VIETNAM BUSINESS NEWS HEADLINES NOVEMBER 28
Korean firm to develop 900-million-USD smart IP in An Giang
Leaders of the Mekong Delta province of An Giang on November 26 had a working session with representatives from the industrial park (IP) investment promotion association of the Republic of Korea (RoK) on developing smart IPs in the locality.
Accordingly, the two sides will cooperate in building smart IPs to serve garment and textile, and metallurgy industries.
At the session, Chairman of the provincial People’s Committee Nguyen Thanh Binh handed over a certificate of investment plan for a smart IP project worth nearly 900 million USD to Oh Se-young – a representative of the Korean Smart IP.
Oh said that An Giang has favourable conditions for developing smart IPs, especially its human and land resources, adding that the Korean industrial park investment promotion association has called on many Korean firms to invest in the province.
The RoK’s smart IPs will use advanced and modern technologies, meeting international standards and Vietnam’s regulations on environmental protection, he stressed.
Oh affirmed that with their experience and strengths in techniques and high-quality human resources, Korean enterprises are completely confident to become important and long-term partners of An Giang in its plan to promote textile & garment and light metallurgy sectors.
He hoped the provincial authorities would support Korean businesses in issues related to land and legal regulations, thus facilitating for their investment in the province.
Binh said An Giang always create the most favourable conditions for investors operating in the province.
The chairman called on more Korean enterprises to invest in An Giang in the time to come./.
Ford Vietnam expands factory in Hai Duong province
Ford Vietnam will invest an additional 1.9 trillion VND (82 million USD) in expanding its automobile assembly and production factory in the northern province of Hai Duong.
This amount brings its total investment capital to 184.7 million USD in the expansion project.
Under a decision allowing the Ford Vietnam’s expansion plan signed by the provincial People’s Committee, the expansion of production will be divided into two stages.
The first stage will be completed and operational in the second quarter of 2020. The second one will come into effect in the third quarter of 2022.
The factory will assemble and manufacture various models of cars and spare parts, as well as supply maintenance and repair services. Its capacity will increase to 40,000 units from current volume of 14,000 units per year./.
FDI poured into Binh Duong up 69 percent
The southern province of Binh Duong has attracted 9.9 billion in foreign direct investment (FDI) from 2016 to October 2019, exceeding the locality’s set plan for attracting FDI in the 2016-2020 phase, the Vietnam Government Portal (VGP) reported.
Since early 2019 to October 31, more than 2.77 billion USD in FDI were licensed to invest in the province, a year-on-year increase of 69 percent and exceeding the plan set for the whole year (1.5 billion USD), making the province rank third in attracting FDI nationwide, according to the recent report of the province’s Department of Planning and Investment.
Binh Duong province has attracted nearly 34 billion USD in 3,700 FDI projects from 64 nations and territories, mainly concentrating on industrial production, trade and service.
To lure FDI sustainably, the province has launched the investment attraction renovation program in the 2016-2020 period, with the aim of raising the FDI capital to 7 billion USD.
In the 2011-2016 period, nearly 75 percent of FDI capital focuses on industrial production and FDI enterprises have contributed to more than 67 percent of the locality’s total industrial production value.
In 2018 only, the FDI sector contributed more than 49.6 percent of the total social investment and accounted for around 20 percent of the province’s budget revenues./.
Sales of feature phones remain steady
Some 1.7 million phones were sold in Vietnam during September, of which over 600,000, or 37 per cent, were feature phones, according to the latest report from market researchers GfK.
Feature phones still account for nearly four out of every ten mobile phones sold in Vietnam.
While there have been predictions that feature phones will lose popularity with the advent of cheap smartphones, sales remain steady at 620,000-700,000 a month.
In terms of market share, feature phones even posted a slight increase recently, from 34 per cent in July to 36 per cent in August.
Nokia remains the leading brand in the segment, with a market share of 55-57 per cent in recent months. The Finnish brand accounted for over half of the 20 top selling feature phones sold in September.
The second most popular feature phone was local brand Masstel, with a market share of 14-15 per cent. Other brands sold include Itel, Mobell, Fmobile, and Coolpad, each with a market share of less than 10 per cent.
But revenues from feature phone sales remain low, as 70 per cent of phones on the market cost less than VND500,000 ($21.5).
The best-selling device in the segment is the Nokia 105, with a price tag of VND350,000 ($15). Itel, the third largest brand, has models costing less than VND200,000 ($8.6), such as the Value 100 and IT2161.
Feature phones are forecast to continue to perform well for at least the next few years.
