JLL reports on real estate M&A in first half
Vietnam’s real estate market continued to exhibit irresistible appeal among foreign investors in the first half of 2018 and continued to witness high-value merger and acquisition (M&A) transactions in a variety of sectors such as residential, commercial, and industrial, according to Ms. Khanh Nguyen, Associate Director, Capital Markets, Vietnam, at JLL.
Joint ventures have become popular among foreign developers who have strong financial capacity and track record, with them joining forces with local developers who own land and have strong connections with the local community. Foreign investors are from many different countries, such as Japan, South Korea, and Singapore, and with an increasing number of groups from Mainland China.
JLL observes that there is an increasing number of local investors who are actively seeking real estate deals alongside foreign investors.
2018 started off with the acquisition of Sun Wah office tower by Nomura Real Estate Development. Nomura acquired a 24 per cent stake in the Grade A office building located in a prime location in District 1, Ho Chi Minh City. This was the company’s first office project in Vietnam and second project in the country, confirming its strong interest in the Vietnam market and its long-term commitment in the country.
The residential sector continued to be buoyant, with five major M&A transactions within the first six months. In March, CapitaLand announced that its wholly-owned subsidiary CVH Nereus Pte. Ltd. Had acquired 16.9 million ordinary shares, representing 99.5 per cent of charter capital, of the Hien Duc Tay Ho JSC, for a total cash consideration of approximately VND685 billion (approximately $29.8 million).
In April, Frasers Property entered into a conditional share purchase agreement with the Tran Thai Lands Company Limited to acquire 24 million ordinary shares, representing 75 per cent of the issued share capital of the Phu An Khang Real Estate JSC.
Another major mixed-use residential development deal in June 2018 was the divestment of Keppel Land’s stakes in the Quoc Loc Phat JSC (QLP)’s development project in District 2, Ho Chi Minh City.
Keppel Corporation Limited has recently announced that its wholly-owned subsidiary, Keppel Land Limited (KLL), through KLL’s wholly-owned subsidiaries Keppel Land Thu Thiem Pte. Ltd. and its indirect wholly-owned subsidiary Orbista Pte. Ltd. (which had a 20 per cent and 25 per cent interest in QLP, respectively) has entered into a sales and purchase agreement to divest their stake in QLP for VND702 billion ($30.6 million).
Malaysia’s Berjaya Land Berhad announced that its wholly-owned subsidiary, Berjaya Leisure (Cayman) Limited, had divested its entire resultant 32.5 per cent of the capital contribution in Berjaya Vietnam Financial Center Limited to the Vinhomes JSC and the Can Gio Tourist City Corporation for a cash consideration of VND884.9 billion ($38.4 million).
Investment deals in the first half were diversified, with a good variety of asset and property types transacted.
“When looking at the market as a whole we expect continued growth through most asset types,” Ms. Nguyen said. “Hospitality has been interesting over the past year, with new funds with foreign capital now specifically targeting the sector. We expect that this trend will continue in hospitality and in other growing sectors such as industrial and alternatives like education. The affordable housing market is another key growing sector, now drawing specialist capital sources who identify value in the underlying fundamentals, including a growing middle class.”
JLL expects foreign investors to continue showing a keen interest and strong commitment in Vietnam’s real estate market and that the market is still growing. “Due to the strong focus on Vietnam from regional investors, we expect M&A activities to reach record levels in 2018,” Ms. Nguyen said.
Aviation infrastructure short of needs
Like many countries around the world, the development of aviation infrastructure in Vietnam has failed to keep pace with growth in passenger numbers, the “Aviation Development – Vietnam Tourism” seminar held in northern Thanh Hoa city by the FLC Group on July 26 heard.
In attendance were representatives from ministries and departments and more than 500 enterprises, organizations and airline agents.
Experts agreed that the government has offered more support to airlines in their early days in terms of capital and infrastructure than in other comparable countries.
Regarding the slow pace of infrastructure development, Mr. Nguyen Thien Tong, former Head of the Aeronautical Engineering Department at the Ho Chi Minh City University of Technology, said there should be a national policy on civil aviation as the sector has a major impact on the economy. “The aviation sector was not privately owned in the past, but now the private sector is heavily involved in the field,” he said. “There must therefore be strong and clear policies to attract investment in aviation development.”
