BUSINESS NEWS HEADLINES FEB. 12
Vietnam holds key to expediting infrastructure investment: Moody’s
Vehicles travel on a section of the North-South expressway. Infrastructure development and upgrades in Vietnam will continue, with the participation of private investors becoming increasingly important – PHOTO: VNA
Vietnam’s rapidly growing economy, rising income and urbanization are fueling a strong need to develop the country’s infrastructure, particularly for more and improved power utilities and road connectivity, Moody’s Investors Service stated in a new report.
The report, called “Infrastructure in Emerging Markets: Focus on Vietnam,” said that infrastructure development is essential for Vietnam to sustain its favorable long-term growth prospects, as well as support the scaling-up of the value chain in the country’s industrial activity.
“The importance of investment from private investors is highlighted by the sizeable infrastructure task required in Vietnam together with the country’s nascent capital markets,” said Mic Kang, Moody’s vice president and senior credit officer.
“The Government’s further progress in developing the country’s contractual legal framework for infrastructure will help attract more private capital, while the evolving regulatory framework and administrative deficiencies will remain key challenges for infrastructure projects."
Based on the World Economic Forum’s assessment, Vietnam’s overall infrastructure competitiveness ranked in the mid to low range out of 141 countries and territories globally, mainly because of its relatively weak quality of electricity supply, road connectivity and quality and the efficiency of its air and water transportation services.
This is despite the country’s continued progress in developing infrastructure, particularly in the power sector, where more than 98% of the country’s population has had access to electricity since 2010, up from some 86% in 2010.
The report indicated that the Government plans to develop further infrastructure, with power and toll roads likely to be the main areas for expansion and quality improvements. Other infrastructure, including ports and railways, will also be developed.
The continued development of Vietnam’s power sector is needed to meet the fast-growing power demand from increasing industrial activity and residential customers’ rising power consumption.
There is also a need to develop renewable sources of energy given the Government’s commitment to reduce greenhouse gas emissions by 8% with domestic resources and by 25% with international support by 2030 on a business-as-usual basis.
Renewables (excluding hydro) accounted for only 0.2% of the country’s power generation mix in 2018, which was much lower than the Government’s target of around 7% in 2025 and about 11% in 2030, according to the report.
Recognizing its vast infrastructure needs and constraints, the Government aims to increase public-private partnerships and foreign direct investment. Multilateral development banks (MDBs) will also continue to help fill some of the funding gaps.
However, Vietnam’s graduation to a lower middle-income country will likely reduce the availability of MDB funding, which is generally provided to poorer countries.
State-owned companies will remain important to the country’s infrastructure sectors, given their status as the main executors of government policy to develop infrastructure and their dominant market positions in the sectors.
“We expect State-owned companies, whose credit quality is typically linked to the Government’s, will continue to be under the Government’s control and supervision, given their essential nature and strategic importance to the economy,” said Moody’s.
The agency explained that State-owned companies will be the off-takers of various infrastructure projects and will therefore have a significant impact on the credit risk of these projects in Vietnam.
Those companies will likely fill gaps in planned infrastructure developments that could be left over by slow investments from the private sector, to the extent that they can obtain funding from the Government and bank loans, issue bonds domestically and overseas and/or establish joint ventures with foreign investors.
The Government has been making progress in developing a contractual legal framework for infrastructure, but improvements are still needed in terms of the efficiency of regulatory approval processes, risk allocation and framework consistency.
“We expect the private sector to invest in infrastructure projects on a selective basis, depending on the projects’ credit risk relative to the expected returns,” said Moody’s.
It noted that foreign investors have participated in projects with acceptable risk allocation between the Government and private investors and/or with export credit agencies’ or multilateral financial institutions’ credit enhancements.
Consumption needs to be promoted to offset exports reduction
Local authorities and businesses are making efforts to promote domestic consumption of agricultural products, which are piling up due to the impact of coronavirus outbreaks in China.
Export turnover is forecast to decrease in the first quarter of this year due to the epidemic and subsequent impact on trade.
According to Nguyen Bich Lam, director general of the General Statistics Office (GSO), exports are estimated to fall 21 per cent to US$46.5 billion in the first quarter. Items including agricultural products, seafood, wood products and garment and textile products are likely to be the worst hit.
