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Tag: Vietnam

  • Fewer sales, but more profit for Bonia

    Fewer sales, but more profit for Bonia

    While Malaysian fashion retailer Bonia sold fewer handbags in its second quarter, it did manage to grow its net profit.

    It achieved a net profit of RM11.99 million (US$3 million) for the period, to the end of December, up 8 per cent. It attributes the upswing to lower running costs and improved gross profit margins.

    Quarterly revenue dropped 7 per cent to RM160.34 million, Bonia saying this had been anticipated because of the closure of counters as part of a rationalisation process.

    However, the lower revenue was offset by improved gross profit margins, up 5 per cent.

    Year-end sales and the festive season boosted revenue and operating profit to RM15.35 million.
    Business in Indonesia, Singapore and Vietnam was hit by weak consumer sentiment.

    Still, the quarterly growth was not enough to stem the fall on its half-year earnings, which saw net profit slide 31 per cent to RM13.3 million. Revenue contracted by 10 per cent to RM279.23 million.

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  • CapitaLand accelerates growth momentum in Vietnam with massive investments

    CapitaLand accelerates growth momentum in Vietnam with massive investments

    CapitaLand Vietnam plans its first mixed-use project for Hanoi.

    In Tay Ho district with West Lake views, the US$217 million project will comprise 19,000sqm of retail space, about 213,000sqm of office space and 380 residences including SoHo apartments.

    Its 0.9ha site connects to both the new and old business districts and is close to the diplomatic district and new government offices as well as the expatriate enclave of Xuan Dieu. It is less than 20 minutes’ drive from Noi Bai International Airport.

    “This mixed-use development allows us to strategically diversify and optimise our Vietnam portfolio with both good trading returns and a strong recurring income stream,” says CapitaLand president/group CEO Lim Ming Yan.

    The Singapore-based group has also set up its second commercial fund in Vietnam, CapitaLand Vietnam Commercial Value-Added Fund (CVCVF), which has closed at $130 million and will have a life span of eight years. CapitaLand and EA Commercial Holdings each hold a half interest in CVCVF, which will focus on grade-A commercial properties.

    After Singapore and Malaysia, Vietnam is the third-largest Southeast Asian market for CapitaLand. At the end of December it had $717 million worth of gross assets under management in Vietnam.

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  • Vietjet to Operate International Flights at Terminal 4, Changi International Airport

    Vietjet to Operate International Flights at Terminal 4, Changi International Airport

    Vietjet will soon shift its operation of international flights from Terminal 3 to Terminal 4 (T4) of Changi International Airport, Singapore beginning 6 March 2018.

    The forthcoming shift in operation marks the expansion and growth of Vietjet in Singapore’s Changi Airport – the world’s best 5-star international airport in the five consecutive years and also helps to reduce travel time by bus from the aircraft parking area to the terminal.

    Since launching its first flights from Ho Chi Minh City in 2014, Vietjet has continually increased its frequency and launched new routes from Hanoi to Changi, serving the rapidly growing travel demands between the two countries which contributes to promoting regional trade and intergration.

    Officially launched on 31 October 2017, T4 – Changi International Airport has since received over 1.6 million passengers and covered more than 9,400 flights.

    The areas serving Vietjet’s inbound and outbound flights are synchronously designed, equipped with modern equipment and prominent branding signs. Vietjet’s check-in counters are located in the same area making ticket counters accessible and convenient for passengers. The opening time of check-in counters for international flights remains at 3 hours before departure time and the closing time is 50 minutes before departure time. Passengers should be aware of the operational change to the new terminal to ensure all travel formalities including check-in, immigration, customs clearance and security procedures are cleared on time.

    Modeling itself as a ‘Consumer Airline’, Vietjet continues to open new routes, expand its fleet, invest in modern technology and offer more value-added products and services to serve the demands of customers. The airline also offers diverse promotional programs on tickets and entertainment especially during the festive seasons.

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  • Vietnam focuses on divestment in oil and gas sector

    Vietnam focuses on divestment in oil and gas sector

    Vietnam Oil and Gas Group (Petro Vietnam or PVN) plans to reduce its ownership of Petro Vietnam Gas Joint Stock Company (PV Gas) from the current 97 per cent to 65 per cent.

    The divestment, scheduled for 2018-20, follows Government instructions for the company to pare its stakes in three State-owned companies to a minimum of 51 per cent by 2020, the other two being Petro Việt Nam Fertiliser and Chemicals Corporation (DPM) and Petro Vietnam Cà Mau Fertiliser Joint Stock Company (DCM).

    The PV Gas divestment is expected to attract many large investors who would be eager to buy into a company that reportedly contribute 30 per cent of PVN’s profits.

    PetroVietnam, established in 1977, through its various companies including wholly-owned subsidiaries, now covers the entire gamut from oil and gas exploration and production to storage, processing, transportation, distribution, and services.

    At an interaction with the media in late January PV Gas chairman Lê Như Linh said the divestment would be done very carefully to identify appropriate strategic shareholders.

