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Tag: Vietnam

  • Vietjet Listing honored as “The IPO Deal of the Year 2017”

    Vietjet Listing honored as “The IPO Deal of the Year 2017”

    Vietjet’s public listing in the Ho Chi Minh City Stock Exchange in February has been honored as “The IPO Deal of the Year 2017” and “The Company with Best M&A Information Disclosure” at the M&A Awards 2016-2017. As a highlight of the Vietnam M&A Forum 2017, the awards were adjudicated by a panel of independent and renowned M&A experts through nominations by consultation organizations and researchers.

    Leading “a series of successful deals” in 2016-2017, Vietjet was highly rated by the panel which named the Vietjet listing as “The IPO Deal of the Year 2017” and “The Company with Best M&A Information Disclosure”. Vietjet’s IPO was professionally conducted following consultations with world-renowned law firms and financial institutions in around 800 days (due on the listing date) in accordance with international IPO standards of Regulation S.

    The adjudication panel also lauded the airline for its information disclosure. Vietjet has performed well in building investor relations, attracting intentions of investment funds and the public as well as bringing transparent, detailed and internationally-standardized information to investors and the public.

    Vietnam M&A Forum, an annual event for companies and investors from Vietnam and other countries was held in Ho Chi Minh City on August 10, 2017 under the auspices of the Ministry of Planning and Investment. With the theme “Seeking a Big Push”, the Vietnam M&A Forum 2017 was held as a platform to exchange suggestions and introduce opportunities as well as experience sharing for breakthroughs in the market.

    Earlier, Vietjet’s 2016 annual report was also honored with a Platinum Award, ranked the 4th among the Asia Pacific region’s awardees and 11th out of 100 worldwide at the Vision Awards 2016 presented by the League of American Communications Professionals (LACP). Themed as “the flight to the future”, the 150-page annual report was graded with almost top scores under the criteria of First Impression, Letter to Shareholders, Report Financials and sustainable development programs.

    Headquartered in the US, LACP was set up to create a forum within the public relations industry that facilitates discussion of best-in-class practices within the profession while also recognizing those who demonstrate exemplary communications capabilities. The Vision Awards honors outstanding and informative annual reports globally following international standards.

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  • Mitsubishi, Audi recall cars in Vietnam due to safety concerns

    Mitsubishi, Audi recall cars in Vietnam due to safety concerns

    The automakers said the technical faults could cause serious damage, and they will be fixed free of charge.

    Mitsubishi Motors Vietnam has recalled 4,218 cars due to technical faults, official reports said.

    The majority of the recalled models are Pajero Sports manufactured between 2011 and 2016, but around 20 percent are Outlander Sports produced from 2014-2016.

    Explaining the recall, which may take until July 2019, Mitsubishi Motors Vietnam said the hinges on the rear doors were prone to rust because they were not completely coated in anti-corrosion paint. This meant they could fall off and injure people.

    In a separate move, Audi Vietnam has recalled 33 of its Q3 models manufactured between June 2014 and November 2016 due to a problem with their brake lights.

    Audi said the brake lights could fail if the handbrake was used to make an emergency stop.

    Official data shows Vietnamese customers bought more than 134,200 cars in the first half of this year, down 1 percent against the same period last year.

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  • Vietnam launches derivatives market to boost liquidity

    Vietnam launches derivatives market to boost liquidity

    Vietnam’s derivatives market is officially launched today, with stock futures contracts the first to begin trading.

    Derivatives trading was planned several years ago to help draw more investment to Vietnam’s capital markets and broaden the country’s finance industry.

    The futures market would initially launch stock index contracts, and when fully operational, more instruments would be introduced.

    “(The launch) will help attract more foreign investors, institutional investors in particular, and boost market liquidity,” the stock exchange said in a statement.

    The VN30-Index, which is reviewed periodically, captures the performance of the 30 largest companies by market capitalization on the Ho Chi Minh city stock exchange. The futures contracts are allowed to move by a maximum of 7 percent in each session.

    The benchmark VN Index has jumped 19.1 percent so far this year and hit its highest level of 796.62 points since 2008 on Tuesday.

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  • VPBank gets all clear to offer 1.3bln shares on Saigon market debut

    VPBank gets all clear to offer 1.3bln shares on Saigon market debut

    The bank’s market capitalization is expected to reach $2.5 billion following the offering.

    The Vietnam Prosperity Joint Stock Commercial Bank (VPBank) was given approval on August 8 to list on the Ho Chi Minh Stock Exchange (HoSE).

