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“Your partner in Indochina”
Executive Consulting & Support for Production, Marketing, Sales
We handle your business activities
German engineer in Vietnam, Cambodia, Laos, Myanmar since 2005, guarantees with his team
of management, engineering, business development, location, product, production,
marketing, sales and M&A experts for turn-key processing to
German quality standards
Mobile: 0084 - (0) 938433385
web: www.produktionsservice-vietnam.com
e-mail: [email protected]
“VIETNAM BUSINESS NEWS”
The Economic Mirror Indochina’s
April 2015
Economy, International Cooperation, Business,
Investment, Markets & Prices
We report about the latest prime business news from various fields, as well as the
economic environment “in particular for western business people”. We publish the
informations, news and reports of the leading news sources which could appear
of special interest for our clients.
INDEX:
Subjects after Country marked:
V = Vietnam. C = Cambodia. M = Myanmar. L = Laos. O = Other Country's.
Topic of the Month
V - Vietnam Corporate Founding with obtaining all national Permits and Licenses
V - Vietnam's cattle situation: From FDI + Import, feed, animal medicines, slaughterhouse
up to the markets with buying habits
Economy & Business
V - Market Entry for European SME in Vietnam Asia
V - Japan suggests building agro-industrial park in Vietnam’s veggie hub
O - Russian firm to build Vietnam's first solar power plant
C - ADB Forecasts Stronger Growth for Cambodia
V - More private investments called for improving Vietnam’s healthcare sector
V - Three richest Vietnamese men step into agriculture to meet local demand
L - SEZs seen as key to expanding Laos economy
V - Vietnam draws attention from FDI firms
O - Japan printer manufacturer expands operations
O - EVFTA’s positive impacts on VN-EU relations
C - Cambodia Joins Treaty To Protect Trademarks
V - HCM City continues to be engine of national growth
O - Foreign companies dominate list of best workplaces in Vietnam
C - Businesses up, reveals survey
Int'l Cooperation
O - Productionservice-Vietnam the business partner on site
O - Laos, Vietnam enhance cooperation ties
O - Cooperation in health technology enhanced
O - German Secretary of State Visits HCM City
O - Switzerland, Germany pledge US$12m for land governance
O - Prospects for Vietnam- Australia investment cooperation
Investment
V - Vietnam Indochina Procurement Import Export
V - US investors interested in business expansion in Vietnam
V - Vietnam – Central Hub of ASEAN for Electronics Industry
O - Coc Coc unveils plans for using German investment
V - Lotte Vietnam boosts investment
M - Western business not rushing to invest in Myanmar
M - Foreign investment just under US$7 billion this fiscal year
V - Foreign firms eye M&A deals as SOEs equitise
V - Medical firms to be equitised
Finance & Banking
O - Vietnam Indochina Asean: Unbeatable prices by R&D Production Export
M - Myanmar’s trade deficit at record high
V - Vietnam’s banks listed in top 500 brands
Markets & Prices
O - Purchase Production Import-Export Servicing in Vietnam Asean
V - Real-estate enterprises flocking to smaller cities
V - Vietnam imports 15,000 cars in Jan-Feb, mostly from India: data
C - Boxing clever
V - Race among high-end hoteliers heats up
O - British bag brand Zatchels eyes Asia
O - Malaysians flocking to Cambodia to do business
O - Asia retail ambition wanes
V - Vietnam electronics sales surge
V - Saigon Co.op to open many more stores this year
V - HPG enters fodder industry
O - France becomes largest medicine provider for VN in January
V - Big year likely for Vietnam’s textile, garment exports
V - Number of new property trading firms increases nearly 89 percent
O - E-commerce in South-East Asia
V - High-tech application boosts agricultural production at Langbiang
O - Asia to drive global retail sales
V - Vietnam online shopping rises
L - Yves Rocher offers botanical beauty in Laos
Export-Import
O - Vietnam Procurement Import Export. Distribution by Representative Office or
Trade Agency
O - Weaker Euro concerns Vietnamese exporters
V - Garment exports up 18% in two months
O - US holds potential for local wood products
O - Exports to Italy surge in January
Particular Reports
O - Relocation of production from Europe + US to China towards zero
The track of manufacturers leads now after Vietnam
O - Game of zones
V - New Immigration Law introduces 20 New Visa Categories
O - Burning rubber
O - Asia’s dominance in manufacturing will endure. That will make
development harder for others
Fairs & Exhibitions
O - VIETNAM - CAMBODIA - LAOS – MYANMAR.
REPORTS:
Topic of the Month
PSV ad:
V - Vietnam Corporate Founding with obtaining all national Permits and
Licenses
* Exploring, obtaining qualified personnel
* Consulting, planning, design, project implementation
* Relocation of production
* Operating Location: exploration, rent, lease, purchase, construction
www.produktionsservice-vietnam.com Acquire, Organize, Produce, Market. From A to Z - we do
the lot.
V - Vietnam's cattle situation: From FDI + Import, feed, animal medicines,
slaughterhouse up to the markets with buying habits
Compiled by Dipl.-Ing. Alex Narr, Productionservice-Vietnam, Maerz 2015
Agriculture involving domestication of plants and animals was developed already 12000
years ago. Growing importance of the agriculture pushes with ongoing increase of the
world population back into the forefront. It was not by chance that the 45th World
Economic Forum (WEF) held recently in Davos (Switzerland) placed the issue of food
security for more than 7.2 billion people in the world as number one of its agenda. This
fact clearly shows the increasingly important role that food producers and suppliers play
and most notably highlight Vietnam’s.
Vietnam actual agribusiness: Situation. Possibilities. Future
Livestock production in Vietnam includes pig, chicken, beef, buffalo and small number of goats.
The largest share of livestock products are pork 79.4 percent (Vietnam ranks 7th of largest pork
producers in the world). After pork, poultry is with 12 percent the second most important meat.
Cows and buffalos in Vietnam are mainly raised to work in rural areas
Vietnamese farmers in many communities are still using cows and buffalos as the main animals
to work on their farms and fields rather than technological equipment or machines. Cows and
buffalos are also used as a means of transportation in these areas. In addition to that, these big
animals are a cash source and “fixed” assets in households. Majority number of cows in
Vietnam is raised for diary production and only small number of cows and buffalos are raised for
meat production purpose due to intensive capital investment and long time to return on
investment. There are some commercial farms for meat production but these farms also remain
a minority. In the livestock production, share of red meat in Vietnam is very small 8.6 percent of
total production. Red meat also accounts for only 9.5 percent of total meat consumption of the
Vietnamese people.
Livestock processing and distribution
So far livestock processing in Vietnam has not been practiced in an advanced way with
technology or comprehensive equipment. For the livestock sector, the term “processing” is
understood as “slaughtering” because slaughtering is the main activity done after livestock is
taken from the farms and before it is sold at the wet market. The vast majority of livestock
slaughtering in Vietnam is carried out mostly under unhygienic backyard conditions by households who specialized in this job. The slaughtering of livestock takes places at floor level where
carcass contamination is heavy. Small privately owned or commune-owned slaughter-houses
process from 5 to 50 pigs and a dozen of poultry per day. They buy pigs or poultry almost
entirely directly from household producers or via middlepersons and after slaughtering this meat
is sold exclusively to the wet market. Large commercial public owned plants or privately owned
slaughtering plants buy from commercial farms and sell mainly to supermarket and restaurants
or hotels. Although ante-mortemmeat inspection is carried out, carcass condemnations are few
and almost no post-mortemexamination or sampling takes place. Meat inspection does not
always take place and is best described as cursory.
Yet, this fresh meat is sold right after slaughtering at wet markets without any further processing
like cutting, slicing, portioning, forming nor packaging. As mentioned above, most of the meat
after slaughtering is distributed to wet markets. Even though urbanization is currently booming in
Vietnam which encourages the establishment of supermarkets, hypermarkets and many other
convenient department stores, buying fresh food including meat, fish, vegetable at wet markets
is still daily practiced by 84 percent of Vietnams consumers. There are hundreds of thousand
wet markets across the country that sell meat and fish to the consumers. Consumers can find all
daily basic food items and other products for households in these markets. However, it was
estimated that there were 21 percent of consumers buying food from supermarket,
hypermarkets or department stores like Big C, Metro Cash & Carry (mainly for wholesalers),
Fivimart, Hapromart,
There is a trend for large-scale farms with intensive and organized models to develop and smallscale farms will decrease. This will help the Vietnams livestock sector to develop in a more
industrial way, enhance the food processing industry and enable it to expand to a larger extent.
In Vietnam currently, livestock is slaughtered and processed preliminarily and is sold to
consumers. Meat in general is not much processed with equipment like cutting, slicing,
portioning, packaging nor labeling in Vietnam due to the traditional behavior characteristics of
Vietnamese people.