Mr. Le Anh Tuan, Head of the Infrastructure Department at the Development Strategy Institute, said that transport infrastructure now accounts for 30 per cent of Vietnam’s priority projects, with aviating accounting for some 20 per cent of transport infrastructure, so the government is particular interested in developing aviation infrastructure.
Mr. Nguyen Van Phuc, former Deputy Head of the Economic Committee of the National Assembly, told the seminar that Vietnam needs to mobilize different sources of capital to develop new airports and that aviation development depends greatly on tourism development.
Speaking about the FLC Group’s preparations for launching Bamboo Airways, Mr. Trinh Van Quyet, Chairman of the FLC Group, said that in order to meet the future requirements of the aviation industry the Group also intend to invest in airports.
Vietnam currently has four operating airlines – Vietnam Airlines, Vietjet Air, Jetstar Pacific, and Vasco, with Vietnam Airlines owning Vasco and 70 per cent of Jetstar and flying into and out of 28 airports, including Noi Bai, Tan Son Nhat, Da Nang, and Cam Ranh International Airports.
Mostly small enterprises investing in agriculture
Vietnam has more than 49,600 enterprises investing in agriculture at present, accounting for 8 per cent of all operating enterprises, according to figures from the Ministry of Planning and Investment (MPI) released at a national conference promoting investment in agriculture held on July 30 in the central highlands province of Lam Dong.
Of these, 92.3 per cent are small and micro enterprises and 2.1 per cent are medium-sized enterprises. They provide more than 4.5 million jobs, accounting for 32.5 per cent of total employment.
As at July, FDI enterprises had invested $3.37 billion in the agriculture, forestry and fishery sector.
However, Minister of Planning and Investment Nguyen Chi Dung emphasized that the number of enterprises engaged in the manufacturing and processing of agriculture, forestry, and fishery products in 2017 was much higher than in 2016. As a result, corporate earnings have tended to increase but gross profit fell nearly 60 per cent between 2008 and 2016, and the loss ratio increased 28 per cent over the same period.
Mr. Dung pointed out the ten main challenges for investors when investing in Vietnam’s agriculture sector. First and foremost, investors have difficulty in accessing land to organize production. Secondly, accessing credit is problematic, while taxes and costs are unreasonable. Thirdly, the machinery industry supporting agriculture is still underdeveloped, partly due to it not being encouraged to invest in manufacturing and processing.
He also emphasized that chains linking the market are unstable. The majority of the human qualification involved in this sector is low, I don’t understand. Moreover, investment incentives are not good enough, and infrastructure for business production is not synchronized or fully developed.
Many administrative procedures are unreasonable, and the final challenges relate to food safety and weaknesses in State management and communications.
He then offered solutions. Local authorities, ministries and sectors should seriously and urgently implement Resolutions 19 and 35 and examine cutting 40-50 per cent of existing administrative procedures.
It is also necessary to actively market and build the Vietnamese agricultural brand as well as develop and improve the quality of human resources.
The conference was an opportunity for the Prime Minister, ministries, sectors, localities, agricultural enterprises, and industry associations to review and evaluate investment in agriculture and the results achieved.
Vietnam’s tourism adapts to Industry 4.0
Tourism has been directly affected by the 4th Industrial Revolution. Smart tourism is now seen as a way for the industry to offer customers the best possible services.
Tourism encompasses many sectors and it takes travelers many steps to book a vacation, from searching for hotels to booking transportation at a reasonable price. The 4th Industrial Revolution has made all these things a lot easier, helping visitors enjoy a better vacation.
Responding to the Prime Minister’s directive on getting Vietnamese tourism to to take advantage of the 4th Industrial Revolution, the Minister of Culture, Sports, and Tourism identified the sector’s key products in the 2017 – 2020 period.
“Key tourism products include those that use virtual reality (VR) or augmented reality (AR) technologies to help visitors preview services in virtual space. Those advanced technologies are of great importance in promoting tourism services and destinations.
Tourist Pass is a new product that integrates many tourism services and allows better management for the sector. The Automatic Narration app enables visitors to explore cultural and historical relics by themselves,” said Doctor Le Tuan Anh, Deputy Director of International Cooperation Department of the Vietnam National Administration of Tourism.