Since customers often prioritize low prices over brand, phones from China and nameless brands will continue to sell well if they meet buyers’ needs, according to GfK. The main buyers of feature phones are usually ordinary workers, students, older people, and businesses buying phones for internal communication needs. A significant proportion are first-time users who want a device that can make and receive phone calls so they can keep in touch, and especially like phones that are easy to use.
Vietnam Food & Beverage Forum 2019 held in Hanoi
The Vietnam Food & Beverage Forum 2019, with the theme “Actions for Sustainability and Better Food Safety Management”, was held by the American Chamber of Commerce Vietnam (AmCham Vietnam) in cooperation with the Vietnam Chamber of Commerce and Industry (VCCI), the Central Institute for Economic Management (CIEM), the Vietnam Dairy Association (VDA), and the Vietnam Association of Seafood Exporters and Producers (VASEP) on November 25 in Hanoi.
The forum concentrated on opportunities and challenges for the food and beverage (F&B) industry in Vietnam from many different perspectives, and shared international best practices towards sustainable goals in business and food safety management in Vietnam.
In attendance were Executive Director of AmCham Vietnam, Ho Chi Minh City Chapter, Ms. Mary Tarnowka, the Deputy Chief of Mission at the US Embassy in Vietnam, Ms. Caryn R. McClelland, Deputy General Director of the General Department of Standards, Metrology and Quality at the Ministry of Science and Technology, Mr. Nguyen Hoang Linh, and General Secretary of VCCI, Mr. Nguyen Quang Vinh. The forum also included speakers and more than 200 delegates from ministries and agencies, research agencies, international organizations, businesses, and business associations, as well as international experts and the media.
The forum provided an opportunity for speakers and participants to discuss and share best practices regarding the business environment, food safety management, and new trends from international and domestic enterprises, as well as initiatives for sustainable development with action for the environment and human health.
It consisted of two dialogue sessions with the topics: Food and Beverage Industry and Actions for Sustainable Environment, and Policy Dialogue to Promote Manufacturing and Trading in the F&B Industry in Vietnam.
In the first session, speakers from the International Finance Corporation (IFC), Food Industry Asia (FIA), and the Packaging Recycling Organization Vietnam (PRO Vietnam) focused on discussing the issues of plastic packaging, waste management, and promoting a circular economic model towards sustainable development. Practical experiences and initiatives were shared to resolve these issues in a real-world and effective way, especially in Vietnam’s F&B industry.
For decades, food and beverage packaging has been an important part of our modern lives, but post-consumer packaging has placed a heavy burden on the natural environment. As explored at the forum, plastic waste management is a complicated matter that requires a holistic approach involving commitments and partnerships from all stakeholders in the public and private sectors.
The forum covered understandings on a circular economy, where Vietnam is, and how industry and country moves forward with policies, business strategies, technology, and public-private partnerships (PPPs) to promote plastics recycling and sustainable packing toward CE concepts and models. Highlights included international good practices on waste management and recycling, holistic whole value-chain solutions for packaging circularity, and initiatives and innovation from fast-moving consumer goods (FMCG) industries implementing sustainable “life cycles” for packaging in the F&B sector.
In the second session, speakers and delegates focused on issues related to policies and regulations on quality management and commodity standards in Vietnam’s F&B industry. Speakers included representatives from the Directorate for Standards, Metrology and Quality, the Department of Food Safety, the Ministry of Health, and independent experts from the International Life Sciences Institute.
Quality and standards are the basic characteristics for evaluating all types of goods, including food and beverages, because these characteristics help consumers understand important information about the products they eat and drink. Improvements in the management of food quality standards will also promote the export of goods by domestic businesses by standardizing quality regulations that meet international standards.
Highlights of this discussion included: (1) labeling according to international standards and conforming to international law on food labeling related to Circular No. 05/2019/TT-BKHCN on goods labeling, including the advantages and disadvantages for enterprises in the actual process of implementing and sharing international experiences in food labeling; (2) development of Vietnamese standards in the F&B industry in the future; and (3) challenges of promoting the import and export of food and beverages related to Health Certification, Certification of Good Manufacturing Practices (GMP), and Certificate of Free Sale (CFS), and products containing food additives on the list related to Circular No. 24/2019/TT-BYT.
“As Vietnam’s population continues to surge, with rising incomes, purchasing power, and demand for new food and beverage markets, the issues of sustainability and food safety management standards are critically important,” said Ms. Tarnowka. “Today’s agenda will explore the opportunities and challenges of the food and beverage business and regulatory climate in Vietnam. It is our hope that today’s discussion and knowledge-sharing will promote improved regulations based on sound science in line with international standards that ensure safe food and beverage products for Vietnamese consumers and sustainability of economic growth. Such standards also help facilitate Vietnam’s rapidly increasing food and beverage exports.”