    A detailed plan would be submitted to PVN and then to the Government for approval, he said.

    He expected the stake sale to not only be hugely profitable for the Government but also secure access to advanced technologies and modern management from strategic investors from the west, Japan and South Korea.

    By 2019 PVN will also have to entirely divest its stake in PVI Holdings, Phước An Port Investment and Exploitation Oil and Gas JSC, Green Indochina Development JSC, SSG Real Estate JSC, Petro Vietnam Trade Union Finance JSC, Petro Vietnam Construction joint Stock Corporation, and Petro Vietnam Maintenance and Repair JSC.

    In the first quarter of this year PVN successfully equitised three of its companies, Petrol Vietnam Oil Corporation (PV Oil), Bình Sơn Refining and Petrochemical Co Ltd (BSR) and Petro Vietnam Power Corporation (PV Power), reducing its ownership to below 50 per cent.

    The three companies made successful initial public offerings.

    In fact, the BSR IPO netted the Government 60 per cent more money than it had expected.

    BSR had expected to sell 241.6 million shares, or 7.79 per cent of its chartered capital, to the public at VNĐ14,600 per share ($0.64).

    At this price, BSR would have been valued at almost $2 billion, making it the largest firm ever to hold an IPO.

    A maximum of 49 per cent is expected to be sold to strategic investors three months after the IPO, with PetroVietnam retaining 43 per cent. Some 0.21 per cent of the shares will be offered to the company’s employees.

    But to return to the IPO, the Government earned VNĐ5.5 trillion ($244.5 million) through the sale. The highest bid was VNĐ35,000 per share, the lowest was VNĐ14,600 per share and the average was VNĐ23,043, 56 per cent higher than the reserve price.

    The auction saw 3,964 individuals and 115 organisations register to buy 652 million shares.

    The Government raised VNĐ6.99 trillion ($307.8 million) from selling 468.37 million shares of PV Power, or 20 per cent of its chartered capital through an IPO on January 31.

    The average price was VNĐ14,938, with the highest and lowest successful bids being VNĐ28,000 ($1.23) and VNĐ14,500 ($0.64).

    The company is now valued at $1.48 billion.

    PV Power’s success came as no surprise because it has been reporting profitable operations year after year, and the offer price was thought to be attractive.

    Established in 2007, the company operates one coal-fired thermal power plant, three gas-powered plants and three hydropower plants. Its annual output is more than 4,208 MW, or 10 per cent of the country’s entire capacity.

    Last year it reported net revenues of VNĐ31.5 trillion, an increase of 12 per cent, and post-tax profit of VNĐ1.9 trillion, a 25 per cent increase.

    In PV Oil’s IPO on January 25 all 207 million shares, or 20 per cent of its chartered capital, were snapped up for a total of $190 million. The average successful bid was VNĐ20,196 ($0.89) per share. The lowest was VNĐ19,200, VNĐ5,800 higher than the reserve price.

    Foreign investors only bought 68.47 million shares.

    The Government has instructed PVN to retain its current ownership in some other subsidiaries and associate companies such as Petro Vietnam Technical Services Corporation, the Vietnam Russia Joint Venture Vietsopetro and Petro Vietnam Drilling and Well Services Corporation.

    PVN owns respectively 51.4 per cent, 51 per cent and 50.4 per cent stakes in them.

    But despite all this, analysts said the PVN’s divestment and privatisation remain lower than expected due to several factors.

    For one, its subsidiaries are too large for strategic shareholders.

    For another, foreign investors expect transparent financial reports, which is lacking at many Vietnamese firms including oil companies.

    Thus, for many, valuation is a difficult and slow process.

    Oil companies have difficulty identifying the ideal management model after their IPO.

    Central bank wary of lending to high-risk sectors

    In late January the State Bank of Việt Nam (SBV) instructed banks to limit lending to the real estate, securities and consumer sectors amid reports of alarming credit growth rates.

    It told them to constantly monitor the progress of property projects and their developers’ financial health, and have measures in place to handle any defaults.

    It said the pace of their stock market lending investment should be curtailed to mitigate risk.

    As for consumer credit, banks have been told to evaluate and process loan applications carefully and ensure borrowers refrain from using the loans to invest in property or stocks.

    Market observers said while it is not new for the central bank to instruct lenders to tighten credit for real estate and stocks, this is the first time it has told banks to monitor consumer credit quality.

    Why?

    Though consumer lending yields big profits to banks, the central bank is definitely worried about the high risks it involves.

    According to data from the National Financial Supervision Committee, consumer lending has been expanding rapidly since 2015. Last year growth was a whopping 65 per cent, up from 50.2 per cent in 2016, and these loans accounted for 18 per cent of the total lending for the year.

    Lending for house renovation and repairs accounted for 53.8 per cent of the total consumer credit, loans for buying home appliances for 15.3, and vehicle loans for 8.3 per cent.

