Tag: Vietnam

  • VietJet inked 100 Boeing 737 jets deal

    VietJet inked 100 Boeing 737 jets deal

    Boeing Co struck a new deal for 100 passenger jets with Vietnamese budget airline VietJet Aviation JSC VJC.HM on Wednesday, deepening a battle for market share against rival Airbus (AIR.PA) in one of southeast Asia’s hottest markets.

    Boeing and VietJet signed the provisional order for 100 Boeing 737 MAX airplanes worth almost $13 billion at list prices at the Farnborough Airshow in southern England.

    Of these, 80 are the recently launched 737 MAX 10 – the largest version of Boeing’s best-selling 737 range – and 20 are the benchmark 737 MAX 8 model.

    “The growth is incredibly strong in Southeast Asia,” said Boeing Commercial Airplanes CEO Kevin McAllister. “VietJet is a major player there.”

    The draft deal comes two years after Boeing upstaged Airbus by clinching an order for 100 737 MAX jets during a visit by then-U.S. President Barack Obama.

    Until then, VietJet had only ordered planes from Airbus, including a bumper order for 92 jets in December 2013.

    However, aircraft finance industry sources have expressed doubts over whether all the planes on order would be delivered on schedule amid a glut of airplane orders in the region.

    VietJet CEO Nguyen Thi Phuong Thao insisted on Wednesday the airline would use both the A320 and 737 aircraft in its fleet and would have “no problem” taking delivery.

    The companies said VietJet, one of the fastest-growing carriers in southeast Asia, needed the planes to satisfy surging demand on high-dense domestic routes as well as popular routes throughout Asia.

    Vietnam’s first privately owned airline will become the largest MAX 10 customer in Asia once the deal is completed, with deliveries due in 2022-2025, the companies said.

  • Big changes brewing at Vietnam’s top beer maker

    Big changes brewing at Vietnam’s top beer maker

    Under a proposal seeking shareholder approval at the firm’s annual meeting on July 21, Mr. Koh Poh Tiong has been reappointed as chairman. The 72-year-old, who is a director of Fraser & Neave and chairman of ThaiBev and F & N Beer Group, is also on the boards of several other organizations in Singapore, Malaysia, Thailand, and China.

    He is to head a new seven-member board that will have another Singaporean, a Thai and four Vietnamese, according to the proposal.

    Last May the company had replaced three foreign deputy general directors, who had in turn replaced a Vietnamese trio just a month earlier, with Singaporeans Neo Gim Siong Bennett, Teo Hong Keng and Melvyn Ng Kuan Ngee.

    TCC Group, led by Thai tycoon Charoen Sirivadhanabhakdi, had paid VND110 trillion ($4.89 billion) for a 53.59 percent stake in Sabeco.

    According to a report prepared for the company’s next general shareholders meeting on July 21, its profit target for this year has been revised to VND4 trillion (about $173 million), a reduction of 19 per cent from last year’s results.

    The dividend target has been kept unchanged at 35 percent.

    The report says foreign brewers would continue to expand their production capacity, intensify brand promotion and sales support to gain more market share, exerting “great pressure” on Sabeco, especially when the special consumption tax rate has increased from 60 per cent to 65 percent since early th.

    It also says that Sabeco is confident about maintaining its No 1 brewer position in Vietnam, and expects to boost its exports to African and Asian markets (especially East Asia and Southeast Asia), North America, Russia, the Middle East and Europe (Italy, Netherlands).

    Vietnam’s stable growth, increase in average income and rising demand are favorable conditions to stimulate and stabilize consumption while creating good growth in rural markets, where its Saigon Beer brand has reasonable product positioning and a widespread distribution network, the report says.

    Meanwhile, the prices of main items like malt, hops and aluminum have increased significantly, allowing the brewer reduce production costs.

    This year, sabeco targets to produce 1.8 billion litres, increase export volume to 33,2 million liters.

    In April this year, the Ministry of Industry and Trade (MoIT) had asked Sabeco to pay about VND2.5 trillion ($111 million) in undistributed profits to the state budget.

    The demand was made after a government audit report said that money was part of the brewer’s VND2.7 trillion ($120 million) in undistributed profit, which belonged to the government as the major shareholder with an 89.6 per cent stake as of December 31, 2016.