Though, there are some big food processors (both state owned and privately owned) in Vietnam
who mainly focus on producing sausages, Chinese sausages, spring rolls, canned meat. Most of
these products are served for local market.
Hanoi will focus on developing high-tech agriculture in order to raise its value of
agricultural production to VND231 million per ha by 2016
With advantages in terms of land, consumption market and application of advanced techniques,
Hanoi has increased the value of agricultural production to VND212.4 million per ha, up 65%
compared with 2008. Hanoi has been deployed many new mechanisms and policies to attract
investment in high-tech agriculture in cultivation, animal husbandry and aquaculture.
Organisations and individuals who invest in high-tech agriculture models will enjoy land
preferential treatment, support from the state fund to build technical infrastructure and soft
interest rate loans.
According to the FIA’s statistics, there are over 16,910 licensed FDI projects with a total
investment capital of US$243 billion now. However, there are only 512 projects in agriculture,
forestry and fishery, with a total registered capital of US$3.39 billion which represents 3.03
percent of the total number of projects and 1.4 percent of a total registered capital. Annually,
there are 20 FDI projects worth at US$130 million attracted in the agriculture. FDI in the
agriculture sector has dropped by 30 times within 15 years. On the other hand, the structure of
FDI in the sector is also unstable.
Investors are now only directing their FDI projects in the short-term fields of processing and
manufacturing of agricultural and livestock products, rather than long-term projects. Another
paradox is that most of the investors come from less developed Asian countries like Thailand,
Taiwan, and Indonesia. While other investors who come from countries with developed
agriculture and industry like European countries, Japan, and the United States show less
interest in the agriculture sector of Vietnam. Another barrier is that there are a few high-quality
FDI projects in high technology. Most of the projects are small scale. It is estimated that while
the average size of an investment project is US$14.7 million, the average size of FDI projects in
the agricultural sector is only US$6.6 million.
Dr Dang Kim Son, Director of the Institute of Policy and Strategy for Agriculture and Rural
Development, said that FDI projects in agriculture are still unsustainable and small scale.
Projects in high-tech agriculture by investors of the U.S. and the EU are limited. Therefore, more
effort is required from the agriculture sector to effectively attract FDI in the upcoming time. In
addition, the Ministry of the Agriculture and Rural Development should also focus on projects
that are based less on natural resources and more on high technology content, and projects
investing in seed production, processing industry, and machinery for manufacturing agriculture.
Besides, to attract more FDI, the Ministry also needs to conduct research on the PPP model to
create more options for foreign enterprises to engage in the agricultural sector.
Foreign firms are showing huge interest in Vietnam’s lucrative livestock production
sector
Agriculture is a sector that has great potential. We have seen other investors turn their eye to
this area and we have also seen that Vietnamese companies not only need foreign capital, but
also foreign investors who bring to the table experience and strength that can help their
businesses grow.
Animal vaccine and pharmaceutical company Medion, based in Indonesia’s Bandung city, inked
a co-operation deal last month with Vietnamese animal vaccine maker Greenvet to produce
animal medicines in Vietnam. Under the agreement, Medion will transfer its knowhow and
technology to Greenvet. Greenvet’s plant in Hanoi will produce vitamins for poultry, then expand
into veterinary medicines for pigs.
In late June 2014, Dutch-backed Rabobank clinched a memorandum of understanding on food
and agribusiness (F&A) co-operation with Vietnam’s Sacombank, with the former to provide the
latter with F&A expertise and know-how.
“Vietnam’s huge raw material potential and attractive investment policies are attracting many
foreign husbandry firms that make animal medicines, feeds, process meat or raise poultry and
cattle,” said Hoang Thanh Van, head of the Ministry of Agriculture and Rural Development’s
Livestock Production Department.
Sooksunt Jiumjaiswanglerg, general director of C.P. Vietnam Livestock Corporation, said the
Thai group would continue building more food processing factories in Vietnam, in addition to its
existing eight animal and aquatic feed plants with the total capacity 3.8 million tonnes, and one
corn semi-processing plant. “We will also expand our products out to provinces, not only urban
areas. We will also boost co-operation with local farmers,” he said.
The US’ Cargill in May 2014 completed its $20 million expansion of an animal feed mill in the
central province of Binh Dinh, raising the mill’s annual capacity four fold, from 60,000 to 240,000
tonnes. As one of Cargill’s eight compound feed mills in Vietnam, this expansion brings the
company’s total investment in Vietnam’s livestock and aquaculture industry to over $110 million
over 10 years, with the total compound feed capacity of 1.4 million tonnes. In 2012 Cargill
committed to building more animal feed mills in Vietnam, doubling its feed capacity to 1.5 million
tonnes per year by 2015.
Australian-Vietnamese joint venture Ausfeed, Indonesia’s Japfa Hypor Genetics and China’s
New Hope are also operating well in Vietnam with their own plants. China’s Tongwei Hoa Binh
was licensed in May 2014 to build an animal feed plant worth $10 million in the province. The
plant is expected to go into service by late 2015 with production set at 200,000 tonnes.
Dutch animal feed maker De Heus is building a $30 million factory in the northern province of
Vinh Phuc, its fifth facility in the country. The company’s spokesperson Nguyen Thai Van
confirmed that the firm planned to build two more plants by late 2015.
Meanwhile, Chinese animal feed producer Tequhope plans to set up 12 more animal feed plants
in Vietnam by 2020. The company currently has a factory in the northern province of Bac Giang.
Malaysia’s UBM Asia, a leading exhibition organiser, is co-operating with the Livestock
Production Department to organise Vietstock 2015 Expo and Forum, Vietnam’s number one
feed and livestock sector event in Ho Chi Minh City. The event will be joined by a record number
of 250 plus foreign husbandry firms from over 30 nations around the world, including the US, the
UK, the Netherlands, Singapore, France, Germany and China, reported the department.
Meat imports reach record high as local livestock industry flounders. The increasingly
high number of meat imports in recent months has put pressure on the domestic cattle
industry
Vietnamese beef products are no longer found on the shelves at Lotte, Co-op Mart and Big C,
the big supermarket chains in Vietnam. There are only beef imports from Australia, which,
though being more expensive than domestic products, are still selling better.
According to the General Department of Customs, in the first months of 2014, Vietnam imported
1,431 pigs, or two times higher than that imported in the same period of 2013. Of these, 66.4
percent were from the US, 31.9 percent from Canada and 1.7 percent from Taiwan.
Vietnamese government agencies had granted licenses to import 72,000 live cows by May 31,
which accounted for 13.2 percent of the total number of cows Australia had sold by that time.
Vietnam imported 150,000 cows from Australia to satisfy 2014 domestic demand. Besides live
cows, Vietnam has also been importing live buffaloes to slaughter domestically for sale and for
frozen products. About 300 tons of boneless meat and 14,532 tons of boned meat had been
imported by the end of May 2014.
Vietnam to step up beef cattle farming. It’s necessary to convert ineffective rice
cultivation areas into grass fields for raising beef cattle, since intensive livestock farming
is significantly more profitable
Vietnam imports about 200,000 heads of cattle every year. There are only 45,000 hectares of
grass across the nation at present. Based on Australian models, raising one cattle requires one
hectare of grass, and as such Vietnam is currently only able to feed 45,000 cattle, well below the
domestic demand. About 70 million tonnes of agricultural by-products like straw, bagasse, and
corn stalk, which can be turned into animal feed, are already produced in the country each year.
If each kilogramme of beef needs 6-7 kilograms of fodder, the country can produce one million
tonnes of beef using only 20 million tonnes of by-products. The enhancement of agricultural
residue processing ensure fodder supply for livestock. Another reason for underdeveloped beef
cattle farming in Vietnam is that up to 54 percent of the cattle population is local unproductive
breeds. Vietnam has previously crossed local cattle with the Sindhi breed to generate hybrids
weighing 220 kilograms each. But hybrids can weigh up to 330 kilograms each if new
technology is applied and local cattle are crossed with such breeds as Angus or Droughtmaster.
DLP Director Hoang Thanh Van said under the Prime Minister’s Decision No. 50/2014/QD-TTg
on assisting animal livestock between 2015 and 2020, Vietnamese farmers will be supported
with high-quality cattle sperm to hybridise their livestock. Cutting-edge fodder producing
technology will also be transferred to make the best use of agricultural residues.
A number of domestic businesses have recognised the observable profitability of raising beef
cattle. The DLP said HAGL (Hoang Anh Gia Lai Group) plans to rapidly develop its beef cattle
herds in the Central Highlands provinces of Dak Lak, Gia Lai, and Kon Tum. In late 2014, the
Daso Group’s Delta farm in Ho Chi Minh City imported nearly 1,800 cattle from Australia to
raise. There has also been a growing number of farms with over 100 heads of cattle in the
Central Highlands and eastern southern provinces. The sector aims to raise the proportion of
hybrid cattle to 70 percent and a beef output of 319,000 tonnes (equivalent to nearly 5.6 million
heads) by 2020. It will also develop small- and medium-sized livestock areas in suitable grassgrowing regions such as northern mountainous areas, northern and central coastal areas, and
the Central Highlands.