“We appreciate the initiative to have an annual forum on the food and beverage industry,” said Mr. Linh. “This will be a link between State management agencies, businesses, and researchers to discuss policies, regulations, standards, the business environment, production, and sustainable development in this important industry.”
Its involvement in the forum, he added, shows that the General Department of Quality Control is keen to accompany associations and businesses to improve State regulations on standards and quality to create favorable conditions for production and business activities and the export of goods, and contributes to promoting Vietnam’s economy in order for it to develop and integrate into the global economy.
Construction of new EGATi coal-fired plant underway
Thailand’s EGAT International Co. (EGATi) kicked off construction of a VND55 trillion ($2.37 billion) coal-fired power plant in the central province of Quang Tri on November 22.
The 1,320-MW Quang Tri 1 plant is included in Vietnam’s Power Development Plan 7 and in the build-operate-transfer (BOT) model with a period of 25 years. The largest-ever project of its kind in Quang Tri, the plant is expected to contribute VND1.25 trillion ($53.69 million) to the State budget annually.
EGATi is a wholly-owned subsidiary of the Electricity Generating Authority of Thailand. The project will use water from a nearby reservoir and the sea for its cooling system and approximately 3.6 million tons of imported coal a year. Commercial operations are expected to begin in 2024-2025, according to a report released on August 30.
Together with the Electricity Generating Public Company Limited (EGCO) and the Kyushu Electric Power Company Incorporation (Kyushu), EGATi signed a Joint Development Agreement (JDA) to co-invest and jointly develop Quang Tri 1 in June 2016. EGATi accounts for 40 per cent of registered capital, while EGCO and Kyushu both account for 30 per cent.
Vietnam’s coal imports in the first ten months of 2019 more than doubled against the same period of last year, to 36.8 million metric tons. Sourced mainly from Australia and Indonesia, the coal is used primarily for the country’s expanding network of coal-fired power plants.
The trend of increasing use of coal continues, but if this was to be constrained it could be reversed by 2030. Liquefied natural gas (LNG) can replace coal in the power sector, at a higher cost but with less environmental pollution.
Early actions to reduce future coal demand are needed. This may include taxation on the use of coal or limits on new coal-based power generation. Coal power plants built today will operate for 30 years, according to the Vietnam Energy Outlook Report 2019 released by the Ministry of Industry and Trade.
Therefore, to avoid lock-in effects, action in the short term is needed to reduce Vietnam’s dependence on imported coal in the long term. As a further benefit, a reduction in coal consumption would reduce air pollution and CO2 emissions.
Construction of new S'Hanoi paint factory underway
The Hanoi Paint JSC (S’Hanoi) officially began construction of a second factory in Vietnam, in northern Hung Yen province, on November 22.
Covering an area of nearly 30,000 sq m, the project is crucial for S’Hanoi in its new stage of development. The factory is expected to be put into operation in the third quarter of 2020 and employ more than 150 experts, engineers, and workers.
The new factory is being built to realize S’Hanoi’s strategy of expanding investment during a period of strong growth, putting into use the most advanced production lines from the EU and meeting the highest standards in industrial production in the world, towards maximum automation, saving human resources, reducing human error, and increasing accuracy, thereby increasing capacity and quality.
With a designed capacity of 50 million liters of decorative paints per year and improvements in product quality, the factory promises to be the foundation for S’Hanoi’s sustainable development.
Mr. Tran Tien Bay, CEO of S’Hanoi, said that to become a leading domestic company it has invested in four important areas - finance, human resources, research and development (R&D), and enhancing production capacity - building new factories with modern production lines meeting EU standards. “We want to bring our customers quality products and services under international standards,” he said.
On the occasion, S’Hanoi and the ICHEMAD Profarb Group also signed a contract on EU-standard automation technology lines. The leading EU group provides comprehensive solutions in equipment and production lines and environmentally-friendly technical solutions, promoting the sustainable growth of manufacturers.
S’Hanoi announced in April it will re-position its brand under a new development orientation to mark its 60th year in business. It will continue to maintain its strong market foothold by repositioning its brand and advances in mold packaging technology (IML) with super anti-counterfeiting functionality.
Its entire product network will be managed by QR codes, helping customers easily confirm product origin. This is an important step in improving image quality and protecting product and brand quality. It has also invested heavily in human resources and production technology with the introduction of the new brand identity.
The company is also cooperating with Niemann of Germany in terms of consulting on construction solutions and supplying equipment for the current factory with the goal of contributing 30 million liters of paint each year to the market.
The company is aiming to transform itself into Vietnam’s No. 1 domestic paint brand and reach out to the international market as soon as possible.