    Local media reported that although Sabeco claimed such a request did not correspond with the Law of Enterprises and Sabeco’s charter, it had already paid the sum. This sum is not mentioned in the report prepared for shareholders, however.

    Currently, within SABECO, there are 26 breweries, 10 trading subsidiaries and has 37 branches nationwide.

    In the first quarter of 2018, Sabeco’s sales reached VND7.8 trillion, about 5 per cent higher than same period last year; while profits of VND1.4 trillion represented a 4 per cent decline.

    On July 18, more than 641 million shares with the sticker SAB declined slightly to VND217,900 ($9.47) each on the Ho Chi Minh stock exchange, for a market value of VND139.7 trillion ($6.07 billion).

  • Vietnam in danger of becoming a dump as China says no to trash

    Vietnam in danger of becoming a dump as China says no to trash

    It’s another waste-full day in Minh Khai, Hung Yen Province.

    Blocks of plastic bags sprawl on the ground, fill up alleys, besiege houses; machines groan and toss shredded plastic pieces into the air; sewage carrying debris leaks onto the streets; and kids splash themselves in a dark, murky pond.

    It is a scene similar to the recycling dead zones in China –exhaustively detailed in documentaries such as Plastic China and books like Adam Minter’s Junkyard Planet.

    There’s a big difference, though.

    China’s recycling villages are cleaning up their act in haste.

    Since January 1, the world’s biggest waste importer and recycler has said no to old mobile phones, paper, textiles and plastics it had always imported from the world for decades. It wants to take back its blue sky.

    While a blue sky has not been a frequent sight in industrial Hung Yen or polluted Hanoi, it has been definitively gray in Minh Khai, one of Vietnam’s largest plastic recycling villages.

    It’s noon, traditional Vietnamese nap time, but in Nguyen’s 100-square-meter workshop, the machines are still roaring.

    The 31-year-old recycler is overseeing five employees as they cut, melt and mold plastic, even as she darts between heaps of translucent bags and her kitchen to cook her family of six a quick lunch.

    These days, Nguyen, who declined to give her full name, can’t afford to take a long break. Her pellet-making machine handles about 1.5-2.5 tons of plastic per day, about 50-75 tons a month. Trash is pouring in from all over the world, Nguyen said, but mostly from Germany, Japan and the U.S.

    Nguyen has been a recycler for about two decades but only in the past year has she seen such a surge in the volume of foreign waste.

    She cannot cite figures; all Nguyen knows is that Chinese brokers hand her cash and tell her they need no contract. “I don’t even know who they are but every month, I buy about three containers from them,” Nguyen said.

    Like many recycling households in Minh Khai, Nguyen will sell her pellets back to China, where they are made into cheap plastic tables, stools, containers that find their way back to compete in Vietnamese market.

    Minh Khai has 1,000 households, of which more than 90 percent recycle plastic at home. Hanoi lacks an effective official recycling scheme, so for more than three decades, Minh Khai has been one of the major informal recycling hubs that handle plastic for the capital and the Red River Delta.

    Until 2017, only 143 households were registered businesses.

    “It’s only in the past two years that our village started buying more from Chinese brokers,” a 64-year-old recycler named Hoang remarked. “Truck after truck brings up to a thousand tons of plastic a day.”

    “My neighbors are not only working by day but they have started to run the machines at night as well to handle the new waste. I can’t get enough sleep,” Hoang complained.

    In May, a national TV channel estimated that around 1,000 tons of plastic waste was arriving in Minh Khai every day, a ten-fold surge since mid-2017.

    Hung Yen authorities acknowledge the surge in waste, but are not able to locate its origins. And until they find a way to sort this problem, informal recycling hubs like Minh Khai are not the only destinations that will see foreign waste pile up.

    From January to November 2017, Vietnam increased its imports of PE and PET plastic by more than 166 percent and 137 percent year-on-year, respectively. In November 2017, it was also the biggest importer of scrap plastics marked “mixed/other.”