Vietnam’s travel companies are trying hard to take advantage of the 4th Industrial Revolution. Companies like Saigontourist, Hanoitourist, Vietravel, Vietrantour, and Five Star Travel have digitalized their data and now offer more online booking and payment. Many companies are encouraging customers to use apps installed on their smart devices to book services.
Tourism, one of Vietnam’s spearhead industries is scrambling to adapt to the 4th Industrial Revolution. Last year, Vietnam welcomed 13 million foreign visitors and served more than 73 million domestic tourists.
The sector aims to attract 20 million foreign visitors and contribute 10% of GDP by 2020.
Pork imports see 50% increase as domestic prices rise
According to the statistics from the General Department of Customs, Vietnam imported nearly 27,000 tonnes of meat and meat products worth US$38.68 million in June, a decline of 9.5% in volume and 9.2% in value compared to May.
The country bought meat and meat products from 35 markets around the world. The US accounted for 30% of total national imports, followed by the Republic of Korea at 10.9%.
Despite the overall decrease in the volume and import value of meat and meat products, Vietnam purchased 678 tonnes of pork worth US$1.03 million from foreign markets in June, a rise of 50.4% in volume and 50.7% in value compared to one month earlier.
The average price of imported pork reached US$1,524 per ton, up 0.1% compared to the previous month.
On the domestic market, from the beginning of July, live pig prices in the northern region have ranged between VND51,000-VND55,000 per kilo. The recent rise in prices has led the price of live pigs in Bac Giang and Hung Yen provinces to reach a two-year record high at VND55,000 per kilo.
In the central region and Central Highlands, the price of live pigs saw a slight fluctuation from between VND43,000-VND53,000 per kilo while that in the south stood at VND48,000 per kilo.
Zhejiang products to be on show in Ho Chi Minh City
Around 106 businesses will have their products displayed across 150 pavilions at the Zhejiang Export Fair set to take place at Saigon Exhibition & Convention Center (SECC) in Ho Chi Minh City from August 2-4.
This is one of the largest and longest-held fairs organised by China’s Zhejiang province in ASEAN with the aim of creating a new impetus for Vietnam-China cooperation.
Covering an area of 4,000sq.m, the fair will introduce machinery, electrical equipment, electronics, construction materials, textiles and garments, and household products.
The organizing board will also set aside a transaction area, provide interpreters to serve exhibitors and clients, organize forums and present the latest techniques and products.
The private economy in Zhejiang has developed strongly and the province’s businesses have invested more than US$4 billion in Vietnam. The import-export value between Zhejiang and Vietnam reached US$7.93 billion last year, a year-on-year rise of 16%, of which Zhejiang’s exports were US$6.02 billion (up 9.6%) and imports were US$1.92 billion (up 42.4%).
Since the first fair was held in Vietnam in 2011, the event has become the biggest foundation for economic transactions between the Chinese province and Vietnam.
17,000 still waiting to get money back from multilevel marketer
By the time Thien Ngoc Minh Uy’s license was revoked in April 2017, the multilevel marketing company had signed up about 26,700 clients.
The number of people waiting to liquidate their agreements with and file complaints against it has fallen to 17,000 this year.
By last April the company had over 9,500 liquidation requests and commodity repurchase agreements of which over 8,700 had reached the final stage of liquidation and 839 were in the first stage of the process.
The Vietnam Competition Authority has said all victims should immediately contact the company, preferably its nearest office, to get their complaints and liquidation contracts considered as soon as possible.
The Ministry of Industry and Trade (MoIT) canceled the Hanoi-based company’s license and slapped a fine of US$8,800 on it for “serious violations.”
For a while afterwards the company continued to carry on other forms of marketing illegally and without a license.
Thien Ngoc Minh Uy used to distribute healthcare products such as nutraceuticals, skincare products and massage equipment through unlicensed branches.
FOL hike aims to aid aviation investments
Despite the latest proposal on raising the foreign ownership limit in aviation business to 49 per cent, the stake sales of the most influential corporations in the sector still face challenges ahead with conditional requirements.
The Ministry of Transport (MoT) is seeking comments from ministries for the draft amendments to Decree No.92/2016/ND-CP, governing investment in the conditional business lines in the civil aviation sector of Vietnam. These amendments aim to facilitate domestic and foreign investment in this growing sector.