In 2014, Vietnam had about 5.16 million heads of cattle with a beef output of 297,400 tonnes – a
4.2 percent increase from a year earlier. It imported roughly 300 million USD worth of live cattle
and 50 million USD worth of frozen beef. However, despite being one of the world’s leading
agro-forestry-fishery exporters, Vietnam's agriculture reveals weaknesses — low value products
at cheap prices, inefficient use of land and natural resources, limited agricultural investment and
poor hygiene and food safety.
With the current status of productivity and quality of agricultural products, Vietnamese farmers
and businesses are in a pickle to take advantage of the coming golden opportunities absent
extensive investment and renovation. Thus, opportunities could be missed and leave Vietnam
stagnant, producing low value commodities.
Investors from the Republic of Korea, Australia and Japan are actively looking for favourable
investment opportunities and have embarked on a number of land lease projects for production,
processing and exports in Vietnam. If Vietnamese farmers are off the mark in negotiating these
agreements they could find themselves simply working as farm labour for foreign investors, or in
other words – they will just be employees on their soil.
In the face of limited agricultural investment, foreign direct investment (FDI) inflows in agriculture
are invaluable. Therefore it is critically important that these agreements be structured in a
manner that enables local farmers and agro businesses to team up with foreign investors on an
equal partnership basis.
On a positive note, in recent times, a series of big enterprises across many fields have shifted
their investment in the agricultural sector to large-scale agricultural projects based on high-tech
models which have brought higher efficiency. The expanding capital inflows into the agricultural
sector show that sufficient resources to restructure the sector are available – it’s just a matter of
sitting down at the negotiating table and working out the details. To this end however,
businesses need the support of the government and more incentives to help entice foreign
investors to fund land and infrastructure purchases as well as acquire the necessary
technologies to revamp the agriculture sector.
To call for more agricultural investment, the Vietnam Ministry of Agriculture and Rural
Development (MARD) has been working hand in hand with multinational groups to implement
the public–private-partnership (PPP) model. Additionally, the MARD, last year, drafted a strategy
for attracting FDI in the agro- forestry- fisheries sector until 2030 for submission to the Prime
Minister for approval.
Agriculture is the biggest advantage of Vietnam’s economy and it logically follows therefore
that agricultural restructuring is crucially important in negotiating free trade agreements.
Restruc-turing is seen as a monumental opportunity that will benefit the whole national
economy. Suc-cessful restructuring will not only enable Vietnam to become an agricultural
power, but also serve as a promoter of the industry and service.
In detail, provinces with modern bigger farms are more economical and thus more profitable.
Concomitantly grows regionally the settlement of suppliers and service companies in the
agricultural economy of fertilizer to harvesters.That creates additional jobs. More purchasing
power develops. With it raising the standard of living is produced in these areas.
Viet Nam must develop a own support industry for agriculture machine manufacturing
and offer locally produced prefabricated modular stables-systems for livestock
production
Viet Nam only manufactures 35 percent of the agricultural machines used in the country. The
rest are imported, mostly from China and Japan. We have not developed agricultural machinery
production largely because the country's support industry is at zero. Our support industry meets
about 20 per cent of the country's demand, leading to difficulties in attracting investment. We
mainly import ploughs, pesticide sprayers, and harvesting machines.
A new market with huge potential for European manufacturers of agricultural equipment,
devices and stables
Farmers to get preferential loans
Short-term loans will be given to farmers to buy fertilisers, seedlings and poultry and livestock
breeds, as well as agricultural equipment. The medium and long-term loans will support
investments in infrastructure and equipment to develop hi-tech models. The loans aim to forge
financial connectivity between businesses and farmers for new farming models.
Financially strong local companies with high capital invest preferably in agriculture,
especially cattle-business
Five years after beginning to invest in agriculture, HAGL (Hoang Anh Gia Lai Joint Stock
Company) said the sector is now its major source of revenue and profit. At its annual
shareholders' meeting in HCM City, it said the sector accounted for 39 per cent of turnover and
59 per cent of earnings last year. The company's profit was VND999 billion on revenues of
nearly VND2.8 trillion ($118 million). Profits from rubber and sugarcane were VND165 billion
and VND537 billion ($25.6 million) on revenues of VND241 billion and VND838 billion.
Real estate, which used to be its mainstay, contributed to only 3.2 per cent of its profit; others
such as hydroelectricity, services, construction, and mining accounted for 0.9-20 per cent.
HAGL's turnover last year was almost 25 per cent below the target, and Chairman Doan Nguyen
Duc, rated the second richest man on the Vietnamese stock exchange, attributed it to the
company's restructuring. He said it had sold six hydroelectricity plants in Viet Nam, sold stakes
in Hoang Anh Gia Lai Timber Corporation, and pulled out of some real estate projects.
HAGL has shifted their investments to agriculture. In mid-2014, it signed co-operation
agreements with Nutifood and Vissan to develop a project to raise cows and oxen, and to build a
processing plant.
Ambitious 2014: At the meeting, Nguyen Van Su , a director, created a stir by promising to
resign if the company did not achieve a growth of 50 per cent in after-tax profit this year.
Duc said the company plans to raise cows and grow corn, rubber, oil palm, and sugarcane in
Laos and Cambodia. Duc backed Su, saying he too was confident because crops like corn, oil
palm, and sugarcane in Laos and Cambodia would soon be harvested and yield large profits
thanks to the use of advanced technologies. Duc revealed that a director would leave for
Australia late last week to buy 40,000 cows to farm in Laos. "From 2015, HAGL will have a new
source of revenue from cows," he said. The company also has real-estate projects in Myanmar
and is set to build two airports in Laos.
HAGL's first Australian beef products introduced to HCM City market
Vissan Company Ltd, a domestic meat processor and supplier, and HAGL will sell 2,000
Australian cows to the local market to serve only the Tet (Lunar New Year 19 – 22 february
2015) holiday. These are the first products to be marketed locally under the cooperation of the
two companies, the company said end of january 2015 in HCM City. Doan Nguyen Duc,
chairman of HAGL, said the cows, which were imported from Australia, are 18 months old and
over, weighing 200-250kg each. They have been fed at HAGL's farms in Viet Nam, Laos and
Cambodia. Each will weight about 500-550 kg when they are sold to the market. At the
ceremony to introduce the first product to the market, a representative of Vissan said the
demand for beef in Viet Nam was about 3,000-4,000 cows per day.
To meet demand, each year the country imports 1 million cows. Co-operation between the two
companies has played an important role in localising cow feeding in Viet Nam. This year, HAGL
plans to feed 100,000 cows, and the figure is expected to increase to 200,000 in 2016. Duc said
the company plans to invest more in feeding oxen as the sector has been very profitable.
The Australian beef products of Vissan and HAGL are sold at Satra, Saigon Co-op Marts and
Vissan's outlets for about VND320,000 (US$16) per kilo.
From supermarkets to retail stores, imported meat floods Vietnam market
Vietnam has surpassed China to become the second-largest importer of Australian cattle, and
retail stores across the southern metropolis have been replacing domestic beef with Australian
meat over the last year. Most of the Aussie beef on sale in Ho Chi Minh City is produced from
live cattle imported from Australia, a trend that emerged in Vietnam’s big cities around two years
ago. Australian beef only costs VND20,000-30,000 (US$1-1.5) a kg more than locally produced
meat.
Vietnam imported 129,273 cows from Australia in the first eight months 2014, up 31,000 cattle
compared to the full-year figure in 2013, according to the Vietnam Livestock Association.
This is not to mention the hundreds of thousands of cattle from Thailand, Laos, and Cambodia
that are brought to Vietnam via the central and southwestern borders, according to the
association. In June Vietnam also opened the door to Japanese beef, enabling more than 20
meat exporters from Japan to officially distribute the famed Kobe beef in the country.
Nearly $3.3 million worth of meat imports from the EU have also arrived in Vietnam in the JanSept 2014 period, seven times the amount imported in the same period 2013 as figures from the
General Department of Vietnam Customs show.
In July last year, the Union of Producers and Employers of Meat Industry, a Poland-based trade
association of meat-industry related entities, initiated a 36-month campaign to enable highquality European meat to enter three key markets, including Vietnam, South Korea, and the U.S.
EU meat imports to Vietnam are expected to continue rising in the future, as the country
gets now a key market for European meat exporters and consequently for the equipment
manufacturers for the meat processing industry to local industry and trade analogous
insiders.
Productionservice-Vietnam handles in Vietnam and Indochina all business activities practicecompliant and reliable. No problems with authorities, site selection, staff recruitment and
training. Our controlling also has the costs and potential returns in grip. We can offer interim
manager too.
