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Tag: Vietnam

  • New Hanoi taxi merger to fight Grab on the streets

    New Hanoi taxi merger to fight Grab on the streets

    Three Hanoi operators have banded together to create the largest taxi business in the capital and compete with Grab. The union, named G7 Taxi, has been able to undercut the fares of Grab, at least over short distances, and it may be looking to bring still more players into its group.

    G7 was formed in October by Thanh Cong, Ba Sao, and Sao Hanoi. Together, they have about 3,000 cars, accounting for around 20 percent of taxis in the Hanoi area.

    The G7 base fare is VND9,900 (43 U.S. cents) for the first one km, while Grab charges VND20,000 (86 U.S. cents) for the first two km.

    The entrance of the new brand is expected to increase competition between traditional taxis and raid hailing firms like Grab.

    Earlier, Nguyen Cong Hung, chairman of the Hanoi Taxi Association, had said: “Traditional taxis, each with their own app, are now trying to compete with Grab. But we are divided, therefore we need to unite.”

    Before Thanh Cong, Ba Sao, and Sao Hanoi teamed up, annual sales at the three companies had declined by 10-15 percent on average over the past few years.

    The number of taxi companies in Hanoi has also fallen down to 70 taxi now, from 115 in 2010.

    Joining the fight

    The taxi trio is not alone in pushing back against the ride-hailing industry.

    In March, southern taxi firms ComfortDelgro Savico and Vinataxi had merged with the same purpose.

    Vinataxi, the third largest taxi firm in HCMC, was confident the merger would increase its growth six-fold this year.

    Mai Linh, Vietnam’s No. 1 taxi operator, has developed a smartphone app similar to that of Grab. Meanwhile, second-ranked Vinasun has launched a ride-hailing service using Facebook’s Messenger app, enabling customers to hail cars and make complaints and requests directly, much like Grab.

    But Grab, the dominant player in the ride-hailing business in Vietnam, is also working on strategies to compete better with local taxi firms.

    Several months ago, it introduced Grab for Business in Vietnam, a service that helps a company track the trips its employees make to limit unnecessary trips and control expenses.

    Grab is also deploying various policies to attract drivers by offering bonuses and opening stops with free wifi and coffee.

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  • AirAsia’s Vietnam venture set to fly in August

    AirAsia’s Vietnam venture set to fly in August

    A new Vietnam-based airline set up by Malaysian budget carrier AirAsia and a local company is expected to fly by next August. Tran Trong Kien, CEO of Hanoi-based resort ooperator Thien Minh Group, AirAsia’s partner, said that applications for aviation licenses would be made next February and likely obtained in six months.

    Vietnam will become the newest market for AirAsia, the largest low-cost carrier in Southeast Asia, which has affiliates in India, Indonesia, Malaysia, the Philippines, and Thailand.

    Kien said Prime Minister Nguyen Xuan Phuc had expressed support for the airline, which has yet to be named.

    The airline plans to deploy five or six Airbus SE A320 and A321 aircraft on domestic and regional routes, and expand the fleet to 30 within three years, he added.

    Last week Thien Minh Group signed a memorandum of understanding with AirAsia for setting up the new airline with a capital of VND1 trillion ($44 million).

    AirAsia will hold a 30 percent stake in it, and Thien Minh, 70 percent.

    The new airline would be a direct competitor to Vietnam’s budget carriers Vietjet Aviation and Jetstar Pacific, according to industry insiders.

    Vietnam Airlines is currently the biggest airline in terms of passengers carried.

    Bamboo Airways, owned by private corporation FLC, last month received a license and expects to make its maiden flight on December 29. It is allowed to operate 10 aircraft on domestic and international routes.

    There are five carriers in Vietnam: Vietnam Airlines, Vietjet Air, Bamboo Airways, Jetstar Pacific and VASCO. Vietnam Airlines owns VASCO and has a 70 percent stake in Jetstar Pacific.

    Vietnam received 14.12 million foreigners in the first 11 months of the year, up 21.3 per cent year-on-year, according to the General Statistics Office. Eighty percent of foreign tourists arrive by air.

    Vietnam’s aviation market has averaged 17.4 percentage growth in the past decade, far higher than the 7.9 percent rate for the Asia-Pacific, according to the International Air Transport Association.

    AirAsia almost struck a deal with Vietjet, but in 2010 the deal collapsed.

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  • Real estate in Saigon the most sought after in Vietnam

    Real estate in Saigon the most sought after in Vietnam

    Saigon leads Vietnam in real estate interest, drawing 300 million internet searches in the last 12 months. According to a report recently issued by Batdongsan.com.vn, one of the biggest property portals in Vietnam, Hanoi is the second most searched city when users look up real estate at 170 million searches.