The highlights in the draft amendments are to raise the foreign ownership limit (FOL) in airlines to a maximum of 49 per cent from the current 30 per cent and to remove the distinction in charter capital cap between international and domestic air carriage. This is seen as a positive development for the domestic aviation sector.
“Raising the FOL will make foreign investment in Vietnamese airlines more attractive, as it will enable foreign investors to manage operations to a degree in which they are satisfied,” Thomas J. Treutler, managing director of Vietnam’s branch of Tilleke and Gibbins Consultants Ltd., told VIR.
“The elite airlines that enter into joint ventures in Vietnam will want to maintain their standards and seek to protect their brand. To do that, they will likely want operational control over many aspects of the local airline,” said Treutler.
What is more, the removal of the charter capital distinction between international and domestic air carriage – which, under the current draft amendments of Decree 92, essentially amounts to an increase in the charter capital for domestic airlines – will help ensure that airlines are properly capitalized.
“Operating an airline is a very expensive business with small profit margins. If an airline is not properly capitalised from the outset, it may default and go out of business.”
Vaibhav Saxena, consultant of Vietnam International Law Firm, said that the lift of the FOL is expected to attract foreign investors.
“The proposed increase from only 30 per cent of the capital ratio in an enterprise engaging in the aviation industry to 49 per cent is a positive shift by the Vietnamese government,” said Saxena.
However, in spite of these positive proposals, some barriers remain, such as capital requirement based on the number of aircraft and the FOL cap.
Specifically, as proposed under the draft amendments, an airline with 10 aircraft are required to have minimum capital of VND700 billion ($31.11 million), instead of the requirement of VND300 billion ($13.33 million) for local air carriage and VND700 billion for international air carriage, as prescribed in Decree 92.
Also, for an airline with 11-30 aircraft, the minimum capital must be VND1 trillion ($44.44 million), instead of VND1 trillion ($44.44 million) for international air carriage and VND600 billion ($26.66 million) for domestic air carriage, as carved under Decree 92.
Besides, Saxena also stressed a need to raise the FOL more. “Increasing the ratio from 30 per cent to 49 per cent will make some difference, but an investor will still not hold a majority in any possible deal and have to depend on Vietnamese enterprises.
It is clear that it will not have gigantic effects due to the persisting minority stake and the value which a majority stake holder enjoys in an investment.”
“It will open up more opportunities to foreign investors in the burgeoning aviation industry, but will also make it arduous for fresh domestic entrants, due to the increased capitalization requirements,” he added.
Vietnam’s aviation sector has yet to attract much foreign investment, as aviation infrastructure investment in Vietnam has been mainly sourced from the state budget or funds from official development assistance (ODA).
As aviation is a conditional business with strict requirements on security and safety, no foreign-invested projects were licensed for aviation infrastructure.
These factors would make the state divestment not an easy tasks for leading corporations, but the positive changes are expected to lay out hopes for a brighter and more profitable future.
With a contribution of $6 billion annually to the country’s GDP and double-digit growth, Vietnam’s aviation market is expected to see more merger and acquisition (M&A) transactions taking place in the near future, driven by state stake divestments among the most influential corporations in the sector.
Vietnam Airports Corporation (ACV), the operator of 22 airports across the country, will sell off 20 per cent of its state shares in 2018 and a further 10.4 per cent in 2019, while the flag carrier Vietnam Airlines (VNA) will sell 35.16 per cent of its shares in 2019.
“Foreign investors are interested in acquiring a stake in the firms to cash in on the room for future growth. Vietnam’s passenger-population ratio is less than 1:1, compared to rates of 4:1 or 5:1 in more developed markets like Singapore, Hong Kong, and the US,” said a senior official of the MoT.
“Foreign investors often target large-scale firms or firms that are in the same business field as they are. VNA and ACV are good examples of past targets,” the official added.
It’s possible that ANA Holding Inc. – Japan’s largest airline – is seeking an opportunity to increase its holding in VNA from its current 8.8 per cent. In 2016, the stake sales by VNA and ACV were among the hottest in the aviation industry, as many multinational corporations lined up to take part in the auctions.
Meanwhile, private budget carrier Vietjet has received multiple calls from overseas stock exchanges such as Singapore, Hong Kong, and London, but the airline has yet to make any concrete plans to list overseas. Vietjet made its debut on the Ho Chi Minh City Stock Exchange last February.
