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Tag: Vietnam

  • Vietnam’s VinFast presents models, prices

    Vietnam’s VinFast presents models, prices

    VinFast, a subsidiary of Vietnam’s biggest private firm Vingroup, presented three models and their prices at its maiden show in Hanoi Tuesday afternoon. Its five-seat sedan Lux A2.0 and seven-seat SUV Lux SA 2.0, which had already been revealed to the public for the first time at the Paris Motor Show last month, cost VND800 million ($34,305) and VND1.136 billion ($48,709) respectively.

    The smaller hatchback Fadil, presented for the very first time, costs VND336 million ($14,410).

    These prices are exclusive of a 10 percent value added tax.

    The company said it was announcing favorable prices for the “initial phase.” The original prices of the hatchback, the sedan and the SUV are VND423 million ($18,140), VND1.336 billion ($57,300) and VND1.818 billion ($78,000) respectively, it said.

    VinFast surprised industry insiders by completing its first two units, the SUV and the Sedan, within one year.But VinFast did not say for how long the promotional prices will last or how many cars will be produced in the initial phase.

    Its first two models are built on frames from BMW. Their components have been engineered by Canadian firm Magna International’s Magna Steyr, while design work was done by Italian design house Pininfarina.

    The small hatchback, Fadil, meanwhile, was developed from the background of the Opel Karl Rocks model in the European market. Its structure is almost equivalent to the latest Chevrolet Spark generation.

    Attending the exhibition, Prime Minister Nguyen Xuan Phuc said building strong Vietnamese brands means promoting patriotism, self-reliance and self-esteem and building a consumer culture in Vietnam.

    “I hope more Vietnamese companies and entrepreneurs follow in the footsteps of VinFast to express an aspiration to dominate the domestic market and reach out to the international level.”

    Vietnam’s population is around 93 million, larger than South Korea, but car consumption is only around 300,000 units a year, he said. Previously, Mike Dunne, an independent industry analyst who has spent more than three decades in Asia, said that he doubted VinFast cars would generate much demand in a country with an average income of $2,385 last year.

    While there is little doubt the market would grow, it won’t happen fast enough to absorb VinFast’s production, planned at 250,000 vehicles annually, he added.

    There are only 358 businesses in the auto industry in Vietnam compared to 2,500 in Thailand, according to the Ministry of Industry and Trade. Over 90 percent of auto parts are imported, it added.

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  • Vietnam’s first private airport set for Christmas launch

    Vietnam’s first private airport set for Christmas launch

    Vietnam’s first private airport near the world-renowned Ha Long Bay is getting finishing touches for a Christmas day opening. The 325-hectare (803 acres) airport at Van Don District, northern Quang Ninh Province cost VND7.7 trillion (more than $330 million) and can handle 2.5 million passengers a year and 1,250 per hour.

    It is expected to focus on services to Northeast Asian destinations such as South Korea, Japan, Taiwan, and China and also Southeast Asian ones like Thailand, Malaysia, Singapore and Cambodia.

    Domestically, flights will mostly be to southern and central regions.

    Dinh Viet Thang, head of the Civil Aviation Authority of Vietnam (CAAV), said the airport could handle the largest of aircraft.

    Construction had begun in 2015.

    Real estate conglomerate Sun Group, who owns it, is completing licensing procedures now so that the first flight can land on December 25.

    It now has gates for four aircraft and the number will be increased to seven by 2030.

    According to the CAAV, the private airport will have to follow all regulations in terms of aviation safety and security like all other airports in the country.

    Airlines served almost 80 million passengers in the country in the first nine months of this year, up 12.1 percent from a year ago.

    The number is expected to cross 100 million for the very first time this year.

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  • Hanoi revives $500 million horse racing, entertainment complex

    Hanoi revives $500 million horse racing, entertainment complex

    A $500 million complex including horse racing in Soc Son District is off the shelf after 10 years. Hanoi authorities have approved the addition of the long-delayed Soc Son multi-purpose entertainment complex and horse racecourse project to the city’s master plan on socio-economic development to 2020 with orientation until 2030.

