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Tag: Vietnam

  • Pandora plans $100-mln jewelry plant in Vietnam

    Pandora plans $100-mln jewelry plant in Vietnam

    Pandora, the world’s largest jewelry company by sales, will set up a US$100-million production facility in Vietnam.

    To be situated in the Vietnam-Singapore Industrial Park 3 in Binh Duong Province, it will be built to LEED Gold green building standards and powered completely by renewable energy.

    Construction is set to start in early 2023, and production by the end of 2024.

    It will hire more than 6,000 craftspeople and have an annual capacity of 60 million pieces of jewelry.

    This is the company’s third production site and the first outside Thailand.

    “We scouted countries all over the world before deciding on Vietnam and Binh Duong Province,” Jeerasage Puranasamriddhi, the company’s chief supply officer, said.

    Pandora is a Danish jewelry manufacturer and retailer founded in 1982 by Per Enevoldsen.

    It sells its products in over 100 markets, and had revenues of $3.5 billion last year.

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  • Menswear startup raises $2 mln in Series A round

    Menswear startup raises $2 mln in Series A round

    Coolmate, a Vietnamese menswear brand that is sold online, has raised US$2 million in a Series A funding round from a group of investors.

    The round was led by Access Ventures and included Do Ventures, CyberAgent Capital and DSG Consumer Partners.

    Coolmate intends to use the money to fund research into new products, upgrade its operating system and hire more human resources, its co-founder and CEO, Pham Chi Nhu, said.

    Founded in 2019, the startup has no physical store up to date. It reportedly gets 10,000 orders a day now compared to 2,000 in the first year of operation.

    It expects to achieve $19 million in revenues this year.

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  • Gold down to 5-week low

    Gold down to 5-week low

    Gold prices fell to their lowest in five weeks Monday afternoon as they tracked a global fall.

    Saigon Jewelry Company (SJC) sold bullion at VND69.25 million per tael Monday, down 0.39 percent from Sunday. A tael equals 37.5 grams or 1.2 ounces.

    DOJI sold at VND68.9 million, down 1.01 percent.

    It meant prices had fallen by 6.76 percent, or VND5.2 million a tael, since scaling a historic peak in March. Global spot gold dropped by 1 percent to $1,793.12 per ounce Monday afternoon, but then bounced back to above $1,825 by Tuesday morning.

    Gold prices in Vietnam are 27 percent higher than global rates. Tran Minh Toi, a gold seller in HCMC’s District 8, said prices fell on higher U.S. dollar and bond yields.

    It is unlikely that prices will return to the previous peak of VND74.4 million in the medium term unless the conflict in Ukraine escalates, he said.

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  • Nearly half of main bourse stocks hit floor prices

    Nearly half of main bourse stocks hit floor prices

    Vietnam’s benchmark VN-Index plunged 4.49 percent to 1,269.62 points Monday, a nine-month low, with 221 tickers out of 484 on the Ho Chi Minh Stock Exchange hitting the floor. The index stayed in the red throughout the day and closed nearly 60 points lower after losing 31 points in the last session.

    It is now at the lowest since July 23 last year, having fallen 15 percent since the beginning of the year.

    Major Asian markets also closed in the red Monday, with China’s Hang Seng Index losing 3.8 percent and Japan’s Nikkei 225 falling 2.5 percent, weighed by global growth worries due to lockdowns in China and aggressive policy tightening from central banks.

    The VN30 basket, comprising the 30 largest capped stocks, saw all tickers losing, with 13 of them closing at floor price.

    MWG of electronics retail chain Mobile World, PLX of fuel distributor Petrolimex and TCB of the largest private lender Techcombank all fell 7 percent.

    BID of state-owned lender BIDV, BVH of insurance company Bao Viet Holdings and CTG of state-owned lender VietinBank dropped 6.9 percent.

    Foreign investors were net buyers to the tune of VND547 billion, mainly buying VHM of real estate giant Vinhomes and HPG of steelmaker Hoa Phat Group.

    The HNX-Index for stocks on the Hanoi Stock Exchange, home to mid and small caps, dropped 5.84 percent, while the UPCoM-Index for the Unlisted Public Companies Market fell 5.28 percent.

  • Finance ministry seeks tax delay for auto industry

    Finance ministry seeks tax delay for auto industry

    The Ministry of Finance wants special consumption tax payable by auto companies to be deferred by up to four months to help them recover from the impact of Covid-19.

