Retail sector sees foreign-Vietnam M&A

The Vietnamese retail market has seen some mergers and acquisitions (M&A) between foreign and Vietnamese enterprises, thanks to the huge development potential of the retail sector. As part of its commitment to join the World Trade Organisation, Vietnam has allowed the establishment of 100 percent foreign retail companies since 2015. Vietnam's membership of the newly-established ASEAN Economic Community will connect the country's market with a single regional market of 600 million consumers, while the Trans-Pacific Partnership agreement will bring more than 10,000 kinds of goods from 12 member countries at zero tariffs. In this context, the current modern retail channel of supermarkets and stores account for only 25 percent of the market share in Vietnam, where the traditional market is still the most popular shopping channel. Compared with the region, the coverage of modern retail sector in the country is much lower than in the regional countries, such as 33 percent in the … [Read more...]

BUSINESS IN BRIEF 14/8

Import costs hit textile firmsViet Nam's garment and textile industry remains reliant on imported raw materials, concerning enterprises seeking to take advantage of zero tariffs mandated in the Trans-Pacific Partnership (TPP), which has been under negotiation.Statistics showed that in the first seven months of this year, the total export turnover of garment and textile products reached US$9.636 billion, a rise of 16.3 per cent year-on-year. But, the import of raw materials for the industry hit $7.646 billion, up 18.2 per cent.Nguyen Thi Bich Lien, deputy director of Dong Nai Industrial Garment Co, said dependence on imported raw materials would be the biggest challenge to the country's garment industry when TPP came into force.The TPP's "yarn-forward" rule of origin required nations to use a TPP member-produced yarn in textiles in order to receive duty-free access.However, Viet Nam currently imported raw materials from many countries which were not members of TPP, such as China.Efforts … [Read more...]

Vincom Mega Mall turns the screws on struggling rivals

The launch of Vincom Mega Mall Royal City, the largest underground retail complex in Asia, is expected to dramatically change the retailing landscape in Hanoi, and pose stiff competition to the current retail centres in the city. Vincom Mega Mall introduces many "firsts" to Hanoi, Photo: Duc Thanh During the first opening week, the junction of Nga Tu So and Nguyen Trai streets where the Vincom Mega Mall Royal City is located was surprisingly busy due to thousands of potential customers visiting the centre in their cars and on motorbikes. The mall space was filled with both shoppers and curious visitors despite a rainy weekend. In its white paper "From ice-scream to ice rink" CBRE described the large footfall over the first few days of its opening as "very impressive and greater than one might have ordinarily expected to see in Vietnam shopping centres." "Vincom Mega Mall Royal City has indeed created a big bang in the Hanoi market," the property consultant stated in the white … [Read more...]

South Korean retailer to boost Vietnam investment

South Korea's retail giant Lotte Mart is set to boost its investment in Vietnam in an attempt to expand its presence in the local market, Yonhap News Agency reported. A Lotte Mart supermarlet in Ho Chi Minh City's District 7 The Vietnamese government has given the greenlight for Lotte to raise the capital for its joint venture by US$50 million, the report said. According to news website VnEconomy, Lotte Mart holds an 80 percent stake in its joint venture with local company Minh Van. The venture, Lotte Shopping Vietnam, was inaugurated in 2008. The Korean retailer has opened two outlets in Vietnam, both in Ho Chi Minh City. It plans to have a total of 30 supermarkets in the country. Vietnam's retail sales grew 22.8 percent in the first nine months, according to the General Statistics Office. The growth had eased from the 24.5 percent increase recorded at the end of 2010 as local consumers cut back on spending amid high inflation. … [Read more...]

Lotte Mart staff stop working due to wage dispute

Around 40 cashiers at the Lotte Mart in Ho Chi Minh City's District 7 walked off the job October 28 in protest of what they say is the company's unfair wage policy. Lotte Mart in District 7, HCM City (Photo: Saigon Times)  The workers complained they were paid only VND1.5 million (about US$85) per month on average after nearly one year of working for the supermarket. Lotte, meanwhile, recently announced that it would pay VND2 million per month to new workers performing the same job at a new company outlet.  The protesters said they had filed a request for higher salaries with the company's management board but their demands were rejected. The same day, District 7 Labor Federation representatives came to the supermarket to try and resolve the dispute, but the supermarket's manager refused to meet with them, saying he was too busy.     Lotte Mart is owned by Lotte Shopping Vietnam Co., Ltd., a wholly South Korean-owned company, located at Tan Phong Ward, District 7, HCM City. The … [Read more...]