    The total investment for this project is currently estimated at about $500 million. The project is expected to go into operation after 2021.

    The planned site is mostly agricultural land. Once put into operation, the project will employ an estimated 5,000 direct laborers and 20,000-25,000 indirect laborers, generating a relatively large, regular revenue for the city’ budget.

    The project, which will be built in a planned tourist area about 40 kilometers north of Hanoi, will add a high-quality tourism product to Soc Son District in particular and the capital in general, the city stated.

    According to Hanoi authorities’ data, the capital has received over 26 million visitors this year, including 5.7 million foreign visitors, which are a 9 percent and 16 percent increase compared to last year respectively.

    The project to build a horse racecourse in Hanoi was first researched in 1999, with the racecourse’s proposed location in the southern districts of Hoang Mai and Thanh Tri.

    However, as Vietnam’s legal framework for sports betting and horse racing was incomplete at the time, the city’s foreign partner eventually withdrew from the project.

    The project was then revived in 2007 when the travel company Hanoi Tourist and South Korea’s Global Consultant Network asked for the city’s permission to research it, and was told by the government that it would be approved once the legal framework for sports betting is completed.

    Vietnam’s legislative body, the National Assembly, approved a bill legalizing sports betting last year and the government earlier this year promulgated a decree regulating the sports-betting business, throwing open opportunities for foreign investors to build racecourses in the country.

    In addition to the racecourse in Hanoi, foreign firms are also said to be pursuing plans to build horse racecourses in the northern provinces of Bac Ninh, Vinh Phuc and in Ho Chi Minh City.

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  • Bamboo Airways plans a year-end take off

    Bamboo Airways plans a year-end take off

    Bamboo Airways, Vietnam’s newest airline, is expected to make its maiden flight on Dec. 29, its founder said Friday. The first routes of the country’s fifth carrier would connect Hanoi and HCMC, and from Hanoi and HCMC to central Quy Nhon City, said Trinh Van Quyet, chairman of Vietnamese private firm FLC, the airline’s founder.

    Dang Tat Thang, Bamboo Airways general director, said the carrier has basically got itself ready for the first flight, and aircraft that it is hiring is due to arrive in Vietnam on Dec. 12.

    “It is possible that flight tickets will be on sale a month before the initial takeoff,” he said.

    Bamboo Airways finally got its long-awaited aviation license early this week.

    It is allowed to operate 10 aircraft on both domestic and international routes and to carry passengers and cargo.

    The airline plans to fly on 100 routes, connecting Vietnam’s major cities with popular domestic and international tourist destinations.

    After licensing, it needs to obtain an aircraft operator certificate and obtain permission for parking and selling tickets, which are expected to take 30-45 days from the date of license issuance.

    Bamboo Airways was founded in mid-2017 with a charter capital of VND700 billion ($30 million), which it increased to VND1.3 trillion ($55.68 million) recently.

    The airline has signed deals to buy 24 Airbus A320neo and 20 Boeing B787-9 Dreamliner aircraft worth a total of about $8.6 billion.

    The other four carriers in Vietnam currently are Vietnam Airlines, Vietjet Air, Jetstar Pacific and VASCO.

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  • Foreign names dominate Vietnam’s high-end home interiors market

    Foreign names dominate Vietnam’s high-end home interiors market

    Foreign home interior brands and designers are present in force and dominating the increasingly affluent Vietnamese market. Brands like Cassina, Badari Lighting, Cantori, Diemme Cucine, Formitalia, and Versace Home have entered the high-end interior market in recent years.

    According to the Vietnam Chamber of Commerce and Industry (VCCI), some 80 percent of luxury woodwork and interior decoration items is imported from Europe, with local players making up the small remaining portion. The market is valued at $2.5 billion.

    Ly Qui Trung, general director of AKA Furniture Group, said the expansion of the “middle and affluent class” has boosted demand for luxury interior items.

    “It is no wonder that many high-end international interior brands have started rushing into the Vietnamese market.”