Exports to China are predicted to reach $5.6 billion, declining by 25 per cent year-on-year, with agricultural and wood products affected.
Insiders said that the agricultural sector is estimated to be most damaged by the epidemic from China, including dragon fruit, watermelon, seafood, wood and rice. However, it’s also an opportunity to change production and business methods to adapt to new challenges and difficulties, including those caused by the spreading of new strain of coronavirus (nCoV-2019).
Minister of Agriculture and Rural Development Nguyen Xuan Cuong said it’s necessary to develop both short- and long-term scenarios.
“In order to take advantage of opportunities, it’s necessary to develop large-scale production and co-operation chains to find other directions for agricultural outputs,” Cuong said.
Cuong added: "If there was no coronavirus, there would be other problems. Therefore, we need to be alert, not afraid of the disease. This situation poses challenges for us, requiring strong solutions to cope with it.”
Nguyen Ton Quyen, former vice president and general secretary of the Vietnam Association of Wood and Forest Products, said shipments of woodchips to China have dropped due to the virus. “However, I see that it’s a chance for local businesses to develop production of artificial boards and medium-density fiberboard made of woodchips.”
“In the last two weeks, four Vietnamese woodchip manufacturers have bought machines to produce artificial boards,” Quyen said.
Quyen also proposed the State to consider supporting such businesses with interest rates and helping them complete production lines to take advantage of the opportunity.
Deputy Chairman of the Vietnam Fruit and Vegetables Association Dinh Cao Khue said as the epidemic broke, the operation of businesses exporting goods to China stopped completely.
“Some businesses lost deposits of VND100-200 million because they could not sell goods, while others bought goods from farmers and kept them in stock because they wanted to keep their prestige,” Khue said.
Khue said the association is promoting exports to other countries. However, the governments of some countries have warned citizens to avoid crowds, meaning fewer people were going to the market and shopping.
Khue said coconuts could be preserved for 75 days, while red dragon fruit and white dragon fruit can keep for 15 days and 45 days, respectively.
“With such times, I expected MARD to supply updated information about the customs clearance of goods in the border area between Viet Nam and China,” Khue said.
“We also need prediction on the purchasing power of the Chinese when trade is re-opened,” he added.
As for seafood, Deputy General Secretary of the Vietnam Association of Seafood Exporters and Producers Nguyen Hoai Nam said the industry has not seen any cancellation of orders due to coronavirus, but there were several delays or order adjustments.
“Our difficulty now is that some cruises have temporarily stopped receiving containers of goods to China,” Nam said.
“Enterprises exporting to China are currently stockpiling, suffering high costs for warehouses. In China, there are many firms directly selling Vietnamese seafood to restaurants, however when the restaurant system stops buying or reduces the volume of seafood purchases, these firms are forced to stop importing seafood from Viet Nam because they do not want to pay the cost of storing goods,” Nam said.
“I see a number of opportunities here. Firstly, the demand for frozen and canned products will increase because many people do not want to eat fresh products during the outbreak. Secondly, China is one the biggest five sellers of tuna in the world. Many countries will cut or reduce the import of Chinese tuna, so it’s time for Vietnamese firms to expand the export of tuna, increasing market share,” he added.
In terms of the rice industry, Bui Thi Thanh Tam, general director of the Northern Food Corporation, said five or six years ago the Chinese market was Viet Nam’s biggest but it’s now different. Viet Nam has expanded to many different markets, so the import value of China is no longer dominant in Viet Nam’s rice industry.
“The coronavirus epidemic does not impact our rice industry much,” Tam said.
Deputy General Director of Central Group Nguyen Thi Phuong said the group is focusing on buying agricultural products from farmers in provinces of Binh Thuan, Gia Lai, Khanh Hoa, Long An and Tien Giang.
“This supporting programme has been carried out at all 37 Big C supermarkets and GO! nationwide, lasting until the situation is controlled. We expect to consume about 80 tonnes of dragon fruit and watermelon per day, helping farmers stabilise their production while customers can enjoy fresh fruits,” Phuong said.