    The tax for June-September, worth a total of VND20 trillion ($871 million), can be paid on November 20.

    If the government approves the ministry proposal, auto manufacturers will get extra time to pay the tax for a third straight year.

    The ministry said last year auto manufacturers saw sales plunge due to social distancing restrictions and also struggled with a shortage of semiconductors.

    Though the tax delay goes against Vietnam’s international commitments, the ministry said it is needed to help businesses overcome difficulties.

    Many countries have done the same to help their manufacturers recover, and Vietnam is unlikely to be sued for it, the ministry added.

    Auto sales in Vietnam last year dropped 3 percent from 2020 to 383,444 units, according to data from data from the Vietnam Automobile Manufacturers Association (VAMA), TC Motor and VinFast.

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  • Indian startup Zoomcar bets on Vietnam as key Southeast Asian market

    Indian startup Zoomcar bets on Vietnam as key Southeast Asian market

    Indian car rental startup Zoomcar eyes Vietnam as a major Southeast Asian market to take advantage of the rising demand for car ownership among its expanding middle class. Vietnam is set to account for 10 percent of Zoomcar’s revenues in the next financial year, which translates to $8 million, Kiet Pham, vice president and country director of Zoomcar Vietnam said.

    In Southeast Asia, the company is focusing on Indonesia and Vietnam, and plans to invest $100 million in the two countries. In Vietnam, it has around 1,000 cars for rent, or 10 percent of its total global number. To achieve the number, Zoomcar has been giving out large rewards to car owners to list their vehicles on its platform. An owner who listed during the four-day holiday earlier this month received VND3 million ($131).

    Zoomcar is also willing to burn cash to change Vietnamese consumers’ habit and make them familiar with renting cars.

    Kiet said the company is willing to spend $25 million to expand its presence in Vietnam. It has raised $207 million since its establishment.

    For Vietnamese users, though it is one of the top car rental companies in India, Zoomcar remains a new brand as it has only been active in HCMC for four months.

    Kiet said Zoomcar is betting big on Vietnam because the country is the fourth biggest car market (in terms of sales) in Southeast Asia and only 5.7 percent of households had a car in 2020.

    The dwindling sales of motorbikes, the expanding middle class and the development of major infrastructure projects are set to increase car usage, he added.

    Vietnam’s car rental market is set to reach $550 million this year and will grow by 10.9 percent annually in the next five years, according to data portal Statista. By 2026, it will reach $840 million with 8.7 million users.

    Kiet said: “This is the right time to enter the market. There is a lot of support for our entrance.”

    The number of trips has been doubling every month in the last four months, he said.

    “Those figures exceed our initial targets.”

    Traditionally, customers have to make a deposit of VND15-20 million, submit their household registration book, a vital identification document in Vietnam. Customers and hire a car for at least one day.

    On Zoomcar, users are not required to put down any deposit or documents, and can rent for six hours.

    But the commission of 40 percent of rental it charges discourages some car owners, who complain it is too high.

    Kiet defended it by saying it is an appropriate ratio to ensure the company has enough resources to develop the market and bear the risks of operation so that car owners only need to list their vehicles and not worry about customers’ trustworthiness.

    He also spoke about the low number of vehicles, saying only 50 percent of registered owners make them available at a time, at a time when the number of renters is increasing.

    The low rate of people with driver’s licenses (estimated to be 3 percent of the HCMC population) is also a challenge, he said.

    The company believes however that car rental would become a future trend in Vietnam as has happened in Singapore and the U.S., he said

    The company hopes to expand to Hanoi this quarter, he added.

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  • Rice export prices drop in Q1

    Rice export prices drop in Q1

    Average rice export prices dipped by 10.6 percent in the first quarter, resulting in a 6-percent decline in revenues.

    Vietnam exported 2.05 million tons of rice for US$1 billion, up 4.4 percent in volume but prices fell to $386.2 a ton due to abundant supply, according to the Ministry of Agriculture and Rural Development.

    On the global market, rice prices also dropped marginally in May, with Thai 5 percent broken rice being $5 per ton cheaper at $410-412 and Indian exports falling by $10 to $361-365.

    Vietnam’s top market in the first quarter was the Philippines, whose imports increased by 63.8 percent year-on-year to 672,142 tons.

    Domestic prices remained unchanged in May, however. In the southern An Giang Province, normal rice was sold at VND11,000 ($0.48) a kilogram and jasmine rice at VND15,000.

