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Tag: Vietnam

  • PM Vietnam warns against allowing in global waste

    PM Vietnam warns against allowing in global waste

    “Authorities need to work in co-ordination to stop scrap from entering Vietnam and affecting the environment and people’s lives,” he said at a meeting of the government’s standing committee on importing scrap Wednesday.

    They need to investigate the scrap containers that have entered the country without anyone accepting delivery so far and occupying huge space at ports, he said.

    They need to take legal action against violations of environmental laws and illegal imports of scrap, he said.

    They should not permit businesses to import scrap, he warned further.

    The Prime Minister approved a proposal to issue a directive on controlling scrap imports, which will be an important legal basis for the Ministry of Natural Resources and Environment to stop their imports.

    Since China announced last year it would stop allowing imports of waste as part of its “war on pollution” Vietnamese experts and officials have been concerned this country could become the next dumping ground for the world’s scrap.

    Over 900 Vietnamese firms import paper, plastic and metal scrap for use in manufacturing, according to Vietnam Customs.

    In the first six months 8,000 containers of scrap arrived at Cat Lai port in Ho Chi Minh City, said its operator, Saigon Newport Corporation.

    A third have remained at the port for over 90 days without anyone carrying out clearance procedures for them, it added.

    This year Vietnam had imported 2.28 million tons of metal scrap for over $816 million as of June 15, an increase of 55 percent year-on-year, according to customs.

  • Vietnam labor unions, businesses remain locked in minimum wage dispute

    Vietnam labor unions, businesses remain locked in minimum wage dispute

    The National Salary Board met for the second time this month to discuss whether or not to raise the minimum wage of Vietnamese workers next year.

    The previous meeting had failed to reach an agreement.

    On Thursday, the Vietnam General Confederation of Labor (VGCL), which represents the laborers, repeat its demand for an eight percent increase in minimum wage, or by VND220,000-330,000 ($9.4-14.6) per month, depending on the area.

    This increase will meet 95 percent of laborers’ living costs, it said.

    However, the Vietnam Chamber of Commerce and Industry (VCCI), which represents businesses, disagreed, saying there should be no increase in minimum wage next year.

    Most business associations in the country don’t agree with the proposal to increase minimum wages next year, said Hoang Quang Phong, vice chairman of the VCCI.

    One of the reasons the two organizations have not been able to come up to an agreement is that they have different methods of determining minimum living costs, said Ngo Duy Hieu, head of the Department of Labor Relations under the VGCL.

    In order that Vietnamese laborers get a minimum wage that completely covers their minimum living costs, there should be an increase in their remuneration over the next two years that is suitable for businesses but also matches the contribution of laborers, he said.

    VGCL recently published a study on minimum wage and cost of living after surveying over 3,000 laborers in 150 different businesses in the country.

    26.5 percent said they were “barely getting by,” while 12.5 percent said their incomes were not enough to support their families, and have to work overtime or extra jobs to make ends meet.

    The study found that an average worker’s minimum spending is VND6.5 million ($290) each month, while the average base salary is just VND4.6 million.

    Thus laborers need to work on average an extra 28 hours a month just to make ends meet, the study found.

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  • Central bank allows dong to slide against greenback

    Central bank allows dong to slide against greenback

    The State Bank of Vietnam sold the greenback at VND23,284 on Wednesday, down from VND23,050 last  Friday.

    It fixed a central rate of VND22,654 on Wednesday compared to VND22,634 on Monday, and banks too sold dollars at higher rates, Vietcombank at VND23,250 and Eximbank at 23,260.

    The higher dollar rates are likely to affect importers, according to industry insiders.

    When the dong depreciates against the dollar, steel businesses have to pay higher prices for feedstock, a source from the Vietnam Steel Association, who asked not be named said.

    “But it’s too early now to say how this weakening of the dong will affect steel firms.”

    Economist Nguyen Tri Hieu said that import firms would continue to suffer because of a strong USD and he estimated it to strengthen by 1-3 percent this year against the Vietnamese currency.

    But export businesses would enjoy the stronger dollar, he said.

    They should seek to expand and take foreign currency loans since interest rates are currently low, he added.