    VP Bank reported recently that its 2017 pre-tax profit of VNĐ8.1 trillion included a full 50 per cent from FE Credit, its finance arm.

    The latter’s credit growth was 39 percent.

    VP Bank CEO Nguyễn Đức Vinh said consumer credit would keep expanding in the next 10 years.

    According to Rồng Việt Securities banks had accounted for $23.27 billion, or 87.6 percent, of consumer loans in 2016. Finance companies had provided the rest.

    VDSC analysts, while believing consumer credit would have a positive impact on economic growth, still warn against risks.

    The biggest risk is people borrowing beyond their means. After analysing consumer behaviour trends, VDSC said many consumers had excessive optimism about their future income.

    A deputy director of a bank in Hà Nội, who asked not to be named, agreed with VDSC experts, adding that many borrowers use consumer loans for buying property, which often requires long-term funds.

    Besides, consumer loans often have interest rates that that could be three times the rates on other loans.

    A VP Bank official said the high growth rates in consumer credit are associated with increased risks of default.

    In a report on VP Bank, HSC Securities has forecast that FE Credit has to make 20.82 percent higher provision for risks.

    Nguyễn Quốc Hùng, director of the central bank’s credit department, said lending in 2017 had mainly focused on priority sectors related to production and distribution.

    The central bank sought to closely monitor lending to high-risk sectors like real estate and stocks and consumer credit, and advised banks to focus on genuine consumer lending to ensure effective and sustainable credit growth and support economic development.

     

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  • Vietnam auto imports plummet over Government’s Decree 116

    Vietnam auto imports plummet over Government’s Decree 116

    Automobile imports in Việt Nam plummeted in the first month of 2018, also the time before Tết (Lunar New Year) holiday.

    Only 337 cars of all kinds were shipped to the country, according to data of the General Department of Customs.

    Of the imports, there were only 17 passenger cars with nine seats or less, amounting to US$567,000. Notably, no cars were imported from Indonesia and India.

    In 2017, Indonesia was among the top countries after Thailand with the highest number of exported cars to Việt Nam. India too had a relatively large number of exported vehicles in 2016. However, in January this year, both the countries did not export any car to Việt Nam. Meanwhile, Thailand lost its recognition as the largest import car market in Việt Nam, with only 36 vehicles exported to the country since the beginning of the year.

    Among the automobile export markets to Việt Nam in January 2018, Russia suddenly rose to the top, with 159 vehicles being exported, worth VNĐ274 billion (US$12.03 million), equivalent to VNĐ1.7 billion each. Under a deal on autos signed between Minister of Industry and Trade Trần Tuấn Anh and the Russian Ambassador to Việt Nam Konstantin V.Vnukov in Hà Nội  in December last year, Russia’s joint ventures in Việt Nam are allowed to import duty-free 2,550 complete built-up units and 13,500 sets of automobile parts from 2018 to 2022 as a way of exploring the capacity and tastes of the market.

    China (65 cars) and the United States (42 cars) ranked second and third in exports, respectively.

    According to The Jakarta Post, Indonesia’s four-wheel car manufacturers face a bleak future in exports following a new regulation of Việt Nam, which is poised to build its own automotive industry.

    The Vietnamese Government in November issued Decree No. 116/2017/ND-CP on car manufacturing, assembly, importation and warranty offering, a move that came into effect from January 1, 2018, and tightened car imports. According to Vietnamese Ministry of Industry and Trade (MoIT), Decree 116 is a supportive measure for domestic companies as it sets up a number of technical barriers to limit the import of cars. The decree comes at a time when the import tax of automobiles from within the ASEAN bloc is zero per cent, which also became effective from January 1, 2018.

    Under the decree, car importers in Việt Nam are required to obtain a Vehicle Type Approval (VTA) certification, which details the imported vehicles’ quality, safety and environmental protection. The VTA must be issued by authorities in exporting countries. In addition to this, one sample will be selected from every batch of imported cars for emission, quality and technical safety tests. The inspection will be repeated in the next shipment, even on the same car models.

    “The new rule creates additional costs; a complete inspection may take one to two months, while other cars from the shipment will have to stay at the port and be charged daily for storage,” Kukuh Kumara, Indonesian Automotive Manufacturers Association (Gaikindo) secretary-general said.

    The new rule prompted Gaikindo to send a letter to the MoIT on January 27. The letter claimed that four automakers—Toyota, Suzuki, Daihatsu and Hino—had stopped the planned production of 9,337 vehicles bound for Việt Nam. The units were supposed to be manufactured in the December-March period.

    Kukuh said that Indonesia sent some 30,000 cars to Việt Nam annually, with the four automakers being the biggest exporters.

    According to data of the Central Statistics Agency, Indonesian passenger car exports to Việt Nam from January to November last year was valued at $241.2 million, up significantly from $17.78 million in 2016. Indonesia is also ranked among the top three passenger car exporters to Việt Nam, along with Thailand and China, with a market share of 13.12 per cent.