    The two cities are followed by central Da Nang City, southern Bien Hoa Town, northern Hai Phong City, central Nha Trang Town, and Vung Tau Town and Can Tho City in the south in terms of popularity.

    Overall, the leading position of Saigon real estate is predicted to continue to remain the same because its housing market is still seeing a lot of actions.

    Consumer data collected from Internet queries also showed the level of interest given to real estate in each specific area.

    Saigon attracted the highest level of interest, at 41.8 percent of recorded consumers, the largest in Vietnam, while Hanoi had 29.7 percent. Central Khanh Hoa Province, Da Nang, and southern provinces of Dong Nai and Binh Duong recorded modest numbers, fluctuating between 3 to 4.5 percent. Interest is measured by saved searches, favorites and number of queries.

    The report also reveals that budget and midrange apartments in Saigon and Hanoi, which are priced between VND20-30 million ($860.47 – $1,290) per square meter, with an area of around 60-70 square meters are the type of high-rise apartments that attracts the most attention from Internet users.

    Meanwhile, in regards to content posted on the website of this organisation, foundation land (land serving as the foundation for housing projects to be built on) tops the board in the number of posts published, at 1.2 million posts.

    The land is also the most indulgent hunting with nearly 120 million searches, showing the habit of clinging to land, ownership of real estate in the territory of the Vietnamese, said the report.

    In addition, separate houses attached to land are also highly sought after, at nearly 120 million searchers. This shows the Vietnamese consumers’ preference to own land, or possess properties attached to land, according to the report.

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  • HCMC a top 20 Asia Pacific office rental market

    HCMC a top 20 Asia Pacific office rental market

    With office rents rising constantly for several years, HCMC has moved into the top 20 Asia-Pacific office rent markets. Grade-A office rents in Ho Chi Minh City have reached a five-year peak of $936 per square meter a year, according to property service firm JLL. The HCMC market has come under the spotlight in a premium office rent report for the Asia-Pacific region just released by the US-based global company.

    The report said that HCMC, an emerging market, saw annual gross premium office rents rising to $635 per square meter, a year-on-year increase of nearly seven percent, placing the city in the list of top 20 office rent markets in the Asia-Pacific region.

    It highlighted the case one unnamed building in the inner city, where a record rent level of $936 per square meter a year was registered, a peak unseen for many years.

    JLL assumes that the HCMC office market is heating up with increasing investment inflow from many multinational firms.

    The US firm added that the total supply of office space in HCMC has increased to two million square meters, a five-fold hike compared to Bangkok. The scarcity of premium office space in HCMC has constantly pushed up rents.

    Financial corporations are willing to pay for high-end office space in HCMC, while banking and financial firms were keen on premium office space, topping the list of 72 key tenant categories.

    Meanwhile, JLL said in the Global Premium Office Rent Tracker Q4 2018 that Ho Chi Minh City and Manila, the two more affordable cities in Southeast Asia, are attracting significant corporate interest, along with European cities like Amsterdam, Berlin and Warsaw.

    The firm said that growth in occupation costs is likely to slow down in 2019 as new supply comes through; however, while rental growth is expected to decelerate, there are very few major markets where a downward correction is projected for 2019. In fact, the delivery of new premium buildings will set fresh rental benchmarks in several markets, it predicts.

    Total occupancy costs are calculated by combining the net effective rent with additional costs, including service charges and taxes.

    JLL’s Global Premium Office Rent Tracker 2018 compares occupancy costs for premium office buildings across the world’s leading real estate markets. This fourth edition includes 72 office submarkets across 61 cities.

    The report includes the key elements of occupancy costs – net effective rent, service charges and government tax on rent – all standardized to enable true international comparisons.

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  • Vietnamese currency falls to new low, could go lower

    Vietnamese currency falls to new low, could go lower

    The official exchange rate between Vietnamese dong and U.S. dollar reached its highest this year Wednesday, and  experts said the dong could depreciate further. The State Bank of Vietnam set a central exchange rate of VND22,757 on Wednesday, the sixth time the rate has gone up in the last two weeks.

    The dong has fallen by VND352, or 1.57 percent, against the greenback since the beginning of the year.

    The dollar’s value increased at commercial banks. At 3p.m. Wednesday, Vietcombank sold the dollar for VND23,350, VND15 higher than Tuesday.

    Vietinbank also sold its dollar for VND23,350, VND17 higher than Tuesday, while BIDV sold it at VND23,355, VND25 higher.