    The middle and affluent class, categorized as those earning $714 a month or more, would double to 33 million, about a third of the population, between 2014 and 2020, the Nikkei Asian Review reported recently citing a study by the Boston Consulting Group.

    Market research firm Nielsen estimates the number of middle and affluent class Vietnamese to reach 44 million by 2020 and 95 million by 2030.

    Paolo Lemma, Italian trade commissioner to Vietnam, believes there will be higher demand for interior design items in future due to the booming real estate market.

    According to the HCMC Handicraft and Wood Industry Association (HAWA), woodwork furniture consumption last year was estimated at over $3.2 billion and that number is expected to reach $4 billion this year.

    Huynh Van Hanh, vice chairman of HAWA, said the industry’s average growth rate has been 8 percent in the last seven years, and his association encouraged domestic manufactures to enter this growing market.

    Trung said his company would seek to tap the growing high-end segment in future, and expected fierce competition between domestic and foreign brands.

    Last year Vietnam exported $8 billion worth of wood and forestry products and has a target of $9 billion this year.

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  • Full service eateries threaten fast food in Vietnam

    Full service eateries threaten fast food in Vietnam

    A survey has found full service restaurants outshining the quick service segment in Vietnam since 2017’s third quarter. Full service restaurants (FSR) or sit down eateries where food is served directly to the customers’ table, have been far better patronized than quick service restaurants (QSR), where table service is minimal and the typical fare is fast food.

    In fact, the QSR segment has been dropping quarter after quarter, according to a report released this week by the HCMC-based market research firm Decision Lab.

    It found that the growth of full service restaurants has been fueled mostly by women, and consumers above 35 years of age.

    The FSRs and QSR are the two most important channels for manufacturers of various product categories, with the other five channels being street food, bars, convenience stores, hotels, and canteens.

    Together, they currently account for the majority of out-of-home visits by consumers across all demographic groups in Vietnam.

    The falling of QSR

    Quick service outlets have been suffering from declining visits from all consumer groups, male and female of all ages from 15 upwards in all the three major cities, the report said.

    Among various types of quick service outlets, cafes, bakeries and juice, smoothie shops are those that have witnessed the biggest drop in visits, by 29 percent, 22 percent and 30 percent respectively.

    They have switched to other channels to consume these daily products likes street food, full service restaurants and convenience stores.

    But this does not mean Vietnamese are cutting down on these products. Vietnamese consumption of coffee, juice and smoothies actually increased in the past year.

    Since April 2016, Decision Lab had tracked the out-of-home eating and drinking market in Hanoi, Ho Chi Minh City and Da Nang, Vietnam’s three biggest cities of Vietnam.

    It tracked all food and drink consumed out of home on a daily basis with an annual sample size of 15,000 completed interviews.

    The respondents were Vietnamese consumers aged above 15, who also reported on consumption by children (under 15 years) present when eating out.

    Nghiem Vu Huong Linh, head of Foodservice at Decision Lab, said the findings suggest that consumers have become very selective in their choice of outlets to visit and that not all outlets can benefit from the increasing demand without making significant efforts to become attractive and worth trying.

  • Vietnam’s 2018 monthly car sales highest in October

    Vietnam’s 2018 monthly car sales highest in October

    October sales of 28,899 cars made it the best month of the year so far, according to Vietnam Automobile Manufacturers’ Association (VAMA). This was 3,811 cars more than the 25,088 sold in September or a 15 percent rise, a VAMA report says.

    October sales of passenger cars by VAMA members climbed 25 percent month-on-month to 21,288.

    During the same period, sales of commercial vehicles dropped 7 percent to 7,096 and that of special-purpose vehicles were up 31 percent to 515, the report says.

    While 17,599 domestically assembled cars were sold in October, up 2 percent, the number of imported completely built units (CBUs) sold was 11,300, up 46 percent over September.

    Toyota remained the leading brand last month, with sales rising 30 percent over the previous month to 8,426 units.

    Truong Hai (Thaco) group, local assembler and distributor of brands such as Kia, Mazda, Peugeot and Hyundai, and a significant player in the commercial vehicle segment, reported a 29.2 percent rise over September in group sales to 8,175 units.