    Oke Nurwan, international trade director general at Indonesia’s Trade Ministry, said if manufacturers were reluctant to export their cars to Việt Nam, Indonesia could lose some US$85 million between December and March.

    He said the Indonesian government had decided to take a soft approach on the matter by sending on February 26 a delegation to lobby with its Vietnamese counterpart.

     

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  • SCIC Vietnam to sell stake in Bình Minh Plastic JSC

    SCIC Vietnam to sell stake in Bình Minh Plastic JSC

    The State Capital Investment Corporation (SCIC) plans to sell nearly 30 per cent of its stake in Bình Minh Plastic JSC or 24.1 million shares on March 9 on the HCM Stock Exchange.

    The 24.1 million shares will be sold via competitive bidding and each investor must register to buy at least 20,000 shares.

    The starting price will be announced on February 28. The bidding price must be above both the starting level and the daily decreasing band of Bình Minh Plastic Company’s share price on March 9.

    For example, if the shares are sold at the starting price of VNĐ100,000 (US$4.44) per share and the decreasing band of the shares is VNĐ95,000 per share, then the bidding price must be above VNĐ100,000 per share.

    If the decreasing band of the shares is VNĐ105,000 per share, then the bidding price must be above VNĐ105,000 per share.

    If investors forecast the required bidding price as unreasonable compared to their expectations, then they can cancel their bidding by 4pm on March 8.

    Investors must deposit at least 10 per cent of their purchase value based on the starting bidding price.

    Bình Minh Plastic JSC is listed on the HCM Stock Exchange with code BMP. The company shares jumped 4.6 per cent on Friday to VNĐ93,400.

     

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  • Vietnam seeing a boom in renewable energy projects

    Vietnam seeing a boom in renewable energy projects

    Vietnam has seen a boom in renewable energy projects, in a bid to meet the nation’s future demands for power, after the Government scrapped plans to build a nuclear power plant in Ninh Thuận Province.

    Experts have noted that this is a golden opportunity for the country, which is confronted by environmental issues, to develop renewable energy, given the huge potential of wind and solar power.

    In 2015, the Prime Minister approved a renewable energy development strategy by 2030 with a vision to 2050, which targeted an increase in the ratio of power generated from renewable energy to 32 per cent by 2030 and 43 per cent by 2050.

    The national project for power development in 2011-20 also identified developing renewable energy as a breakthrough to ensure the security of the nation’s energy supplies, and reduce the negative impact of generating power on the environment.

    This could be regarded as a launching pad to promote investment in developing renewable energy in Việt Nam, according to Võ Tân Thành, deputy chairman of the Việt Nam Chamber of Commerce and Industry.

    There were some 50 wind power, and more than 100 solar power projects, along with a number of biomass projects being developed in the country.

    Hundreds of solar projects have been registered, as of July 2017, allowing them to seek investors, with a total capacity of up to 17,000 MW, according to an estimate by the Energy Programme’s officer under the US Agency for International Development.

    Also, many investors recently announced very large investments in renewable energy projects in Việt Nam.

    Thiên Tân Group announced it would invest US$2 billion in building five solar power projects in Ninh Thuận Province by 2020. The group also seeks to develop some 20 large-scale solar power plants in the northern provinces by 2020.

    In late January, BIM Group began construction of the BIM 1 solar power project in Ninh Thuận Province, with a planned annual electricity output of 50 million kWh, in cooperation with AC Energy, a subsidiary of Philippines’ Ayala Group.

    The group planned to develop the largest clean energy farm in Việt Nam in Ninh Thuận Province, with a total capacity of 300 MW, by the first quarter of 2019, with a target of producing 1,000 MW of clean energy by 2025.

    Besides Ninh Thuận, investors were also keen on developing solar power projects in other provinces, with a potential for generating solar power in Phú Yên, Bình Phước and Khánh Hòa.

    Recently, Asia infornet INC, a member of Japan’s AIN Group, began working with Bình Phước Province on the feasibility of developing a solar power project in Becamex Industrial – Urban Zone.

    The Phú Yên People’s Committee said that it allowed 17 investors to carry out field surveys and study the possible development of solar power projects, with a total capacity of 1,310 MW, in the province.

    Besides solar power, wind energy projects are also being developed, such as a 98 MW wind power plant by Super Wind Energy Công Lý Sóc Trăng in Sóc Trăng Province, the 373 million kWh Bạc Liêu wind power plant phase three, and phase two of the Đầm Nại wind power project in Ninh Thuận Province.

    Read more at https://vietnamnews.vn/economy/422909/vn-seeing-a-boom-in-renewable-energy-projects.html#72dOEXroH8LmVOYq.99

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  • Fees, retail services to be banks’ main income

    Fees, retail services to be banks’ main income

    Commercial banks are expecting the revenue from fees and retail banking services to become their main income sources this year, as a result of rising market demands.

    According to Nguyễn Đức Vinh, general director of VP Bank, after years of investing in the financial company FE Credit, his bank was expecting to receive a large profit from the company in 2018.