At Big C and GO! supermarkets in the northern region, watermelon is sold at VND6,200 per kilo while dragon fruit at VND15,500 per kilo. In the southern region, the fruits are priced at VND4,900 and VND10,900 per kilo, respectively. These prices are two to three times lower than those on normal days.
“The demand for agricultural products is very high in our supermarket chain. At this time, we are committed to providing as maximum support as we can.”
“We proposed MARD inform us of agricultural products which are in stock, to set up proper marketing programmes,” Phuong said.
Hanoi lures more than $140m in foreign investment
Ha Noi licensed 68 new foreign-invested projects worth US$30.2 million in January, the capital's Department of Planning and Investment has announced.
In the first month of this year, the city also approved seven existing projects to raise their investment capital by $71.4 million. It also granted permission to foreign investors to spend nearly $40 million to acquire shares in domestic firms in the month.
Last year, Ha Noi led the nation in terms of foreign direct investment (FDI) attraction, luring $8.45 billion, the highest amount in the last decade while the disbursed amount hit $6.5 billion, or 74 per cent of total registered capital, the highest disbursement rate so far.
Foreign-invested businesses also earned $6.8 billion in exports in 2019, making up 40.7 per cent of the city's total export turnover and up 5.6 per cent year-on-year.
The positive performance was attributable to the city's efforts to carry out administrative reform, improve the business and investment environment, and support enterprises.
The department's director Nguyen Manh Quyen said the city is striving to attract between $35 billion and $45 billion in foreign investment by the end of this year.
The city would continue to encourage foreign investment in priority fields with high added value, such as construction, smart city, IT, high-quality services, hi-tech farming and finance-banking, among others, he said.
Vietnam’s tourism sector proactively copes with novel coronavirus epidemic
The tourism sector has suffered severe impacts from the complicated movements of the acute respiratory infection which is caused by a new strain of coronavirus (Covid-19) over recent days.
How to cope with and minimise the negative consequences of the epidemic to maintain the stability and quickly recover tourism activities is a difficult problem that is of concern to the whole sector.
Difficulties due to epidemic
Compared to the impacts on the tourism sector during the outbreak of the SARS epidemic 17 years ago, the consequences caused by Covid-19 are more serious. In addition to the sharp decline in the number of Chinese tourists, which accounts for 30% of the structure of international visitors to Vietnam, the epidemic has also made foreign tourists from other markets afraid to travel to Asia. Moreover, the number of domestic travellers has also plummeted. The danger posed by Covid-19 has forced many countries to take drastic measures such as closing flight routes and cancelling or postponing all crowded events and festivals. According to the travel management agencies and tourism associations in many localities, the cancellation of tours, seats and services is very common. The immediate damage to the tourism sector is estimated at tens of trillion of Vietnamese dongs.
In Hanoi, the number of cancelled rooms reached 13,000 (equivalent to more than 16,000 guests) by February 3. Over 7,600 inbound visitors and 7,100 outbounds tourists cancelled tours; meanwhile the operation of transportation enterprises decreased by 30%-50% and the number of tourists to destinations in the capital city also saw a decline of around 30%-50%. The number of visitors to Quang Ninh Province decreased sharply by 90%. Ha Long Bay in the province previously welcomed an average of 12,000 tourists per day, but now only receives around 3,000 guests per day. The figure is forecast to drop even lower in the coming days. Meanwhile, over 500 tourist ships, with over 4,000 employees, are still being maintained, so it is difficult to ensure the economy. Similarly, around 30%-50% of hotels in Lao Cai have witnessed the cancellation of their services. The number of foreigners travelling to Da Nang City has dropped by nearly 70% in the last month and is expected to continue to decrease.
Many travel businesses, especially tour operators, are likely to “sit on a fire” due to the economic losses caused by Covid-19. General Director of Viet Tourism Company, Tran Van Long, said that the difficulty that most travel businesses are facing is the cancellation of tours and the reclamation of deposits. Meanwhile, with the coming tours, enterprises have paid the related service costs to partners in advance. They had to take measures to prevent and fight against the epidemic, while resolving arising situations. It can be said that with the ‘freezing’ of tourism, enterprises seem to be in a crisis whose consequences can affect the sector in both short and medium terms.