Big C signs commercial cooperation contract with suppliers in Bac Kan
Big C, a member of Central Retail Vietnam, signed a commercial cooperation contract with nine suppliers in northern Bac Kan province on November 22, which will contribute to creating stable livelihoods for 200 farming households, mainly ethnic minorities, in the province.
The cooperation is part of a series of programs organized by Central Retail Vietnam in collaboration with ministries and local authorities to promote, stimulate demand, create added value, and build brands for agricultural products and specialties around Vietnam.
This contract also stems from an MoU signed between Central Retail Vietnam and Bac Kan’s Agricultural Extension Center.
Under the MoU, representatives of Big C and the Center are working together to implement the Community Livelihood Project in the six districts of Na Ri, Cho Don, Ngan Son, Bach Thong, Cho Moi, and Ba Be. More than 200 ethnic minority farmers have been supported in ten groups of cooperatives in selling their products at 17 GO! and Big C supermarkets in the northern region.
The Community Livelihood Project in Bac Kan is the sixth project within the Community Livelihoods Program launched by Central Retail Vietnam in early 2018, joining those in Son Ha district in central Quang Ngai province, Van Ho district in northern Son La province, Binh Dinh province, A Luoi district in central Thua Thien Hue province, and Sapa town in northern Lao Cai province.
A representative from Central Retail Vietnam said the Group wishes to develop sustainably in Vietnam and realize its strategic vision of contributing to the country’s prosperity and improving the lives of Vietnamese people. “Big C and GO! Vietnam, members of Central Retail Vietnam, are ready to accompany small and medium-sized enterprises (SMEs), farmers, and local agricultural cooperatives in Vietnam by supporting the supply of goods in a modern distribution system and assisting in market development and branding,” the representative added. “We also support the government, by fulfilling our commitment to having 90 per cent of goods at our supermarket chains being of Vietnamese origin.”
Mr. Hoang Van Hung, Deputy Director of the Bac Kan Agricultural Extension Center, said the contract with Big C has a very special meaning. “It will contribute to the development of sustainable supply chains for agricultural products, from production to consumption, thereby gradually stabilizing income sources and improving the lives of farming households, mainly in remote areas of the province,” he added. “Bac Kan province will continue to cooperate with Big C to conduct the program for SMEs to boost the consumption of the province’s specialty agricultural products.”
Viettel & Hoa Lac Hi-Tech Park agree to strategic cooperation
The Viettel Group and Hoa Lac Hi-Tech Park signed a strategic cooperation agreement on November 23 to promote the Park’s development and meet Viettel’s needs in investment, research, and production, witnessed by National Assembly (NA) Chairwoman Nguyen Thi Kim Ngan.
Viettel will begin construction in the first quarter of 2020 of a high-tech industrial production complex on an area of 9.1 ha at Hoa Lac, which will become a center for testing and manufacturing Viettel’s high-tech equipment.
It will also build the Viettel Research and Development Center, on an area of 13.2 ha, for key Viettel projects such as defense industry products, electronics and telecommunications equipment, and 5G and Internet of Things (IoT) network infrastructure.
Viettel also will support and work with Hoa Lac’s Management Board to develop applications related to smart cities such as environment management, urban lighting, smart parking, traffic management, supervision security monitoring, IoT, and other technologies where Viettel possesses advantages.
In addition, Viettel will support the development of technology businesses, human resources training, and contests in IoT, and introduce technology consultants.
Meanwhile, Hoa Lac Hi-Tech Park will cooperate with Viettel to build an innovative information technology (IT) startup area, build an IT interaction portal for companies, investors, and partners, and provide information on products and services at Hoa Lac Hi-Tech Park in general and of investors at the Park in particular.
NA Chairwoman Ngan said she appreciates Viettel’s contribution to Hoa Lac’s development and also assigned tasks to investors who need to make plans for development, creative investment, production expansion, and the application of advanced technological achievements, proactively creating products with a Vietnamese imprint and quickly bringing quality technology products to the market to raise brand value and pride in Vietnamese products.
Viettel has previously focused on investing and building facilities for research, testing, and manufacturing high-tech industrial equipment and products at Hoa Lac Hi-Tech Park. In particular, it has invested in building a data center of international standard and with the largest scale and capacity in Vietnam. It also built a high-tech industrial research and production complex with nearly 2,000 experts and engineers.
Bigbuy24h opens fourth rep office in Vietnam
E-commerce platform Bigbuy24h opened a fourth representative office in Vietnam on November 22 in Hanoi, helping small and medium-sized enterprises (SMEs) in the capital in particular and the northern region in general join its network and have the opportunity to develop.