    In the first quarter of 2018, Vietnam imported nearly 79 million pounds of recovered plastics, up from 40 million pounds over the same period in 2017. It became one of the U.S.’s largest scrap plastic buyers, Resource Recycling Inc. quoted the U.S. Census Bureau as saying.

    International dumping ground

    In 2011, China introduced its Green Fence program, an attempt to slowly close its doors to contaminated materials.

    China had been importing 45 percent of world’s plastic waste since 1992, and according to a research article published on Science Advances this June, the Chinese ban will displace an estimated 111 million metric tons of plastic waste by 2030.

    While major exporters like Europe and the United States are diverting their trash to Southeast Asia, industry insiders say that China’s recycling industry itself could shift to other destinations in the region, such as Vietnam.

    According to a report, Chinese recyclers are already moving much of their capacity abroad, as the curbs on imported trash have deprived them about half the materials they normally need to produce plastic pellets.

    The report says over 1,000 Chinese recyclers already investing in Southeast Asia, particularly Malaysia and Thailand, hoping to indirectly move processed foreign scrap in higher-grade form to meet their country’s new standard.

    However, the new routes have not been smooth since shipments have faced delays, while Thailand and Malaysia were also tightening regulations. One China-invested importer was already forced to close in Thailand, while Malaysia has not been accepting import permit applications since mid-May.

    In Vietnam, fears of the country turning into “an international dumping ground” are growing.

    Despite a halt in issuing scrap import permits since 2017, Vietnamese seaports have been clogged with thousands of containers of foreign scrap.

    As of May 2018, nearly 28,000 containers were stuck in seaports across Vietnam, according to the Vietnam Maritime Administration. The goods range from electric cords, outdated household appliances, secondhand fabric and used cars to plastic and paper scrap, which makes up the majority.

    Tan Cang Cat Lai, one of Vietnam’s largest shipping terminals, had more than 8,000 TEUs (1 TEU equals a 39-cubic-meter container) of plastic waste and paper as of May 21.

    The Tan Cang Cai Mep International Terminal also said that the large volume of plastic waste containers the port has received has caused troublesome backups and delays. Both terminals, which are operated by the Saigon Newport Corporation, say they are not accepting plastic scrap until October 15.

    Customs officials are ramping up inspections after a recent report of the  Vietnam Customs described numerous violations in scrap paper and plastic waste imports – including materials not meeting quality standards, mislabeling, forged import permits and even lack of permits.

    In a recent National Assembly session in Hanoi, Tran Hong Ha, Minister of Natural Resources and Environment, responding to concerns that the country can become a landfill of industrial and radioactive waste, said Vietnam has to start saying no to scrap import because the country is not able to deal properly with solid waste.

    “Waste in Vietnam is different from the world and even the advanced technologies that other developed countries use to treat their waste have turned out to be inappropriate in Vietnam,” he said.

    Many domestic waste treatment plants do not operate effectively and if those plants cannot meet technical and environment criteria, they should be shut down, the minister added.

    Until developed nations find a concrete solution for the new-found crisis, it appears that the burden will be borne by Vietnam’s seaports and its limited recycling infrastructure.

    For informal recyclers like Hoang and Nguyen of Minh Khai, business will remain hectic, but they are not complaining.

  • Vietnam’s Cong Ca Phe eyes South Korea expansion

    Vietnam’s Cong Ca Phe eyes South Korea expansion

    Vietnamese traditional-coffee chain Cong Ca Phe is opening its first overseas outlet by the end of this month.

    The Hanoi-based chain has appointed a master franchise in South Korea and according to the Cong Ca Phe South Korea Instagram account, the first outlet will open in Yeonnam-dong, a popular destination for local youth.

    According to a report, all staff are being trained in Vietnam, and the main barista is Vietnamese.

    An all-original menu will be served in the Seoul outlet, including Cong’s signature coconut coffee and local Vietnamese snacks such as peanut brittle and sunflower seeds.

    Founded in 2007, Cong Ca Phe’s interior design is inspired by the 80s in Vietnam, the so-called “subsidy period” with colourful murals depicting old communist-era lifestyle. They usually have wooden floors, mid-tone brown tables, and antique wooden chairs, padded with chinese cotton-print cushions.

     

    The chain now has more than 50 outlets across Vietnam, both company owned and franchised.