Interested investors / companies we give an free first time estimate of the requirements,
possibilities and project costs http://www.produktionsservicevietnam.com/Englisch/leistungen.php
Source: Trung Quang Dinh, Prof. Hilmarsson University of Akureyri. Vietnam Business News –
The Economic Mirror of Indochina. GSO. VNA. Hanoi Times.
Economy & Business
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V - Market Entry for European SME in Vietnam Asia
From 2015 Asia is the world's largest free trade zone.
In the face of the ASEAN Free Trade Zone Agreements
EVFTA (EU-Vietnam FTA)
TPP (Trans-Pacific Partnership)
AEC (ASEAN Economic Community)
RCEP (Regional Economic Partnership)
European entrepreneur should be present in ASEAN. When these trade agreements come 2015
into force, Vietnamese exports will be freely accessible to the world’s largest markets.
Whoever wants to join the fields of opportunities are:
> Procurment, Import, Export, Marketing, Sales of merchandise of all kinds
> Production. As a in-house production or contract manufacturing
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Productionservice-Vietnam handles in Vietnam and Indochina all business activities practicecompliant and reliable. No problems with authorities, site selection, staff recruitment and
training. Our controlling also has the costs and potential returns in grip. We can offer interim
manager too.
Interested investors / companies we give an free first time estimate of the requirements,
possibilities and project costs http://www.produktionsservicevietnam.com/Englisch/leistungen.php
V - Japan suggests building agro-industrial park in Vietnam’s veggie hub
Tuoitrenews , 24/03/2015
A Japanese agency has suggested developing a hi-tech agricultural-industrial park in the
Central Highlands city of Da Lat, known as Vietnam’s veggie hub, to make the locality a
leading source of green produce for Japan.
Mori Mutsuya, chief representative of the Japan International Cooperation Agency (JICA) in
Vietnam, put forward the idea at a seminar his agency organized jointly with the administration
of the Central Highlands province of Lam Dong and the Japan External Trade Organization
(JETRO) on Monday.
Da Lat is the capital city of Lam Dong, which is seen as a potential source of fruits and
vegetables for Japan, according to the attendees. The proposed agro-industrial park is expected
to cover 300 hectares and be capable of producing 20,000 metric tons of green produce a year,
all of which will be exported to Japan, according to the JICA representative. Mutsuya hinted that
around 50 Japanese agricultural businesses will lease spaces at the park, adding the JICA has
already found a suitable land plot for the construction. If site clearance could be completed in 12
months, it will take another two years for the park to reach completion, he added.
The Japan-Lam Dong seminar was joined by 30 businesses from the East Asian country and 60
Vietnamese companies. Lam Dong chairman Doan Van Viet took advantage of the event to call
for Japanese investment in the hi-tech agricultural production in his province. “Lam Dong
welcomes Japanese businesses to invest in the fields of post-harvest technology, flower
wholesaling, and agricultural produce processing industries,” he said.
A representative from Japanese advisory company Dream Incubator Inc. (DI) told the seminar
that Lam Dong has a golden chance to become the leading production cluster for Japan. Japan
is the largest importer of processed fruit and vegetable products and fresh flowers in Asia,
accounting for up to 70 percent and 60 percent of the total imports in the region, according to DI.
The domestic production of these products in Japan is shrinking, whereas shipments from such
countries as China, Malaysia, and Columbia have also dropped, which the Japanese firm said
creates an opportunity for Lam Dong. DI also pinpoints three shortcomings Lam Dong must
improve to grab the chance to become a stable supplier of green produce for Japan: high
production costs, unstable supply, and small production scales.
O - Russian firm to build Vietnam's first solar power plant
Cập nhật: 24/03/2015
Russian energy company Arman Holding is working with the sole power provider in
Vietnam EVN on a solar plant worth US$140 million.
A source from Quang Nam Province in central Vietnam said the Russian firm, the main investor
of the project, is surveying for a location with its partners – Singapore’s finance company Royale
Star Holdings and Vietnam’s Natural Energy Investment & Development JSC.
The 100-megawatt plant is expected to be the first solar power project in Vietnam connected to
the national grid network.
The partners are discussing with EVN, fully known as Electricity of Vietnam, about market
prices.
Further details and timeframe of the project are not available.
Vietnam has been putting solar panels on large buildings across the country, but the generated
electricity mostly serves the buildings themselves.
The country is still depending on hydro and thermal plants for most of its electricity demand.
C - ADB Forecasts Stronger Growth for Cambodia
Khmer Times, Igor Kossov, 24 March 2015
Cambodia’s economic growth will accelerate in the coming two years due to improving
conditions in the US, lower domestic labor tensions and soft global fuel costs, the Asian
Development Bank (ADB) said in a report released yesterday.
ADB representatives present the findings of the bank’s annual Asian Development Outlook
report. KT Photo: Igor Kossov
In its annual report, titled “Asian Development Outlook 2015,” the bank estimated that
Cambodia’s growth will rise from 7 percent last year to 7.3 percent in 2015 and 7.5 percent in
2016. Agriculture, garments, tourism and construction continue to drive the economy, but the
country is becoming more advanced in each of those categories and moving higher up global
value chains, it said.
“With the stronger performance of the world economy and overall prudent macroeconomic
management, the growth prospects for Cambodia over the next two years remain good,” Mr.
Eric Sidgwick, ADB Country Director for Cambodia, said at a press conference for the report’s
release.
Growth Sectors
Garments form one of the pillars of Cambodia’s economy, accounting for nearly three quarters
of its total exports, ADB data shows.
Export growth of garments and footwear cooled slightly to 10.7 percent last year due to labor
unrest in early 2014. The bank said the situation has eased, but has not ruled out more unrest in
the future, which would be a significant source of risk for the economy. In the meantime, output
quality is improving. “Cambodia managed to increase the quality and price of its products, over
the years, not just exporting average t-shirts but also high-end garments for more sophisticated
consumers,” Mr. Sidgwick said.
Cambodia’s agricultural sector, another pillar of the economy, saw slow growth last year as a
result of flooding and drought damage. The sector increased by just 1.8 percent in 2014, helped
along by rising cassava demand from China. At the same time, Cambodians are increasingly
milling their own rice, which is “winning international awards for its quality,” according to Mr.
Sidgwick.
Growth in trading, tourism and real estate contributed 7.9 percent to expansion in services last
year. Tourist arrivals were up 7 percent to 4.5 million in 2014. To maximize the sector’s
economic contribution, measures should be taken to ensure that tourists spend money locally
rather than giving it all to foreign airlines and hotels, the report said.
Macroeconomic Indicators
Inflation grew in early 2014 due to higher meat prices but the global oil price decline brought it
back down. Average inflation was 3.9 percent for the year, while ADB predicts next year will see
an average 1.6 percent inflation on low oil prices. Cambodia improved its tax collection, lifting
revenue to 15.7 percent of GDP and expenditure as a ratio of GDP declined. The fiscal deficit,
excluding grants, narrowed to 4.1 percent, from around 9.3 percent. The deficit is “broadly
stable,” ADB said.
Access to credit has improved for private enterprise, which along with money supply grew by
about 30 percent last year. The ratio of credit to GDP climbed to 54.6 percent in 2014, from 45
percent a year earlier. This, and increased dollarization, might heighten macroeconomic risks,
and requires stronger oversight by the government, the report said.
Diversification
Despite praising the economy, ADB said that Cambodia needs to do more to diversify its
industry and exports. “Cambodia needs to continue to broaden its economic base and diversify
sources of growth to support more sustainable and inclusive growth,” said Mr. Sidgwick.
The ADB indicated that small assembly in Special Economic Zones (SEZs), including bicycles,
car wiring, phone components and packaging is increasing. While this activity is still too small to
impact the economy, if it continues to grow at the present rate, it will sustain and diversify growth
in a few years, the report said, adding that vocational training is necessary to help this
diversification succeed. “Cambodia needs to worry less about where its export markets are, but
needs to diversify its clients and also its products,” said Mr. Sidgwick
V - More private investments called for improving Vietnam’s healthcare
sector
By Chi Tin , 23/03/2015
Vietnam’s healthcare authorities continue to court increased private investments, but
making efficient use of private-sector capacity and benefits remains an issue.
While public hospitals are hugely over-crowded the patient-bed occupancy rate in the
private sector remains rather low at many private hospitals.
A recent Ministry of Health (MoH) report showed that only 5 per cent of private hospitals
reported a full patient bed occupancy rate while the rate is as low from 20 to 60 per cent at 56
per cent of these private units.
Head of MoH’s Financial Planning Department Nguyen Nam Lien said he believes the
bottleneck would be addressed through gradually reducing subsidies the public receive at their
normal hospitals. “This will stimulate the public into using the private sector facilities,” Lien
said. The MoH has presented a concrete roadmap to revise service prices in the public
healthcare sector.