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  • French meat producers eye expansion in Vietnam

    French meat producers eye expansion in Vietnam

    Meat producers from France are seeking to expand their market share in Vietnam to take advantage of the EU-Vietnam Free Trade Agreement.

    “Meat product exports to Vietnam are expected to grow faster, as, for the next 10 years, tariffs on those products will gradually decrease to zero percent,” Emmanuelle Pavillon-Grosser, the French consul general in HCMC, said.

    France is already the ninth-largest meat exporter to Vietnam, but wants to further increase its market share.

    The trade deal took effect in August 2020. The French Association of Butchers and Caterers and Business French in Vietnam are running a campaign to increase sales of meat products with EU sponsorship.

    It is expected to go on until 2024, with activities such as store promotion and inviting Vietnamese buyers to see the production process in France. Emilien Besnard of FICT said the French meat industry has more than 450 products, some of them already popular in Vietnam.

    Besides the EU, Vietnam also imports meat from the US, Russia, South Korea, and others, mostly being pork.

    Pork imports rose from 33,000 tons in 2018 to 225,000 tons in 2020 before slipping last year to 143,463 tons due to the pandemic.

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  • Liquor industry wants tax increase delayed

    Liquor industry wants tax increase delayed

    Liquor companies want the proposed increase in special consumption tax put off until they recover from the effects of the Covid-19 pandemic. The government plans to hike the taxes on beer, liquor, and cigarettes from now until 2030 and is still considering by how much.

    The current rates are 65 percent on beer and 35-65 percent on liquor. Nguyen Van Viet, chairman of the Vietnam Association of Beer, Wine and Beverages (VBA), said the two years of Covid caused beer sales to drop by 20 percent or one billion liters.

    Around half of all breweries and distilleries saw revenues and profits fall in 2020 and 2021, according to a survey by the Central Institute for Economic Management (CIEM). Over 79 percent of them tried to cut costs, and 58 percent postponed expansion plans and laid-off employees.

    It is estimated that 4-7 percent of workers were laid off, and the rest saw their incomes reduce by 7-10 percent. Though the situation has improved thanks to the reopening of the economy this year, the industry is unlikely to see profits rise as input costs have risen to historic highs.

    Gasoline and malt prices have increased by 50 percent, and that of beer cans by 30-40 percent. Holly Bostock, corporate affairs director of Heineken Vietnam, said any increase in special consumption tax would add to the burden on the beverage and tourism industries, while what they need now are stability and support.

    Phan Tuan Khai, a lawyer for the VBA, said the government needs to come up with a new tax mechanism that would help businesses but also generate more tax instead of just increasing the rates. Economist Ngo Tri Long said a tax hike would exhaust businesses.

    Long said a new mechanism that taxes products with higher alcohol content more would be fairer and more transparent than the current tax mechanism and encourage people to drink responsibly. Taxation by alcohol content is done in Singapore and European Union countries.

    A study by the CIEM from 2010 to 2018 found that despite increases in alcohol tax, consumption actually rose from 6.6 liters per capita per year to 8.3 liters.

    A 2019 study by Lancet, a British medical journal, found Vietnam among the world’s top beer-consuming countries and a 90.2 percent rise in drinking per capita between 2010 and 2017.

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  • Seafood companies post profit surge as global demand recovers

    Seafood companies post profit surge as global demand recovers

    Many seafood firms have seen a year-on-year surge in profits in the first quarter this year thanks to surging prices and recovering demand.

    Vinh Hoan Corporation, the largest listed seafood company, posted after-tax profits of over VND550 billion ($23.9 million) in the first quarter, up 4.2 times year-on-year.

    Cuu Long Fish Joint Stock Company·also saw its profits surge over 5.7 times against the same period last year to VND63 billion, the highest quarterly profit since late 2018.

    IDI International Development & Investment also recorded after-tax profits of over VND200 billion, the highest quarterly profit since 2010 when it began releasing financial reports.

    Nam Viet Corporation reported a three-time year-on-year surge in profits to VND206 billion while Camimex Group saw its profits double to VND25.1 billion.

    Sao Ta Foods Joint Stock Company, another seafood firm, reported its profit surging nearly 1.5 times year-on-year to VND42.2 billion.

    The surge in profits among seafood companies in the first quarter was credited to surging prices and recovering global demand.

    Vietnam’s seafood exports grew by 40 percent year-on-year to $2.4 billion in Q1 despite direct impacts of the ongoing Russia-Ukraine crisis.