    The dollar also inched up on the free market. At 11.30 a.m. Wednesday, it was selling for VND23,360-23,410, VND10-20 higher than on Tuesday.

    Economist Nguyen Tri Hieu said that the reason for the hike was high demand for dollars toward the end of the year as businesses often import large amounts of materials needed for manufacturing.

    The ongoing U.S.-China trade war continues to exert exchange rate pressures, despite the U.S. announcing a 90-day halt on additional tariffs on Chinese goods starting next year, as there is no certainty that tensions will decline, he said.

    “There is a high possibility that the dong’s value will continue to fall this year,” Hieu said.

    Hieu said that the government should also devaluate the dong against the Chinese yuan so that the trade deficit between Vietnam and China can be reduced.

    Vietnam relies heavily on China for materials and equipment for its labor-intensive manufacturing sector.

    As the yuan’s value has fallen by 9 percent to the dollar since the beginning of this year, some experts have said that the dong should be devaluated even more to avoid impacts a cheaper yuan. Cheap made-in-China goods could be imported in large quantities to Vietnam and compete with domestic products, they said.

    But economist Tran Dinh Thien said that the dong should be kept at a balanced rate between the U.S. dollar and the Chinese yuan. A 2-3 percent band a year is acceptable, he added.

    A stronger dollar will benefit exporters, but will also create stronger pressure on inflation and interest rates which will increase business costs in a country with high imports and public debt, Thien said at a recent conference.

    He added that the fluctuation of the dong should be controlled to help local companies conduct their business with greater certainty.

    The government doesn’t want businesses to suffer shocks, he said.

    Prime Minister Nguyen Xuan Phuc had said in August that the devaluation of the dong needs to be kept within a 2-percent band this year compared with the end of last year.

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  • Apple assembler Foxconn considering iPhone factory in Vietnam

    Apple assembler Foxconn considering iPhone factory in Vietnam

    Apple’s biggest iPhone assembler Foxconn is considering setting up a factory in Vietnam to mitigate any impact of the ongoing trade war. The report from Vietnamese state media comes after several executives interviewed last week singled out Vietnam and neighboring Thailand as preferred destinations should they need to shelter operations from the trade war, braving hurdles such a lack of skilled labor and inadequate infrastructure.

    Foxconn Group and the Hanoi People’s Committee are working together to open an iPhone manufacturing facility in Vietnam to negate the impacts of the U.S.-China trade war.

    Vu Tien Loc, head of the Vietnam Chamber of Commerce and Industry, raised the matter with Prime Minister Nguyen Xuan Phuc at a meeting on Nov. 22.

    “We are discussing the possibility of this with Foxconn,” Loc said, without elaborating. Hanoi People’s Committee Chairman Nguyen Duc Chung declined to comment.

    Taiwan’s Foxconn, formally Hon Hai Precision Industry Co Ltd said it “follows a strict company policy of not commenting on any matters related to current or potential customers, or any of their products”.

    In trade talks on Saturday, U.S. President Donald Trump and Chinese President Xi Jinping agreed not to introduce any tariffs for 90 days as negotiations continue.

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  • Vietnam eyes $10,000 per capita income by 2035

    Vietnam eyes $10,000 per capita income by 2035

    Vietnam has set target of increasing GDP per capita to $6,500 in 2030, and $10,000, or four times the current value, in 2035. The GDP in those years would then be $670 billion and $1.05 trillion, according to an economic policy framework for the period up to 2035 recently issued by the Ministry of Planning and Investment. This will make Vietnam an upper middle-income country.

    Vietnam has also targeted to reduce its poverty rate to 1 percent and increasing the middle-class rate to 50 percent by 2035.

    The middle and affluent class now is categorized as those earning $714 a month or more, according to the Boston Consulting Group.

    According to the document, encouraging the continued development of the private sector and developing human resources and innovations taking advantage of the Fourth Industrial Revolution would be two of the driving forces for economic growth.

    The country hopes to have two million private businesses that contribute 50 percent of its GDP by 2020 and 60-65 percent by 2030.

    The reforms to achieve these goals will focus on modernizing the economy and developing the private sector, building innovation capacity, improving economic efficiency of urbanization, and building modern institutions and efficient governance.

    Vietnam also aims to ensure its development is environmentally sustainable and equitable, promote social inclusion and enhance its adaptability to climate change.

    Minister of Planning and Investment Nguyen Chi Dung said strong reforms are needed to continue developing and not fall behind the times.