Vietnam, India target towards becoming bigger economic partners
Vietnamese and Indian leaders have called for joint efforts to push up bilateral economic relations by lifting bilateral trade to US$15 billion by 2020.
Vietnamese Ambassador to India Ton Sinh Thanh made the remarks at the international conference “India-Vietnam: Strengthening Economic Ties” in New Delhi on July 26-27.
The Vietnamese diplomat regarded economic cooperation as one of the five pillars of the Vietnam-India Comprehensive Strategic Partnership which was established during the Vietnam visit by Indian Prime Minister Narendra Modi in 2016.
During the India visit by President Tran Dai Quang and Prime Minister Nguyen Xuan Phuc earlier this year, the two countries’ leaders also showed their determination to further strengthen bilateral economic relations towards a two-way trade target of US$15 billion by 2020, Thanh said.
He is highly optimistic about the target to be achieved for the three following reasons. First, strongly political foundation between the two countries facilitates the expansion of economic ties. Second, they have recorded robust economic growth in recent times, thereby providing plentiful opportunities for stronger economic cooperation.
Finally, bilateral economic ties have been grown rapidly over the past few years with bilateral trade rising to US$7.7 billion in 2017, up 12% from a year earlier. In the first half of 2018, the trade value expanded by 48% year-on-year to US$5.44 billion and, if this trend is maintained, the figure is likely to touch the US$11 billion mark by the end of this year, the Ambassador noted.
In terms of investment, there was also an impressive growth in foreign direct investment (FDI) from India flowing into Vietnam as Indian investors have poured roughly US$876 million into 190 projects in the Southeast Asian nation, a year-on-year rise of 29% in the six months leading up to June.
On tourism, Indian travellers to Vietnam have posted an average of 17% year-on-year since 2010. Around 150,000 Indian tourists are destined to visit Vietnam and approximately 70,000 Vietnamese will travel to India this year. During the 2016- 2017 period, this number has grown by 30%, from 85,000 to 110,000.
Of the 22 million Indian people travelling abroad last year, 3.5 million visited Southeast Asia but only 110,000 came to Vietnam. Meanwhile, Indian visitors to Thailand amounted to 1.6 million, he said.
Thanh hoped that this seminar would give in-depth analysis helping Vietnam and India to promote bilateral trade, investment and tourism, thereby becoming larger partners of each other in economic development.
However, the Vietnamese ambassador stated that many opportunities for economic cooperation have yet to be fully tapped, citing the fact that two-way trade remains modest when compared to Vietnam’s total foreign trade at US$425 billion and India’s US$781 billion last year. The figure accounted for below 10% of trade between India and ASEAN state members.
Thanh said he hopes that the conference will provide insights to help Vietnam and India to promote their bilateral ties in trade, investment, and tourism in future.
Minister of State for External Affairs V. K. Singh, for his part, said the two countries boast huge potential to expand cooperation on pharmaceuticals, health care, petroleum, renewable energy, agriculture, tourism, textile and garments, leather, and mining.
Minister of Commerce and Industry Suresh Prabhu highlighted Vietnam as one of the fastest growing economies in ASEAN and as a bridge connecting India with other member countries of the regional bloc. India attaches a high value on cultural and religious similarities between the two countries. He said that the Act East Policy initiated by Prime Minister Modi has opened doors for exploiting the two countries’ great potential to stimulate their growth.
Both countries have extensive economic relations in the field of oil and gas exploration, agriculture, manufacturing, defense, and service – a field that is seen as a new growth driver in global trade.
Discussions at the conference were also concentrated on topics, including: “India-Vietnam Bilateral Trade: Issues and Prospects”, “Infrastructure and Development Partnership between India and Vietnam”, “Energy Cooperation between India and Vietnam”, “Exploring India-Vietnam Economic Realities and Business Culture”, “Improvement in India-Vietnam Regional Value Chain”, “Made-in-India Scheme and Opportunities for Vietnam”, and “India-Vietnam Economic Cooperation in the Context of Trade Agreements and Partnerships”.
The workshop was co-hosted by the Vietnamese Embassy in India and the Centre for Vietnamese Studies in India, and the Nehru Memorial Museum and Library, with Indian Minister of Commerce and Industry Shri Suresh Prabhu and Minister of State for External Affairs V. K. Singh in attendance.