During 2014-2015, the price of medical services will include all direct expenses such as wage
costs and shift charges, even in minor surgery. The direct costs for patients during this period
will now include 30 per cent of the wage expenditure for provincial-level hospitals and district
level hospitals in Hanoi and Ho Chi Minh City, and 50 per cent of wage expenditure for central
level hospitals.
In the following period 2016-2017, the service price will cover 100 per cent of the wage
expenditure for central and provincial level hospitals and 50 per cent for district-level hospitals.
From 2018 onwards, the medical service charge for patients at public healthcare units will
include the patient paying for direct expenses, wage expenditure, housing and equipment
amortisation, training, and scientific research. “There will be a shift in the way state budget is
allocated. Support will go directly to medical insurance beneficiaries instead of going to hospitals
as previously,” Lien said. This mechanism will encourage people to buy medical insurance,
creating the conditions for the growth of the private sector. Promoting public-private partnership
in medical services development is also important to attract private investors into the sector.
In December 2014, the prime minister enacted Resolution 93/NQ-CP presenting some policies
and mechanisms to spur the health sector. Healthcare units are encouraged to form so-called
‘alliances’ and joint ventures to build new facilities to be operating as businesses.
The southern province of Dong Nai is a successful public-private model. Dong Nai general
hospital’s second phase investment, carrying a price tag of VND1.2 trillion ($56 million) and
having 700 patient-beds in scope, will go underway using private capital.
According to the Ministry of Health, Vietnam is now home to 170 private hospitals
accommodating 9,501 patient-beds, representing 11 per cent of total number of hospitals
nationwide. This includes six foreign-backed hospitals and more than 30,000 private clinics and
medical service facilities.
Patient-beds at private healthcare units only make up about 4 per cent of the total whole while
nearly 250,000 people are working at these units, including more than 64,400 doctors, 88,000
nurses, 15,180 technicians and 27,500 midwives.
Some private hospitals have seen growth such as the Hanoi French Hospital, Vimec
international Hospital (Hanoi), Hoan My general hospital (Ho Chi Minh City), Hop Luc general
hospital (Thanh Hoa) and Hoang Viet Thang general hospital (Hue).
Thereof see our February 2014 newsletter “Vietnam's healthcare chain”
http://produktionsservice-vietnam.com/news.php
V - Three richest Vietnamese men step into agriculture to meet local
demand
tuoi tre news, 03/22/2015
The three richest Vietnamese men on the local stock exchange have already entered, or
announced that they will, agriculture, from vegetable planting and livestock farming to
animal feed manufacturing to keep up with rising demand for quality produce from the
market.
Vietnam’s top realty developer, Vingroup, last week proposed that authorities in the northern
province of Quang Ninh allow the firm to set up large-scale farms for vegetables, fruits, and
other agricultural products in the locality, according to news website VnExpress.
The firm’s plan was warmly welcomed by both leaders of the Ministry of Agriculture and Rural
Development and the provincial authorities, Quang Ninh has a population of 1.2 million and is
home to tens of thousands of workers from other areas working in industrial zones across the
province, plus seven million foreign and local tourists each year. Vingroup, about 30 percent of
which is owned by Pham Nhat Vuong, the richest man in Vietnam with a net worth Forbes said
topping US$1.7 billion, has long planned to penetrate the new sector. In a press briefing after
the 2015 Lunar New Year, Vuong, chairman of Vingroup, said that after working with agricultural
experts from Israel, he found that it is worthwhile to pour money into agriculture.
The group already owns several dozen hectares of agricultural land to realize Vuong’s dream.
The first dollar billionaire of Vietnam said his ambitious project will help boost the country’s
agricultural development, and local consumers will be able to use clean agro-produce at low
prices.
As of March 15, Vuong had total assets reaching VND20.99 trillion (about $1 billion) on the
stock market, followed by Doan Nguyen Duc, chairman of Hoang Anh Gia Lai Group with more
than VND7.6 trillion ($357.2 million), and Tran Dinh Long, chairman of Hoa Phat Group, with
more than VND5.4 billion ($253.8 million), according to statistics by VnExpress.
But Vuong was the latest of the three to unveil a plan regarding the agriculture sector.
Prior to Vingroup’s announcement, Hoa Phat Group, one of the country’s big names in steel
production and real estate, late last year said the firm’s long-term strategic investment will be
focused on agriculture, and it will set aside human and financial resources for that investment.
Initially, the group will invest VND300 billion ($14.1 million) in establishing an animal feed plant
with a capacity of 300,000 metric tons a year in the northern province of Hung Yen. The plant,
which will launch its first batches of products in June this year, will help Hoa Phat earn around
VND3 trillion ($141 million) in revenue a year in the next three years.
Vietnam’s animal feed market is worth around $6 billion annually, and the country is expected to
churn out 15.6 million metric tons this year, up 6.1 percent year on year, according to the
Ministry of Agriculture and Rural Development. However, this number is not sufficient to meet
market demand, as according to the sector’s development strategies, Vietnam needs 18 to 20
million metric tons of animal feed by the end of this year, and around 25-26 million metric tons
by 2020.
To meet this demand, the Southeast Asian country has spent billions of dollars importing animal
feed, such as $3.3 billion in 2014. In addition, the market is still in the hands of foreign rivals, as
a report from the Association of Livestock showed that joint ventures and 100-percent foreigninvested firms accounted for over 60 percent of total feed production in 2014.
Doan Nguyen Duc, chairman of conglomerate Hoang Anh Gia Lai, which previously
concentrated on real estate, turned his head to agriculture by setting up rubber, sugarcane,
palm oil, and corn plantations in Laos and Cambodia in 2008 after recognizing that the local
realty sector has many potential and cyclical risks. As of mid-2014, Hoang Anh Gia Lai owned
about 44,500 hectares of rubber, 8,000 hectares of sugarcane, 17,300 hectares of oil palm, and
5,000 hectares of corn. Taking advantage of available agricultural by-products, Hoang Anh Gia
Lai last year executed a plan to raise 100,000 cows locally.
The firm and its partner, Ho Chi Minh City-based milk manufacturer Nutifood, on Wednesday
reached a deal with the authorities in the northern province of Ha Nam to build a chain of
Nutifood-model dairy farms and develop the local dairy cow herd.
They will run training courses for local dairy farmers on technical and scientific processes of
breeding Australian dairy cows imported by the firm, or any other kind of dairy cows these
farmers want to raise. With the construction of the largest dairy plant in the northern region, a
VND1.6 trillion ($75.2 million) milk plant with a capacity of 200 million liters of liquid milk and
31,000 metric tons of milk powder per year in the province’s Thanh Liem District, Nutifood is
committed to buying all the raw milk produced by local farmers, said Tran Thanh Hai, chairman
of Nutifood.
See also November 2014 Newsletter “Hanoi focuses on developing high-tech agriculture”
http://produktionsservice-vietnam.com/news.php
L - SEZs seen as key to expanding Laos economy
By Somsack Pongkhao, March 19, 2015
Special and specific economic zones (SEZs) have become the main driver for growth in the
industrial and service sectors in Laos, laying the foundation for diversifying the nation's economy
into the future. The development of SEZ's is part of the government's policies to boost economic
growth and generate job opportunities for local people through increased modernisation and
industrialisation. The government's policy to encourage the industrialisation of Laos' economy is
resulting in changes to the country's economic makeup, with the industrial and service sector
gradually growing while the agriculture and forestry sector is declining.
Within the SEZs themselves the industrial sector accounts for 28 percent of the total economic
activity while the services sector makes up 44 percent. This is in stark contrast to the overall
general economy where agriculture still comprises the largest share of the economy. The
government has invested more than US$8.8 million to facilitate the development of special and
specific economic zones (SEZs), aiming to boost economic growth.
Deputy Minister and Vice President of the Lao National Committee for Special Economic Zones
(NCSEZ) Ms Bouatha Khattiya said at a meeting in Vientiane this week that the rising number of
foreign investments in the SEZs demonstrates investors' increasing confidence in doing
businesses in Laos. Over the past 12 years, about 198 companies have been approved to
invest in the SEZs in Laos with the total value of investment amounting to over US$6 billion. Of
the total figure, more than US$1 billion has already been spent on development activities at the
zones. The largest number of foreign companies investing in the SEZs zones is from China.
The SEZs not only contribute to urbanising the remote regions of Laos and boosting economic
growth but also contribute to generating income for Lao people. Currently over 10,000 people
are employed in the zones, of which 32.4 percent are Lao people and the rest are foreign
nationals.
The government is committed to focusing on labour skill development so that more Lao people
are employed and benefit from the SEZ developments. Laos currently has two special economic
zones and eight specific economic zones, which combined cover an area of more than 13,600
hectares. Despite the achievements, she said, Laos will need to continue to handle some
challenges and some shortcomings notably related to land compensation, legislation for SE Z
management and plans to supply Lao labour to the zones. Another challenge was to ensure that
the SEZ projects are beneficial to local people affected by their development.