    The SBV said it allowed the dong to weaken against the greenback to keep the market stable.

    Pham Thanh Ha, head of its monetary policy department, said the recent increase in the central bank’s dollar selling was to stabilize the market.

    Its monetary policy would remain unchanged to control inflation and stabilize the economy, he said in a statement.

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  • Vietnam steel faces protectionism in Canada, EU

    Vietnam steel faces protectionism in Canada, EU

    The EU and Canada are taking safeguard measures to protect their steel companies from exports from Vietnam.

    The EU claimed it is taking the protective measures due to a surge in imports from many countries in recent years.

    Imports of steel products had been 18.8 million tons in 2013 but jumped to 30.5 million last year, according to the Official Journal of the European Nation published on July 18.

    Vietnam is listed among the developing countries which face provisional measures lasting 200 days starting July 19.

    Three of its products – non-alloy and other alloy cold-rolled sheets, metallic coated sheets and stainless cold-rolled sheets and strips — now attract a 25 percent additional tax.

    The Canada Border Services Agency (CBSA) said it is considering if Vietnamese carbon steel-welded pipes are being sold at unreasonable prices making it harder for local companies to compete.

    Other countries are also being investigated, including Pakistan, the Philippines and Turkey.

    The investigation, which began on July 20, came after Novamerican Steel Inc. in Montreal city alleged that local steel companies could not compete because of price undercutting by the countries listed subsequently.

    The CBSA will work with local authorities to investigate and expects to release its preliminary evaluation on October 18.

    Vietnam exported 4.71 million tons of steel worth $3.15 billion last year, 35.6 percent and 55.1 percent up from 2016 in terms of volume and value.

    ASEAN member countries are its main importers, accounting for 59.2 percent of exports, and the U.S. ranks second at 11 percent, a Vietnam Steel Association report said earlier this year.

  • Vietnamese firms get the hang of mergers, acquisitions

    Vietnamese firms get the hang of mergers, acquisitions

    A new report by the annual Vietnam M&A Forum shows that 17.72 percent of the total value of M&As in H1 2018 involved Vietnamese buyers. The corresponding figure last year was 8.2 per cent.

    Such a rise shows Vietnamese investors are and would be “more active” acquirers though foreign investors will continue to lead the market, it said.

    In H1 2018, M&As reached $3.35 billion, up 39 per cent year-on-year.

    Dang Xuan Minh, general director of AVM Vietnam, one of the organisers of the Vietnam M&A Forum, said many Vietnamese firms like Kido, Vingroup, Masan, FPT, Viettel, Pan Group, and Vinamilk are using M&As as a ticket to growth.

    They have all done some 4-5 deals on average either as a seller or buyer, he said.

    Nguyen Van Thinh, CEO of Deloitte Vietnam, said he has seen a sharp rise in the involvement of Vietnamese firms in M&As, especially by bigger private firms like Vingroup.

    “Vietnamese firms will be a major driving force of M&As in Vietnam along with foreign investors in the coming years,” he said at a press conference on the Vietnam M&A Forum 2018, scheduled to take place in HCMC in August.

    Four thousand M&As deals worth $48.8 billion took place in Vietnam in 2009-2018, according to the M&A Vietnam Forum report.

    In 2017 the value had risen 10 fold from 2009 to $10.2 billion as Thailand’s TCC Group acquired 53.59 per cent of Vietnam’s number one brewer Sabeco for $4.89 billion.

    This year M&As deals are expected to fall to $6.5-6.9 billion since there are no large deals like Sabeco on the horizon, the report said.

    Most future deals would be seen in the real estate and consumer goods sectors, while telecom, energy, infrastructure, pharma and education are also likely to attract funds.

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  • Online Food Order Vietnam Rally

    Online Food Order Vietnam Rally

    The Association of Vietnam Retailers says that there has been an exponential increase in the number of people ordering food online in Hanoi and HCMC in the last few years, and it is foreign firms that are cashing in on delivering it.

    The food delivery market is now dominated by Delivery Now, and Vietnammm.com.

    Delivery Now is a product of Foody Corporation, once a Vietnamese food service startup that was acquired by Singapore-based internet firm Sea LTD last year, while Vietnammm.com is a subsidiary of Takeaway.com, one of the world’s largest online food ordering websites based in the Netherlands.