  • Two foreign brands dominate personal hygiene market in Vietnam

    Two foreign brands dominate personal hygiene market in Vietnam

    Among the 10 most popular personal care brands in the country, Diana and Kotex hold a whopping 80 percent of the domestic market share.

    Unicharm, the Japanese company which owns the Diana brand, has been in Vietnam for 27 years.

    Diana brand products earned revenues of VND5 trillion ($218 million) in 2016, up 10.6 percent over 2015, for a net profit of VND819 billion ($35.7 million), making it the market leader by far.

    In second place is the Kotex brand, owned by the U.S. based Kimberly-Clark Corporation, which reported revenues of VND4.9 trillion ($214 million) in 2016, a year-on-year increase of 9 percent, for a net profit of VND485 billion ($21 million).

    With a large proportion of young people in its population of 93 million, both brands expect the Vietnamese market for personal sanitation products to grow significantly in the coming years.

  • E-commerce booms in Vietnam but top firms stay in the red

    E-commerce booms in Vietnam but top firms stay in the red

    Vietnam’s e-commerce sector grew by more than 25 percent last year and can maintain this growth rate in the next two or three years, according to the Vietnam E-Commerce Association (VECOM).

    It says online sales is set to hit $10 billion by 2020, accounting for five percent of the country’s total retail sales.

    Yet the four top firms that have built up the nation’s e-commerce so far, Lazada, Tiki, Shopee and Sendo, have repeatedly reported accumulated losses.

    Market observers explain that in a “primitive market with high growth rates,” top companies are not afraid to accumulate losses in order to entrench themselves in positions of strength by focusing on expanding their market share at “at all costs.”

    Singapore-based Lazada entered Vietnam in 2012 when it was still owned by Germany’s Rocket Internet.

    In April 2016, China’s Alibaba Group Holding Ltd bought a controlling stake in Lazada for about $1 billion to support its expansion plans in Southeast Asia.

    In June 2017, Alibaba Group increased its investment in Lazada by an additional $1 billion, raising its stake from 51 percent to 83 percent.

    Lazada Vietnam reported a loss of VND977 billion ($42.2 million) in 2015 and over VND1 trillion ($43.3 million) in 2016. It attributed losses to big spending on management and sales promotions.

    By late 2016, its charter capital stayed at just VND15 billion and loans accounted for most of the working capital it was using.

    However, Lazada is still an attractive investment option, with Alibaba announcing in March that it would double its investment in the e-commerce firm to $4 billion.

    A project of Garena, a consumer Internet platform provider based in Singapore, Shopee is second in the list of e-commerce firms suffering big losses in Vietnam.

    In 2016 when it first entered Vietnam, Shopee posted losses of VND160 billion, but this had risen to more than VND600 billion last year.

    By the end of 2017, the total asset value of Shopee had risen ten times to more than VND730 billion as its parent firm raised its total capital by VND30 billion to more than VND1.14 trillion.

    Compared to Lazada and Shopee, which have giant firms backing them, Tiki and Sendo are quite modest, meaning they had made smaller losses.

    Tiki started off as an online book store in 2010 before venturing into e-commerce. Just six years later, the firm was valued at $45 million, following domestic tech firm VNG injecting some $17 million in a 38 percent stake acquisition deal.

    Tiki had posted revenues of nearly VND62.4 billion ($2.71 million) in 2016, a six-fold increase over 2015. However, this was accompanied by a loss of around VND179 billion ($7.78 million) because of high operational costs.

    In its annual report for 2017, VNG showed Tiki making a loss of VND282 billion ($12.26 million) for the year.

    Despite its losses, Tiki has remained attractive to investors as a leading brand in the market. In mid-January this year, JD.com Inc., a giant retailer in China, injected an unspecified sum into Tiki. The Chinese firm had announced last November that it would pump $44 million into the Vietnamese e-commerce platform, making it Tiki’s largest shareholder.

    The last of the top four is Sendo owned by Vietnamese tech giant FPT.

    Sendo raised more than VND400 billion in the two years of 2015 and 2016 and the company reported losses of VND60 billion in 2015 and VND136 billion in 2016.