    Speaking to Vietnam’s development partners at a forum on reform and development Wednesday, Prime Minister Nguyen Xuan Phuc said: “We have the aspiration to become a prosperous economy, but we are fully aware that the road will be uneven with many challenges. Those are the challenges from both within the economy and the impacts caused by fluctuations in the global economy.”

    To address these issues he pledged his government would soon speed up administrative reform and establish an economic system that enables all economic entities to have the right to participate in making development plans and policies.

    “Vietnam will focus on building its soft and digital infrastructure to convert the economy into a digital one, reform its recruitment mechanism and focus on training human resources to make use of the fourth industrial revolution as a driving force for growth.”

    According to World Bank Group statistics, Vietnam’s GDP per capita in 2017 is $2,343. The figure for Singapore is $57,714, Malaysia ($9,945), Thailand ($6,594), the Philippines ($2,989) and Myanmar ($1,298).

    Minister Dung estimated that Vietnam’s GDP would grow by 6.57 percent on average in the 2016-2018 period, meeting the National’s Assembly target of 6.5-6.7 percent growth.

    In the first nine months this year, Vietnam’s GDP grew by 6.98 percent, the highest nine-month growth rate since 2011. The economy grew by 6.81 percent last year, the highest rate in a decade.

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  • Vietjet CEO climbs Forbes list of World’s Most Powerful Women

    Vietjet CEO climbs Forbes list of World’s Most Powerful Women

    Nguyen Thi Phuong Thao has been named the 44th most powerful woman in the world by Forbes, up 11 places from last year. Thao is the only Vietnamese to make the magazine’s list of 100 most powerful women this year. Forbes estimated the CEO of budget carrier Vietjet Air and the richest woman in Vietnam to have a net worth of around $2.6 billion.

    Forbes compiles the list based on assets, impact, spheres of influence, media presence, and social media power.

    Thao has extensive experience in doing business in Vietnam and abroad in multiple fields such as finance, banking, aviation, real estate, and retail.

    She launched Vietjet in 2011. The airline leads the domestic market with a 45 percent share. It operates 385 flights daily within Vietnam and to Japan, Hong Kong, South Korea, Taiwan, Singapore, mainland China, Thailand, Myanmar, and Malaysia.

    Thao also has interests in banking and real estate, which includes owning three beach resorts.

    Topping the list of the most powerful women in the world, for an astonishing eighth year, was German Chancellor Angela Merkel.

    She was followed by British Prime Minister Theresa May, former U.S. Federal Reserve Chairwoman Janet Yellen and General Motors CEO Mary Barra.

    The list comprises business leaders, politicians, investors, scientists, philanthropists, and people who are finding solutions to the world’s most difficult problems or have the most global impact.

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  • Vietnam solar power investment rush poses an overload risk

    Vietnam solar power investment rush poses an overload risk

    The investment rush in solar energy could end up testing Vietnam’s weak power infrastructure, experts say. They say that both transmission capacity and the ability of grids to absorb the energy produced by new projects are suspect, as of now. The 9.35 U.S. cents per kWh Feed in Tariff (FIT) for solar power in Vietnam has sparked an investment rush.

    The latest project to be completed is the 49MW Krong Pa plant in the Central Highlands province of Gia Lai. It began operations last week.

    The investor, TTC Group, a corporation that invests in real estate, energy and education projects, has 19 other solar power projects underway.

    Other corporations have also been rolling out ambitious plans. The Xuan Cau Group plans to invest in a 2,000MW solar power project in southern Tay Ninh Province, while the Xuan Thien Corporation plans a 3,000MW project in the Central Highlands province of Dak Lak.

    September statistics from the Ministry of Industry and Trade show that 121 solar power projects been approved, which are expected to add 6,100 MW of output by 2020 and another 7,200 MW by 2030.

    Of these, 25 have signed power purchase agreements with Vietnam’s biggest power producer and sole distributor, Vietnam Electricity (EVN).

    In addition, another 221 projects await authorization, with a combined 13,000 MW of potential output.

    At this rate, the combined solar power output would accounts for 60 percent of Vietnam’s total output from all power sources kinds of power. It also far exceeds the country’s plan for solar energy output of 850MW by 2020, and 4,000 MW in the 4 following years.

    “There is an investment boom in solar power projects, but this is not good,” said Toby Couture, an expert of the German Corporation for International Cooperation (GIZ).

    He said authorities should come up with a balanced forecasting framework, rather than letting the market overheat.

    On top of the race to get projects completed before June 30, 2019 to enjoy the preferential FIT, the explosion of investment in solar power is also raising concerns over overloading of the power grid once the projects become operational.