    Invested in by Ho Chi Minh City-based Scommerce Group, an information technology and services firm, Lala is considered a rising star in food delivery sector by industry insiders, having the advantage of hi-tech knowhow from its parent firm.

    Lala connects its users directly with restaurants before its shippers from Ahamove, also a child of Scommerce Group, delivers food.

    Delivery Now has already gained great popularity in the country and GrabFood poses a serious threat, Vu Hoang Tam, co-founder and director of Lala, said.

    “Obviously, GrabFood is already equipped with an army of drivers, which makes it so easy for its delivery service” he said.

    Two months ago, Malaysia-based ride-hailing firm Grab launched GrabFood in Ho Chi Minh City.

    Apart from Malaysia and Vietnam, GrabFood is now available in six others countries in Southeast Asia: Singapore, Indonesia, Cambodia, Myanmar, the Philippines and Thailand.

    GrabFood has partnered with more than 1,000 restaurants around HCMC and is expected to expand its service to Hanoi in late September and Da Nang later this year.

    But GrabFood also has certain weaknesses as it does not link customers with restaurants. Its drivers are simply hired to go to the restaurants and bring back the food requested by customers.

    There is an element of risk involved for the drivers, who have to pay for the food first and collect payment from customers later.

    Currently invested in by Hanoi-based tech firm VCCorp, eat.vn and chonmon.vn are the two names getting known in the food delivery market these days.

    While chonmon.vn targets local customers, eat.vn focuses on serving expats and foreign visitors to Vietnam.

    “If a fierce battle started around 4 years ago for the ride-hailing service in Vietnam, it is time now for a yet another battle in the food delivery market,” a company representative said.

    However there are fears that despite the strong growth of the industry, local firms could be pushed out of the game, leaving the field exclusively for foreign investors.

    Do Xuan Quang, deputy head of Vietnam Logistics Business Association, said Vietnam was the fastest growing e-commerce market in Southeast Asia, and along with the strong growth of the logistics industry at 15-20 percent, a similar movement in the delivery market is not surprising.

    In 5-10 years, the delivery market in Vietnam will be valued at around $10 billion, he said.

    This is clearly a fertile ground for businesses but if Vietnamese firms do not prepare themselves for the race, they will repeat the failure of the logistics sector, allowing foreign companies to take over the market, he added.

    U.K.-based market research firm EuroMonitor International values the food delivery market in Vietnam at around $33 million this year and at more than $38 million in 2020.

    It also puts the annual growth rate of the market at 11 percent.

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  • Mothercare Vietnam opens second store

    Mothercare Vietnam opens second store

    UK-based baby-goods retailer Mothercare Vietnam is opening its second store, inside the newly-opened Vincom Landmark 81 in Ho Chi Minh City.

    Opened three months after the first store at Crescent Mall, the new 286sqm shop offers a full range of products for mothers, and for kids under five years old.

    The brand plans to open a third store by the end of this year at another, as yet unidentified, shopping mall.

    The baby goods retailer was brought to Vietnam under franchise agreement between Mothercare UK and IPP Group’s subsidiary ACFC, which also manages Gap, Nike, Old Navy, and Tommy Hilfiger.

    While expanding in international markets, the UK brand has shuttered stores in an effort to survive in its home market.

  • SE Asia Stocks: Indonesia, Vietnam rise; others subdued

    SE Asia Stocks: Indonesia, Vietnam rise; others subdued

    Investors’ risk appetite soured on fears of more trade protectionist measures from the United States as U.S. President Donald Trump said on Friday he was ready to impose tariffs on all $500 billion of imported goods from China, threatening to escalate a clash over trade policy that has unnerved financial markets.

    The dollar declined against major currencies after Trump criticised the Federal Reserve’s monetary tightening policy.

    “Market players will likely closely monitor China’s policy reaction, especially on the RMB front in the interim. Asian markets are likely to also trade with a cautious tone today,” OCBC said in a note.

    Singapore shares were down after four straight sessions of gains ahead of June inflation data.