    However, there its equity stands at more than VND227 billion thanks to a stock issue in 2016.

    In a report last April cited Bain, a U.S.-based global management consulting firm as saying online businesses were booming in Southeast Asia.

    Bain estimated that the region had 200 million digital consumers, or people who bought goods or services online, out of an adult population of 405 million. Vietnam, with a population of 93.7 million, accounted for 35 million of these consumers.

    Vietnam’s youthful population is among the keenest users of mobile devices in the region, while the country’s consumers spend more time online than most of their neighbors, several studies have pointed out.

    Research firm Nikkei estimated that Vietnamese people spend nearly 25 hours online per week, on a par with or just behind Singapore and the Philippines.

  • Vietnamese dong caught between rising dollar, falling yuan

    Vietnamese dong caught between rising dollar, falling yuan

    As the trade war of duties and counter duties escalates, China has weakened its currency to boost exports making its goods even cheaper in Vietnam.

    Local economists have noted that while the yuan has lost 4.18 percent against the U.S. dollar over the last two weeks, the Vietnamese dong has only lost a little above one percent, making Chinese imports much cheaper.

    Vietnam has to balance between keeping the trade deficit control and being able to compete with cheaper Chinese goods in the market.

    In the past three months, the yuan has fallen 3 percent against the dollar while Vietnam only devalued dong around 1.1 percent.

    And Vietnam should take precautions because the yuan could fall even further, financial expert Nguyen Tri Hieu said.

    “China has set the yuan’s foreign exchange rate at 6.95 per dollar,” he said. “But around two years ago, that number was even lower at 6.69 per dollar. So there is a potential for the yuan to slip further.”

    Hieu said he believes that if the government decides to devalue the dollar, a three percent drop by the end of this year is reasonable.

    Economist Ngo Tri Long, former director of the Market Price Research Institute under the Ministry of Finance, cautioned that that the central bank should adjust the dong’s exchange rate based on the market and not the yuan.

    “In my opinion, adjusting the dong’s value at the moment is a risky move, especially, with a three percent drop.

    “It is going to be hard to achieve the nation’s target of keeping inflation below four percent by the end of this year. Not to mention other future-factors we should take into consideration other factors like higher oil prices and damage caused by natural disasters.”

    But if Vietnam decides to move forward with devaluing the dong decision, the adjustments should be based on market demand and not on the yuan’s value. Long felt that a two percent drop would better match current market.

    On the other hand, president of Vietnam Institute for Economic and Policy Research Nguyen Duc Thanh stated that Vietnam should reduce dong’s currency exchange rate against the dollar and the yuan.

    However, such a move it would greatly affect many businesses, Thanh said.

    “This is a risky step since it will have ripple effects on many sectors like stocks and real-estate.”

    Asked how businesses can protect themselves from future foreign exchange fluctuations, Hieu recommended that businesses follow set contracts with fixed exchange rate.

  • Lazada Vietnam appoints Chinese CEO

    Lazada Vietnam appoints Chinese CEO

    Chinese national Zhang YiXing, 36, will take over from Alexandre Joel David Sylvain Dardy, who was the CEO since 2014.

    The change in leadership was announced by Lazada Vietnam’s legal representative, the Recess Company.

    In 2016, Chinese e-commerce giant Alibaba purchased 83 percent of Lazada’s stocks for $2 billion. In March, Alibaba injected another $2 billion into Lazada to boost its Southeast Asian expansion.

    Founded in 2012, Lazada currently operates in Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam, and has 560 million consumers in the region.

  • Vietnam stands to lose from trade war between big powers

    Vietnam stands to lose from trade war between big powers

    The Vietnam Institute for Economic and Policy Research (VEPR) has cautioned that the ongoing trade war between the U.S and China is changing the dynamics of trading in the world, and would eventurally hit Vietnam more than in its exports sector.

    Pham Sy Thanh, head of VEPR’s Chinese Economic Studies Program, said: “When a large economy decides to protect itself, other economies will start to imitate.”

    Global trade growth last year reached 4.7 percent, but this year’s estimate of 3.1 to 5.3 percent shows that even top economists are uncertain about how the trading picture will turn out after this trade war, he said.

