Nguyen xuan phuc

In a previous working session with Binh Phuoc Province’s leaders in last December, the then PM Nguyen Xuan Phuc delegated the provincial People’s Committee to implement the project under the public–private partnership (PPP) mode.

He also asked the Ministry of Planning and Investment in coordination with the Ministries of Finance, and Transport to allocate financial resources collected from the State budget in the Mid-term public investment plan for the 2021-25 period.

On March 18, the governments of HCMC and its neighboring province of Binh Phuoc had a working session on the construction project of HCMC-Thu Dau Mot-Chon Thanh expressway. On this occasion, the two sides agreed to establish a steering committee for the project.

Accordingly, the HCMC-Thu Dau Mot-Chon Thanh expressway is about 70 km long with 6-8 lanes, connecting HCMC and the Southern provinces of Binh Duong and Binh Phuoc. The stretch in HCMC is 1.5km long, expected to link up to Ring Road No.2 at Go Dua Intersection in Thu Duc City. The section running through Binh Duong Province is 57km long while the section running through Binh Phuoc Province is 11.5km long.

The project costing VND36,000 billion (US$1.55 billion), including around VND17,000 billion (SU$736.5 million) coming from the State budget will be kicked off before 2030.

Binh Phuoc Province will take responsibility for carrying out the project; organizing working sessions on investment modes, capital resources, building the overall plan for the project with ministries, departments and localities.

Since 2018, PAPI has been co-funded by the Department of Foreign Affairs and Trade (DFAT) of Australia, the Embassy of Ireland and United Nations Development Programme (UNDP) in Vietnam.

The report, which assessed citizen experiences with national and local government performance in governance, public administration, and public service delivery, showed that the Control of Corruption in the Public Sector dimension has improved significantly each year since 2016.

The dimension on Vertical Accountability Towards Citizens also steadily improved during the 2016-2021 term, mainly because an increasing number of citizens have contacted local officials, in particular village heads and People’s Council delegates.

Dimensions posting declines included Participation at Local Levels and Public Administrative Procedures.

“New features of the 2020 PAPI Report include insightful findings on the performance of local governments across two terms (2011-2016 and 2016-2021); experience of internal migrants with accessing services in receiving provinces; and voter perception of women in leadership roles,” UNDP Resident Representative in Vietnam Caitlin Wiesen said in her opening remark at the report launch.

“As the Government embarks on a new term, PAPI provides rich and deep datasets on citizens’ perception of local government achievement in each of the 63 provinces and important metrics to review and further improve their performance across eight key dimensions of governance,” she noted.

Analysis in the 2020 PAPI Report shows that citizen engagement and anti-corruption efforts have a positive correlation with Vietnam’s ability to respond to the COVID-19 pandemic.

Australian Ambassador to Vietnam Robyn Mudie, acknowledged an improvement in provincial governance and public administration performance, which may have contributed to Vietnam’s successful response to the COVID-19 pandemic.

Findings from the 2020 PAPI Report show that there is a correlation between good governance and effective pandemic responses, she added.

Nguyen Huu Dung, Vice President of the Central Committee of the Vietnam Fatherland Front said he hope that PAPI will continue to serve as a reliable policy monitoring tool that helps promote government accountability and reforms, thereby furthering modern governance.

Over 14,700 citizens were interviewed for the 2020 PAPI Report. This is the largest number of citizens to participate since the survey was first conducted nationwide in 2011. For the first time, the survey also gathered responses from citizens with temporary residence registration status. Nearly 300 migrants were surveyed in six centrally governed municipalities and provinces (Hanoi, Ho Chi Minh City, Bac Ninh, Da Nang, Dong Nai and Binh Duong).

Source: VNA

Digiworld aims to grow 25 per cent on average annually in the next decade

Two months ago, Digiworld’s executive told securities firms that a partner producing and assembling Xiaomi tech products is opening a plant in Vietnam’s northern port city Haiphong, and that the plant would commence operation in the second half of this year.

Albeit the information was not yet confirmed by Digiworld’s leadership at the company’s recent annual general shareholders’ meeting on April 4, the company’s CEO Doan Hong Viet was quoted as saying, “This is informal information; Xiaomi and Digiworld will be making an official announcement on a suitable timing in the future.”

In fact, Digiworld is the exclusive distributor of all Xiaomi products in the Vietnamese market. According to Viet, home appliances would be one of hte key segments of Digiworld by 2024 with the target of holding a “remarkable market share”, in which TV sets would secure the largest share in value.

The home appliances market, with teh main items being TV sets, refrigerators, washing machines, ovens, and the like, has been totally untouched by Digiworld until the present. Viet explained that the overly high import duty of about 15 per cent was the reason why Digiworld had yet to engage in importing products for distribution and wholesale in the Vietnamese market.

At the recent AGM, CEO Viet also lifted the curtain on Digiworld’s intention to venture into other product segments to realise the target of reaching a market cap in the billion-dollar range.

“If there was a plant assembling Xiaomi products in Vietnam, the tariff barrier would disappear, providing the bedrock for us to break into this up-and-coming segment. This will be the answer for the question how Digiworld would attain an annual growth pace averaging 25 per cent in the upcoming decade,” said Viet.

On the sidelines of Digiworld’s annual general meeting (AGM), Viet said that the company will be making an official foray into the home appliance wholesale market late this year or early next year. Hence, this new segment will make no contributions to the company’s revenue and post-tax profit targets which have been set at VND15.2 trillion ($660.87 million) and VND300 billion ($13 million) for 2021.