    The bank plans to make its IPO on August 17 under the code VPB with a reference price of VND39,000 ($1.72).

    The bank’s market capitalization is expected to reach $2.5 billion following the offering, which would make it the largest private bank listed on the HoSE.

    The bank said it plans to pay its shareholders a 15 percent dividend in 2018.

    VPBank has set a consolidated net profit target of $374 million for 2018, a 50 percent increase compared to the target set for 2017.

    In the first half of this year, the bank made $141 million in pre-tax profit, equivalent to 40 percent of its annual target.

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  • Vietnam develops an appetite for booking trips by phone

    Vietnam develops an appetite for booking trips by phone

    ‘Travel expenditure in Vietnam will rise rapidly due to increasing disposable incomes and growing middle-class affluence.’

    Mobile travel sales accounted for around 7 percent of total online sales in Vietnam in 2016.

    Over the past four years, mobile sales have witnessed strong growth of nearly 60 percent, a new report released by Criteo, an internet advertising company, revealed.

    “Travel expenditure in Vietnam will rise rapidly due to increasing disposable incomes and growing middle-class affluence,” said Alban Villani, general manager of Criteo Southeast Asia, Hong Kong and Taiwan.

    “Vietnam is a mobile-first society with a very high mobile penetration rate. Since the ubiquitous presence of internet, online and mobile traveling purchases become more commonplace. We expect digital traveling will become the new trend of traveling,” he added.

    In comparison to other countries, mobile travel sales in Vietnam contribute modestly to total online travel sales, but are expected to take up a bigger slice of online travel sales by the end of 2020, according to the report. During the next five years, the revenue generated from travel purchases via mobile is expected to grow by 22.4 percent.

    Travel remains an area that the Vietnamese are devoted to, according to the report. During 2016, Vietnamese people took 6.9 million outbound trips and 52.8 million domestic trips, said the report.

    On average, each Vietnamese person took 5.6 trips each in the last 12 months.

    Online and mobile strategies are crucial for retailers and online travel agents to engage with shoppers while they browse and book trips and ancillaries.

    The survey was conducted in February 2017 among 1,900 travelers from Australia, China, India, Indonesia, Japan, Singapore, South Korea, Taiwan and Vietnam who search or book travel products online.

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  • Honda motorcycle sales boost quarterly net profit

    Honda motorcycle sales boost quarterly net profit

    Motorcycle sales volume grew in India and Vietnam. Japanese vehicle maker Honda on Tuesday said net profit for the second quarter rose by double digits boosted by strong motorcycle sales, revising up its full-year forecast.

    The Tokyo-based company said “solid sales of two-wheel vehicles in Asia and cost reduction efforts” contributed to increased profits.

    Motorcycle sales volume grew in India and Vietnam, Honda said, while four-wheel vehicle sales volume increased in Japan and China but declined in North America.

    Japan’s number-three automaker booked net profit of 207.3 billion yen ($1.88 billion) in the April-June period, up 18.7 percent from the previous year.

    Sales grew 7.0 percent to 3.71 trillion yen, while operating profit rose 0.9 percent to 269.2 billion yen.

    Honda boosted its net profit forecast to 545 billion yen from an earlier figure of 530 billion yen for the fiscal year ending March 2018.

    It also lifted its fiscal year operating profit and revenue outlooks.

    “Honda’s profit pales compared to figures last year when it booked a one-time gain in a pension accounting change,” Satoru Takada, an analyst at TIW, a Tokyo-based research and consulting institute, said ahead of the earnings release.

    “But it displayed a good performance in China and Indonesia while showing steady sales in North America,” he said.

    While North American vehicle sales declined in the quarter year on year to 481,000 from 510,000, revenue rose slightly to 2.13 trillion yen from 2.06 trillion yen.

    Takada added that the foreign exchange situation is “a key factor” for automakers.

    “Current levels are relatively positive for the Japanese auto industry,” he said.

    Although the yen has strengthened slightly in past days, it remains weak against the dollar over recent years.

    A stronger Japanese yen can hurt carmakers by eroding the value of overseas profits when repatriated.

    On Thursday, Nissan reported a drop in quarterly net profit, hit by higher costs and weak sales in key markets, although it left its annual forecasts unchanged.

    Toyota will release earnings on Friday.