S. Korea Tops FDI Source in Vietnam

Foreign direct investment (FDI) from South Korea into Vietnam so far this year has reached around US$2.4 billion in 203 projects, three times last years figure, Foreign Investment Agency under the Ministry of Planning and Investment (MPI) reported. With the impressive figure, S. Korea replaced Hong Kong as the biggest investor during the first ten months of the year, to become the number one investor in the Southeast-Asian nation in 2006. The agency said S. Korean investment mostly focuses on industrial production, construction and tourism. S. Korea's leading steel group Posco on November 18 was granted an investment certificate by the MPI for its steel project worth US$1.128 billion in Phu My II Industrial Park in the southern coastal province of Ba Ria-Vung Tau. Meanwhile Kumho Asiana group has kicked off the US$380-million project to produce tires in the southern province of Binh Duong and it has also invested US$260 million in building hotels and apartments in Ho Chi Minh City. … [Read more...]

Retail sector sees foreign-VN M&A

HA NOI (VNS) — The Vietnamese retail market has seen some mergers and acquisitions (M&A) between foreign and Vietnamese enterprises, thanks to the huge development potential of the retail sector. As part of its commitment to join the World Trade Organisation, Viet Nam has allowed the establishment of 100 per cent foreign retail companies since 2015. Viet Nam's membership of the ASEAN Economic Community, signed last month, will connect the country's market with a single regional market of 600 million consumers, while the Trans-Pacific Partnership Agreement will bring more than 10,000 kinds of goods from 12 member countries at zero tariffs. In this context, the current modern retail channel of supermarkets and stores account for only 25 per cent of the market share in Viet Nam, where the traditional market is still the most popular shopping channel. Compared with the region, the coverage of modern retail sector in the country is much lower than in the regional countries, such … [Read more...]

Vietnamese fashion brands fading away

VietNamNet Bridge - Many Vietnamese fashion brands which were once strong have gone downhill because they cannot compete with foreign brands. Foci, Sea, Sifa, N&M, Viet Thy, Dan Chau and Sanding, for example, have fallen into oblivion. Many garment companies, which vowed to conquer the domestic market in the ‘return home’ movement, have given up and shifted to make products for export. Only 20 percent of producers keen on domestic market Pham Xuan Hong, general director of Saigon Gon 3 Garment Company, a big exporter, said the company has set up several showrooms in HCM City, but they have been taking losses. The domestic market has been very difficult to exploit, even for experienced producers of garments for export. Many Vietnamese fashion brands which were once strong have gone downhill because they cannot compete with foreign brands. Many exporters, who decided to focus on conquering the domestic market some years ago, as export markets shrank in the global … [Read more...]

Vietnam may become China’s technological landfill: expert

VietNamNet Bridge – The Trans-Pacific Partnership (TPP) is expected to bring many advantages for Vietnam, especially for the textile-garment industry. However, the sudden increase of Chinese projects has triggered many concerns. Dr. Duong Dinh Giam, former Director of the Institute for Industrial Policy and Strategy Studies of the Ministry of Industry and Trade, talks about the issue. Related news The negative side of Chinese investment in Vietnam Illustrative image. - Under TPP, textile materials will enjoy zero percent tax rate in TPP member states so when Chinese enterprises invest in textiles in Vietnam, will they also enjoy the advantages brought by the TPP? That's right since TPP regulates that commodities or raw materials used to produce the commodities to enjoy tax privileges must be produced in the member countries of the TPP, whether they are produced by domestic or foreign firms. Currently, Chinese enterprises have invested heavily in textile manufacturing in … [Read more...]

SOEs required to divest non-core business fields, but proceeding slowly

VietNamNet Bridge - State-owned economic groups have three more months to withdraw capital from non-core business fields as requested by the government. But they have only completed half of the goal. Part 1: The seduction of the banking sector MobiFone, called the ‘state’s blue-eyed boy’, has said it is following procedures to withdraw investment from TPBank and SeABank. At SeABank, the official website says MobiFone is a strategic shareholder which holds 6 percent of the bank’s stake by 2012. And the mobile network operator is also a strategic shareholder of TPBank in which it held 12 percent of stake. The Vietnam Textile and Garment Group (Vinatex) also is in a hurry to withdraw capital from banks. Though its total investment capital in banks is not high, it holds a stake in many banks, including ACB, Techcombank, Eximbank, Maritime Bank and Navibank. Injecting money into banks is considered a ‘fashionable business’ for SOEs, which held a … [Read more...]