    FE Credit started to gain profits from the retail banking segment in 2016, and the profit improved continuously last year. VP Bank’s financial reports showed that the bank’s profits last year hit a record high of more than VNĐ6.43 trillion (US$283.25 million), of which FE Credit made up some 51 per cent.

    Vietcombank also expects to better exploit the potential retail banking segment this year, as it recruited Thomas William Tobin, a Canadian foreign senior expert in retail banking, last year, to be its retail banking director. It was the first time the State-owned bank appointed a foreigner in its management board, showing its priority for the retail banking segment.

    Vietcombank’s chairman Nghiêm Xuân Thành hoped that the expert, who has expertise in global and Vietnamese finance, will help the bank make a leap in the retail banking segment.

    Vietcombank is targeting to become the country’s leading bank in retail segment in 2020, Thành said.

    According to Nguyễn Đình Tùng, general director of the Orient Commercial Joint Stock Bank, his bank is expected to earn a pre-tax profit of more than VNĐ1 trillion in 2018, thanks to specific strategies in the sales of financial products, especially in non-credit services.

    Some other banks have also planned to better exploit the potential business segment in 2018 through mergers and acquisitions last year. Typically, Shinhan Bank Vietnam acquired ANZ’s retail banking services or the Vietnam International Bank (VIB) acquired the HCM City’s branch of Commonwealth Bank of Australia.

    According to experts, banks are investing significantly in retail banking services, instead of only focusing on corporate lending in the hope of gaining higher profits from the potential segment this year.

    With more than 93 million people and sharply increasing consumption, Việt Nam is considered a hot destination for the retail banking segment, which is why banks have strategically planned to boost the segment.

    In fact, the in-cash habit of Vietnamese people is no longer an obstacle to the development of card network and non-credit services. Thus, several banks are aiming to give their customers a variety of non-traditional credit services, such as savings and transactional accounts, mortgages, personal loans, debit and credit cards.

    Notably from the beginning of this year, many banks have considerably improved the quality of their retail banking services to enhance competitiveness in the market. They are also focussing on other aspects such as marketing, technology and human resources to attract more individual customers to non-credit services.

    The move was decided after the retail banking segment contributed to a large amount of the total profits of many banks last year. BIDV and MB Bank, for example, gained high profits last year, thanks to a 34 per cent to 35 per cent rise in retail banking services.

    Nguyễn Thanh Nhung, general director of VietBank, said retail banking services would be a key to making a sustained and stable profit for the banking sector this year. The development of non-credit services contributes to diversifying bank’s services, thereby bringing more customers. This type of service will also disperse risks and create higher profits for commercial banks, said Nhung.

    According to Trần Du Lịch, a member of the National Financial and Monetary Policy Advisory Council, banks currently not only gain profits from lending but also from retail banking services, so the move to invest in retail services is inevitable in the future.

    Based on the results gained, leaders of commercial banks said they would continually apply this business strategy, with a focus on retail banking services next time.

     

  • Vietnam enjoys bright prospects for e-logistics development

    Vietnam enjoys bright prospects for e-logistics development

    As one of the fastest growing e-commerce countries in the world, Việt Nam is considered a high-potential market for e-logistics, analysts have said.

    Việt Nam has an average annual growth rate of 35 per cent.

    The boom in online shopping and home delivery in the country in recent years have also created many opportunities for e-logistics operators, they said.

    In 2017 alone, over 50 domestic and foreign e-logistics providers entered the market, which is predicted to reach US$200 million by 2020. They include Lazada, Giaohangnhanh or Grab Express or Speedlink.

    The combination of local and international expertise has created a tailored, unique solution for the Vietnamese e-logistics sector, paving the way for endless e-commerce growth, Fabian Wandt, country manager of Lazada eLogistics said.

    Another delivery operator, Giaohangnhanh, is also upbeat about the prospect of the delivery market reaching a three-fold annual increase, particularly with investments from both local and foreign players to enhance their technology, network and offerings.

    Giaohangnhanh CEO Nguyễn Trần Thi said that his company planned to expand its operations by more than double this year and targeted to reach 1,500 customer collection points by the end of 2018.

    Backed by State regulations

    According to analysts, opportunities for companies providing e-logistics services are brighter, especially since new regulations aimed at enhancing the competitiveness of the logistics sector will soon come into force. Decision No 200/QĐ-TTg, which will provide the action plan to develop and raise the competitiveness of the logistics industry in Việt Nam until 2025, will have a positive impact on the development of logistics companies.

    With the State’s assistance in information technology, human resource training and operation cost reduction, the new decree is expected to help logistics companies, especially those providing e-logistics services, to sharpen their competitiveness in the time to come, analysts said.

    Meanwhile, the Prime Minister has also issued Decree No 163 on logistics services, which will come into force on February 20. The decree is expected to open up the e-logistics market to foreign investments. Under certain circumstances, foreign investors can establish enterprises or contribute capital to Vietnamese businesses engaged in maritime freight transport (excluding inland transportation), container handling services as part of maritime transport support services, freight transport services as part of inland waterway transport services and freight transport services as part of road transport services.