    Compared to September, Ford’s sales were 9.2 percent higher at 2,574 units; while Honda sales rose 12.4 percent to 3,475 units.

    In the first 10 months of the year, VAMA members sold a total of 223,326 vehicles, up one percent over the same period last year.

  • Asia rice: Indian rates up on firmer rupee; Thai harvest to shore up stocks

    Asia rice: Indian rates up on firmer rupee; Thai harvest to shore up stocks

    Rice prices in India nudged higher this week as the rupee firmed, while Thai exporters eyed fresh demand from the Philippines. India’s 5 percent broken parboiled variety was quoted around $363-$371 per tonne this week, versus $362-$369 last week.

    “As the rupee has started to appreciate, we have to adjust export prices,” said an exporter based at Kakinada in the southern state of Andhra Pradesh.

    The Indian rupee rose 0.4 percent on Thursday to its highest level in nearly 8 weeks, trimming exporters’ margins from overseas sales.

    In southern and eastern states, supplies have started to arrive from the new season crop but they are expensive due to higher fixed government buying prices, said a Mumbai-based exporter.

    India’s rice exports dropped 9.6 percent to 5.8 million tonnes between April and September from a year earlier, as leading buyer Bangladesh trimmed purchases due to a bumper local harvest, a government body said earlier this week.

    Meanwhile in Thailand, benchmark 5 percent broken rice prices were quoted at $380 – $398 per tonne, free on board (FOB) Bangkok, unchanged from last week.

    “There have been some minor deals with markets like Japan but they have had no impact on prices,” a Bangkok-based trader said.

    “Thai rice exporters are now watching the Philippines closely because their government will open the bidding process next week.”

    The Philippines’ National Food Authority has issued an international tender to import up to 500,000 tonnes of rice with offers to be opened on Nov. 20.

    “We see this as a major deal ahead of December,” another trader in Bangkok said, pointing out that during the mid-November to early-December period, the market expects an increase in supply due to the seasonal harvest.

    In Vietnam, rates for 5 percent broken rice remained in the $415-$420 a tonne range seen last week.

    “We haven’t signed any new export deals over the past month as domestic supplies are scarce,” a trader in Ho Chi Minh City said. “We wouldn’t be able to secure sufficient rice if we got any new contracts now.”

    Egypt received offers for more than 500,000 tonnes earlier this week, including 50,000 tonnes from Vietnam, the trader said, adding that they were not sure if they will bid in the Philippines’ state grains agency tender.

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  • Most SE Asia stocks fall in line with broader Asia; Indonesia climbs 1 pct

    Most SE Asia stocks fall in line with broader Asia; Indonesia climbs 1 pct

    Most Southeast Asian stock markets fell on Tuesday, tracking broader Asia after a selloff on Wall Street overnight. As reported, citing sources from both sides, that China’s top trade negotiator Liu He may visit Washington to prepare for the talks between U.S. President Donald Trump and his Chinese counterpart Xi Jinping on the sidelines of the G20 summit in Argentina later this month.

    Philippine shares declined 1.2 percent, extending falls into a third session, dragged by industrial and real estate stocks. SM Prime Holdings declined 2.3 percent, while JG Summit Holdings fell 6.9 percent.

    Singapore shares declined for a third consecutive session, dragged by financials. DBS Group Holdings, the city-state’s largest lender, slipped 0.9 percent, while rival United Overseas Bank Ltd fell 1.2 percent.

    Malaysian shares extended falls into a third session, with IOI Corp Bhd shedding 3.1 percent to a near 11-month closing low and IHH Healthcare Bhd declining 2.8 percent to its lowest close since July 2014.

    Trade tensions between the United States and China will create a “domino effect” and prompt other countries to turn protectionist, said Malaysian Prime Minister Mahathir Mohamad.

    Vietnam shares declined 1.4 percent, dragged by financial and real estate stocks. Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) fell 3.7 percent, while real estate investor Vingroup JSC ended 2.7 percent lower.