Tourism experts said that the number of tourists would decrease not only during the Covid-19 outbreak but also after the end of the epidemic. All countries that were affected by the epidemic will come up with strategies to engage with international visitors. Therefore, right now the tourism sector should proactively make action plans to recover the smokeless industry as soon as the epidemic passes through. To accomplish this goal, the Vietnam Tourism Association (VITA) has held an online conference to seek “solutions to limit the impact of acute respiratory infection caused by the new strain of Coronavirus on Vietnamese tourism”, with the participation of representatives from the Tourism Departments, the Departments of Culture, Sports and Tourism and Tourism Associations in the localities and travel agencies. Standing Vice President of VITA, Vu The Binh, affirmed that the calculation of measures to recover the market is the most urgent issue of the tourism sector at this time. The joint efforts of all localities, agencies, enterprises nationwide are very important. The experiences in handling the crisis caused by the epidemics proved that tourism should not depend solely on one market. Director of AZA Travel Company, Nguyen Tien Dat, emphasised that although the epidemic has affected the number of visitors, a more positive aspect is that this is an opportunity for enterprises to have time to restructure their customers and seek new markets as well as focus on training and improving the capacity of tour guides and developing attractive tours.
In the context of epidemic outbreak, enterprises should thoroughly grasp the situation of both domestic and international tourism markets. The provision of high-quality and professional travel information will create trust from visitors, especially foreigners. The immediate solution is the development of the domestic market. A representative from Da Nang Tourism Association noted that the domestic agencies should enhance the strong linkage to implement domestic tourism promotion strategies, including the reduction of fares for transportation, accommodation and destinations. Notably, it is crucial to pay strong attention to the full implementation of travel insurance for tourists to ensure the rights of travellers and limit the damages to enterprises when incidents occur.
VITA said that the domestic tourism promotion programmes will be boosted immediately. Vietnamese travel enterprises should be ready to actively join in promotion events at home and abroad to attract more visitors as soon as the epidemic is under control, not waiting for it to end. General Director of HanoiRedtours Company Nguyen Cong Hoan said that enterprises need accurate information on the epidemic to set plans to exploit and recover the markets, and want to know more about the resources from the State to support them, aiming to create effective promotion strategies.
In terms of the number of rooms and services available during the epidemic, the enterprises can join together to stimulate tourism to recover. In addition, it is essential to focus on activities to welcome foreign visitors to Vietnam and bring Vietnamese tourists to international markets which are not in the epidemic areas. In addition, tourism experts also noted that despite difficulties, the enterprises should retain their personnel through many activities, including professional training, upgrading infrastructures and renovating management work on the basis of 4.0 technology.
Standing Vice President of VITA, Vu The Binh, said that Association will coordinate with relevant agencies to propose the Government to set practical policies to support travel enterprises such as the exemption and reduction of taxes, utility bills, land tax and VAT. In addition, it is necessary to strengthen the close relationship with the tourism administrations in the foreign countries to promote the exchanges of visitors, firstly the implementation of agreements signed with ASTA and JATA to attract tourists from these two markets. VITA will also coordinate with training units and travel enterprises to organise training courses for key staff of enterprises and tourism associations in the localities.
The Vietnam National Administration of Tourism (VNAT) held a conference, themed “The tourism sector copes with the acute respiratory infection which is caused by a new strain of Corona virus”, to objectively and full assess the evolution of the disease caused by Covid-19 as well as forecast the extent of damage and losses caused by the disease to the tourism sector and propose measures to quickly restore Vietnam's tourism activities as soon as possible after the epidemic is controlled. The VNAT set many solutions, including those in terms of market, tourism promotion and communication. Accordingly, in addition to urgent and long-term measures, the tourism sector will pay attention to domestic and nearby markets with convenient air routes and high growth rates including the Republic of Korea, Japan, Taiwan (China) and ASEAN. The sector will also continue to exploit potential markets such as India, while enhancing the attraction of visitors from the North America, Western Europe and Northern Europe. The related agencies and enterprise will make efforts to affirm that Vietnam is a friendly and safe destination when the disease is controlled.