    According to Vu Ngoc Duc of the Energy Institute under the Ministry of Industry and Trade, the fact that most projects are concentrated in central provinces of Ninh Thuan and Binh Thuan, and Dak Lak carries the risk of overloading the current power grid.

    Power plants cannot be plugged in without considering the capacity of each power transmission line, he said.

    Dinh Quang Tri, acting general director of EVN, admitted that 9.5 cents a kWh was still cheaper than electricity from oil, but the main problems the utility faces are infrastructural.

    Central Vietnam has relatively weak electricity infrastructure because of low consumption, but it is where the new renewable energy projects will be concentrated, he said.

    “The lines cannot take thousands of megawatts at the same time,” said Tri, adding that EVN had petitioned the government to plan and approve additional transmission lines.

    However, the procedures for planning, land clearance and construction will take a long time, so the existing grid will not be able to keep up with capacity of new solar plants.

    “This is a huge challenge. If we don’t purchase electricity from these solar plants, there will be a shortage. But if these projects are completed too quickly, the grid will not be able to load it all,” Tri said.

    He said that to avoid overloading the transmission grid, the Government should promote household solar panels, suitable for the low voltage grid, so that no additional investment into the transmission grid is required.

    Deputy Minister of Industry and Trade Dang Hoang An said that the ministry was directing the re-planning of local and national power development. It is assigning grid development units the task of resolving infrastructural bottlenecks to support approved solar power projects, he added.

    Solar power currently accounts for just 0.01 percent of the country’s total power output, but the government plans to increase the ratio to 3.3 percent by 2030 and 20 percent by 2050.

  • Vietnamese network providers ready for 5G rollout

    Vietnamese network providers ready for 5G rollout

    Vietnamese telecom firms are seeking a head start in the 5G race as the country becomes an early adopter of the technology. State-owned Vietnam Posts and Telecommunications Group (VNPT) recently signed a deal with Finnish telecom firm Nokia to develop 5G solutions and technology for the Internet of Things. The three-year deal is worth $15 million.

    The country’s third largest mobile service provider is seeking permission from the Ministry of Information and Communications for its Vinaphone network to beta test 5G, chairman Tran Manh Hung said at a conference last month.

    He said the test would help VNPT master the technology and prepare to produce 5G equipment, adding Vinaphone is ready to provide 5G services as soon as it gets the ministry green light.

    Military-run Viettel Group has also announced it is ready to beta test 5G next year. Its deputy director, Tao Duc Thang, said its installation of infrastructure for 4G even in remote areas allows Viettel to be ready for the new network.

    5G is said to offer speeds 100 times faster than 4G, primarily used for smartphones and other similar devices. The former is also expected to support new applications like remote medical procedures and autonomous driving.

    Thang said Viettel, the country’s largest mobile service provider, is working with partners to manufacture 5G equipment.

    “I think Vietnamese operators are ready for 5G with the existing infrastructure. When the market, equipment and users are ready, developing 5G will be possible.”

    The company, which has been working on 5G plans since 2015, will start installing infrastructure early next year and introduce the service first in big cities like Hanoi and HCMC.

    The country’s second biggest mobile service provider, MobiFone, which trailed its competitors in deploying 4G, earlier this year signed an agreement with Samsung Electronics for engineering and commercial cooperation on 4G and 5G networks.

    Vietnamobile, a joint venture between Hanoi Telecom and Hongkong-based Hutchison Asia Telecommunications, has also announced its interest in offering 5G services.

    VNPT, Viettel, MobiFone, and Vietnamobile are expected to receive 5G testing licenses in January.

    Last month Minister of Information and Communications Nguyen Manh Hung said at a conference that Vietnam should test 5G next year and ensure nationwide coverage by 2020.

    “Vietnam should be one of the first to launch the network, at least in Hanoi and HCMC.” The country had been one of the last in Southeast Asia to roll out 4G.

    This time Vietnam would be able to produce the required equipment before it launches the network, whereas for 4G the country had to wait for eight years before being able to do so, and for 2G and 3G all the equipment had to be imported, he said.

    “5G is not only an opportunity for connection services and going up the telecommunications ladder, but also an opportunity for developing the country’s information and communications technology industry.”

    The International Telecommunication Union last year ranked Vietnam 115th out of 193 economies in terms of mobile teledensity, but Hung wants the country to have 100 percent subscription by 2020 and be among top 30-50 countries in the world in data spending per capita.

    Vietnam’s telecom market was estimated at more than $16 billion in 2016, with the three state-owned providers, Viettel, MobiFone, and VNPT, accounting for 95 percent of the market.