    The annual headline inflation rate is expected to have risen in June from the previous month, according to a Reuters poll.

    Financials were among the biggest drag with index heavyweights DBS Group Holdings, Oversea-Chinese Banking Corp and United Overseas Bank shedding between 0.9 percent and 1 percent.

    Indonesian shares rose 0.9 percent with all sectors but materials in positive territory.

    Financials led the charge, with Bank Central Asia Tbk PT rising 1.7 percent to its highest in more than three months, while Bank Mandiri (Persero) Tbk PT gained nearly 2 percent.

    The impact of U.S.-China trade tensions on Indonesia is “not a lot” as exports to these countries are not the biggest parts of Indonesia’s economy, said Nomura Indonesia analyst Elvira Tjandrawinata.

    “Indonesia is instead affected through the impact global events have on the local currency, which pours into general sentiment in the economy,” she said.

    Last week, the central bank kept its benchmark interest rate unchanged as expected, taking a pause in its monetary tightening cycle.

    Vietnam shares jumped 1.4 percent, driven by gains in real estate and financial stocks. Vingroup JSC and Petrovietnam Gas Joint Stock Corp were the top gainers.

  • Beauty Garage launches in Singapore

    Beauty Garage launches in Singapore

    Japanese beauty product mail order service Beauty Garage has opened e-commerce sites and showrooms in Singapore and Malaysia.

    Beauty Garage Online Shop Singapore, the company’s first overseas base, opened mid July as an e-commerce platform and a showroom store selling wholesale merchandise. The Singapore service was established by partnering with beauty merchandise wholesale/seminar business Haru Singapore into a group company through third party allotment of capital increase. Haru’s roadside shop has been renovated to house the new showroom.

    A spokesperson for the company said “In the future, we will use the experience and expertise that Beauty Garage has cultivated in the Japanese market [over] a long time, not only to aggressively develop new customers and expand our handling products, but also [to] establish logistic bases in the Southeast Asian market. We will develop the strength of ‘IT × logistics’ as a trading company globally.”

    Beauty Garage Malaysia plans to open e-commerce sites and showroom stores in August.

  • Vietnam job seekers switch to foreign companies

    Vietnam job seekers switch to foreign companies

    The increase was recently announced by the executive search company Jobstreet.com.

    Le Thi Huyen Anh, key account sales manager at Jobstreet.com, attributed this to the appealing working environment, remuneration and bonus and other rewards at foreign firms.

    Speaking about the dramatic changes in the area of human resources, she said the element of technology is creating new job prospects, job titles and responsibilities and demanding specific skill sets and multitasking capabilities in new candidates as well as existing employees.

    But the ratio of Vietnamese employees who can meet the multitasking requirements in technology-based working environments remains modest, she said.

    According to Jobstreet’s bliss index of employees, a candidate’s final call on whether to select or prove their loyalty to a certain workplace depends not just on the income and job title. There are also other determinants such as position, reputation, corporate values, working culture and the community of fellow staff members, it said.

    Certain job titles like “officers” and “specialists” are offered higher wage increases and bonuses than others. Half of businesses recently surveyed by Jobstreet.com are committed to expanding recruitment while 10 percent plan to keep the recruitment ratio unaltered next year.

    Nguyen Thi Thu Trang, general manager of JobStreet.com, said the top three recruitment categories this year are wholesale-retail, communication-marketing and information technology.

    Vietnam received an estimated $16.2 billion in foreign direct investment (FDI) in the first half of this year, down 4.4 percent from the same period last year, according to the General Statistics Office.

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  • New management targets lower profits for Vietnam’s top beer maker

    New management targets lower profits for Vietnam’s top beer maker

    Sabeco targets profits of VND4 trillion ($173 million) this year on revenues of VND36.09 trillion ($1.58 billion), a 2.4 percent rise over last year.

    Newly appointed chairman Koh Poh Tiong explained to shareholders that spending on brand promotion would be higher this year.

    He said rising cost of raw materials due to bad harvests across the world and the new special consumption tax, up to 60 percent from 50 percent, effective this year, would also hit profits.