     

  • SmartOSC Joins Hands with UrbanFox to Promote End-to-End Ecommerce

    SmartOSC Joins Hands with UrbanFox to Promote End-to-End Ecommerce

    SmartOSC, a leading ecommerce agency, has joined hands with UrbanFox, an omnichannel logistics and channel management solutions brand, and a subsidiary of Singapore mainboard-listed Keppel Telecommunications & Transportation, to jointly promote their end-to-end ecommerce services to retailers across Southeast Asia.

    In recent years, several brands, including Club21 and Times Publishing Group, have chosen SmartOSC and UrbanFox as strategic partners for their ecommerce needs. The partnership promises to bring retailers seamless omnichannel solutions, backed by SmartOSC’s consulting, user experience and platform implementation practices, together with UrbanFox’s logistics services and omnichannel management.

    Retailers in the region have been looking to create a more seamless shopping experience for their customers in tandem with their changing shopping habits. According to recent research published in the Harvard Business Review, the omnichannel shopping generation spent an average of 4% more on every shopping occasion in-store and 10% more online than single-channel customers. Even more compelling is that, with every additional channel they used, the shoppers spent more money in the store.

    SmartOSC has leveraged its strong ecommerce expertise, technical capability and scalable resources to meet the rapidly evolving needs of global brands and retailers. Today, major consumer brands such as COURTS Singapore, Lotte, Nestlé and Friso have partnered with SmartOSC to implement effective ecommerce solutions, which has enabled the brands to get to market faster, as well as optimise sales.

    Thai Son, CEO of SmartOSC shared, “We’ve seen raving demand from clients in Europe and North America for implementing omnichannel solutions to catch up with the new shopper generation. The same trend is happening across Southeast Asia, and our partnership will help retailers in the region to implement the best practice for their new retail strategy.”

    Answering the needs at the other end of the ecommerce supply chain is UrbanFox, which is part of Keppel Logistics. By incorporating omnichannel strategies as part of their services provided for B2C and B2B brands, UrbanFox is able to enhance the efficiency of the brands’ supply chains.

    Channel management is another key service in which UrbanFox is seeing strong pick-up. In this area, UrbanFox helps retailers manage multiple sales channels and distribution from the initial order through to the last mile delivery, by using a centralised inventory management model. UrbanFox counts many major companies among their clients, such as Kao Singapore and Mondelez.

    Joe Choa, Managing Director of UrbanFox shared, “UrbanFox has helped retailers respond to the ecommerce trend by integrating their online and offline channels onto one unified platform where inventory, sales and promotional campaigns can be managed across various marketplaces with ease. Following our initial success with clients in Singapore, we hope to offer our effective logistic solutions throughout Southeast Asia together with e-commerce veterans SmartOSC.”

    Both SmartOSC and UrbanFox will be present at the Last Mile Fulfilment Asia 2018 event in Singapore from March 15-16, to share successful case studies and showcase how retailers can benefit from their joint offering.

    The abovementioned transaction is not expected to have any material impact on the net tangible assets or earnings per share of Keppel Telecommunications & Transportation for the current financial year.

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  • Vietnam to revise automobile industry laws

    Vietnam to revise automobile industry laws

    The Ministry of Industry and Trade (MoIT) has asked the Ministry of Finance to remove the special consumption tax for locally-manufactured auto parts.

    This is part of a recommendation document that MoIT sent to the finance ministry in order to revitalise domestic automobile industry in the future and reduce the import of autos.

    The MoIT said that it is needed to have more measures to help local automakers cut production cost and accelerate the product’s competition capacity as well as revising policies on tax and fees.

    The ministry wanted the finance ministry to exempt the import tax on materials for part and components manufacturers who invest in Việt Nam, which should be in association with their commitment on long-term investment, volume of products, technology transfer and use of local labour force.

    The MoIT also recommends the application of a tax payment guarantee for a period of eight months instead of the current 30 days.

    The MoIT expected the finance ministry to study to amend and supplement a number of the above contents, which were proposed by Thành Công Group, with regard to laws on value-added tax, special consumption tax, and corporate income tax, in addition to personal income tax and natural resources protection tax.

    Earlier, at the review conference of the industry and trade sector held in Hà Nội on January 15, General Director of Hyundai Thành Công Lê Ngọc Đức proposed that the MoIT, in co-ordination with the finance ministry, consider several recommendations as those mentioned above.

    According to Đức, in order to achieve the goal of developing the automobile industry in Việt Nam, the Government has issued decrees such as Decree 116 on conditions for production, assembly, import and business of warranty service, car maintenance, and Decree 125 that regulates the roadmap for import duty exemptions of parts and components for manufacturers who meet conditions such as emission standards, engine displacement capacity for the car with nine seats and less, passenger car and truck.