Vietnamese firms make no hi-tech medical equipment
The medical equipment market is growing rapidly in Vietnam, but Vietnamese firms have almost no role on the supply side.
Most of hi-tech medical equipment in the country is imported, with Vietnamese firms mainly making medical beds and cabinets.
Hua Phu Doan, Vice President and Secretary General of Ho Chi Minh City Medical Equipment Association, told VnExpress that not much medical equipment was being produced domestically.
“There are roughly 50 large medical equipment manufactures in Vietnam, but they only produce medical beds and cabinets,” Doan said. “In terms of technology, too, Vietnam only plays a small part in the assembly segment with Japanese and Korean manufactures. “
Doan said the top 3 medical equipment providers for Vietnam are the U.S., Germany, and Japan.
Imaging equipment such as magnetic resonators, computed tomography, ultrasound machines, X-ray machines account for 30 percent of the import volume.
Vietnam’s total investment capital in medical equipment reached $950 million in 2016 and rose to $1.1 billion in 2017.
Dang Viet Dung, an official with the Planning and Finance Department of the Ministry of Health, said the industry is forecast to grow by 10-11 percent each year, but Doan said it has already seen an average 18 percent over the past five years.
The largest customers for medical equipment are public hospitals, which account for 70 percent of market demand. Foreign-invested hospitals, domestic private hospitals, research institutes and universities are other big customers.
Last year, the Nikkei Asian Review reported that Japanese medical equipment producer Nipro was expanding its operations in Vietnam with a new factory worth $300 million in Ho Chi Minh City.
The factory will produce catheters, blood tubing and other dialysis equipment that will be sold mainly in Japan and Southeast Asia.
Wider investments needed for agriculture to flourish
Prime Minister Nguyen Xuan Phuc pointed to conclusions and direct the implementation of important policies and measures to resolve difficulties in agricultural investment promotion at a national conference in the Central Highlands province of Lam Dong on July 30.
The conference attracted the participation of Deputy Prime Ministers Vuong Dinh Hue and Trinh Dinh Dung, Secretary of Ho Chi Minh City’s Party Committee Nguyen Thien Nhan and more than 600 delegates, including leaders of ministries, sectors, localities, businesses, and domestic and foreign development partners.
The event is seen as an opportune occasion to evaluate what has been done and what has yet to be done in order to find a solution for encouraging businesses to invest in agriculture.
In his opening address, Deputy PM Trinh Dinh Dung emphasized the due attention given by the Party and State to agricultural and rural development, as shown by the 10th Party Central Committee’s Resolution No. 26 in 2008 which asserted the important role and strategic position of agriculture, rural development, and farmers.
The Government has also issued a number of major agricultural investment policies as stipulated in the Resolution.
Since the beginning of his term, the Government leader has chaired a host of conferences of its kind such as a “Building Vietnam’s Agriculture and Industry” conference in 2016, a conference discussing solutions for sustainable development of the rice industry in the Mekong River Delta region in 2017, a conference on the development of Vietnam’s shrimp industry in 2017, a “Market Development for Fruit and Vegetables, a Solutions for the Development of Logistics Systems for Agriculture and Rural Areas” forum in 2017, and the first-ever dialogue with Vietnamese farmers in 2018.
The issuance of many specific policies has showed the dedicated focus of the Government and Prime Minister and served to actualise Party and State guidelines on enhancing agricultural and rural development.
The delegates highlighted the important role played by businesses in agricultural and rural development, thereby helping to restructure high value goods production and generate employment and incomes, facilitate engagement in the global value chain.
It is estimated that around 49,600 businesses nationwide are invested in agriculture, making up 8% of all companies in the country, and creating more than 4.5 million jobs, accounting for 32.5% of the total workforce of all businesses throughout the nation.
However, these achievements are still below the agricultural sector’s potential and capabilities as a result of unsustainable development, weak competitiveness, slowly renovated production organization, small and scattered production, and its low productivity, quality and added value, which failed to meet the requirements for the production of commodities.
According to some participants, there should be agricultural investment promotion policies. Businesses must be the key force, while farmers must take the initiative with high technological adaptation. It is necessary to establish chains of connection from production to consumption, and improve the infrastructure for agricultural development.
The conference is part of a string of other recently held events such as a national conference on promoting ASEAN Single Window (ASW), National Single Window (NSW) and trade facilitation, a conference on logistics and export promotion and related meetings on the Industrial Revolution 4.0.