State-owned conglomerates disclose information about chairs’ salaries

VietNamNet Bridge - Some state-owned economic groups and general corporations have publicised their business performances, including managers’ incomes. The pay for the chair of the Vietnam Textile and Garment Group (Vinatex) was reported in social media in early July at VND640 million a year. One month ago, the information about the annual salary of VND640 million of Vinacomin’s (Vietnam Coal and Mineral Industries Group) chair, appeared on news websites. Prior to that, the loss of trillions of dong incurred by Petrolimex from its overseas investment was the hot topic of discussion in local newspapers. The information was found on the official websites of the groups. Vinacomin updated its payroll on the website, while Petrolimex updated its audited financial reports. However, Vinacomin and Petrolimex are just a few of the enterprises that publicised their business results. Meanwhile, under current laws, nearly 1,000 state-owned economic groups and general … [Read more...]

How did Vietnam’s textiles and garments conquer the US market?

VietNamNet Bridge - Vietnam had to proceed down a thorny path and overcome many difficulties to cement its firm position in the US textiles and garments market. "Right after the two countries normalized diplomatic relations, in 1995, 30 Vietnamese business leaders and I had the chance to attend a 2-month training course in the US organized by AAVF, the veterans’ association. We practiced at Oxford Industries, a garment company in Atlanta," Le Quoc An, former chair of the Vietnam Textile and Garment Group (Vinatex), said. "This was the first time we learned about the way of organizing production and business of a US company in the garment industry. And this was the first time we approached the US business culture," An said. However, only six years later, when the Vietnam-US Bilateral Trade Agreement (BTA) was signed was An able to use the knowledge he got at the training course. In late 2001, Vinatex, Vietnam’s largest textile and garment corporation, began … [Read more...]

To construct Vinatex garment plant in Duc Pho district

​The Duc Pho garment JSC last weekend began the construction of Duc Pho garment plant at Pho Hoa Industrial Zone, Duc Pho district. Secretary of the provincial Party Committee - Chairman of the provincial People's Committee Le Viet Chu attended the ceremony. ​The plant is built on an area of 4 hectares with the investment capital of VND80 billion and is expected to be completed within 6 months of construction, creating jobs for about 2,000 local workers. The plant could produce over 2 million of products per year, including trousers and Jackets. It is expect to reach the estimated turnover of about US $6 million/year. The Project is belonged to the investment strategy of Vietnam Textile and Garment Group. The plant has also recruited and trained 400 local workers. Minh Th​ien … [Read more...]

Vinatex receives green light for $400 million IP in Nam Dinh

The Nam Dinh Provincial People’s Committee has licensed the Vietnam Textile and Garment Group to initiate construction of the $400 million Rang Dong Industrial Park (IP), a large scale industrial park dedicated for textile and garment suppliers. photo source Cafef The IP is located in the southeast of Nam Dinh, 140 kilometres from Hanoi. Covering an area of 2,109 hectares, including an area of 1,434 hectares for constructing factories and 675 hectares of auxiliary areas, the project has two phases. Construction of the first phase will start in the fourth quarter of this year. By early 2016 investors can start investing in the industrial park. The second phase will start in 2018. The project is expected to be fully built within six to ten year. Once completed, the IP will have a capacity to produce two billion metres of fabric per year and employ 60,000 people. It will include a complete supply chain with two environmental friendly and sustainable production zones for … [Read more...]

Garment firms queue up for TPP tariff incentives

The wave of investment in Vietnam’s garment and textile production shows no sign of stopping. Polytex Far Eastern Vietnam, a subsidiary of the Far Eastern New Century Corporation (FENC) from Taiwan, has received an investment certificate from the People’s Committee of the southern province of Binh Duong to invest US$274 million into building a textile and garment production site. The 99-hectare project adds to FENC’s existing Apparel Far Eastern garment production facility established in 2007 in Vietnam Singapore Industrial Park I, also in Binh Duong. This investment is specifically aimed at exploiting business opportunities presented by the Trans Pacific Partnership (TPP). The upcoming vertically-integrated production site for yarn, fabrics, dyeing and apparel aims to meet the TPP’s yarn forward rule. FENC expects to invest up to US$320 million in the project, and turn Vietnam into its third vertically-integrated production site, after China mainland and … [Read more...]