Launched in 2018, Bigbuy24h.com is an intermediary marketing channel between buyers and sellers, serving consumers and SMEs. Businesses and suppliers of goods are free to open online booths and connect online sales in the community of Bigbuy24h members.
Distributors then have the opportunity to increase sales and profits and cut brand development and operating costs. They will also receive free sales management training from Bigbuy24h.
After more than a year in Vietnam, Bigbuy24h has over 1 million consumers using its app and more than 100,000 partners, suppliers, and shops.
Bigbuy24h plans to open a chain of Bigbuy24h supermarkets in major cities in Vietnam to promote products of businesses and suppliers in its system. It can also arrange goods delivery in the fastest time possible.
Other Bigbuy24h representative offices will also be opened in November and early December in provinces such as Bac Ninh, Bac Giang, Ninh Binh, Vinh Phuc, Phu Tho, and Ha Nam.
Mr. Nguyen Van Anh, Chairman of Bigbuy24h, believes it will become one of the leading e-commerce platforms in Vietnam. “Bigbuy24h takes technology as a foundation for development, based on understanding the habits of Vietnamese people,” he said. “Bigbuy24h will continually create a professional sales and purchase environment, where Bigbuy points can be used to buy and sell goods in our system, and will continuously expand the range and number of products.”
According to the e-Conomy Southeast Asia Report 2019 from Google, Temasek, and global management consultancy Bain, e-commerce is a key economic driver in Vietnam. The country’s internet economy is expected to reach $12 billion in 2019 and $43 billion by 2025, with a boom in e-commerce, online tourism, online communications, and ride-hailing. Vietnam now has 61 million internet users, who spend three hours and 12 minutes per day on average using the internet on mobile devices.
VinSmart opens new production line at Hoa Lac Hi-Tech Park
The VinSmart Research and Manufacturing Company held an inauguration ceremony for a new production line at its facility in Hanoi’s Hoa Lac Hi-Tech Park last week, after completing the first phase of the project.
The VinSmart facility is designed for the production of smartphones and smart devices, and the opening of the new line is an important milestone on its journey to becoming one of the leading brands in the global tech industry.
It covers an area of 14.8 ha with a production capacity of 125 million devices per year once fully completed. In the first phase, the production line has been built on 4.8 ha with an operational floor area of 45,000 sq m. It has different production zones, for mainboards, smartphones, and dedicated laboratories.
Capacity in the first phase is to hit 26 million devices per year: 23 million smartphones, 1 million IoT devices, and 2.4 other smart devices.
VinSmart’s manufacturing facilities are built under international standards using cutting-edge technologies and equipment imported from the US, Germany, Japan, and South Korea. The production line is fully automated to optimize productivity. Product tests on assembly lines are done entirely by robots, to ensure accuracy and product quality.
Its production process, quality control, manufacturing facilities, and operating information technology systems are vigorously audited by partners from the US, the EU, and Russia. VinSmart has shown not only an ability to satisfy demand in Vietnam but also the capacity to meet global standards.
VinSmart also cooperates with leading scientists, engineers, and product designers from all over the world, and invests in its own research and development institutions. It plans to launch its first 5G products in 2020, aiming to lead trends in the 5G e-commerce sector.
Ms. Thuy Le, Vice Chairwoman of Vingroup and CEO of VinSmart, said that the introduction of electronics and smart devices will be a stepping stone for Vietnam to become one of the world’s leading technology manufacturing centers. “VinSmart has also kicked off Phase 2 of construction at Hoa Lac and is working with the global tech leaders to craft the most advanced devices in our smart ecosystem,” she added. “This is a strategic move within Vingroup’s ambitious journey to become one of the major brands in the global tech industry.”
A year since its establishment, VinSmart has built factories in Hai Phong and Hoa Lac, cooperated with global technology and industry leaders such as Qualcomm and Google, and launched eight models of smartphones. It has also expanded its distribution channels across borders, to Spain, Russia, and Myanmar.
ABB appoints new Managing Director for Vietnam
Leading Swiss tech firm ABB has announced the appointment of Mr. Noel Hupont as Managing Director and Head of the Electrification Business for Vietnam, effective from October.
Mr. Hupont’s strong leadership will drive the corporate strategy across businesses and underpin ABB’s growth momentum in Vietnam.
He succeeds Mr. Brian Hull, who has moved to lead the Power Grids (PG) business in Vietnam following ABB’s announcement of the planned divestment of the global PG business to Hitachi, to be completed by next June.
Mr. Hupont has been involved in different management roles in his 20 years at ABB Mexico and ABB France and most recently served as Local Division Manager for Electrification at ABB France. He brings a deep understanding of market trends and the challenges industries are facing.