The 10 SEZs in Laos include the That Luang Marsh specific economic zone in Vientiane,
Savan-Seno special economic zone in Savannakhet province, Golden Triangle special
economic zone in Bokeo province, Boten Dankham specific economic zone in Luang Namtha
province, Vientiane Long Thanh Golf Course in Vientiane and the Phoukhiew specific economic
zone in Khammuan province.
V - Vietnam draws attention from FDI firms
VietNamNet Bridge14.3.2015,
Several foreign direct investment (FDI) enterprises are planning to develop big projects in
Vietnam this year in view of an improved investment environment.
Workers at Samsung Viet Nam in the northern province of Bac Ninh's Yen Phong District on an
assembly line. Foreign investors are looking at big projects in Viet Nam.
Katsuyoshi Soma, general director of Canon Viet Nam told Hai quan (Customs) newspaper that
the company had achieved significant success in 2014 in Viet Nam despite a slow recovery in
the world market. This year, the company plans to maintain stable production and focus on
renewing quality, technique and automation. It will also actively seek local suppliers in the
support industry for boosting localisation and reducing inventory as well as prices.
Samsung Viet Nam has designed a big plan for investing in the energy, shipbuilding and airport
sectors in the country this year with an expected total investment of US$20 billion. In the field of
infrastructure, Samsung C&T has signed a memorandum of understanding to develop the Vung
Ang 3 Thermopower Plant in the central Ha Tinh Province under a build-operation-transfer
(BOT), with a total investment of $2.45 billion. It has been preparing a feasibility study and will
submit it to the Prime Minister for approval this year. Samsung has also exhibited an interest in
transport projects in Viet Nam. It will research and participate in investment, construction and
operations for some categories at the Long Thanh Airport, such as terminal and duty-free shops,
if the project is approved. It expects the feasibility study to take place during the first quarter of
this year.
The company has also invested in shipbuilding plants in the southern-central Khanh Hoa
Province. Han Myoung Sup, Samsung Viet Nam's general director said the company planned to
set up two factories in the northern Thai Nguyen Province, while investing in the Centre for
Research and Development in Ha Noi's Cau Giay District with 1,200 labourers.
The FDI's big plans this year show that Viet Nam's investment environment is attracting
numerous foreign investors.
Soma of Canon said Viet Nam was still a young economy and would develop strongly with
politically stable and favourable policies for foreign investors and an abundant labour workforce.
However, FDI firms expect further improvement. A recent survey conducted by the Japan
External Trade Organization (JETRO) showed that 66 per cent of Japanese businesses want to
expand into Viet Nam and consider the country an important investment location. In addition,
they have also expressed concern for risks in the investment environment, such as
administrative procedures and ramping up labour costs.
Soma added that the Vietnamese business environment should be improved through better
infrastructure, upgrading the electricity system and developing seaports and roads. The
supporting industry should be also developed, he said, adding that the Government plans to
promulgate a decree for developing the sector. He expects the decree to create a better legal
framework and opportunities for businesses to improve their competitiveness globally.
Samsung expansion
The Ministry of Industry and Trade and Samsung Electronics Viet Nam has organised a trip for
Vietnamese enterprises to visit eight of Samsung's tier 1 and 2 electronics and mechanical parts
suppliers. The two-day trip for 20 Vietnamese firms was the latest effort by Samsung towards
promoting the development of Viet Nam's supporting industries. Samsung has been expanding
in Viet Nam with its latest and premium products, and will reportedly continue to enhance
investments in mobile phone manufacturing in the country in the future. It has said that it will
always welcome Vietnamese firms to join its supply chain, provided they satisfy the three criteria
of quality, timely delivery and price. Jang Hoyoung, General Director of Samsung's purchase
division, expected that after the visit, the Vietnamese firms can send a registration form to the
group's project department to confirm whether they can produce components for Samsung. "The
purchase division will be willing to support them, if the Vietnamese firms meet the criteria
required to become Samsung's suppliers," he said.
Samsung currently has 87 suppliers in Viet Nam. Jang emphasised that Samsung will not
discriminate between Vietnamese and Korean suppliers. Samsung is willing to co-operate if
Vietnamese enterprises can provide goods at reasonable prices and with timely delivery. Last
September, Samsung held a seminar in Ha Noi to search for local suppliers. It is expected that
Samsung will organise a similar seminar before June 2015, to increase the number of
Vietnamese suppliers in its supply chain.
Samsung has affirmed its priority for co-operation with competent authorities in Viet Nam to
support electronics and mechanical parts manufacturers to develop their capacities. Samsung
has prioritised the need to find local suppliers in order to reduce charges and meet the
production requirement, which will benefit both Samsung and Viet Nam.
O - Japan printer manufacturer expands operations
VNS, 13/03/2015
Japan's Kyocera Corp plans an expansion worth US$57.8 million in Viet Nam this year in
an effort to shift part of its high-cost Chinese operation to Vietnam.
Japan's Kyocera Corp plans an expansion worth US$57.8 million in Viet Nam this year.
By March 2018, its factory in the northern city of Hai Phong is expected to produce two million
units of multi-purpose printers each year, quadrupling the current level.
Construction on a new facility producing metal moulds and plastic components will also begin no
later than this August.
The workforce is expected to triple to 5,000 with over 200 employees working in research and
development. Kyocera currently produces over two million multi-purpose printers annually,
mostly in China. Europe accounts for the largest market share, especially Russia and Turkey.
O - EVFTA’s positive impacts on VN-EU relations
VGP, 10/2/2015
Viet Nam and the EU will continue the 12th round of negotiations on the EU-Viet Nam
Free Trade Agreement (EVFTA) on March 24 in Ha Noi, which is expected the last session
before the negotiations are concluded and the agreement signed.
The signing of the Agreement of Partnership and Cooperation and the EVFTA negotiations are
positive signs in bilateral ties as Viet Nam and the EU celebrate the 25th anniversary of
diplomatic ties this year, said spokesman for the EC's Trade Office Joseph Waldstein
Wartenberg.
Viet Nam is a friendly and reliable partner of the EU and the EVFTA will promote growth for both
sides, he asserted. The EU is the second largest trade partner of Viet Nam, with the two-way
trade turnover reaching €27 billion in 2013. Viet Nam is the fourth largest trading partner of
the EU in ASEAN and the 30th in the world. The nation’s exports to the EU increased by 28%
during the 2009-2013 period. Mr. Wartenberg added that the country is one of the most rapidly
developing ASEAN countries and serves as an outstanding example of an open trade market.
With its young and skilled workforce, the country has great potential for trade and investment
partnership with the EU, he said.
The official asserted that the EVFTA is an ambitious and comprehensive deal in terms of goods,
services, investment and government purchase. Apart from the removal of tariff and non-tariff
barriers, both sides are working to settle other issues related to trade, legal matters, competition,
intellectual property, and geographical indication, he revealed. He also expressed his
appreciation of Viet Nam’s commitment to economic and political reform, affirming that the EU
will continue assisting Viet Nam in the process through the EVFTA.
Mr. Warternberg said that besides tax and trade barriers, negotiations would focus on legal
issues, competitiveness and other issues related to intellectual property rights. Other regulations
on the labor and investment environment as well as a legal framework involving civil
organizations will also be negotiated.
Viet Nam should commit to protecting and managing sustainably its biodiversity and forests,
preventing illegal logging as part of its efforts to fight climate change, he suggested.
C - Cambodia Joins Treaty To Protect Trademarks
By Chris Mueller | March 9, 2015
Cambodia last week became the 95th member of the Madrid System, an international
agreement that allows businesses to register their trademarks in more than 110 countries,
according to a statement posted to the website of the U.N.’s World Intellectual Property
Organization (WIPO).
Cambodia joined the Madrid protocol—a revised treaty the Madrid System functions under—
after the Commerce Ministry submitted its “instrument of accession” to WIPO director general
Francis Gurry, the statement says. “With this accession, the Madrid System provides
Cambodian brand owners the potential to protect their products through one international
application covering more than 110 countries,” it says.Officials at the Commerce Ministry could
not be reached Sunday.
According to the WIPO statement, the Madrid System “simplifies the process of multinational
trademark registration by reducing the requirement to file an application at the intellectual
property office in each country in which protection is sought.”
V - HCM City continues to be engine of national growth
The Hanoitimes, 08 Mar 2015
Ho Chi Minh City is to continue playing its role as an engine of Vietnam’s growth and a
nucleus of development in every aspect in the southern key economic zone, experts
agreed at a March 6 workshop in the city.
At the event, which was held to scrutinize a blueprint on the city’s economic restructuring for
2013-2020, Deputy Director of the HCM City Institute for Development Studies Tran Anh Tuan
said the economic restructuring scheme has improved the quality of economic growth based on
the effective use of resources, especially capital, labour and land. The scheme is aligned with a
national economic restructuring project that targets public investment, credit organisations, and
State-owned enterprises.