Garment and textiles exports reach 3.4 billion USD in the first two months

The Hanoitimes - According to the latest figures of the Ministry of Industry and Trade, garment and textiles exports in two months of this year earned 3.4 billion USD, an increase of nearly 18% over the same period last year. Since the middle of January, most of enterprises in Vietnam Textile and Garment Group signed orders exporting for the end of the second quarter of 2015. The US remained the largest export market for Vietnamese garment and textiles, accounting for 8.4% of the country’s market share. Vietnamese garment and textiles exports to the highly lucrative market is estimated to reach 11 billion in 2015. Meanwhile, the EU continues to be a main market for Vietnamese garment and textiles in the coming time after the EU-Vietnam Free Trade Agreement comes into effect. Accordingly, a tax cut of 12 to zero % on Vietnamese garment products will create more favourable conditions for Vietnamese enterprises raise their competitiveness. Thu Minh … [Read more...]

Garment sector targets USD3 billion export value to RoK

Source: VNA Vietnamese garment and textile companies are targeting a total export turnover of an estimated USD3 billion to the Republic of Korea this year, Vietnam Investment Review reported. The total export turnover of Vietnam's textile and garment sector to the RoK reached USD2.4 billion last year, an increase of 27 percent compared to 2013. The highest growth was seen in jackets, overcoats, suits and male and female trousers. The Republic of Korea is Vietnam's fourth-largest textile and garment export market. The Ministry of Industry and Trade said last year the market share of Vietnam textile and garment export to the RoK reached 16.4 percent, an increase of 2.1 percent compared to 2013. This year, the RoK's textile and garment import turnover is expected to reach USD16.3 billion, an increase of 11.6 percent over last year. Tran Viet, head of the Vietnam Textile and Garment Group's market department, said the RoK is still a major market for Vietnamese textiles and … [Read more...]

Garment sector targets 3 bln USD export value to RoK

Vietnamese garment and textile companies are targeting a total export turnover of an estimated 3 billion USD to the Republic of Korea this year, Vietnam Investment Review reported. The total export turnover of Vietnam's textile and garment sector to the RoK reached 2.4 billion USD last year, an increase of 27 percent compared to 2013. The highest growth was seen in jackets, overcoats, suits and male and female trousers. The Republic of Korea is Vietnam's fourth-largest textile and garment export market. The Ministry of Industry and Trade said last year the market share of Vietnam textile and garment export to the RoK reached 16.4 percent, an increase of 2.1 percent compared to 2013. This year, the RoK's textile and garment import turnover is expected to reach 16.3 billion USD, an increase of 11.6 percent over last year. Tran Viet, head of the Vietnam Textile and Garment Group's market department, said the RoK is still a major market for Vietnamese textiles and garments, … [Read more...]

SOE equitization to depend heavily on private capital

VietNamNet Bridge - A number of big state-owned enterprises (SOEs) are eagerly awaiting significant cash injections from private Vietnamese businesses to carry out their equitization plans. The HCM City Stock Exchange (HOSE) reports that 90 percent of the Vietnam Textile and Garment Group (Vinatex) shares put on sale at its IPO (initial public offering) have been sold. This was not a surprise to investors, as the number of shares sold equalled the number that investors had previously registered to buy, while the selling price was equal to the starting price, at VND11,000 per share. As such, 11 million Vinatex's shares out of the 122 million shares put on sale could not be sold, although the IPO attracted 30 foreign investors who bought 55 million shares, and three securities companies, which ordered shares in large quantities. An analyst noted that the unsold volume of shares would have been much higher if Vinatex had not met two Vietnamese strategic investors. Vingroup, a … [Read more...]

Breakfast @ Tuoi Tre News – October 25

Tuoi Tre News briefs you on some of the leading stories published today, October 25, in Vietnamese media. Politics -- Vietnamese Prime Minister Nguyen Tan Dung and his spouse will pay an official visit to India from October 27 to 29 to discuss measures to boost the two-way trade and expanding cooperation between the two countries in such fields as science-technology, culture-education, tourism and aviation. In 2013, two-way trade amounted to US$5.23 billion, up 30 percent from 2012. It is expected to reach $15 billion by 2020. Society -- Police from the Ministry of Public Security on Friday evening arrested Ha Van Tham, 42, former chairman of the Dai Duong Commercial Joint Stock Bank (OceanBank),on charges of "breaching regulations on loan provision in the operations of credit institutions." Tham was removed from his post earlier the same day. -- A heavy rain together with strong winds that occurred in Ho Chi Minh City on Friday afternoon uprooted at least 19 trees, which fell … [Read more...]