In his new roles, he will continue to focus on strengthening ABB’s relationship with its customers and partners in the utility, industry, transportation, and infrastructure sectors, to help accelerate sustainable value creation for their businesses.
“I am excited to be here in a growing country which is experiencing fast paced urbanization,” Mr. Hupont said. “I look forward to working with the ABB team in Vietnam and our local customers and partners to explore opportunities in e-mobility, industrial automation, and digitalization.”
“As a pioneering technology leader, ABB will continue to bring innovative solutions to help customers achieve energy efficiency and optimize productivity and reduce environmental impacts. We are committed to supporting a safe, smart, and sustainable future for Vietnam.”
He holds a Bachelor’s degree in Engineering from Les Compagnons Du Devoir in France and an MBA from the University of Barcelona in Spain.
FLCHomes expects to list at VND35,000
FLCHomes is expected to be listed at VND35,000 ($1.5) per share in December, a company representative told a launch and introduction ceremony of investment opportunities for its stock code, FHH.
This price is considered by many economists and analysts to be reasonable given the prospects for the real estate industry in general and the company in particular.
FLCHomes’ core business is real estate as a project investor, project distributor, and project operator.
In its plan for the next five years, it expects average annual growth in revenue and profit after tax of 46 per cent and 60 per cent, respectively. Equity is expected to increase from over VND4 trillion in 2019 ($172.7 million) to over VND10 trillion ($432 million) in 2024.
Total revenue in 2020 is expected to reach VND5 trillion ($216 million), three-fold higher than in 2019, and profit after tax is to reach nearly VND1 trillion ($43.2 million), a four-fold increase. In particular, revenue from investment in real estate projects in 2020 is expected to reach over VND2.8 trillion ($120.7 million), contributing nearly 60 per cent of total revenue.
Ms. Huong Tran Kieu Dung, Chairwoman of FLCHomes, said it is supported on many platforms and business development and distribution projects of the FLC Group. “FLCHomes’ investment and distribution projects have therefore reached more than 300 projects in most cities and provinces,” she added. “These funds can meet the supply and operational capacity of FLCHomes until 2030.”
Commenting on the launch, economist Tran Dinh Thien said the business is supported by favorable objective conditions such as a stable macroeconomy, good economic growth, and determination by the government in reform and its orientation to considering private enterprises an important driving force in the economy.
Senior banking expert Nguyen Tri Hieu said that FLCHomes lists on the stock market in the context of a restructuring economy and a healthier market. “The development of FLCHomes is in line with the growth of the FLC Group and its specialized brands,” he added.
At the ceremony, Mr. Trinh Van Quyet, Chairman of the FLC Group, revealed that subsidiary Bamboo Airways also plans to list at VND60,000 ($2.5) per share in 2020 with the stock code BAV. “Prices of FHH and BAV shares will reach three digits, over VND100,000 ($4.3) each, in 2020,” he declared. “This is my surest promise for the Group’s development in 2020.”
MoMo at 36th among 100 leading fintech companies
For the second consecutive year, Vietnam’s MoMo e-wallet was named in the “Leading 50” of the Top 100 Fintech companies in 2019.
The only representative of Vietnam made a breakthrough to 36th position on the prestigious list, which was released early this month by Australian fintech venture capital investment firm H2 Ventures and accounting and auditing company KPMG.
As in 2018, this year’s rankings were divided into two lists, including the Top 50 leading companies and the Top 50 emerging companies. MoMo is the only representative of Vietnam in the “Leading 50”.
According to the report, some payment and lending companies have been replaced by a surge in the number of wealth, insurance, and multi-sector companies.
Leading the rankings this year are China’s Ant Financial, the world’s largest third-party payments platform, JD Finance, a digital technology company, Singapore’s ride-hailing firm Grab, Go-Jek from Indonesia, Opendoor from the US, Paytm India, and OakNorth from the UK.
The firms were ranked based on total capital raised, rate of capital raising, location, and degree of sub-industry disruption, as well as the judging panel’s subjective ratings of the degree of product, service, customer experience, and business model innovation.
Fintech100 2019 also provides an overview of the fintech market. This year, capital invested in fintech companies on the list reached over $70 billion, up 35 per cent against the previous year, according to the report.
“Momo’s products help customers in Vietnam make nationwide cash transfers, pay more than 100 types of bills, recharge mobile phone accounts, settle personal loans, and purchase services like software licenses and online game cards and airline and movie tickets,” the report noted.
“This rating is meaningful for the MoMo team,” said Mr. Nguyen Ba Diep, Vice President and Co-founder of MoMo. “We are proud to have shown the world that Vietnamese people can fully create products that resonate globally. We are proud to show the world how Vietnamese fintech can compete against the world.”