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  • Danang denies Uber pilot run

    Danang denies Uber pilot run

    Danang City Department of Transport said on August 2 that they hadn’t allowed Uber and Grab Car to operate yet despite an advertisement about Uber’s pilot run posted on the internet.

    According to the department, the city won’t give the go-ahead until the Ministry of Transport review the two-year pilot project of applying science and technology to support management and connect passenger services of contracted cars such as in Uber and Grab Car cases.

    The ministry will announce the legal framework to better manage such services.

    “After the government and the Ministry of Transport issue legal documents related to the services, we’ll work with related agencies to consult the city people’s committee and allow them to operate in accordance with the procedures and regulations,” the department’s representative said.

    The department will meet with Uber Vietnam to halt the advertised service being made available in the city.

    Uber Vietnam had previously announced on its website that after three years in Vietnam, the company would start a pilot run in Danang starting from August 1. Passengers would be given free rides during the first week.

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  • Viettel launches 4G in East Timor

    Viettel launches 4G in East Timor

    Vietnam’s Viettel has launched 4G services in East Timor through its subsidiary in the market Telemor.

    The launch in East Timor marks the Viettel group’s sixth 4G launch outside Vietnam, and follows launches in Burundi, Cambodia, Haiti, Laos, and Peru.

    Viettel first entered East Timor in 2013, investing $15 million to deploy a mobile network covering 95% of the population within a year. The company was able to achieve profitability within ix months, generating $17 million in revenue and $4 million in profit in its first year.

    The company has now captured a roughly 47% share of the market, making it the incumbent operator in the market, ahead of competitors Timor Telecom and Telkomcel.

    According to the report, Viettel increased its revenue in East Timor by 29% year-on-year during the first half of 2017 and attracted 42% more new subscribers than anticipated.

  • Domestic air carriers post huge profits in H1

    Domestic air carriers post huge profits in H1

    Domestic airlines posted huge revenues and profits in the first half of 2017 following a 19.5% year-on-year growth of the aviation market with the number of air passengers reaching 30.3 million, according to the Civil Aviation Administration of Vietnam (CAAV).

    There are currently 63 foreign airlines from 25 countries and territories operating international flights to and from Vietnam.

    On the domestic market, four domestic airlines namely Vietnam Airlines, Vietjet Air, Jetstar Pacific Airlines and VASCO are operating 52 domestic air routes connecting Hanoi, Danang and HCMC with 18 local airports. Local and foreign carriers also have conducted chartered flights to Can Tho, Dalat and Vinh among others.

    Vietnam Airlines and Vietjet Air, two domestic largest airlines, both posted huge revenues and profits in the year’s first half.

    Vietjet’s business report for the first six months of 2017 released last week shows that both revenue and profit of the airline far exceeded the plan.

    In particular, Vietjet posted revenue of over VND10.7 trillion (nearly US$472 million), up 45.1% compared to the same period last year, and reaching 108% of the six-month plan. Its pre-tax profit amounted to nearly VND1.1 trillion, up 46% year-on-year.

    Vietjet is operating 73 domestic and international air routes. The number of people flying with Vietjet in January-June totaled 8.27 million, a rise of 22.4% year-on-year.

    Meanwhile, the national flag carrier Vietnam Airlines served nearly 10.3 million air passengers in the first six months of 2017, increasing by 6% compared to the same period last year.

    The airline’s revenue totaled nearly VND43 trillion, up 18% year-on-year, and pre-tax profit was estimated at VND830 billion, 51% of the year’s plan.

    As of mid-2017, Vietnam Airlines had a fleet of 11 Boeing 787-9 and seven A350 aircraft.

    The growth of the domestic aviation market is forecast to slow down in the coming time but double-digit growth will be achievable.

    However, the business performance of the airlines may be affected when the country’s biggest airports, Noi Bai and Tan Son Nhat, are partially closed for repair and upgrade by the end of this year.

  • Vietnam’s 4G population coverage hits 95%

    Vietnam’s 4G population coverage hits 95%

    Vietnam’s 4G networks now cover 95% of the nation’s population, attendees to the 4G LTE 2017 International Conference learned.

    The conference, organized by the Vietnam Internet Association and IDG Vietnam, was told that around 43,000 4G base stations have now been deployed nationwide.

    Vietnam issued 4G licenses in the 1800-MHz and 2600-MHz band last year. There are now four 4G licensees in Vietnam – Viettel, Vinaphone, MobiFone, and Gmobile – with the first three of these having launched services.