Building an electronics industry with high added value
Vietnam’s electronics export growth has been among the world’s fastest for the past ten years, with total revenue reaching US$84 billion in 2018. But such growth is primarily driven by foreign-invested enterprises, which account for 95% of total exports, while the capacity of domestic firms remains limited.
Heavy reliance on FDI
China is the currently the world’s largest electronics exporter, with annual revenue at nearly US$700 billion, but export growth during the 2010-2018 period averaged at 6% only due to the relocation of manufacturing to nearby countries.
The Republic of Korea was the number two exporter during the said period, although average growth was just 1%, while some countries in the region such as Malaysia posted negative growth. Indonesia and India also witnessed a slowdown in average growth.
In the meantime, the growth of Vietnam’s electronics exports during the 2010-2018 period reached 50%, the highest in the world. Vietnam is now the 12th largest electronics exporter in the world and 3rd in ASEAN. Exports of telecoms equipment grew 62% while electronic parts and computers increased by 42% and 19%, respectively. Consumer appliances and other electronics also posted respective growth of 35% and 39%.
But according to the Ministry of Industry and Trade, such impressive growth was a result of major investment from multinational corporations, especially those from Japan and the Republic of Korea.
In contrast, the capacity of domestic firms in the field remains limited with their quality and appearance having yet to meet the market’s high requirements. Many popular domestic companies are slowing down or losing their brands and account for a tiny market share. Despite some emerging names such as BPhone, Vsmart and Viettel, the domestic consumer electronics market is still dominated by foreign brands.
Furthermore, the rate of local content in the electronics industry is fairly low at 5-10%. The majority of electronic products on the market are imported as completely built units or assembled from imported parts. Local supporting industry companies, albeit taking part in the supply chain, are only able to fulfil low-value and low-technology orders.
Focus on R&D
In order to address the challenges facing Vietnam’s electronics industry, experts have recommended formulating a plan to create an electronics industry with higher added value. For now, Vietnamese companies only specialise in assembly and simple processing without any progress in more complex manufacturing processes.
Most Vietnamese companies are reliant on importing main equipment and parts. The country also has no research institutes or experts on machine parts and key technologies. Therefore, Vietnam needs to form research & development (R&D) centres, not only for hardware but also for software.
R&D support policies can be implemented through focusing on software R&D, supporting research cooperation between companies, large firms as well as small and medium-sized enterprises (SMEs). SMEs can create ecosystems and innovation networks through software education and training, and can activate networks and expand specialist forums.
These activities can be initiated by government agencies independently or in cooperation with other agencies. In that way, a sustainable corporate ecosystem with continuous innovation can be established. The government will play an important role in promoting and creating initiatives, providing technology and management with assistance from universities and experts in the field.
Vietnam’s electronics industry needs to change from simple manufacturing and assembly to higher-value manufacturing with a focus on main devices and parts. To realise these plans, the first thing is improving labour productivity through technological innovations. It is also necessary to create the conditions for start-up companies and SMEs to take part in technical innovations because they will be the ones establishing relations with large firms which possess the foundations for further innovation and development. The cooperation policy between large firms and SMEs also needs to be strengthened.
On the other hand, it is necessary to promote products with high added value such as monitors, semiconductors and electronic parts. It will take significant resources as well as 10-20 years to manufacture products with a long lifespan like these, but it will help create high-salary jobs and boost economic growth.
Continuous investment is needed to improve capacity as well as scientific and technological level of the industry. If Vietnam wants to have an electronic industry with high added value, it must have a long-term support strategy.
Weighing up stock investment opportunities in 2020
Nguyen Tu Anh, head of the General Economics Department under the Central Economic Commission made the assessment at a recent event held by the chartered financial analyst (CFA) community in Hanoi.
The event, Forecast Dinner 2020, took place in the context of the novel coronavirus outbreak (nCoV) and touched on the serious impacts on economies and global stock exchanges.
In this context, the VN-Index hit a three-year record low and the event speakers assumed this poses worthwhile opportunities for bottom fishing for good tickers.
“The implications of the outbreak are remarkable, but this severity is not likely to be prolonged. The economy would rebound no later than in the third quarter this year,” Tu Anh opined.