    Growth was led by pangasius catfish, whose exports increased by 88 percent to $646 million and accounted for 27 percent of overall exports, according to the Vietnam Association of Seafood Exporters and Producers.

    Shrimp remained the top seafood export item, accounting for 37.5 percent of the total at over $900 million, up 37 percent.

    A recent report by Rong Viet Securities Corporation said that pangasius exports would record a strong recovery this year due to increased global demand and supply shortage from Russia. The high selling price will last until the end of the second quarter due to increase in raw material prices.

    An Binh Securities warned of downside risks like surging feed and logistics costs and fierce competition from other exporting countries like India, Ecuador and Indonesia.

    On the stock market, the seafood sector has posted gains over the past months, with some hitting the ceiling regardless of the overall gloomy market trend.

    On Friday, Vinh Hoan closed at around VND104,000, up 55 percent since January.

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  • Vinhomes profits slips by 17 percent in Q1

    Vinhomes profits slips by 17 percent in Q1

    Property developer Vinhomes reported a 17-percent decline in profits in the first quarter to VND5.89 trillion (US$256.8 million).

    Net revenues were down 9 percent to VND14.28 trillion, according to its consolidated financial statement.

    Around 62.5 percent of its revenues, or VND8.92 trillion, came from the sale of three housing projects, Ocean Park, Smart City and Grand Park.

    Its selling expenses were down, but administrative expenses rose by over 60 percent.

    The company, a subsidiary of conglomerate Vingroup, eyes revenues of VND75 trillion and profits of VND30 trillion this year, according to a document it circulated among shareholders.

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  • Gold consumption up

    Gold consumption up

    Vietnam’s gold consumption rose 6 percent year-on-year in the first quarter as inflation concerns pushed people to invest in safer assets. Gold consumption hit 19.6 tonnes, compared to 18.6 tonnes in the same quarter last year, according to the World Gold Council (WGC).

    Demand for gold bars and coins rose 4 percent to 14 tonnes in the period, while demand for jewelry rose 10 percent to 5.6 tonnes.

    Andrew Naylor, head of ASEAN and Public Policy at the World Gold Council, said rising demand for gold in Vietnam happened as the dong weakened and inflation rose.

    The nation’s economic recovery also helped demand to rise, especially during Tet, the Lunar New Year holiday, Valentine’s Day and the God of Wealth Day in February.

    Vietnam was the Southeast Asia’s largest gold bullion and coin market last year and among the top 10 globally.

    Geopolitical tensions sent global gold prices surged to $2,070 per ounce, near an all-time high, in March.

    Louise Street, senior analyst at the World Gold Council, said that the first quarter of 2022 has been a turbulent one, marked by geopolitical crises, supply chain difficulties and surging inflation.

    “These global events and market conditions have solidified gold’s status as a safe haven holding, not just for investors but also for retail consumers, thanks to its unique position as a dual-natured asset class.”

  • Digital transformation key to Vietnam’s ambitions of getting rich and clean

    Digital transformation key to Vietnam’s ambitions of getting rich and clean

    Digital transformation would be the key for Vietnam to achieve its targets of becoming a high-income country and a ‘net-zero’ emissions economy, an IFC vice president says.

    Vietnam has two big goals by the middle of this century. One is to become a high-income country by 2045 under the Resolution of the 13th National Party Congress and another is to reach net-zero carbon emissions by 2050 as committed by Prime Minister Pham Minh Chinh at the 2021 United Nations Climate Change Conference (COP 26).

    Alfonso Garcia Mora, the International Finance Corporation’s regional vice president for the Asia Pacific, told VnExpress that Vietnam now faces two major challenges as it has to manage to bring labor productivity to a new level in order to achieve the goal of becoming a rich country while learning to adapt to climate change.

    “From the above two challenges, we have a common key to solve it through technology and digital transformation. It is no longer an option, it is a must,” said Alfonso.

    He said Vietnam has lots of advantages for digital transformation.

    According to World Bank data, the digital sector in Vietnam has expanded by 10 percent per year and could reach over $200 billion by 2045, a huge figure compared to the size of Vietnam’s GDP, which was nearly $352 billion last year.

    The young population rate and high smartphone and Internet coverage are also favorable factors for Vietnam to accelerate digital transformation, Alfonso said.

    To enhance innovation and maximize development opportunities for the digital economy, there are four keys – digital entrepreneurship, digital infrastructure, digital skills and digital financial services, he added.

    “It’s necessary to improve digital skills among the workforce, a step to take the economy to a new level of development and achieving ambitions of high incomes and net-zero emissions,” he recommended.