Doosan helps six South Korean companies open in Vietnam
Six investment certificates were issued by the Dung Quat Economic Zone Authority and presented to company representatives at a ceremony at Doosan heavy Industries Vietnam’s high-tech industrial complex in the central province of Quang Ngai on July 25.
The six new South Korean firms that will invest in Quang Ngai are Kwang Jin Vietnam, Samshin Valve Vina Co. Ltd, Wookwang Vietnam Co. Ltd, YoobongVina Co. Ltd, Hanbit P&L Vina Co. Ltd, and Nasan Electric Industries Co. Ltd.
The six will invest over $11 million and build six factories on 65,022 sq m of land.
Construction is expected to begin in August and once operational the companies will provide packaging and logistics services and be engaged in the manufacturing of electrical components, industrial valves, hangers, braces, struts, pipe supports, and the tubes and fining needed for HRSG projects. They project there will be several hundred new jobs created over the next couple of years.
“Since commencing operations in 2009, Doosan Vina has worked closely with the leadership of the Dung Quat Economic Zone and Quang Ngai province to help attract additional investment in the province, and the investment by these six South Korean enterprises is especially meaningful because we’ve been able to bring everyone together on this project, which will be another positive factor in Quang Ngai’s continuing growth and development,” said Mr. Park Hong Ook, CEO and General Director of Doosan Vina.
This effort by Doosan to further help economic development in Vietnam began in 2017 and the company will continue to offer advice and support to the six new businesses to assist them in their initial stages of operations.
At the ceremony, Mr. Nguyen Han Phong, Deputy Director of the Dung Quat Economic Zones Authority, thanked Doosan Vina for its efforts in securing these investors as well as Doosan’s efforts to improve the quality of life for people in Quang Ngai through steady employment, the development of Vietnam’s mechanical sector, and its extensive CSR programs.
Doosan Vina is a high-tech industrial complex employing 2,000 Vietnamese workers. It supplies the mega infrastructure products that make modern life a reality, including boilers for thermal power plants, desalination plants the size of a football pitch that turn sea water into fresh, material handling systems like cranes that are the heart of logistics at ports around the world, and structural steel for buildings and infrastructure developments. To date the company has exported products valued at $2.4 billion.
Baoviet Holdings’ 1H revenue up 37.8%
Baoviet Holdings has released its business results for the first half of the year (before review), showing total consolidated revenue of VND20.7 trillion ($890.18 million), up 37.8 per cent year-on-year.
Bao Viet Life’s total revenue was VND14.9 trillion ($640.7 million), up 46.3 per cent against the same period last year, while Bao Viet Insurance’s was VND5.3 trillion ($227.8 million), up 25.6 per cent and representing 51.2 per cent of the annual plan.
Total revenue of the parent company was estimated at VND770 billion ($33.1 million). Preferred shares were issued to employees in an ESOP this year. Chartered capital has increased to nearly VND7 trillion ($300.9 million); a 3 per cent increase.
The Bao Viet Fund (BVF) is estimated to have recorded nearly VND60 billion ($2.5 million) in total revenue, up 22.1 per cent year-on-year. The Bao Viet Holdings Fund (BVBF), meanwhile, continued to record good results, with growth of 9.56 per cent.
Bao Viet Securities (BVSC) saw total revenue of VND280 billion ($12.03 million), up 19.9 per cent.
Baoviet Holdings will close the list of shareholders to receive cash dividends at a rate of 10 per cent, equivalent to VND700 billion ($30.08 million), on August 3, payable from August 31, raising the total amount of cash dividends paid since 2007 to nearly VND7.5 trillion ($322.3 million).
According to the Vietnam Insurance Association, as at the end of June, total revenue in Vietnam’s life insurance market is estimated at VND37.2 trillion ($159.8 million), up 31 per cent year-on-year. Revenue from the non-life insurance market is estimated at VND 22.2 trillion ($954.09 million), an increase of 12 per cent. Bao Viet continues to lead in market share in both life and non-life insurance.
Shinhan Bank & MuaBanNhaDat.vn strike partnership
Shinhan Bank Vietnam has officially announced a partnership with MuaBanNhaDat.vn to promote the Shinhan Bank brand name through digital marketing tools and to establish a brokerage cooperation program.