    However, he said such privileges were not strong enough to be of significant priority for locally-assembled autos to help them compete with complete built-up units imported from ASEAN.

    Under the ASEAN Free Trade Agreement (AFTA) commitments, a zero per cent tax has been applied on cars imported from the bloc with a localisation rate of 40 per cent or more in the country of origin from January 1.

    A MoIT report showed that the price of an automobile in Việt Nam is currently high in the region but its quality is lower than an imported one.

    “Locally-assembled autos in Việt Nam have a similar price doubling as those seen in regional countries and much higher than other countries which have a stable automobile industry such as Japan and the United States,” said the report.

    “The domestic automobile industry has not yet reached the standards of the real automobile industry because most are at the level of simple assembly; the production line mainly consists of four key stages including welding, painting, assembly and inspection. There is no co-operation, linkage and specialisation between automakers and assemblers and part suppliers. There is no such system used by material suppliers and large-scale parts and components makers.

    “The localisation rate of new autos is only between 7 per cent and 10 per cent on average (compared to the target of 40 per cent in 2005 and 60 per cent in 2010). Currently, locally-produced products with very low technological content are tubes, tires, chairs, mirrors, cables, plastic products and batteries,” the report pointed out.

    MoIT has on numerous occasions warned that if such privileges and incentives were not approved, the domestic automobile industry would find it difficult to compete with imported cars.

     

  • Vietnam plastics export turnover to increase by 15%

    Vietnam plastics export turnover to increase by 15%

    Exports of plastics are expected to grow by 12–15 per cent this year, according to the Việt Nam Plastics Association (VPA).

    Hồ Đức Lam, chairman of the association, said the country’s key export markets this year would be Japan and the US, which has high demand.

    Other markets such as China, Laos, Cambodia and Myanmar are expected to become new export markets for plastics in the future.

    Plastic bags made in Việt Nam are still subject to anti-dumping taxes in the US market, but the US imposition of anti-dumping duties has had almost no impact on exports of the sector, according to Lam.

    Every year, the average US import turnover is more than US$50 billion for plastics and plastic products, accounting for 9.1 per cent of the world’s total import of plastics, according to VPA.

    The largest plastic export market is Japan, with an average growth rate of 20–25 per cent per year. Việt Nam now ranks sixth in the top 10 countries exporting plastics to Japan, which is one of the most difficult markets with many strict regulations on the quality of goods. Vietnamese plastic exporters have been urged to improve quality, design and trade promotions to enter this market.

    Lam recommended that Vietnamese plastic producers prepare long-term strategies and invest in market research to increase their penetration into the Japanese market.

    In addition, the EU’s demand for plastic products imported from Việt Nam is high, especially plastic pipes.

    Việt Nam’s plastic products are not subject to anti-dumping duties in the EU markets like other Asian countries (the average tax rate is from 8-30 per cent). Thus, Vietnamese producers are also urged to seek new export markets.

    Despite the high export prospects and strong development in recent years, the plastics industry is still known only as part of the plastic processing industry.

    More than 80 per cent of raw materials are still imported from other countries.

    Each year, the plastic industry needs an average of four million tonnes of raw materials, but only manages to produce about 900,000 tonnes, with the rest imported.

    Experts have said that a shortage of raw materials will reduce the competitiveness of exporters.

    Because of regulations on the origin of goods, it is difficult to take advantage of tax incentives in free trade agreements.

    Exporters also need to focus on environmentally-friendly and safe products for sustainable growth.

    Việt Nam’s plastics industry earned $3 billion last year, posting a 17.3 per cent increase over 2016, according to VPA.

     

  • Supermarkets in HCM City gear up for Lunar New Year

    Supermarkets in HCM City gear up for Lunar New Year

    Many supermarkets are launching attractive promotion programmes in the days ahead of Tết (Lunar New Year) to attract customers. Tết falls on February 16 this year.

    In addition to cutting prices on more than 5,000 essential items from January 11 to February 14, Co.opmart and Co.opXtra have teamed up with suppliers for another programme under which they will cut prices of many kinds of fresh food by the maximum possible rates for seven days starting just before Tết.

    They have also applied “Super discounts” and “Buy more, get more discounts” on the weekend and incentive programmes for their loyal customers such as offering high reward points.

    Similarly, Korean retailer Lotte Mart also launched three consecutive promotion programmes: The “Tết comes to Lotte Mart” programme takes place from January 24 to February 15, with discounts between 5-49 per cent on more than 1,200 products; “For a full Tết” from February 7 to 15 with discounts on over 80 Tết-featured products; and “Starting a desired spring” programme from February 13 to 21 with hundreds of products discounted between 5-49 per cent.

    Supermarket chain Big C is offering a discount of up to 40 per cent on 13 types of fruit. Imported fruits like Egyptian oranges, Korean pears, French kiwis and South African grapes are priced at VNĐ30,000-83,000 (US$1.32-3.64) for a kilo until February 15.