“Digiworld is the exclusive distributor of Xiaomi and Huawei products in Vietnam. If we succeed in grabbing about 5-10 per cent market share of the TV market, which is now valued at about VND40 trillion ($1.74 billion), that would be remarkable. For the time being, we are distributing Xiaomi items in this segment,” said Viet.

The Chinese TV market is dominated by Xiaomi. In Vietnam, the TV market belongs to three top players – Samsung, Sony, and LG.

According to figures by the Ministry of Industry and Trade’s Domestic Market Department, the domestic home appliances market is valued at about $12.5-13 billion and the purchasing demand for household electronic items and kitchen devices will remain high at least to 2025.

At the recent AGM, CEO Viet also lifted the curtain on Digiworld’s intention to venture into other product segments to realise the target of reaching a market cap in the billion-dollar range.

Accordingly, mergers and acquisitions (M&A) deals through acquiring firms possessing distribution channels which Digiworld doesn’t have is the tactic helping the company to realise its 25 per cent annual growth target.

Digiworld was also reported to have been working with several consultancy firms and “targeting” several firms for M&A but has yet to reach the stage of “making an announcement”.

Last year, consumer goods fetched Digiworld VND265 billion ($11.5 million), only 2 per cent of the company’s total revenue, fulfilling only 53 per cent of the projection.

The solution for this disappointing performance is “giving priority to finding new products as well as engaging in M&A”.

Digiworld’s putting investment into pawnshop chain Vietmoney is an example. The company has been using Vietmoney’s outlets as a lever to stimulate business activities.

Accordingly, in September 2020, Vietmoney announced wrapping up its Series A funding round from Digiworld Venture and Finnish equity fund Probus Opportunities.

These two partners were reported to co-manage a 30 per cent stake in Vietmoney and have seats at Vietmoney’s Board of Management.

According to Digiworld’s report, the partners have put VND50.5 billion ($2.2 million) to possess a 21.86 per cent stake in Vietmoney.

“To grow into a billion-dollar company, we are seeking growth across the board, from consumer goods to supplementing new brands, customers, and sales channels. We are also constantly searching for new models towards realising the target of shaping a complete consumer ecosystem,” said Nguyen Hai Khoi, Digiworld’s investment director.

Khoi shares that Vietmoney is providing personal financial solutions that could effectively serve Digiworld’s consumer goods segment.

Statistics by fintech firm FiinGroup show that around 48 per cent of the Vietnamese population have low income of below $300 per month, a potential segment for consumer lending firms.

Vingroup’s billionaire Pham Nhat Vuong is taking an unexpected step entering the world’s largest electric car market.

HCM City (VNA) – Several of Vietnam’s key export sectors, such as textile-garment, leather-footwear, and electronics have become magnets for merger and acquisition (M&As) activities, posing a risk of leading enterprises in those sectors being purchased by foreign investors.

An advantage of Vietnam’s textile-garment industry is low labour costs, and it was also identified as one of six sectors on a list of supporting industry products prioritised for development.

The country has become the “footwear factory” of the world, while the domestic market boasts a population of more than 96 million.

Vietnam is also establishing itself as the world’s electronic manufacturing hub, with FDI continuing to flow into the sector over recent years.

Tran Phuong Lan, an official from the Vietnam Competition and Consumer Authority at the Ministry of Industry and Trade (MoIT), said that apart from existing development potential, opportunities created by bilateral and multilateral free trade agreements (FTAs) have also fuelled those industries’ development.

For example, she noted, under the EU-Vietnam FTA that took effect on August 1, 2020, 42.5 percent of import tariffs on textile-garment products were immediately eliminated, while those on leather-footwear items will be gradually cut to zero percent. The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which came into force on December 30, 2018, abolished tariffs on Vietnam’s textile-garment products exported to other member countries.

A recent study of COVID-19’s impact on certain main industries in Vietnam noted that there have been signs of M&As surging in the textile-garment, footwear, and electronics sectors over the last three years.

In 2018, Japan’s Itochu Corporation spent 47 million USD on purchasing nearly 10 percent of shares in the Vietnam National Textile and Garment Group (Vinatex), raising its stake to almost 15 percent and becoming the second-largest shareholder, after MoIT.

Notable M&A deals last year included the one between the Taekwang MTC Vietnam Co. Ltd and the Jin Heoung Vina JSC in the leather-footwear industry, and the one between the Zenith Electronics LLC and Luxoft USA Inc. in the electronics industry.

Investors from the Republic of Korea, who have continually conducted large-scale M&A deals in Vietnam, also tend to select sectors with potential, like textile-garment, leather-footwear, and electronics.

Economic experts cited the experience of other countries as showing that to ensure effective M&A activities and protect the interests of all sides involved it is necessary to perfect related legal regulations, especially those on information transparency, and set up a regular consultative mechanism between the MoIT and the Ministry of Planning and Investment to develop an M&A database for key industries like textile-garment, leather-footwear, and electronics.

Vietnamese enterprises should proactively diversify technical solutions to keep information transparent, identify their targets in M&A deals, and analyse partners to avoid risks during negotiations.

In particular, experts noted, in M&As involving foreign firms, businesses should have a good grasp of market information and carefully assess foreign investors regardless of the deal’s value.

Nguyen Thi Tong, former Vice Chairwoman and former Secretary-General of the Vietnam Leather, Footwear and Handbag Association, recommended that as the leather-footwear and handbag sector is one of Vietnam’s five key export industries, businesses should make proactive moves to boost their capacity and cooperation via M&As within their sector, to secure sustainable development./.

VNA