To Duy Lam, Director of the State Bank’s Ho Chi Minh City branch, described the restructuring
of credit organisations as a cornerstone and driving force that has brought about improved
financial capability and risk management, ensuring the stable growth of the banking sector and
monetary market in particular. Within the city’s industry and trade sector, restructuring should be
focused on stimulating production in tandem with fostering innovations and human resources,
particularly in mechanical manufacturing, electronics, information technology, chemicals,
pharmaceuticals, rubber, and food processing, experts suggested. They also recommended
developing support industry, raise the rate of local contents in products, and join the global
supply chain.
According to the Department of Industry and Trade, the technology, processing and
manufacturing sectors account for 68.26 percent of the city’s exports.
About shifting the structure of tourism sector, a representative from the municipal Department of
Tourism talked about plans to promote competitive tourist products and boost marketing in
major markets, domestically and globally. Throughout 2015, the sector is continuing building up
the HCM City tourism brand while working for the targets of a 8-10% yearly increase in foreign
arrivals and a 15-20% rise in domestic visitors. Participants also discussed policies impacting
the city’s economic restructuring in services, industry, agriculture, and land, among others.
O - Foreign companies dominate list of best workplaces in Vietnam
Vietnamplus, March 5, 2015
Foreign-invested and joint stock companies dominated the list of 100 best workplaces in
Vietnam in 2014 published on March 5.
Unilever, a British–Dutch multinational consumer goods company, topped the list. Six other
consumer goods companies – Vinamilk, Abbott, Nestle, Procter & Gamble, Coca Cola, Pepsi –
the two software companies Microsoft and IBM, and the HSBC bank filled out the top ten. The
list had 20 Vietnamese companies, six more than on the 2013 list.
FPT was the leader in the retail, wholesale and commercial sector while Vingroup led the
property, architecture and design sector. Vietjet led the tourism, hotel and restaurant industry.
The electronics, technology and gadget sector was topped by Samsung and Nike was the
leading company in clothing and footwear sector.
The organiser also announced the six best employers, including Vinamilk, Unilever and
Microsoft.
The list is the result of a joint survey by Anphabe.com, the leading “Share to Succeed”
community for business leaders and experts in Vietnam, and Nielsen, an American global
information and measurement company. The survey was conducted from October, 2014 to
January 2015 with the participation of over 15,000 respondents in 24 career fields across the
nation.
The survey was based on 46 criteria in six main groups: salary, bonuses and beneficiaries;
development opportunities; leadership; culture and values; job quality and life; and the
company’s reputation.
C – Businesses up, reveals survey
Phnom Penh Times, 26 February 2015
Cambodia increased the number of business enterprises it had to 513,759 companies at
the end of March last year, up from the 463,363 enterprises accounted for in 2011,
according to the final results of the 2014 Cambodia Inter-Censal Economic Survey.
Factory workers conduct quality control checks on food products in Phnom Penh last
year at a medium-sized enterprise.
The 2014 report was released by Chhay Than, minister at the Ministry of Planning, who said the
number of self-employed or single employee enterprises decreased 13 per cent in 2014
compared to 2011, the last time the survey was completed. However, the number of enterprise
that employed two or three people increased 28 per cent and 47 per cent respectively. “The data
will serve as a major statistical base for investors to see, consider, and make easier decisions
as to which sectors they should invest in,” Than said. An important metric is the number of
businesses employing 100 or more employees, which saw a 14 per cent increase from 2011,
said Than. “This shows that enterprise owners that participate in the economic sector have
gradually shifted investments in the agricultural sector to the trading, industry, and service
sector.”
The Cambodian government is in the process of preparing a policy aimed at strengthening the
Kingdom’s small and medium-sized enterprises (SMEs), and data from the CIES 2014 would be
used for by policy makers to that effect, according to Than. The CIES data would also be handy
for formulating central and local government policies, and can be used by research institutes for
crafting management strategy and market research in the private sector. “Maybe during the first
half of next year [2015], the policy will be ready for implementation,” said Cham Prasidh,
minister at the Ministry of Industry and Handicraft, last December, adding that a comprehensive
SME policy would boost industry competitiveness.
Phnom Penh led the survey with 97,000 enterprises, or 19 per cent of the total number.
Kampong Cham followed with 54,231 enterprises, Kandal with 38,679, and Siem Reap and
Takeo had 37,622 and 32,780 companies respectively.
In Channy, group CEO of Acleda Bank, said the data was especially important for banking
institutions as it helps them plan their fiscal strategies based on the growing number of
enterprises in the country. “It’s good that we have a specific figure of the number of enterprises,”
he said. “When enterprises grow, the banking sector also grows and the economy, as whole,
also develops.”
As of 2014, Acleda was lending to 366,000 businesses and plans to widen its net to 412,000 this
year. Of the $2 billion in outstanding loans last year, SMEs accounted for $1.35 billion, or 67 per
cent of the total loans. The bank plans to increase its lending to SMEs to $1.76 billion, up 32 per
cent from 2014.
The CIES 2014 Survey was conducted across 550 villages nationwide. The total budget was
$300,000, of which $190,000 was funded by the Japan International Cooperation Agency,
$32,564 directly from the Japanese government, with the remainder paid for by the Cambodian
government. “This data helps us to understand clearly the structure of the Cambodian
economy,” said Yamuchi Akihito, director of Japan’s Statistical Information Institute for
Consulting and Analysis, which was involved in preparing the report.
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O - Laos, Vietnam enhance cooperation ties
By Times Reporters, March 24, 2015)
The top leaders of Laos and Vietnam have agreed to continue to guide various sectors in
the two countries in maintaining effective cooperation towards more fruitful friendship,
special solidarity and f urther comprehensive cooperation.
President Choummaly Sayasone ( right ) yesterday greets President Truong Tan Sang at the
Presidential Palace in Vientiane.
This was the shared message from President Choummaly Sayasone and Vietnamese President
Truong Tan Sang when they met in Vientiane at the Presidential Palace yesterday.
President Truong Tan Sang is visiting Laos from March 23 to 25. During the meeting, which was
attended by senior officials from the two countries' Parties and governments, the two leaders
briefed each other on the latest developments in their respective countries and shared views on
regional and international events of mutual interest. Reviewing the fruits of their cooperation, the
two leaders said they highly valued the traditional ties of friendship, special solidarity, and
comprehensive cooperation between the two Parties, governments and peoples. They agreed
that, despite the complex changes that have occurred both regionally and internationally, the
special ties between Laos and Vietnam had been enriched and grown continuously, which
benefited the two nations.
Yesterday evening, President Choummaly and his wife hosted a dinner at the Presidential
Palace in honour of President Sang and his wife, and the high-level Vietnamese delegation.
President Sang and his delegation will today meet Prime Minister Thongsing Thammavong and
National Assembly President Ms Pany Yathotou. The Vietnamese President and his delegation
will also visit previous Lao leaders such as former President Khamtay Siphandone, former
President of the Lao Front for National Construction Sisavath Keobounphanh, and former
National Assembly President Samane Vinhaket.
President Sang and his delegation will also visit the Kaysone Phomvihane Museum, former
President Kaysone Phomvihane's family, the President Souphanouvong Monument, and
members of the Souphanouvong family. Tomorrow, President Sang will receive a courtesy visit
from Deputy Prime Minister and Minister of Education and Sports, and President of the LaosVietnamese Friendship Association, Dr Phankham Viphavanh. President Sang and his
delegation will also visit the Vietnamese Embassy in Vientiane.
O - Cooperation in health technology enhanced
The Hanoitimes - 22 Mar 2015
A workshop on cooperation in health technology was held in Hanoi on March 21 by
Japan’s Nagoya University, the Japanese daily Nikkei in collaboration with the Japan
International Cooperation Agency (JICA), and Vietnam’s Ministry of Health and Bach Mai
Hospital.
Addressing the event, Deputy Health Minister Le Quang Cuong highlighted effectiveness of
bilateral cooperation programmes in health care between Vietnamese agencies and foreign
partners. He said he hopes for the further development of cooperation in health care, particularly
cancer prevention and treatment between Asian countries as well as between Vietnam and
Japan.
According to the official, despite considerable upgrade of facilities in recent years, hospitals in
Vietnam can handle about 25 percent of all cancer cases.
Cancer is one of the leading fatal reasons in the world and Vietnam. The country has around
150,000 new cancer cases and 75,000 deaths of the disease each year.
The Vietnam-Japan digestive endoscopy centre was set up in July 2014 at Bach Bach Mai
hospital with financial assistance from Japan’s Ministry of Economy, Trade and Industry and
technical support from Nagoya University.