    Indonesian shares were the top gainers in Southeast Asia with a rise of 1 percent. Consumer staples and financials led the gains with United Tractors Tbk PT and Bank Central Asia Tbk PT rising 5.5 percent and 1.6 percent respectively.

    Thai shares climbed 0.3 percent, helped by consumer staples.

    Glass container manufacturer Berli Jucker PCL rose 1.4 percent, while convenience stores operator CP All PCL climbed 2.6 percent to a more than one-month closing high.

    “Stocks are rising on internal factors like government improving infrastructure and linking of our three airports,” said Teerada Charnyingyong, an analyst with Phillip Capital Thailand.”The government also announced measures to stimulate spending by promoting the tourism sector.”

  • Transport giant to withdraw capital from leading HCMC taxi firm

    Transport giant to withdraw capital from leading HCMC taxi firm

    In an apparent u-turn, transport giant Tracodi has approved divestment of its 30 percent stake in Vinataxi. Just months after saying it intends to increase its stake in Vinataxi, renew its fleet and install driver software, the Transport and Industry Development Investment Corporation (Tracodi) has decided to pull out.

    Tracodi has authorized Nguyen Thanh Hung, its general director and vice chairman, to seek investors and negotiate a transfer price not lower than the net present value of Vinataxi shares calculated according to book value.

    Vinataxi is a joint venture between Tracodi and electronic component distributor Tecobest Hong Kong, established in 1992. In 2003, Tecobest transferred capital management rights to ComfortDelGro, the leading public passenger transport operator in Singapore.

    According to the consolidated financial statement of the third quarter, Vinataxi occupied the third largest market share in Ho Chi Minh City with a chartered capital of VND113 billion ($4.84 million). Tracodi’s initial investment value was approximately VND34 billion ($1.46 million) in the joint venture.

    Tracodi’s capital withdrawal is in stark contrast to the plan announced by its board at its annual general meeting mid-June. Then, the corporation announced it wanted to negotiate raising its ownership ratio in Vinataxi to 49 percent, and coordinate with ComfortDelgro Savico Taxi, a joint venture between ComfortDelgro and Saigon General Service Corporation, to renew their fleets and install driver software.

    Tracodi’s management board estimates the firm will reap net profit of VND8 billion ($342,916) from its taxi business line this year with its combined fleet of over 300 cars.

    In 2017, revenues and after tax profit of Vinataxi reached over VND47 billion ($2.01 million) and VND1.2 billion ($51,431) respectively.

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  • Vietnamese banks report Jan-Sept rise in bad debts

    Vietnamese banks report Jan-Sept rise in bad debts

    Thirteen of 17 listed banks have seen their bad debts rise in the first 9 months of this year, according to banks’ financial reports. Experts blame this on recent credit growth, loose lending practices and accumulated old non-performing loans.

    Bad debts of VietinBank, the country’s second largest lender by assets, rose by 34.5 percent to nearly VND12.13 trillion ($519.82 million) in the first 9 months of this year.

    Group 5 debt, the worst category for potential loan losses, accounted for the largest proportion at 72 percent of the bank’s total bad debts. Group 5 debt was also the category with the biggest increase in the last 9 months, rising 68 percent to nearly VND8.74 trillion ($374.57 million).

    At BIDV, Vietnam’s biggest bank by assets, bad debts had totaled VND17 trillion ($728.65 million), a 21.1 percent increase over late 2017. However the bank’s bad debt ratio stood at 1.76 percent, well below the 3 percent danger limit set by the State Bank of Vietnam.

    The bad debt ratio of VPBank, meanwhile, rose to 4.7 percent by Q3, compared to 2017’s year-end figure of 3.39 percent. At the end of Q3, VPBank’s bad debt had increased by 52 percent compared to the beginning of the year, reaching VND9.4 trillion ($402.9 million)

    At Techcombank, total bad debt rose 33 percent between January and September, with Group 5 bad debt rising by 31 percent. Overall, the bad debt ratio on the bank’s loans rose to 2.05 percent from 1.61 percent at the beginning of the year. The bank’s bad debt is currently at VND3.43 trillion ($146.82 million).

    trillion VNDVietnamese banks’ bad debtas of September 201812.112.117179.49.43.43.4VietinbankBIDVVPBankTechcombank05101520BIDV● Bad debt: 17

    Banking expert Nguyen Tri Hieu said that the increase in bad debt was related to credit growth. New bad debt rises as banks increase lending and adopt looser lending practices, he said.