The partnership will see digital marketing tools used on MuaBanNhaDat.vn to raise awareness among users on the products and services provided by Shinhan Bank.
MuaBanNhaDat.vn’s e-communications channels will be also used as a bridge to connect users in need with financial consultants at Shinhan Bank.
Besides the digital platform partnership, Shinhan Bank and MuaBanNhaDat.vn will also conduct a brokerage cooperation program to create a connection between property brokers and the bank.
“The agreement demonstrates Shinhan Bank’s ongoing focus on developing and expanding its market share in retail banking services, typically mortgage credits,” said Mr. Shin Dong Min, CEO of Shinhan Bank Vietnam.
“This cooperation not only opens up a new channel to access customers but also enables the provision of information on banking utilities from one of the leading foreign banks in Vietnam to users of MuaBanNhaDat.vn.”
“Along with rapid digital expansion plan, our objective is to become an information gateway for real estate transactions and related sectors,” Mr. Emre Sigure, CEO of MuaBanNhaDat.vn, told the signing ceremony. “The cooperation between Shinhan Bank and MuaBanNhaDat.vn pioneers the combination of an international bank and a property portal in Vietnam. I hope the agreement will achieve initial results, as a premise of long-term cooperation”.
Along with the announcement of a comprehensive strategic cooperation agreement between Shinhan Bank in South Korea and the Zalo messenger app last June, this agreement further affirms the bank’s strategy of striking partnerships with technology partners to expand market share and provide more utilities to Vietnamese customers.
MuaBanNhadat.vn is the top property portal in Vietnam, after beginning in 2008 and receiving investment from Ringier in 2010.
Seven-month retail sales boosted by growing consumption demand
Besides the impressive growth of the index of industrial production, trade and service activities were also bustling in the first seven months of this year due to increasing consumption demand.
According to the General Statistics Office (GSO), the total retail sale value of goods and services was estimated at VND371.5 trillion (US$15.97 billion) in July, up 1.6% over the previous month and up 13.3% over the same period in 2017.
Thus, the total retail sale value of goods and services in the first seven months of this year climbed to VND2,490 trillion (US$107.07 billion), an increase of 11.1% over the corresponding period last year.
Of which, the retail sale value of goods was reported at VND1,870 trillion (US$80.41 billion), accounting for 75.2% of the total retail sale revenue and up 11.7% compared to the same period in 2017.
The GSO reported that the consumption demand mainly focused on essential goods, including food and foodstuffs, with an annual increase of 12.6%, while apparels saw an annual rise of 12.4%, household equipment with an annual increase of 12.3% and cultural-educational products, up 10.3%.
Several localities posted high retail sale growth of over 12% including Thai Nguyen, Ho Chi Minh City, Thanh Hoa, Lam Dong, Binh Dinh, Bac Giang, Hanoi and Nam Dinh.
Seventh phase of Vietnam – Japan Joint Initiative launched
The seventh phase of the Vietnam-Japan Joint Initiative was launched in Hanoi on July 31, covering some matters left by the previous phase and new contents.
Vietnam’s Ministry of Planning and Investment, the Japanese Embassy in Vietnam and the Vietnam-Japan Economic Committee under the Japan Business Federation (Keidanren) jointly held a meeting to launch the phase.
The seventh phase, to last from August 2018 till the end of 2019, will deal with ten items, with nine agreed by the two sides during the meeting.
The Japanese side has made 65 recommendations regarding regulations on investment in Vietnam for foreign investors as prescribed in the Investment Law, the Law on Enterprises, the Land Law and other relevant laws.
The recommendations also cover the reform of State enterprises and the stock market, the intensification of industrialisation with international competitiveness, labour and wage, and the policy framework on Public-Private Partnership (PPP), among others.
There will be three meetings which are scheduled for late 2018, mid-2019 and late 2019 to review the implementation of the phase.
A memorandum of understanding to this effect was signed at the meeting.
The Vietnam-Japan Joint Initiative was launched in April 2003 as a result of special cooperation mechanism between the Vietnamese and Japanese Governments.
It serves as a policy dialogue forum between Japanese investors and relevant Vietnamese ministries and agencies, where proposals have been made to help competent Vietnamese agencies fine-tune laws and policies.
Over the past six phases, more than 470 action plans have been carried out.
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