MoMo wallet has more than 13 million users, 12,000 payment partners, and 100,000 payment points nationwide. It is directly linked with 23 major banks in Vietnam and 43 domestic banks via the Napas portal.
Another Vietnamese fintech firm, Finhay, established in 2017 with capital of $100,000 as a micro-investment platform targeted at millennials, is in the “Emerging 50” category.
Citi & Lazada launch Vietnam's first e-commerce credit card partnership
Citi, the largest pan-regional credit issuer, and Lazada Group, Southeast Asia’s leading e-commerce platform, have launched a new Lazada Citi credit card in Vietnam - the first e-Commerce Credit Card Partnership in Vietnam - one month after the launch of the same card in Malaysia and Thailand.
For the first time ever, cardholders will enjoy the highest rewards points on Lazada purchases, with 10X points, in line with the card’s theme “Play it Up”.
Shopping with Lazada is now more rewarding with a 30 per cent weekend discount, 2X monthly free shipping for cardholders, and further savings by using points earned to offset purchases at Lazada.
In addition, cardholders earn 25,000 bonus points every month by using the card for all retail purchases with a minimum retail spend of VND10 million ($429) per statement month.
Tapping into the growth potential of e-commerce spending in the region, Citi and Lazada are targeting over 500,000 sign-ups for the new card across the region over the next few years. The launch of the Lazada Citi card is a natural extension of Citi and Lazada’s regional partnership, which dates back to 2016.
“This is a step forward in partnerships for the credit card business as it showcases the power of e-commerce combined with the strengths of a global financial platform,” said Citi Country Officer for Vietnam and Consumer Business Manager Ms. Natasha Ansell. “At Citi, our priorities include expanding into new segments such as millennial shoppers, who make up the most e-commerce customers. As a premier global digital bank, we are constantly innovating to bring to market exciting digital financial solutions.”
“As the pioneering e-commerce platform and leading lifestyle destination for Vietnamese, Lazada continues to innovate products that combine rewarding, entertaining shopping experiences with the best deals,” said Mr. James Dong, CEO of Lazada Vietnam. “Themed ‘Play it Up’, the Lazada Citi credit card is a great choice for shoppers keen to embrace cashless digital lifestyle solutions and who demand more value from their purchases. We are thrilled to be partnering with Citi to offer this card to our customers.”
“Consumers in Vietnam are steadily increasing their trust in online transactions as digital payments continue to prove to be secure and convenient,” said Ms. Winnie Wong, Mastercard Country Manager, Vietnam, Cambodia and Laos. “We are excited to launch a co-brand card with Mastercard’s strategic partners - Citi and Lazada - to accelerate the growth of Vietnam’s e-commerce.”
The card is expected to be well received in Vietnam and the region through incentives and exclusive benefits, features, and deals.
The card also comes packed with lifestyle benefits such as 5X points when spending on Travel and Fashion; a rich Citi usage platform including Citi World Privileges with more than 11,000 deals in more than 1,000 cities; and better yet, exclusive deals for this card such as a year-round VND200,000 discount on Flights, Hotels, and Experiences at Traveloka and free bagel / croissant / cookie / espresso biscotti with any one drink purchased on Fridays at Coffee Bean & Tea Leaf.
With the new card, Citi will access a younger, digitally-savvy customer pool who make up the majority of e-commerce customers in the region, while Lazada widens its breadth of offers and services by leveraging a global financial platform.
Citi’s Asia Pacific Consumer Banking business has around 15.2 million credit cards, covering 12 markets in Asia-Pacific as well as five in EMEA. Close to half of new credit card and loan acquisitions are generated digitally today, representing an increase of more than two-fold in the last three years.
Bamboo Capital to continue moves into into real estate and energy
The Bamboo Capital JSC (HSX: BCG) announced at an Investors’ Conference held recently in Ho Chi Minh City that it will continue to move towards real estate and renewable energy projects in the future.
The company expects to post $35.6 million in net profit in 2023, with large cash flows and around $13.5 million in net profit for this year.
Shifting investments into real estate and renewable energy
BCG also proposed delivering the company’s fundamental change in strategies in accordance with market fluctuations. According to the its Board of Directors, it will maintain its activities in four main sectors in the upcoming years: Agriculture and Manufacturing, Construction and Trading, Infrastructure and Real Estate, and Renewable Energy.
Since 2018, BCG has made significant changes in its investment strategy by narrowing inefficient business operations, retaining only successful restructured businesses. At the same time, it has shifted investments into highly-profitable segments such as real estate and renewable energy.