    Last year Sabeco produced 1.8 billion liters of beer and reported sales of VND35.22 trillion ($1.54 billion), up 11.2 per cent year-on-year, and net profit of VND4.95 trillion ($216 million), up 9.6 percent.

    This is Sabeco’s first annual general meeting since the TCC Group, led by Thai tycoon Charoen Sirivadhanabhakdi, paid Vietnam’s Ministry of Industry and Trade (MOIT) VND110 trillion ($4.89 billion) for a 53.59 percent stake late last year.

    The management said that thanks to Sabeco’s collaboration with Thai Beverage it would be able to get raw materials cheaper in future.

    The firm also hopes to capitalize on ThaiBev’s experience in public relations, logistics and working with global PR agencies to promote its brand internationally.

    The management said Sabeco is exploring opportunities to expand capacity.

    Shareholders heard that the firm faced difficulties in competing with strong foreign brands, and so plans to further develop its distribution networks, especially in HCMC.

    Asked about the possibility that the Sabeco brand could disappear since “it is in Thai hands” now, especially if MOIT divests further, he said TCC Group plans to develop this brand since it had spent an enormous $4.89 billion to buy it.Koh said Sabeco has a 40 percent market share.

    Last April the ministry had called on Sabeco to pay VND2.5 trillion ($111 million) in undistributed profits to the government, the major shareholder with an 89.6 per cent stake as of December 31, 2016.

    Koh told shareholders that since the firm had submitted related documents to the government, he could not give them a more detailed answer.

    The AGM approved a new seven-member board for 2018-23 including four representatives of the Thai company – Koh, Michael Chye Hin Feh, Pramoah Phornprapha and Tran Kim Nga.

    Of the remaining three, chief accountant Nguyen Tien Dung and Luong Thanh Hai are MOIT’s representatives.

    The price of Sabeco (sticker SAB) shares on the Ho Chi Minh stock exchange has plunged since TCC Group’s acquisition.

    On July 20 it traded at around VND200,000 ($8.74), giving the company a market value of VND128 trillion ($5.6 billion).

    TCC Group had bought Sabeco’s shares at VND320,000 ($13.98).

    Koh told shareholders that the price merely reflects supply and demand in the market, while TCC looks at the long term and the firm’s future prospects.

    Vietnam is one of the top 10 beer producing countries in the world besides being the top consumer in Southeast Asia and the third largest in Asia with an average of 43 liters per person per year, according to Sabeco’s management.

    MOIT figures show that the brewery market growth has been slowing, growing at only around 5 per cent in the last five years compared with 10 per cent 10 years ago.

    Last year it grew at 5.6 per cent.

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  • Vietnam Casino fined $15,000 for tax evasion

    Vietnam Casino fined $15,000 for tax evasion

    The Quang Ninh Tax Department says it has found the casino violating corporate tax and value-added tax regulations after inspecting returns filed in 2017 and its value-added-tax receipts until February 2018.

    The department has levied total fines of $15,000, including $10,500 for faulty reporting of value added tax and $3,700 for using illegal invoices.

    The Casino Gaming Club is the only gambling facility approved to serve foreigners exclusively in Ha Long Bay City, but it has been in the red since 2013.

    Last October, the company’s financial report stated that its losses in the third quarter had jumped 23 times from a year ago to more than $3.04 million.

    Managers said most of its customers were from Taiwan and mainland China, but their numbers have dwindled in recent times.

    In the first three months of this year, the company earned nearly $2.92 million in revenue, and around $69,000 in after tax profits. This is a sharp increase compared to a $908,000 loss during the same period last year.

    However, the company’s accumulated loss is estimated at more than $7.4 million on a total capital investment of $30.5 million.

    Vietnam has six casinos that are open exclusively for foreigners, and four of them are reporting losses.

    Earlier this year the government lifted a long standing gambling ban on Vietnamese nationals, allowing them to patronize two casinos, one on the southern resort island of Phu Quoc and the other at the Van Don Special Economic Zone in the northern province of Quang Ninh.

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  • Collecting back taxes from Uber tough, say authorities

    Collecting back taxes from Uber tough, say authorities

    Apart from the company contesting the department’s claims, the fact that it has sold its Southeast Asia business to its former competitor Grab adds to the difficult, department deputy director Tran Ngoc Tam said at a recent half-year review meeting.