    Speaking at the event, deputy minister for information and communications Pham Hong Hai called on operators to launch 4G network to create opportunities for explosive growth in 4G services.

    He said the arrival of the 4G era in Vietnam will also create opportunities in fields including the IoT and smart cities.

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  • Vietjet Generated USD84.7 million Group Profit before Tax in 1H2017

    Vietjet Generated USD84.7 million Group Profit before Tax in 1H2017

    Following its 1H2017 unaudited separated financial statements released last week, Vietjet Aviation Joint Stock Company (HOSE code: VJC) has released its unaudited group financial statements for 1H2017, charting surpassed growth in targets as compared to the same period last year.

    Accordingly, overall revenue for 1H2017 stood at USD730.7 million, an increase of around 31 per cent compared to the previous period. Revenue in 2Q2017 on the other hand reached USD503.0 million, an increase of 89 per cent year-on-year.

    The group profit before tax in the second quarter was USD66.1 million while the group profit before tax in the first half of 2017 stood at USD 84.7 million, a 44.7 per cent increase year-on-year.

    Moreover, the growth in passenger carriage on international routes increased by nearly 130 per cent, making it the main driving force behind the quarter growth. Also, revenue in aviation carriage in 1H2017 stood at USD478.9 million, an increase of 45.1 per cent compared to the same period last year. The company’s profit before tax from aviation carriage reached over USD48.6 million, an increase of 46 per cent year-on-year.

    In 2Q2017, Vietjet received five more brand-new A321 aircraft from Airbus, generating USD250.6 million in revenue from aircraft sales. As of 30 June 2017, Vietjet’s total assets were USD1.13 billion, a 50.8 percent increase; while owners’ equity reached USD355.04 million, an increase of 130 per cent year-on-year.

    The airline also successfully optimised its operation costs as its cost of Available Seat-Kilometer excluding fuel (CASK ex-fuel) continued to decrease to 2.23 US cents compared to 2.43 US cents in the same period last year. Furthermore, the Revenue per Available Seat-Kilometer (RASK) increased from 4.29 US cents to 4.42 US cents. This puts Vietjet among the most efficient carriers in the world.

    As of 30 June 2017, Vietjet operated 30 A320 aircraft and 15 A321 aircraft on 73 domestic and international routes, an increase of 13 routes compared to that of 31 December 2016.This is equivalent to an increase of 37.7 per cent year-on-year, an achievement of the year’s target by 110.6 per cent

    The airline conducted a total of 49,151 flights with 8.27 million passengers, charting an average load factor of around 88 per cent and an increase of 22.4 per cent year-on-year. Vietjet also recorded a technical reliability rate of 99.55% and on-time performance rate of 85.7%. Other index rates for operation safety, technical operations and ground operations were among the highest in the Asia-Pacific region.

    Vietjet also broke ground for the construction of the Vietjet Aviation Academy in the Saigon Hi-Tech Park in District 9, Ho Chi Minh City, Vietnam. The first element of the academy – the full flight simulator is expected to be operational in the next 12 months.

    On July 25, Vietjet and Japan Airlines (JAL) reached a formal comprehensive partnership agreement with the aim of improving customer convenience and operations and service quality while enhancing the corporate value of both companies.

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  • HSBC profits up in first half of 2017

    HSBC profits up in first half of 2017

    The Asia-focused giant has been on a recovery drive over the past two years to streamline the business and slash costs, and has laid off tens of thousands of staff.

    HSBC said profits were up Monday in the first half of the year in what it called an “excellent” result after a turbulent 2016.

    Reported pre-tax profit for the six months to June rose five percent to $10.2 billion compared with $9.7 billion for the same period last year.

    HSBC also announced a share buyback of up to $2 billion, expected to be completed in the second half of the year.

    Shares were up 2.77 percent at HK$78.55 ($10.06) in early afternoon trading in Hong Kong Monday.

    The half-year results showed operating expenses dropped 12 percent to $16.4 billion, partly stemming from a sell-off of its Brazil operations.

    Chairman Douglas Flint described the performance as “extremely pleasing”.

    Flint said there were still uncertainties due to increasing geopolitical tensions and “ambiguous predictions” around Britain’s future relationship with the European Union post-Brexit, but described HSBC’s performance as resilient.

    Analysts said the results had outstripped predictions.

    “HSBC’s earnings are definitely better than market expectations,” said Dickie Wong of Hong Kong-based Kingston Securities.

    He described the firm as in “very good shape” after wide-ranging restructuring programmes following the global financial crisis in 2008.