According to its plan, BCG will reduce investments in the trading and infrastructure segments. In 2018, capital inflow into the real estate segment projects increased rapidly due to it investing in the Da Nang, Malibu Hoi An, and Thao Dien projects. In 2019, capital inflow into renewable energy increased sharply due to various investments in solar farm projects in the Mekong Delta’s Long An province.
In the short term, BCG’s current cashflow is being used for projects in agriculture, manufacturing, and trading, in order to create a stable cash flow, while continuing to focus on investing in medium and long-term projects.
In the medium term, the company will concentrate on developing real estate projects such as Pegas Nha Trang, the Bao Loc Urban Area, the Loc Phat Residential Area, the Hiep Binh Chanh Urban Area, and the Hoa Ninh Residential Area.
Pegas Nha Trang is one of its largest real estate projects, with total investment of $33.7 million, and will feature a 38-story hotel and apartment building in the coastal city of Nha Trang.
The project is a type of condotel. Since there is concern among investors about the legality of such projects, a representative lawyer from BCG said it is being built on land licensed for 50 years that can be extended for 50 years more.
In the long term, the renewable energy segment will contribute effectively to the company’s growth, with stable income and high profit margins. Projects deployed include floating solar power plants in Quang Nam and Dak Lak provinces, a wind power plant in Soc Trang province, and three solar power plants - Sunflower, Redsun, and Ben Tre.
It is also researching developing a liquefied natural gas (LNG) plant that is the largest in its energy portfolio, with total investment of over $3 billion. Rooftop solar power projects will be its main investment in 2020. The company’s plan this year is to reach a total capacity of 50MW.
Mr. Nguyen Ho Nam, Chairman of BCG, told the conference that it will cooperate with international corporations to take advantage of their science and technology, brand, and cash flow. It also receives support from foreign shareholders contributing capital to implement solar power projects, such as Hanwha Energy and Japan Asia Investment.
“BCG is also working with other partners and will raise additional loans from local banks,” he said. “Through these strategies, BCG expects revenue to reach $291.7 million in 2023, with an ROE of 77 per cent.”
Lotte E&C & TTC Land to develop property projects
South Korea’s Lotte Engineering & Construction (Lotte E&C) signed a strategic cooperation agreement with Saigon Thuong Tin Real Estate JSC (TTC Land) on November 21.
Lotte E&C will jointly develop real estate projects with TTC Land through its wholly-owned subsidiary in Vietnam, Lotte Land. It plans to invest around $100 million in such projects, of which $22 million will be disbursed to TTC Land early next year.
Following TTC Land’s comprehensive restructuring strategy adopted at the General Meeting of Shareholders in April 2019, building a strong and sustainable financial structure is one of the strategies its Board of Directors is paying particular attention to in order to prioritize and accelerate deployment.
The signing of this strategic cooperation agreement marks the first success in realizing this strategy.
Lotte E&C, one of the key affiliates of the Lotte Group, is a leading real estate developer and a general contractor in every sector of construction, with a head office in South Korea and numerous branches across the globe.
It is the undisputed industry leader in South Korea’s housing sector, providing over 20,000 units every year and building prestigious landmarks including the 123-story Lotte World Tower and the 65-story Lotte Center Hanoi.
After a period of working and negotiating, TTC Land and Lotte E&C reached an agreement and signed the strategic cooperation agreement. TTC Land will research and develop plans, complete legal procedures, and create a clean land fund for project development.
Meanwhile, Lotte E&C will establish the business structure, finance, and financial arrangements for projects, and participate closely and contribute to design, construction, and marketing activities for such projects.
At the signing ceremony, Mr. HA Suk Joo, President and CEO of Lotte E&C, expressed his pleasure at becoming a strategic partner of TTC Land and hopes the two sides will work closely to successfully develop future projects.
“Lotte E&C is a real estate project developer and general contractor in all construction sectors and has strong financial potential, while TTC Land has 15 years of real estate development experience in Vietnam and an abundant land bank,” said Mr. Nguyen Dang Thanh, Chairman of TTC Land.
“The cooperation between the two sides is to implement high-quality real estate projects, from planning and design to construction, with the goal of bringing Vietnamese people real estate projects with the best living environment and best product quality.”
TTC Land currently has 27 projects with hand over completed or underway, serving over 105,000 customers. Its total assets stand at over $473 million, has a land fund of more than 1,500 ha, employs over 600 people, and has invested in many cities and provinces throughout Vietnam.
In the past six months, it has implemented strong restructuring activities, with financial restructuring and proactive access to global capital being among the important goals to be pursued in the near future.
The cooperation agreement with Lotte E&C will contribute to TTC Land’s access to solid capital sources, advanced real estate development techniques, and experienced staff, which will help it quickly realize its business philosophy.