    Viettel had the largest share with 46.7 percent, followed by MobiFone with 26.1 percent and VNPT with 22.2 percent.

    While MobiFone and VNPT are on the list of state-owned companies slated for privatization by 2020, Viettel will remain in government hands.

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  • Vietnam’s wind power tariffs attractive, but concern rises

    Vietnam’s wind power tariffs attractive, but concern rises

    Vietnam’s new feed-in tariffs are attracting great interest in wind power, but investors are concerned about grid connection and purchase agreements. The new feed-in tariffs (FIT) are expected to be attractive to domestic and foreign investors, Tommaso Rovatti Studihard, South East Asia sales director for wind power developer Vestas Asia Pacific said.

    The government recently approved tariff revisions under Decision 39 on support mechanisms for the development of wind power.

    The decision, effective from November 1 this year, raises the tariffs from 7.8 US cents per kWh to 8.5 US cents for onshore and 9.8 US cents for offshore generation respectively.

    “Electricity demand will grow at an estimated 8 – 10 percent a year from now to 2030. This represents realistic opportunities for investors,” Studihard said.

    Conjecturing that the national plan envisages adding 1,000 MW of wind power by 2020 and 6,000 MW by 2030, he said the targets are achievable.

    “Vestas is excited about the Vietnamese market, probably this is the most promising market in the Asian region with very good wind resources,” he said.

    Vestas has so far put three wind power projects into operation in Vietnam and plans to have another project come online by 2019 and “do a lot more in the future.”

    Studihard noted that over the next three to five years there are huge opportunities in Vietnam to have some gigawatts of wind power, but the bankability of the power purchase agreement (PPA) remains an issue with many investors, especially international investors, and banks finding it a little difficult to be comfortable with.

    There are no clear termination and force majeure clauses in the PPA, which hinders the attraction of foreign investment, especially from banks and credit institutions, he explained.

    “One more problem is Vietnam’s weak grid capacity, which would become a bottleneck for developing wind and other renewables. The grid needs to be upgraded to tap the great potential Vietnam has for offerable, sustainable and reliable wind power.”

    Bui Van Thinh, CEO of the Thuan Binh Wind Power JSC (TBW), said having gained success in developing the 24MW Phu Lac wind power project in the central province of Binh Thuan, TBW is completing procedures to start construction of a 30MW wind power project in neighboring Ninh Thuan Province.

    But the weak grid capacity is the biggest challenge to expanding renewables like wind and solar power, he said.

    The transmission line near Phu Lac site could handle 100MW, compatible with two 50MW wind power projects.

    Overload capacity is imminent once a solar power project connects with the transmission line, Thinh noted, citing the concerning fact that there are eight solar power projects in the locality approved to connect with the grid.

    “The government should instruct the state-run Electricity of Vietnam (EVN) to install transmission lines to cope with the renewable power projects across the country, especially those in Ninh Thuan and Binh Thuan.”

    Ninh Thuan and Binh Thuan are central provinces that have the greatest potential for renewable energy in the country.

    While 2,000 MW of solar power are proposed to be generated in Ninh Thuan, the local transmission line can only handle a few hundred megawatts. Thus, 110 kV or 220 kV transmission lines need to be installed before pushing the power to the 500kV transmission line and sending it to Ho Chi Minh City or Danang City, Thinh added.

    Nguyen Van Thanh, deputy head of the Ministry of Industry and Trade’s Electricity and Renewable Energy Authority, said demand for energy, wind power in particular, has been growing rapidly.

    The need for ensuring energy security but also sustainable development has changed Vietnam from an energy seller to buyer, with the country’s dependence on imported energy sources also rising, he said.

    Vietnam also faces a shortage of primary energy, with coal imports posing many risks related to supply, price and transportation, he noted.

    “Given that, efficient exploitation of new and renewable sources would play a key role in the country’s socio-economic development, energy security and sustainable development.

    “The country is working diligently to draft policies for the efficient and economical use of energy, diversification of energy sources and increasing application of new and eco-friendly technologies,” Thanh added.

    Under the revised Power Development Plan VII, power stations in the country are expected to generate a total of 60,000 MW by 2020. Of these, coal-fired stations would make the largest proportion of 42.7 percent, followed by hydropower (30.1 percent), gas-fired plants (14.9 percent) and renewable energy sources (9.9 percent).

    By 2030, the total capacity would soar to 129,500 MW, with coal and gas-fired plants accounting for 42.6 percent and 14.7 percent respectively, similar to the figures set for 2020. But the ratio of renewable energy sources is set to double to 21 percent by then.