    If this continues, multilateral relationships will be replaced by bilateral ones, which will be a disadvantage for a developing country like Vietnam, because stronger countries will have more resources and power to negotiate, he said.

    Another consequence of the trade war on Vietnam is that it will be profoundly affected as global production chains shift.

    As the lack of workforce is no longer a big problem thanks to the fourth industrial revolution, “smaller countries will lose their advantage in just a few years,” he said, adding that technology giants, such as Foxconn, are now investing more in manufacturing in its own country, the U.S.

    When large corporations no longer see the attractiveness of developing countries, their capital will flow back to the big countries, and the abundance of labor will no longer be perks for developing countries such as Vietnam, Thanh said.

    The U.S. has announced that it would slap a 10 percent tariff on $200 billion worth of Chinese export goods as soon as September. This announcement came after it slapped a 25 percent duty on about $34 billion worth of Chinese goods earlier this month.

    China had retaliated “immediately” with a similar action, the country’s foreign ministry had said in response to the first move by the U.S.

  • Vietnam part of attractive Southeast Asian start-up scene

    Vietnam part of attractive Southeast Asian start-up scene

    The trend of investing in Southeast Asia start-ups gained momentum in 2016-17, including in Vietnam, though the country has yet to get its “unicorn,” or a privately held start-up with a valuation of $1 billion or more.

    “I think one of the reasons start-ups in Southeast Asia get such attention from foreign investors is the ‘unicorn’ companies, which attract talent from other countries to the region,” KK Fund’s general partner, Kuan Hsu, said.

    “In contrast to Vietnam and Malaysia, which are yet to have any unicorns, Indonesia already has four companies in this category.”

    Vietnamese start-ups received $61.5 million worth of investments last year. But Topica Founder Institute (TFI) said it is much higher than that, with $300 million invested in 92 different deals, and potentially even higher.

    Hsu said that Vietnam and Indonesia are favored destinations for anyone looking to start companies because they have big populations on top of large numbers of young people, and thus have huge consumption potential.

    Nikhil Kapur, head of South Asia, GREE Ventures, agreed with that view, saying Vietnam shows many promising signs of becoming a start-up nation though it is still at an early stage.

    “We will evaluate annually to determine Vietnam’s potential growth for start-ups. But at the moment, we need more time to carefully study the market because Vietnam is different from other countries in the region. Some businesses are on the right path to becoming a successful company.”

    Research shows there is a new start-up for every 57,982 people in Vietnam. According to the website Worldometers, the country had roughly 1,664 start-ups.

    But Hsu said the nationality of founders does not matter when counting the number of start-ups in a country, only where the businesses are registered.

    For instance, Loi Luu, a Vietnamese entrepreneur and the CEO of Kyber Network, registered the business’ headquarters in Singapore. As a result, this successful company, listed among the 50 most successful start-ups in Southeast Asia in terms of attracting investments, is considered Singaporean.

    Now e-commerce is the most popular sector with foreign investors.

    The Vietnam E-commerce Association said the country’s e-commerce market grew by 25 percent last year and this rate is expected to continue through 2020.

    Last year the sector saw 21 deals worth $83 million, the highest of all sectors.

    It was followed by culinary technology, financial technology, communications, transportation, and online travel.

    The start-up to attract the highest funding was Foody, which received $198 million from Sea Group for an 82 percent stake.

    Sea Group also bought two unnamed companies in logistics and financial technology for $64 million and $50 million.

    Rounding off the top six were Tiki ($54 million from JD.com Inc), an unnamed company ($20 million from TNB Ventures) and Vntrip ($10 million from Hendale Capital).

  • Vietnam postpones plans to increase fuel tax

    Vietnam postpones plans to increase fuel tax

    Top legislator Nguyen Thi Kim Ngan on Thursday approved the delay after listening to experts’ concerns that the tax will affect Vietnam’s goal to contain inflation below four percent this year.

    “Although increasing the environmental tax on fuel will bring trillions of Vietnamese dong to the state budget,” there is uncertainty in price changes for the rest of the year,” Ngan said.