    He said the department had sent documents to many local banks asking them to deduct the full amount of money transferred to Uber’s bank account as a form of tax enforcement, but it turned out that the firm had not opened any account in the country.

    After an inspection that it carried out in September 2017, the department had requested the Vietnamese branch of Uber International Services Holding B.V. based in the Netherlands to pay VND66.68 billion ($2.91 million) in back taxes and fines for violating tax laws.

    However, the company appealed that decision, telling the General Department of Taxation as well as the Ministry of Finance, that it is not subject to paying taxes according to Vietnam’s agreement on double taxation avoidance with the Netherlands, where it is based.

    The Ministry of Finance issued an official reply, which rejected Uber’s argument. In response, the company filed two lawsuits against the Ho Chi Minh City Tax Department.

    Tam said at the meeting that while the court was handling the lawsuit, there was no certain time frame within which the issue could be resolved. He said it would be difficult to collect taxes and fine from Uber even if the department were to win the lawsuit, because the company did not have a bank account in Vietnam.

    Furthermore, the company had sold its Southeast Asia operations to competitor Grab on April 8, which means it no longer had a presence in Vietnam.

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  • Standard Chartered Bank says Vietnam economy to grow faster than expected

    Standard Chartered Bank’s Global Focus report on the economy for the third quarter said manufacturing and construction will be the fastest growing sectors this year.

    FDI inflows will remain strong, with 50 percent coming into manufacturing, the report entitled “Fattening tail risks” said.

    Vietnam received an estimated $16.2 billion in FDI in the first half of this year, down 4.4 percent from the same period last year, according to the General Statistics Office (GSO).

    “We are positive on Vietnam’s growth medium-term on strong manufacturing activity as FDI inflows to manufacturing remain strong. We believe that Vietnam will remain one of the fastest growing economies in Asia in 2018,” Asia Economist for Standard Chartered Bank Chidu Narayanan said.

    The report said Vietnam would have a trade surplus this year due to high export growth and slowing imports.

    The country reaped export earnings of $113.9 billion between January and June, a year-on-year increase of 16 percent. Meanwhile, it spent $111.2 billion importing goods, up 10 percent.

    A World Bank report last month had said Vietnam’s economy might expand by 6.8 percent this year, revising upwards the bank’s previous forecast of 6.5 percent. It estimated growth of 6.6 percent in 2019 and 6.5 percent in 2020.

    Prime Minister Nguyen Xuan Phuc has said the target this year is to keep inflation below four percent and achieve economic growth of 6.7 percent. The consumer price index increased by 0.55 percent and 0.61 in May and June, pushing the inflation rate for the year-to-date to 3.29 percent.

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  • Bamboo Airways expected to take off in October

    Bamboo Airways expected to take off in October

    According to an FLC Group spokesperson, the first passengers will be offered various discounts on services offered by FLC Group such as golfing and accommodation at its resorts.

    Bamboo Airways will become Vietnam’s fifth airline.

    Dinh Viet Thang, general director of the Civil Aviation Administration of Vietnam (CAAV), said his agency has not granted the airline an operating license and it is still under consideration.

    This month the airline increased its charter capital to over $56 million with a fresh infusion of $26 million.

    The airfreight project, which has a 50-year operating license, is expected to cost $30 million and be implemented in 2019-23.

    Bamboo Airways is expected to buy 24 narrow-body Airbus A320NEO and 20 Boeing B787-9 Dreamliner aircraft at a list price of $8.6 billion.

    Bamboo is expected to be a hybrid carrier combining full-service and budget models.

    Vietnam’s four airlines are flag carrier Vietnam Airlines; budget operator Jetstar Pacific Airlines which is partly owned by Vietnam Airlines; budget carrier Vietjet Aviation and Vietnam Air Services Co.

    The country’s airport capacity has been reaching its limits as fast economic growth means more people in the nation of 90 million are taking flights.

    Hanoi-based FLC, whose main businesses are housing, resorts and golfing, had said it planned to operate international flights through Bamboo Airways to tourist spots in Vietnam including where FLC has properties and also plans domestic flights.

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