    Net profit for the first half of the year rose 10 percent to $6.99 billion from $6.36 billion for the same period in 2016.

    Pre-tax profits for the second quarter rose $1.7 billion to $5.3 billion year on year, beating Bloomberg analysts’ estimates, which had averaged out at a $4.6 billion forecast.

    HSBC announced the appointment of a new chairman in March as part of a management overhaul that will also see it choose a new chief executive to replace Stuart Gulliver, following a massive drop in 2016 profits.

    British businessman Mark Tucker, currently group chief executive and president of insurance group AIA, will take over from Flint in October.

    Gulliver has said he will step down in 2018.

    Gulliver and Flint were grilled by British lawmakers in 2015 and apologised for “unacceptable” failings at HSBC’s Swiss division following allegations the unit helped rich clients hide billions of dollars from the taxman.

    HSBC was one of six major U.S. and European banks that were fined a total of $4.2 billion by global regulators in a November 2014 crackdown for attempted manipulation of the foreign exchange market.

    It was also fined $1.92 billion by U.S. prosecutors in 2012 to settle allegations that it failed to enforce anti-money laundering rules exposing it to exploitation by drug cartels and terrorist organisations.

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  • Samsung to heat up Vietnamese logistics market

    Samsung to heat up Vietnamese logistics market

    By teaming up with  MP Logistics, South Korean enterprise Samsung not only demonstrated its interest in the Vietnamese logistics sector, but its participation also heats up the market.

    On July 14, 2017, Samsung SDS, a subsidiary of Samsung Group, established a joint venture with MP Logistics with the aim of expanding its logistics business in Vietnam. The cooperation with MP Logistics is expected to help Samsung’s information and technology (IT) and logistics services access to the Vietnamese cargo transportation industry.

    “The logistics market in Vietnam has an annual growth rate of about 15-20 per cent due to the promotion of free trade agreements with South Korea, China, Japan, and the European Union (EU),” a leader of Samsung SDS said.

    Samsung SDS expected that this cooperation would expand its business in the Vietnamese IT-based logistics market, as well as other transportation services for consumer goods and food.

    “This new joint venture will give us the motivation to expand our business in the Vietnamese logistics market,” Kim Hyung-tae, vice chairman of Samsung SDS’s Smart Logistics Business Unit, said.

    The cooperation with MP Logistics is considered Samsung’s next step in the Vietnamese logistics market, because previously in 2016, Samsung SDS had established another joint venture with Aviation Logistics Corporation (ALS), one of the leading aviation logistics service providers in Vietnam. With this new joint venture, Samsung now has the right to manage the cargo terminals in Noi Bai International Airport.

    Thanks to the right to manage activities in this big airport, Samsung can ensure its delivery deadlines, gradually complete its supply chain, and cut down on expenses. Noi Bai is an important gateway to deliver Samsung exports from Samsung’s two Vietnamese complexes in the northern provinces of Bac Ninh and Thai Nguyen.

    Regarding MP Logistics, it is now one of the biggest providers of logistics services in air and ocean freight, warehousing, distribution, project cargo, and inland transportation in Vietnam. Its founder cum CEO, Dang Thi Minh Phuong, was highly complimented as the “Queen of Logistics” in Vietnam. Thus, teaming up with MP Logistics may be the best way for Samsung to join the domestic logistics market.

    Competition heating up

    In any economy, logistics always plays an important role. In Vietnam, the economic development has led to the expansion of the logistics market. According to statistics from Vietnam Logistics Association (VLA), there are over 1,300 logistics enterprises operating in the country, including foreign-invested enterprises. Logistics services in Vietnam currently have a value of $20-22 billion per year, accounting for about 20.9 per cent of the country’s GDP.

    As reported by newswire Enternews, due to the expansion of the logistics market, many foreign-invested enterprises have expanded their businesses in Vietnam, such as DHL Global, Maersk Logistics (Denmark), APL Logistics (Japan), Nippon Express (Japan), and Kerry Logistics (Hong Kong). Foreign-invested enterprises may dominate the segment of international deliveries, but Vietnamese enterprises still hold most of the domestic deliveries market share.

    “Currently, most domestic logistics services, including trucking transportation, cargo terminals, and seaports, are provided mainly by domestic enterprises,” Nguyen Tuong, deputy chairman of VLA said.