    As the trade tension between the U.S. and China has been escalating, and the fact that stormy weather during the second half of the year often increase commodity prices in Vietnam, it would be more appropriate to raise the fuel tax at a later time, said Nguyen Van Giau, chairman of the External Affairs Committee of the National Assembly.

    Giau proposed that the tax be imposed two months after the next Vietnamese Lunar New Year, which will fall on February 2019.

    Earlier this year, Vietnam’s Finance Ministry proposed that the environmental tax on petrol and diesel be increased by 33 percent, or VND4,000 (17 cents) per liter for petrol and VND2,000 per liter for diesel.

    The proposed hike, which is the highest rate permitted in Vietnam, has met with strong public opposition. But the ministry defended its proposal by saying that it was supported by many ministries and departments, and that fuel prices in Vietnam is still lower than in 120 other economies in the world.

    The proposed tax can bring VND57.3 trillion ($2.4 billion) each year to state coffers, an annual increase of VND15.7 trillion ($650 million) from current collections, it said.

    The Standing Committee of the National Assembly will discuss the proposal again in August.

  • H1 car imports slow down to a crawl in Vietnam

    H1 car imports slow down to a crawl in Vietnam

    More than 126,000 autos were sold in Vietnam in the first half of the year, 106,600 of them locally assembled and over 19,000 imported ones.

    The Vietnam Automobile Manufacturers’ Association (VAMA) says that sales of locally assembled cars increased 10 percent over the same period last year, while that of imported cars plunged 49 percent.

    As a whole, sales were down 2 percent over H1 in 2017, VAMA said.

    It noted that the decline in sales of imported cars was mainly because of a government decree that took effect this year, setting tough conditions for car imports.

    The decree stipulates that traders will only be permitted to import automobiles if they can provide valid vehicle registration certificates issued by authorities from the countries of origin.

    Original quality control certificates for each vehicle and letters of authorization regarding recalls of defective vehicles from the manufacturers are also be required, along with copies of quality assurance certificates provided by the countries of origin.

    The regulation also requires importers to have one car from each batch shipped to Vietnam to go through emissions and safety tests.

    The decree was met with strong opposition from importers who said that it cost them more time and money, but the Ministry of Industry and Trade countered it by saying the new rules would protect consumers and facilitate fair competition.

    However, in March this year, the government removed the condition for local testing of autos, and June auto imports saw a 45.6 percent surge dominated by Thailand.

  • Vietnam’s ‘Coffee Queen’ to launch 1,000 King Coffee cafés

    Vietnam’s ‘Coffee Queen’ to launch 1,000 King Coffee cafés

    Le Hoang Diep Thao says they plan to open a thousand such establishments nationwide.

    The 1,200 square meter cafe in Gia Lai Province is divided into two areas, one for appreciating the art of coffee and another to enjoy the beverage.

    King Coffee is a brand launched by Thao’s Trung Nguyen International, the overseas branch of coffee giant Trung Nguyen.

    Thao said the cafés, which would cater to different tastes, would be the stepping stones for Trung Nguyen International to conquer the domestic market and reach foreign markets like the U.S., China and Singapore through franchising.

    Last month, the Trung Nguyen Group, co-founded by Thao and her husband Dang Le Nguyen Vu and currently headed by Vu, also launched a project to enhance its brand recognition, particularly its coffee houses.

    The Trung Nguyen Legend Cafe on Alexandre de Rhodes Street in Ho Chi Minh City has became the project’s pilot venture. Its area has been expanded two or threefold and it has 50 employees now. A library with over 16,000 books and a reading space has been added and its furniture designed in the style of the Nguyen Dynasty (1802-1945).

    If successful, the new model will be applied to all 80 Trung Nguyen cafés, and by the end of this year, the company plans to have 100 coffee houses across the country.

    Shortly after Vu and his wife’s marriage broke and divorce proceedings were launched, the husband disappeared from public view for several years.

    He resurfaced earlier this year in an unexpected appearance at a company event and said that he’d spent a lot of time meditating in the mountains, and had found answers to everything.

  • Lotte Mart’s ‘Be Goods by Busan’ in Vietnam

    Lotte Mart’s ‘Be Goods by Busan’ in Vietnam

    Lotte Mart Vietnam will promote products from South Korean SMEs in its Go Vap outlet in Ho Chi Minh City.