The VN-Index hit a three-year record low and the event speakers assumed this poses worthwhile opportunities for bottom fishing for good tickers.
Statistics show that with past pandemics (such as SARS or ebola) the global stock market usually took a deep plunge at the time of the outbreak, then quickly rebounded with news that the outbreak was brought under control.
Meanwhile, Dr Can Van Luc, chief economist and director of the Training Centre under Bank for Investment and Development of Vietnam (BIDV), assumed that the banking and insurance sectors have vast potential for development in 2020.
In Luc’s opinion, the tickers of ICT companies also deserve attention, while the logistics industry, which benefitted from the strong investment in infrastructure and will continue receiving the government's attention, promises further development.
“In addition, although the retail sector is not forecast to grow as robustly as in the previous year, it would maintain its growth momentum this year. I believe the retail sector deserves investors’ attention,” Luc said.
Although the VN-Index closed 2019’s last trading session with a 7.7 per cent jump compared to the beginning of the year, the market failed to create any remarkable rise amidst very positive macro-economic indices.
Accordingly, the GDP was on a consistent upward trend, growing at more than 7 per cent. Inflation was kept at a low level and disbursed foreign investment set a new record by surpassing $20.3 billion.
It is even more disappointing to look at tickers, with half of the tickers on the Ho Chi Minh City Stock Exchange (HSX) falling. Generally, two-thirds of tickers on all three floors (HSX, HNX and UPCoM) dropped, according to a report from Vietcombank Fund Management (VCBF), a leading fund manager in Vietnam which is a joint venture between leading state-owned Vietcombank and Franklin Templeton Investments (FTI) – a global leader in asset management domiciled in Luxemburg.
Vietnam’s top influencers
Although influencers’ stories and successes vary, they continue to inspire many young Vietnamese while impacting local communities around the country. Timeout wants to introduce you to some of these people from different fields and showcase contemporary Vietnamese talents that shape the future of our nation.
Following the success of our poll in 2018, this year, Timeout continues to present outstanding faces based on our readers’ votes. Remarkably, many of the people on this list are very young, with most of them between 25 and 35. In addition, they also belong to many ethnic groups and work in many different professions.
Last year, we presented two extraordinary women who continue to contribute to the development of local projects and communities - Madame Nguyen Thi Nga, chairwoman of BRG, and Nguyen Thi Phuong Thao, the “princess of the Vietnamese aviation industry”.This year we honour entrepreneurs who continue the missions entrusted by their partners and write their very own success stories, often continuing their family’s legacy.
Leading our list is a familiar face who also appeared among the top candidates of our previous poll. Nguyen Ngoc My, CEO of Foodino Land JSC and member of the board of directors of Alphanam Group.
With her participation, Alphanam has become a major partner of leading corporations such as Marriott International and the InterContinental Hotels Group. Nguyen Ngoc My continues to be mentioned among the most influential figures who have made great contributions to high-class tourism and resorts in Vietnam.
Staying in the field of tourism, we want to introduce businesswoman Le Thi Hoang Yen, CEO of Muong Thanh Group. Under her direction, Muong Thanh has grown to be the largest private hotel chain in Vietnam with about 60 hotels in Vietnam and Laos. The hotel brand also won many prestigious awards and greatly contributed to introducing the beauty of traditional Vietnamese culture to international friends.
Two representatives of the ethnic minority of the H’Mong are working in the field of fashion design and social work. Sa Binh, the designer at 9X, has brought H’Mong culture to many countries around the world through the special medium fashion. His contemporary designs are based on traditional materials and patterns. Meanwhile, Tua Khang, another representative of the H’Mong community, has grown to be an idol and engages mostly in social activities that connect the community and inspire the H’Mong youth to strive to fulfil their dreams.
Through their continuous efforts and actions, these people have made their mark and spread their positive influence on the communities. They are good examples for young Vietnamese who tend to think and act more drastically and enable Vietnam to pave the way for a bright future.
SK Lubricant buys 49 per cent of Mekong Petrochemical
SK Lubricants' purchase of Vietnam’s top lubricants company, Mekong Petrochemical JSC, will be a stepping stone for South Korea’s leading lubricants producer to expand its business in this potential market, which is dominated by foreign players.