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  • Cashless services explode in Vietnam

    Cashless services explode in Vietnam

    Vietnam’s central bank says the value of cashless transactions more than doubled over the first three quarters of 2018. The Department of Payments at the State Bank of Vietnam reported a strong rise in payments over electronic channels between January and September, compared to the same period last year. Accordingly, the value of online payments rose by 18.3 percent, while transactions over mobile apps and e-wallets rose by 126 percent and 161 percent respectively.

    The number of transactions over Internet, mobile and e-wallet channels also rose 33 percent, 30 percent and 28 percent respectively.

    “Mobile payment is becoming a new trend with the rise of technologies such as QR codes, contact and contactless payments, and the tokenization of card information,” said Nghiem Thanh Son, deputy director of the department.

    The first months of 2018 saw the number of users and the value of transactions through electronic channels such as online, mobile and e-wallets rocket at many banks.

    At Sacombank, statistics show that as of October, the number of registrations for online banking reached over 1.3 million accounts and for mobile banking 1.1 million accounts. The total value of transactions per month through both channels exceeded VND108 trillion ($4.63 billion).

    For VietinBank, the country’s second largest lender by assets, the number of internet banking users in the first half of this year surged 114 percent over the same period last year to a total of 1.5 million accounts and VND44.26 trillion ($1.90 billion) in total transaction value.

    Its mobile banking users also reached 1.5 million, engaging in transactions totalling VND64.35 trillion ($2.76 billion) between January and June.

    Over 7 million people are using digital services provided by MBBank. The average transaction value per month reached VND27.4 trillion ($1.17 billion), with digital transactions making up approximately 2.6 million out of 3 million total monthly transactions seen at this bank.

    Nguyen Hoang Minh, deputy director of the State Bank’s HCMC branch, noted that the number of online banking customers has seen average annual increase of 20 percent in recent years.

    Minh said that in order to continue developing non-cash payment channels, credit institutions should pay attention to linking their cashless systems with the public sector, specifically in areas like health, education, payroll and utilities.

    Cashless services should also expand to include online payment options for public services like buses, trains and other smart urban solutions, he said.

  • Vietnam Airlines eyes stock market listing in 2019

    Vietnam Airlines eyes stock market listing in 2019

    Vietnam Airlines plans to list its shares on the Ho Chi Minh City Stock Exchange next year amidst rising competition of low-cost carriers. “Vietnam Airlines will go public in the first quarter of next year,” its chief executive, Duong Tri Thanh said. “We are making our target the first quarter of next year, and I think it is feasible.”

    But he admitted the final decision rests with the government.

    The carrier’s shares are traded on Hanoi’s Unlisted Public Company Market (UPCoM) and it has a market capitalization of more than $2 billion.

    The government currently owns around 86 percent of Vietnam Airlines, but has said it wants to reduce this to 51 percent by 2020.

    The country’s largest airline by passengers carried now faces rising competition from budget carrier VietJet Aviation and others. Last month Vietjet became the second most valuable airline in Southeast Asia by market cap behind only Singapore Airlines.

    With the domestic market showing signs of saturation, Vietnam Airlines seeks to expand overseas. In October it started a daily service from central Da Nang City to Osaka City to add to the 70 weekly flights from Vietnam to Japan. In 2020 it plans to begin a direct service to the U.S.

    Vietjet launched a daily service from Hanoi to Osaka last month to take its total number of international routes to 64 in 11 countries. It plans to add two more routes to Japan by next month.

    Other airlines are also jostling for market share. Bamboo Airways, Vietnam’s newest airline, received a license last month and is set to make its maiden flight on December 29.

    Experts said the listing of Vietnam Airlines would allow it to compete with other carriers by attracting more investors.

    “This would be a major Vietnamese company joining the stock exchange, which would interest international investors and potentially enable Vietnam Airlines to raise funds more easily to compete with the likes of VietJet and Bamboo,” the Financial Times quoted Tony Foster, a partner at Hanoi law firm Freshfields, as saying.

    Vietnam’s international aviation market, driven by the rapid growth in tourism, has been expanding at more than 30 percent a year, according to the CAPA Centre for Aviation, an Australian consultancy.

    Vietnam welcomed 14.1 million international tourists from January to November, up 21.3 percent year-on-year, according to the General Statistics Office. As many as 11.4 million of them came by plane, up 15.3 percent, it added.

    Vietnamese carriers transported 45.1 million passengers between January and November, up 11.9 percent year-on-year, and 369.2 million tons of goods, up 18.6 percent, according to the General Statistics Office.