    The retailer will add a special sales zone called Be Goods by Busan, to sell 70 products from 13 companies based in Busan.

    Lotte has selected products including fruit and vegetable drinks, frying pans and shampoos, items it believes will appeal to local Vietnamese consumers. More items are to follow.

    The retailer is also planning to provide online and offline marketing support for the products.

    This is the second time Lotte Mart has opened a Be Goods store.

    Last October, Lotte Mart Nguyen Van Linh hosted 196 products of 23 Korean SMEs, and earned 240 million won (US$215,827) in sales over seven months.

    Vietnam is Korea’s third largest export market and Lotte Mart believes it is the best place for Korean SMEs to test and export their products.

    Last month, another Korean retailer E-Mart also promoted Korean SME’s products in Singapore.

  • Vietnam to suffer collateral damage in China-US trade war

    Vietnam to suffer collateral damage in China-US trade war

    The first salvo in the latest trade war between the U.S. and China was fired by the former last Friday, when it slapped a 25 percent duty on about $34 billion worth of Chinese goods.

    China retaliated “immediately” with a similar action, the country’s foreign ministry said.

    However, the tariffs that the U.S. has slapped on China will likely see Chinese products “flood into Vietnam,” including textiles, garments and wood products, said Tran Tuan Anh, Minister of Industry and Trade.

    This is not only a trade war but also “a war on power, technology and currency policy between the world’s two largest economies,” Anh said at a recent government meeting.

    Cheaper yuan

    The trade war will have negative impacts on Vietnam’s economy as China will take the opportunity to export in large quantities to Vietnam, according to local economists.

    The Chinese yuan has lost 4.18 percent against the U.S. dollar over the last two weeks, while the Vietnamese dong has only lost a little above one percent, so Chinese goods will be 3 percent cheaper than before when exported to Vietnam. This will increase Chinese exports and gradually take away jobs and manufacturing facilities in Vietnam, they said.

    Another worrying aspect of the situation is that low quality products from China, which are labeled as residual inventory of exports to the U.S., will rush into Vietnam and be bought by Vietnamese consumers, said Robert Tran, CEO of global business advisory firm RBNC.

    Some experts also fear that Vietnam might be one of the next targets of the U.S.

    When the world’s two largest economies slap tariffs on each other, other countries will be affected in trade, said Dr. Pham Sy Thanh of the Chinese Economic Studies department under the Vietnam Institute for Economic and Policy Research.

    “When Vietnamese exports to the U.S. originate from China, the U.S. can also impose the same tariffs on Vietnam,” Thanh said.

    This will be a big challenge for Vietnam as the U.S. is one of Vietnam’s top export markets, he added.

    Industry leaders in Vietnam have also expressed similar concerns. Many Chinese clothes, shoes or bags are entering Vietnam illegally to be exported to the U.S., said Pham Xuan Hong, chairman of HCMC Association of Garment, Textile, Embroidery and Knitting (AGTEK).

    “Local firms should not buy these items for short-term benefits as the reputation of Vietnam’s textile industry will be affected,” Hong said.

    The Vietnamese government should get involved in preventing local firms from importing Chinese products to export to the U.S., he added.

    The bright side

    Beyond the potential threats, Vietnamese business leaders also see great opportunities in the trade war.

    AGTEK chairman Hong noted that Chinese textile is one of the items affected by the U.S. tariffs, so there are chances that foreign investors will transfer orders to Vietnamese firms.

    The animal husbandry sector is also looking at the bright side of the trade war.

    With China saying it will impose an additional 25 percent tariff, on U.S. pork, the total tariff will rise to 71 percent, exclusive of VAT, said Doan Xuan Truc, vice chairman of the Animal Husbandry Association of Vietnam (AHAV).

    “This will definitely be a great opportunity for Vietnam, as China has huge demand for pork,” Truc said, adding that it imports over 2 million tons of pork each year.

    Exports to the U.S. reached $41.6 billion last year, accounting for 20 percent of Vietnam’s total exports, according to Vietnam Customs.

    Meanwhile, it exported $35.4 billion worth of goods to China, a growth of 61.5 percent from 2016.