    According to a World Bank report, only 40 percent of businesses in Vietnam said they have enough capabilities in terms of information and communication technology and it is estimated that the market would face a huge shortage of up to one million ICT engineers by 2023.

    Some large enterprises have already begun adopting digital transformation but the problem is that most of the country’s enterprises are small and medium sized and the top challenge is how to help this group go digital.

    Alfonso said there must be a clear and credible policy, investment in 4G and 5G technology infrastructure and improvement in digital and technology skills while the government should offer fiscal incentives for small and medium businesses so they are ready for digital transformation.

    The IFC expert said many Vietnamese companies have not used digital transformation tools, which poses opportunities for the potential market to develop.

    Besides, the Covid pandemic in the past two years has helped the Vietnamese economy make leaps in digital transformation that should have taken three to five years to achieve.

    He said it’s high time for Vietnam to push up digital transformation.

    In order to achieve successful digital transformation, there needs to be cooperation between the public and private sectors while the government should have a clear strategic vision as to how many percentages the economy would go digital by 2050.

    With specific localities in particular and Vietnam in general, digital transformation is only to help the country grow richer but also to reduce risks and boost adaptation to climate change. Therefore, digital transformation must also pay attention to sustainable development.

    “Today, we see 80 percent of greenhouse gas emissions coming from large cities. To achieve the goal of carbon neutrality by 2050 we will need changes like digitization and use of electric vehicles,” he said.

    In addition, he said the government should have encouraging policies to motivate businesses to join digital transformation.

    “We must open the market and allow innovative startups to develop to push the digital economy forward. We need to give them a safe environment,” said Alfonso.

    “Four years ago, no one trusted telemedicine but now people are familiar with the service. Similarly, online learning could have been an option before the pandemic but it was mandatory during the lockdown period. These new habits are very important in increasing accessibility for people in remote areas and ensuring inclusive development,” he said.

    Alfonso said the IFC, the largest global development organization focused on supporting the private sector in emerging economies, has invested $13.3 billion in more than 190 projects in Vietnam and will continue to invest in many activities to support Vietnam’s digital transformation.

    IFC would help local banks provide more digital financial services on mobile phones and optimize logistics, encourage the use of clean energy as w

  • Government rejects airlines’ demand for further tax cuts

    Government rejects airlines’ demand for further tax cuts

    The Ministry of Finance has turned down airlines’ requests for further tax breaks, saying they have received enough support from the government.

    In response to several airlines’ request to reduce value-added tax from 8 percent to 5 percent and fuel import tax from 7 percent to zero, the ministry said in a statement Friday that only the National Assembly can decide on VAT cuts.

    The current 8 percent VAT is already a reduction from the normal 10 percent, and aviation companies are also eligible for the lower rate, it said.

    It also pointed out that the aviation industry has already benefited from a lot of support in terms of taxes and fees since the pandemic began.

    Environment tax on jet fuel has been reduced by half to VND1,500 per liter until the end of this year.

    It is important to ensure a balance between the benefits companies and the government get, the ministry said.

    Vietnamese carriers served 14.5 million passengers in the first four months of this year, up 26.3 percent year-on-year, according to the General Statistics Office.

    Airlines resumed regular international services in March after a two-year hiatus due to Covid-19.

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  • HCMC high-end office rents jump in Q1

    HCMC high-end office rents jump in Q1

    Grade A office rents in HCMC rose by 5.1 percent quarter-on-quarter to US$44.9 per square meter per month last quarter. The average rent was 5.3 percent up from a year earlier, according to real estate consultancy CBRE Vietnam.

    Grade B rents averaged $25.9, up 1.7 percent and 3.1 percent. Similar surveys by other consultancies Colliers and Savills showed grade A rents increasing by 1-3.8 percent.

    Net absorption during the quarter was 16,500 square meters compared to 15,000 in the last quarter of 2021, according to Savills.

    Two sectors that achieved growth during the pandemic, information technology and logistics, accounted for nearly 60 percent of all transactions and are likely to lead demand in the next two years.

    Office relocation accounted for 55 percent of transactions.

    Demand for office space would keep rising, especially in sectors that would see growth such as e-commerce, real estate, electronics, IT, and communications, deputy director of Colliers Vietnam, Nhung Vu, said.

    Savills added that HCMC would need around 140,000 square meters of office space for new workers this year, based on an estimate that each needs eight square meters.

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