    The country’s credit growth in the first nine months of this year was 9.52 percent.

    Pham Hong Hai, CEO of HSBC Vietnam, said that from 2019 onwards, bad debt may re-emerge as a problem for banks after the recent credit growth and instability in global financial markets.

    State Bank of Vietnam Governor Le Minh Hung said recently that bad debts and potential bad debts of the sector amounted to 8.61 percent of total credit by the end of September.

    Vietnam’s banking sector posted an estimated 18.17 percent credit growth in 2017, according to the Ministry of Finance. It has targeted a credit growth of 17 percent this year.

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  • Vietnam brewer Sabeco lifts foreign ownership cap

    Vietnam brewer Sabeco lifts foreign ownership cap

    Vietnam’s largest brewer Sabeco says it has removed its foreign ownership limit, in a statement on its website Monday. The company, known for its Bia Saigon and 333 brand, said that its board of directors had issued a resolution on Oct. 30 that approves “unrestricted foreign ownership percentage in Sabeco.”

    Last December, Thai Beverage acquired a 53.59 percent stake in Sabeco from Vietnam’s Ministry of Industry and Trade for $4.84 billion through a local entity, Viet Beverage (VietBev).

    Under the government’s Decree 60 dated June 26, 2015, listed companies, except those working in conditional business fields like banking, are allowed to determine their foreign ownership cap. They just need to register the limit with the State Securities Commission.

    The Ministry of Finance last week presented a draft securities law that would remove the current 49 percent foreign ownership cap in many sectors, except some conditional sectors.

    However, the draft has not been finalized and submitted to the National Assembly for approval.

    In Vietnam, conditional sectors refer to industries subject to additional regulations that would override limits set out by the securities law.

    Sabeco, formally known as Saigon Beer Alcohol Beverage Corp, recorded revenues of VND25.5 trillion ($1.1 billion) in the first nine months of this year, meeting 70 percent of its annual target.

    It occupies approximately 42.8 percent of the domestic beer market, according to the Ho Chi Minh City Securities Corporation. Last year, it produced nearly 1.8 trillion litres of beer.

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  • Bamboo Airways gets license, to start flying before year end

    Bamboo Airways gets license, to start flying before year end

    Vietnam’s newest airline, Bamboo Airways, has received its long-awaited aviation license and plans to launch its first flight within the next 45 days. The carrier, the country’s fifth, is allowed to operate 10 aircraft on both domestic and international routes and to carry passengers and cargo on its flights.

    It plans to fly on 100 routes, connecting Vietnam’s major cities with popular domestic and international tourist destinations.

    But initially it is likely to only operate on certain sectors like Hanoi-Quy Nhon and Ho Chi Minh City-Quy Nhon. Quy Nhon is a city on the central coast.

    According to Bamboo Airways general director Dang Tat Thang, most of the preparatory works have been completed for the maiden flight to take off before the end of the year.

    It needs to obtain an aircraft operator certificate and obtain permission for parking and selling tickets, which are expected to take 30-45 days from the date of license issuance.

    Bamboo Airways was founded by Vietnamese private firm FLC in mid-2017 with a charter capital of VND700 billion ($30 million), which it increased to VND1.3 trillion ($55.68 million) recently.

    The airline has signed deals to buy 24 Airbus A320neo and 20 Boeing B787-9 Dreamliner aircraft worth a total of about $8.6 billion.

  • Vietnam’s Vietjet valued second in Southeast Asia

    Vietnam’s Vietjet valued second in Southeast Asia

    Vietnam’s largest private airline, Vietjet Aviation, is the second most valuable airline in Southeast Asia by market capitalization. Vietjet’s value is only behind Singapore Airlines, as reported last Thursday. Last Friday, the airline was valued at $3.02 billion while Singapore Airlines topped the region at $8.29 billion.