SK Lubricant has acquired a 49 per cent stake in Mekong Petrol for KRW50 billion ($42.1 million), marking its first overseas investment in order to expand its business in the Southeast Asian country and the ASEAN market, according to newswire Pulsenews.co.kr.
The two parties signed the stock purchase agreement at an event held last week at Mekong Petrol headquarters in Ho Chi Minh City, Vietnam.
Under the latest deal, SK Lubricants will supply its products to Mekong Petrol for sale in Vietnam. The production and sale of lube base oil will be entrusted to the Vietnamese firm for further business co-operation. They also agreed to ramp up storage, replace aged facilities, and bolster the sales network with a plan to expand business across the ASEAN countries. Vietnam’s lubricants market is estimated to grow to 6.4 million barrels by 2028 from 3.5 million barrels last year. The market is dominated by BP – the owner of Castrol –, which is followed by Shell and Chevron, without leading local players.
Mekong Petrol held 6.3 per cent of the Vietnamese lubricants market in 2018. It has affiliates that run two tank terminals, lubricants production factories, and logistics centres, as well as 12 dealerships and sales shops. For business expansion, it is also planning to turn its distribution and sales units into subsidiaries.
Mekong Petrochemical JSC has a manufacturing factory in An Thanh industrial cluster, Ben Luc district, Long An province with the area of 38,084 square metres in total and the capacity of 34,000 metric tonnes per year.
Validus Vietnam and Nafoods Group partner up to finance agriculture
Validus Vietnam, the local entity of Singapore’s largest SME financing platform, Validus Capital (Validus), has announced entering into a collaboration with Nafoods Group JSC to provide supply chain financing to Nafoods and the small- and medium-sized enterprises (SMEs) in its ecosystem.
Agriculture is a crucial sector that accounts for 10 per cent of Vietnam’s GDP and supports 40 per cent of its total employment. Agricultural exports like fruits and vegetables surged by 29 per cent in 2018, contributing $438 billion to the country – exceeding conventional commodities like crude oil and rice. Local SMEs make up 97 per cent of the total number of registered enterprises in Vietnam, but these businesses face an unmet $21 billion SME financing gap in the country.
Tran Thi Thuy Ha, chief business officer of Validus Vietnam, said, “SMEs play a crucial role in the country’s economy. With access to financing, these SMEs are able to obtain capital to fund their business operations as well as expand and accelerate their business growth. Validus Vietnam is proud to be working alongside Nafoods Group and its SMEs, as agriculture continues to be a key sector that contributes significantly to the country’s economy.”
The partnership iterates Validus’ commitment to providing ways and bridging the financing gap that many SMEs face when it comes to business financing. Through its Corporate Partnership programme, Validus seeks to actively work with companies like Nafoods to provide supply chain financing to its SMEs, such as farmers and distributors. Nafoods is a Vietnamese agri-food business and manufacturer that integrates agricultural processing from farm to distribution. It is also backed by the International Finance Corporation (IFC), a member of the World Bank Group that works with the private sector in developing countries to create markets that open up opportunities for all.
Nguyen Manh Hung, chairman and CEO of Nafoods Group, said that many farmers and SMEs along the supply chain sometimes do not get the funding on time to purchase their primary materials for crop growth. “Many agricultural SMEs in Vietnam face financial issues due to challenges in getting loans from banks such as insufficient collateral, strict corporate customer screening criteria, and lack of financial literacy. Through working with Validus Vietnam, SMEs can obtain financing in time to improve their productivity to grow and expand their businesses.”
Nafoods Group is among the most innovative fruit and vegetable growers, processors, and exporters in Vietnam, specialising in fruit juice/NFC, puree, concentrate, IQF, and fresh fruits. The company sources more than 13,300 tonnes of fresh and processed fruits annually from farmers located in various regions in Vietnam, including the Central Highlands, the northwestern mountains, and the north-central coastal regions.
The company’s products are distributed all over the world, especially in Europe, the United States, Oceania, the Middle East, as well as Japan and Korea.
