from January 1 to 3, said Ms. Tran Thi Vu Loan, Deputy Chairwoman of the Da Lat People’s Committee.

    Of this, domestic visitors reached 57,500, a year-on-year increase of 44% while foreigners numbered over 500, a year-on-year decrease of 92%. Total number of visitors staying overnight was 48,000.

    While the tourism industry of many countries in the world and many localities in the country are greatly affected by the COVID-19 pandemic, the number of tourists choosing Da Lat for their destination on New Year is remarkable and is expected to open prospect for the city’s tourism industry in 2021.

    In 2020, Da Lat welcomed four million tourists; down 44% compared to 2019. Of which, over-staying visitors were more than 3.6 million, down 24.7%.

    It is forecasted that by 2021, the COVID-19 pandemic may still be complicated; the local tourism industry focuses on attracting domestic tourists, with many programs linking tours, stimulating tourism demand during the tourist season and holidays. It aims to welcome more than 4 million visitors this year./.

  • VietinBank reports record profit

    VietinBank reports record profit

    VietinBank, Vietnam’s third largest lender by assets, has reported a 40 percent increase in standalone profits in 2020 to VND16.5 trillion ($715 million).

    This is its highest ever profit, and chairman Le Duc Tho, speaking at a meeting on Wednesday, attributed it to a surge in non-interest income and reduction in operation costs.

    While it has not published its financial statement for the year, the bank said in a press release that consolidated debts rose by 7.7 percent and non-performing loans were less than 1 percent.

    Its non-interest income jumped 35 percent, lifting it as a ratio of total income from 16.5 percent in 2019 to 20 percent.

    Income from services, foreign exchange trading and treasury operations increased by 12 percent, 24 percent and 70 percent.

    The bank targets 8-11 percent credit growth in 2021 and 10-20 percent growth in standalone profit and consolidated profit, and keeping non-performing loans to under 2 percent.

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  • US absolves Vietnamese tire exporters of dumping

    US absolves Vietnamese tire exporters of dumping

    The U.S. has made a preliminary determination that most Vietnamese tire exporters did not dump products in the U.S. and not subjected them to anti-dumping duties.

    Six producers and exporters of passenger vehicle tires from Vietnam, who account for over 95 percent of Vietnamese tire exports to the U.S., were found to not dump following an investigation by the Department of Commerce that began last June.

    But some other companies were hit with a 22.3 percent anti-dumping duty, with the Trade Remedies Authority of Vietnam saying it was because they did not fully cooperate with U.S. authorities.

    The U.S. has imposed duties of 13.25-98.44 percent on South Korea, Taiwan and Thailand. A final determination will be issued on May 14.

    The U.S. imported nearly $4 billion worth of tires from the four in 2019, with Vietnam accounting for $469.64 million.

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