    Moreover, for the first time, French and US green and red apples will be sold at the same price of VNĐ29,900 a kilo.

    In addition to this, Big C will launch two “unprecedented price shock” programmes applicable to its food and fresh goods until New Year’s Eve on February 15.

    According to insiders, the closer to Tết, retailers increasing apply promotion programmes to enhance competitiveness in attracting customers.

    Market movements in the peak shopping days for Tết usually change quickly. Therefore, retailers need to keep a close eye on up-to-date figures to identify changes for timely responses.

    Wholesale markets

    Goods transported to the city’s two wholesales markets have increased strongly to meet peak shopping demand for the New Year from February 11 to 15.

    Nguyễn Văn Huây, director of Thủ Đức Wholesale Market Management and Trade Company, said goods volume entering the market can reach up to 7,500 tonnes a day, an increase of 10 per cent over last year’s Tết.

    Vegetable volume at the market fluctuates between 2,700 tonnes to 3,000 tonnes a day, while fruits are between 4,300-4,500 tonnes a day.

    At Hóc Môn wholesale market, the amount of goods entering the market from February 12 (four days ahead of Tết) may go up to 5,500 tonnes per day, up 100 per cent compared to normal days.

    According to traders at the two wholesales markets, the supply of popular fruits for Tet such as grapefruits, mangos, tangerines and dragon fruits may be not much higher due to unfavourable weather last year.

    About 150-170 tonnes of grapefruits and 100-120 tonnes of mango are expected to enter Thủ Đức Market a day on days near Tết, but their prices will rise sharply if there is a surge in demand.

    Thủ Đức Wholesale Market’s management board forecasted that grapefruits can be priced at VNĐ60,000-65,000 per kilo for green skin grapefruit and VNĐ28,000-30,000 a kilo for Năm Roi grapefruit, while it is VNĐ130,000-150,000 for a kilo of Hòa Lộc mango, VNĐ45,000-50,000 per kilo of sweet tangerine and VNĐ80,000-100,000 per kilo of custard-apple.

    Nguyễn Huỳnh Trang, deputy director of the HCM City Department of Industry and Trade, has asked the management boards of the two wholesale markets to keep track of markets and update supply-demand and pricing situations, in order to quickly report to the department and relevant agencies if there is a sudden fluctuation.

     

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  • G&M Cosmetics expansion plans into Vietnam

    G&M Cosmetics expansion plans into Vietnam

    Australian skincare brand G&M Cosmetics has expanded into Vietnam, with a presence in Aeon supermarkets and at Ho Chi Minh City’s airport.

    This follows the company exporting to Asian markets such as China, Hong Kong, Taiwan, Thailand and Singapore in the past few years.

    The company has also opened a showroom and sales office in Ho Chi Minh City, and plans to open up to five of its own branded retail outlets in Vietnam.

    “We have always had a high demand and interest in Southeast Asia and believe the time is right to enter the Vietnam market, with a population of more than 90 million and a growing middle and upper class, making it an ideal export market,” says G&M Cosmetics global marketing and sales manager Peter Bosevski.

    “Vietnam also give us access to the wider growing Southeast Asian markets of Cambodia, Laos and Myanmar.”

    To promote its launch in Vietnam, G&M has secured Miss Globe as brand ambassador.

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  • Vietcombank sign agreement to provide converting bank service

    Vietcombank sign agreement to provide converting bank service

    Joint Stock Commercial Bank for Foreign Trade of Việt Nam (Vietcombank) and Nghi Sơn Petrochemical and Refinery LLC (NSRP) on Thursday signed a Memorandum of Understanding (MoU) on converting bank service.

    Under the MoU, Vietcombank will be the sole bank to provide the service of foreign currency converting bank for the Nghi Sơn Petrochemical and Refinery Project.

    Phạm Quang Dũng, CEO of Vietcombank, said the signing of the MoU would acceleratethe negotiation process towards agreeing on the official contents of agreements on foreign currency conversion.

    Ahmad Aljemaz, vice president of Kuwait Petroleum International Ltd, one of NSRP’s investors, said the provision of the converting bank service by Vietcombank is significant to the operation and success of NSRP.

    Turki Alajmi, acting CEO of NSRP,  expressed confidence in this cooperation with Vietcombank. “The converting bank is one of the elements which plays a vital role in the financial success of the project. NSRP is confident that Vietcombank, as the leading joint stock commercial bank in Việt Nam, with the highest support of the Government, will be able to perform this function successfully and most effectively,” he said.

    Nghi Sơn Petrochemical and Refinery Project is a key petrochemical and refinery project of national importance, which is being implemented in Nghi Sơn Economic Zone in Tĩnh Gia District, Thanh Hóa Province.

    The refinery has a total investment of over US$9 billion, intended capacity of 10 million tonnes a year in maximum operation and scope of producing 200,000 barrels of crude oil a day. Upon operation, it is expected to meet approximately 40 per cent demand of the domestic petroleum market and export millions of tonnes of petrochemical products.