    On Thursday, Vietjet Air launched a new international route between Hanoi and Japan’s Osaka. It plans to open two more routes to Japan in December and January.

    Earlier this month, Vietjet signed a $6.5 billion agreement to buy 50 Airbus A321neo jets.

    The airline said that the order was in line with its growth strategies and will enhance its operational efficiency and capacity, especially on international routes.

    In Vietnam, Vietjet only has to contend with two domestic rivals: the state-run Vietnam Airlines and its low-cost arm, Jetstar Pacific Airlines.

    “There are only three airlines in Vietnam, and that arrangement facilitates profit generation domestically,” a representative at an international brokerage told the Nikkei Asia Review.

    In March last year, Vietjet’s market capitalization surpassed that of state-owned Vietnam Airlines only a week after it was listed.

    Vietjet currently operates 60 Airbus jets with more than 385 flights daily within Vietnam and to countries and territories such as mainland China, Hong Kong, Japan, Malaysia, Myanmar, South Korea, Singapore, Taiwan and Thailand.

  • SK Korea keeps building Vietnam ties

    SK Korea keeps building Vietnam ties

    SK Chairman Chey Tae-won met with Vietnam Prime Minister Nguyen Xuan Phuc in Hanoi Thursday to discuss the conglomerate’s plans to invest more in both private and public companies and introduce measures to ease environmental problems there.

    They met for the second time in a year. As a result of the previous meeting, SK purchased a 9.5 percent stake in the holding company of Masan Group, one of Vietnam’s largest private enterprises, for $470 million in September.

    “We are pursuing further cooperation with private companies after our first meeting beginning with investment in Masan Group,” said the chairman of Korea’s third-largest conglomerate. “We expect cooperation in other areas such as privatization of state-owned companies to speed up.”

    Nguyen explained Vietnam’s privatization plans to Chey while asking SK to help develop the country’s growing industries.

    “Chairman Chey is the only foreign company chief that I meet every year, my interest in SK is special,” said Nguyen.

    Chey also said the group will help Vietnam combat environmental problems that stem from industrial development. SK Group currently supports the reforestation of a mangrove forest in Vietnam.

    Mangrove forests used to cover 4,400 square kilometers (1.08 million acres) of Vietnam, but only 30 percent remains. Since last May, SK Innovation has provided support to reforestation efforts in a mangrove forest in Tra Vinh province and reforestation research by Ho Chi Minh City University of Technology.

    SK’s relationship with Vietnam has grown over the years. Energy subsidiary SK Innovation has taken part in oil exploration and crude oil production from the country’s offshore oil fields since 1998. SK’s construction unit, SK E&C, has helped build petroleum complex projects in the country.

    Chey also participated in the Hanoi Forum Friday and Saturday.

    The Korea Foundation for Advanced Studies, an academic non-profit organization, and Vietnam National University in Hanoi jointly launched the forum this year to encourage academic cooperation between the two allies.

    Korea Inc. has been paying increasing attention to Vietnam as an alternative investment destination to China. Vietnam is expediting privatization amid a difficult fiscal situation, putting on sale several government-owned companies.

    In late October, Samsung Electronics Vice Chairman Lee Jae-yong paid a visit to Vietnam and vowed to increase investment during a meeting with the Vietnamese prime minister. Samsung Electronics operates major phone manufacturing lines in Vietnam, which has helped Vietnam become the second-largest exporter of mobile phones after China. As a manufacturing location, Vietnam serves as an important strategic partner for many Korean companies’ global supply chain.

    LG Display and textile giant Hyosung are also Korean companies with manufacturing units in Vietnam.

    During President Moon Jae-in’s visit to the country earlier this year, senior executives from SK and Samsung were in the president’s entourage in an effort to establish stronger business relations.

    In 2017, Korea placed second in terms of direct foreign investment in Vietnam, following Japan. Vietnam is currently Korea’s fourth-largest export partner.

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