    However, the situation may change and many overseas logistics enterprises have entered Vietnam to gain more market share in this sector. Besides Samsung, previously, DHL Global and Kerry Logistics also established logistics joint ventures in Vietnam to develop their businesses. In addition, some Japanese enterprises, such as Yusen Logistics and Logitem, have also been present for a long time.

    In May 2017, Korea Economic Daily of South Korea reported that TaeKwang Industrial Co., Ltd., a South Korean enterprise in the textile and petrochemical industries, had expressed interest in holding a stake in Gemadept Corporation, one of the leading Vietnamese companies in its core business sectors, including port operation and logistics.

    If domestic logistics enterprises keep their old strategies without providing any new services, they may lose significant market share to foreign investors when the logistics industry in Vietnam sees a boom in the coming period.

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  • Banks apply free on-net money withdrawal, account transfer

    Banks apply free on-net money withdrawal, account transfer

    Despite being allowed to charge on-net fees for automatic telling machine (ATM) transactions, some commercial banks have recently applied the exemption to on-net money withdrawal and account transfer to attract new customers and develop the retail banking segment.

    Platinum debit cards, while Viet Capital Bank and SCB have exempt money withdrawal fee for international and domestic debit cards.

    The exemption of money withdrawal fee at all ATMs nationwide is also being offered by other banks such as TPBank and BaoVietbank.

    Talking about the move, Viet Capital Bank said free money withdrawal via ATM will encourage people to make non-cash payments. This policy is being implemented with great support from banks.

    A representative from another bank said State Bank of Việt Nam approved commercial banks to charge on-net fees for ATM transaction since March 2013 to offset the cost of purchasing machines and periodic maintenance, however, some banks are now willing to offset the losses to increase customers.

    According to the representative, the bank having cardholders still has to pay VNĐ3,300 to their partner for each external money withdrawal. Therefore, ATM operations of the bank have never been profitable.

    Industry insiders admitted that ATM card service companies often incur losses because an ATM costs tens of thousands of US dollars besides large annual maintenance fees. In addition, the cost of renting sites to install ATMs is becoming more and more expensive. Interest from non-term deposits of ATM cardholders therefore is not enough to offset the costs.

    To offset the costs, the money withdrawal fee charged at other banks averages VNĐ1,000-3,000 per transaction and the fee for inter-bank money transfer is VNĐ11,000.

    According to banking experts, the fee exemption policy at some banks is within the banks’ retail banking development plan, and is also a way for banks develop individual customers as well as products and services for the customers.

    This is also the premise based on which banks can promote other products and services, such as Mobile Banking and Internet Banking, they said.

    The country currently has more than 17,000 ATMs nationwide.

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  • Vietnam’s fuel imports may drop as Dung Quat oil refinery tax cut finally felt

    Vietnam’s fuel imports may drop as Dung Quat oil refinery tax cut finally felt

    Lower tax will help boost 2017 Dung Quat output by 20 percent. Vietnam’s fuel imports may drop as the effects of a tax cut on sales of gasoline and diesel fuel from the country’s Dung Quat oil refinery start to be felt as earlier term contracts expire.

    Vietnam’s government allowed Dung Quat’s operator Binh Son Refining and Oil Co, starting on January 1, to lower its tariff on domestic gasoline sales to 10 percent from 20 percent while the tax on other oil products including diesel was lifted, Binh Son Chief Executive Officer Tran Ngoc Nguyen said on Monday.

    The reduction allowed Binh Son to match the current 10 percent tax on gasoline imports from South Korea established under a free-trade agreement (FTA) and the tax-free status for diesel sales from countries in the Association of Southeast Asian countries (ASEAN) under a different FTA.

    “Before January, taxes on Binh Son’s oil products are always … higher than imported products, making our product prices high and they cannot be sold,” Nguyen told.

    The lower taxes are expected to reduce imports of gasoline and diesel into Vietnam, denting overall profit margins for the oil products, four fuel traders told on Monday.

    While the tax reduction was effective from January, local importers had already agreed to long-term fuel contracts with Binh Son in December, meaning they missed the lower taxes, the four traders said.

    The tariff reductions were announced in September but would only apply to contracts signed in 2017, said Nguyen.

    Dung Quat’s full-year production this year is expected to reach 6.1 million tons per year, equivalent to about 122,000 barrels per day (bpd), nearly 20 percent higher than its initial target as a result of the lower taxes, said Nguyen.

    The refinery, currently Vietnam’s only operating refinery, has a total capacity of 6.5 million tons per year.