    There are five carriers in Vietnam: Vietnam Airlines, Vietjet Air, Bamboo Airways, Jetstar Pacific and VASCO. Vietnam Airlines owns VASCO and has a 70 percent stake in Jetstar Pacific.

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  • Vingroup’s smartphone launched soon

    Vingroup’s smartphone launched soon

    Vietnam’s largest private conglomerate, Vingroup, will introduce its first smartphones on December 14 as part of its tech expansion. The company will launch four new models under the brand name “Vsmart,” at the Landmark 81 skyscraper in Ho Chi Minh City.

    The phones are produced at Vingroup’s factory in the northern city of Hai Phong, which is capable of making five million phones a year in its first phase of operations, a Vingroup statement said.

    The company will utilize Spanish experts for product development as it owns 51 percent of Spanish technology firm BQ.

    “We hope that Vsmart phones, alongside VinFast cars, will contribute to the development of Vietnam industry and bring Vietnamese brands to the world,” said Nguyen Viet Quang, vice chairman and chief executive officer of Vingroup.

    Vingroup became the country’s first full-fledged domestic car maker two months ago, introducing three new car models. In June, it established the VinSmart Co. to produce smartphones and other smart electronic devices with a registered capital of VND3 trillion ($131.54 million).

    VinSmart is also working with Qualcomm and Google’s Alphabet Inc to “update to the most advanced technology in the smartphone sector,” the statement said.

    The company will be the newest phone maker seeking success in Vietnam, a country of 95 million people. The market is currently dominated by Samsung and Apple phones. Vietnam is the largest smartphone production base for Samsung Electronics.

    Vingroup said its VinSmart factory will also produce smart TVs and other smart products in the future.

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  • Vietnam must avoid power cuts next year: PM

    Vietnam must avoid power cuts next year: PM

    Prime Minister Vietnam Nguyen Xuan Phuc has ordered agencies to ensure that the country won’t suffer power shortages in 2019. The Prime Minister has communicated this to relevant agencies several times, Mai Tien Dung, Minister and Chairman of the Government Office, said at the government’s regular press conference on Monday.

    The communiqués have instructed the agencies to ensure that there’s no electricity shortage for both industrial and domestic uses, emphasizing they would be held responsible for failures, Dung said.

    The PM has also tasked relevant agencies with definitively resolving the ongoing issue of coal shortage for thermal power plants, which Vietnam Electricity (EVN) has warned could lead to power cuts early next year.

    The national power utility said in a recent report to Deputy Prime Minister Trinh Dinh Dung that the country will need over 54 million tons of coal for electricity production next year, of which 43.4 million tons will come from domestic production and 10.68 million tons will be imported.

    But the country’s only two suppliers, Vietnam National Coal-Mineral Industries Corporation (Vinacomin) and the North-Eastern Company (NECO) under the Ministry of Defense, will only be able to produce 37.21 million tons of coal next year, 6.19 million tons lower than estimated demand, EVN said.

    Speaking at the press conference, Deputy Minister of Industry and Trade Do Thang Hai said a total of four different electricity supply plans have been drafted, all of which designed to ensure there would be no power shortages next year.

    However, in certain cases, Vietnam would still need to produce 2-7 billion kWh of electricity from expensive oil-powered generators.

    “If we want to have enough electricity then we must increase the production of electricity by oil, which would be more expensive,” he said, asking consumers to make plans to save electricity.

    Regarding the issue of coal shortage, Hai asserted that Vinacomin and NECO have both supplied enough coal for thermal power plants as committed.

    “The two major coal suppliers have tried their best. If coal from domestic sources is not enough to supply [thermal power plants] then we will import more,” he said.

    The deputy minister also said a scenario for regulating electricity prices next year would be reported to the government later this month.

    “The electricity price for next year is being carefully considered and the scenario is being built in accordance with regulations, including factoring in the effect on inflation,” he said.

    Vietnam currently relies largely on hydropower and thermal power plants for its electricity needs. However, its hydropower potential is almost fully exploited and its oil and gas reserves are running low.

    Thermal energy is expected to account for over 48 percent of the country’s power production next year.

    Vietnam, one of Asia’s fastest-growing economies, has been struggling to develop its energy industry, and its heavy reliance on non renewable sources could prove problematic in the future, experts say.

    World Bank country director for Vietnam Ousmane Dione said at a recent forum that Vietnam will need to raise up $150 billion by 2030 to develop its energy sector; that electricity demand in the country will grow by about 8 percent a year for the next decade.

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