Nguyen Chi Long, general director of Long Hue Investment JSC, an SME supplier to Nafoods, admitted that he was able to boost his cash flows for operational expenses and expand his business operations after receiving funding from Validus Vietnam. “In the past, it was difficult for small business owners like myself to obtain sufficient funding from banks due to the lack of collaterals and business records. Thanks to Validus Vietnam, I can now receive financing on time to purchase farming equipment to harvest fruits and vegetables on my farm and sell them to Nafoods. I managed to improve my cashflow to purchase new supplies and expand my crop variety.”
“These SMEs each play an important role in supplying local produce like fruits and nuts, supporting and helping to boost Vietnam’s strong food culture. Validus is proud to be a part of Vietnam’s agricultural ecosystem by supporting the SMEs in Nafoods’ supply chain with much-needed financing,” added Ha from Validus Vietnam.
Focusing on agri-business, Nafoods marks Validus Vietnam’s third corporate partnership in the country within a short span of less than three months since its launch last November. This comes after Validus Vietnam’s pilot partnership project with Medicare Vietnam, the largest pharmacy, health, beauty, and personal care retail group, and Unicons, a member of Coteccons Group and one of the leading private construction enterprises in Vietnam.
Validus Vietnam looks to plug the unmet financing needs of SMEs in Vietnam’s burgeoning industries like agriculture, manufacturing, wholesale trade, and healthcare. It operates using the same proprietary technology and credit scoring systems used in Singapore and Indonesia (known as Batumbu) to provide local SMEs to fast, reliable, and affordable sources of growth financing.
3M increases global production to respond to coronavirus outbreak
3M, a global leader in personal protective equipment, is increasing the global production of respiratory protection products as quickly as possible in response to the novel coronavirus (COVID-19) outbreak.
In China and around the world, 3M is working with customers, distributors, as well as government and medical officials to help get supplies where they are needed. As a leader in personal protective equipment, 3M is committed to supporting the public health and governmental response to the coronavirus to help protect and treat people.
“3M has donated medical supplies, including respirators, surgical masks, and hand sanitizer in affected areas in China, and we will continue to work with our humanitarian aid partners such as Wuhan Red Cross, Direct Relief, and MAP International to donate supplies,” a representative of 3M told VIR.
The World Health Organization (WHO) and the US Centers for Disease Control and Prevention (CDC) have not made any recommendations for personal protective equipment (PPE) use, including respirators, by the general public. Healthcare workers are advised to wear PPE in certain situations.
According to the latest update from the Ministry of Health, as of 5:30AM of February 12, it was reported 44,754 people testing positive for nCoV in 28 countries, including 44,276 in China. The deadly virus killed 1,112 people. The coronavirus was detected in 478 patients outside of China.
Vietnam reported 15 cases of nCoV infection, with six successfully cured. They include nine people in Vinh Phuc, three in Ho Chi Minh City, and one in the northern central province of Thanh Hoa.
Established in 1994, 3M Vietnam operates in the fields of industrial; safety and graphics; healthcare, and consumer goods. By the end of December 31, 2018, the company's revenue was estimated at $32.765 billion, 3.5 per cent higher than in the same period last year.
3M, one of the US Fortune 500 multinational corporations, has been continuously listed among Vietnam’s top 100 places to work in recent years thanks to its unique culture of flexibility, innovation, and its focus on ethics and sustainability.
Phu Yen company to repay VND470m for illegal quarrying
A company in Phu Yen Province has been fined VND90m (USD3,900) for illegally quarrying thousands of cubic metres of rock.
Vice-Chairman of Phu Yen People's Committee Nguyen Chi Hien issued the fine for the Minh Binh Construction Company. Minh Binh Company must also pay VND470m (USD20,200) which they earned from selling the illegally quarried rock to the state budget.
A truck and an excavator were also seized.
According to the Environment Police in Phu Yen, from 2018 to June 2019, Minh Binh Company had started exploiting rocks to use as construction materials in Tan An Village, Suoi Bac Commune, without any licence.
During this time, they exploited nearly 4,700 cubic metres of rock.
Minh Binh Company was asked to restore the environment within 30 days after receiving the decision. If they do not follow the decision, the authorities will apply coercive measures.