O - German Secretary of State Visits HCM City
VCCI, March 17, 2015
Mr Hans-Joachim Fuchtel, Secretary of State of Ministry of Economic Cooperation and
Development of Germany, recently visited Ho Chi Minh City.
During the visit, Mr Fuchtel attended the opening of the Regional Conference on the
Development of Democracy in Asia Konrad Adenauer Stiftung Institute. The Secretary of State
also held exchanges with members of Congress on issues such as the private economic
development and construction of framework conditions for economic development, in the
context that Vietnam strongly applying the Green growth strategy.
Mr Fuchtel also visited the Disadvantaged Youth Training Centre in Thai Binh. The focus of the
project in using funds sponsored by the Ministry of Economic Cooperation and Development of
Germany is providing & training in the field of restaurants and hotels for young people in difficult
circumstances to improve living and working conditions for these young people.
O – Switzerland, Germany pledge US$12m for land governance
By Times Reporters, March 16, 2015
The government of Switzerland, represented by the Swiss Agency for Development
(SDC), and the Lao government, represented by the Ministry of Planning and Investment,
on Friday launched the Mekong Regional L and Governance Project in Laos.
Dr Kikeo Chanthaboury ( right ) and Mr Manuel Sager shake hands after signing the MOU.
The project, which is planned for a period of eight years, will received financial support from the
Swiss government amounting to US$8 million (65.2 billion kip), and from the German
government through the Federal Ministry for Economic Cooperation and Development (BMZ),
amounting to 3.5 million euros (about US$3.7 million or 30 billion kip).
Secretary of State for the Swiss Confederation, Mr Manuel Sager, and Lao Deputy Minister of
Planning and Investment, Dr Kikeo Chanthaboury, signed a Memorandum of Understanding on
the launch of the project. The project is an initiative to support land tenure security for family
farmers, especially women and ethnic groups, by assisting the emergence of more favourable
policies and practices, according to a press release.
The Lao government has been granting large-scale and long-term economic land concessions
of agricultural and forest land to international and domestic investors (mostly for industrial
agriculture, logging, mining, and hydropower). This has resulted in a significant shrinking of the
area available for family agriculture and community forestry, and reduced access to natural
resources that used to contribute to food security. The situation for family farmers is sometimes
made even more difficult by the loss of land tenure and use rights, environmental degradation,
resettlement, and limited prospects of finding alternative employment. “I believe the human
relationship to land is such that people see land not only as the basis for their livelihoods. It is
also essential for people's social and cultural identity and even their sense of self-worth,” said Mr
Sager, who is also SDC Director General. “If you take away the land from people you also take
away a part of their dignity. So ultimately the good governance of land is a precondition for
social harmony and political stability,” he added.
The Lao government is revising land policies and laws, and in recent years, moratoriums on new
concessions have been declared in order to re-evaluate the benefits and risks of land
concession policies, comparing it with other options of agriculture intensification.
“The Mekong Region Land Governance Project will assist family farmers in Laos, especially
female farmers and those belonging to ethnic groups, to have secure and equitable access to
and control over agricultural land, forest, and fisheries,” said Dr Kikeo.
Through the project, the Swiss government will support the Lao government in its effort to
develop appropriate land policies and practices, responding to national priorities in terms of
reducing poverty, improving nutrition, increasing e conomic development, and supporting family
farmers, as part of its commitment to implement the Seventh and Eighth Socio-economic
Development Plans from 2011-2015 and 2016-2020, respectively. The project's first phase of
four years will receive a total budget of US$9.25 million (75.3 billion kip).
O - Prospects for Vietnam- Australia investment cooperation
The Hanoitimes - 15 Mar 2015
Vietnam has plenty of opportunities for exporting its key items- garments and textiles,
footwear, wood furniture and agro-fisheries products to Australia.
Vietnam and Australia established formal diplomatic relations on February 26, 1973. Over the
past four decades, especially since the relationship was upgraded to a comprehensive
partnership in 2009, bilateral ties have developed comprehensively both in breadth and depth
across a variety of fields. In particular, economic, trade and investment cooperation has
become one of the important pillars in the bilateral relations.
Bilateral cooperation takes place in some main areas: economic growth, trade and industry
development; development assistance; and defence, law enforcement and security ties.
Bilateral trade volume increased from US$3.3 billion in 1990 to US$6 billion in 2014. Australian
direct investment in Vietnam jumped to US$1.65 billion last year. Vietnam is Australia’s fastest
growing trade partner among all ASEAN countries.
Australia is currently the 8th biggest export market and the 11th largest importer of Vietnam.
In 2014 alone, Vietnamese exports to Australia surged nearly 14% to US$4 billion over one year
earlier. Vietnam was Australia’s 14th trade partner. The country enjoyed a trade surplus of
US$1.9 billion with Australia in 2014.
According to Deputy Minister of Industry and Trade Tran Tuan Anh, Vietnam and Australia are
having advantages for promoting economic and trade links in the future. “Bilateral trade has
grown considerably since the two countries signed the Australia- New Zealand- ASEAN Free
Trade Agreement (FTA) in 2009, delivering substantial and practical benefits to both sides. With
high levels of technological advances and capital resources, Australia is regarded as an
important partner of Vietnam at present and the time to come.” Tuan Anh said.
As of 2014, Australia had in excess of 320 valid direct investment projects in Vietnam with a
total registered capital of US$1.65 billion.
Currently, Australia ranks 19th out of 101 countries and territories investing in the Southeast
Asian nation with a focus on energy, construction, service, education, agriculture, forestry and
fisheries. Vietnam Ambassador to Australia Luong Thanh Nghi said more and more Vietnamese
businesses show a keen interest in investing in Australia. In turn, Vietnam is offering more
favourable conditions for foreign firms including those from Australia to do business.
However, Chamber of Commerce and Industry of Vietnam (VCCI) Chairman Vu Tien Loc said
the Vietnam-Australia trade and investment cooperation is still below their full potential and
expectation. In the future, the two sides should maximize joint efforts to create an open
investment environment for enterprises by removing or loosening trade barriers to help products
from the two nations achieve greater market penetration, the VCCI leader said.
Loc emphasized, "Australia has a developed market economy and is intensifying the integration
process. The Trans-Pacific Partnership (TPP) participation will help open up a more favourable
investment environment of Australia for Vietnamese enterprises.
Vietnam is engaging in new generation free trade agreements (FTAs) and embarking on strong
institutional reforms. The two governments are making breakthroughs in improving the business
environment. As a result, Vietnamese and Australian businesses will further boost investment
cooperation in the time ahead.” Deputy Minister of Industry and Trade Tuan Anh said by
participating in the TPP Agreement, Vietnam will have numerous advantages for expanding
export markets to TPP members including Australia with products of its strength like garments
and textiles, footwear, wood furniture and agro- fisheries products. “Both nations should simplify
market access procedures and remove most tariff barriers to facilitate the market opening of
TPP members as well as their partners. If Vietnam succeeds in its TPP negotiations, the country
will be able to enjoy more better conditions for market access to TPP members including
Australia, thus creating two-digit growth for key goods, " the Deputy Minister noted.
Vietnam and Australia are working together to deepen the comprehensive partnership and build
an action program for the period 2015-2017 in a bid to augment bilateral economic cooperation.
With the combined efforts and determination, Vietnam -Australia economic and trade
cooperation will grow and flourish in line with their expectation.
O - Hungary, VN strengthen business ties
VGP | 13/03/2015
Viet Nam has called for Hungarian investments in its industrial and logistics sectors.
Addressing the Viet Nam-Hungary business forum in Ha Noi on March 12, Industry and Trade
Deputy Minister Ho Thi Kim Thoa pointed to the steady bilateral trade growth and emphasized
that greater efforts are required for Vietnamese and Hungarian businesses to tap their trade
potential .
Mr. Lang said that with its developed industrial base, Hungary could help Viet Nam to renovate
equipment and create added value for export products. The country also wants Hungarian
businesses to invest in the services, logistics, forwarding and health care sectors.
According to statistics from the Ministry of Industry and Trade, two-way trade between Viet Nam
and Hungary reached $174 million in 2014. Deputy CEO of Hungary’s National Trading House
Gabor Kun said his agency set up a representative office in Viet Nam to facilitate the
international operations of Hungarian small- and medium-sized firms.
Viet Nam’s major export items to Hungary include foodstuffs and telecommunications. Hungary
now has 13 projects in Vietnam involving agriculture, medicines, and medical equipment.
Viet Nam and Hungary recently celebrated the 65th anniversary of the establishment of
diplomatic relations (February 3, 1950 - February 3, 2015 ).
Investment
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V – Vietnam Indochina Procurement Import Export
For over 2000 years there have been trade agencies. In the Middle East
a long time ago they were called Caravanserai. By the Middle Ages they were in business in
Europe at the coaching inns, where the horses were changed. After world war one the new
phrase Import / Export came up. And more recently the advertising people have applied the
new term Event Marketing. But it’s really still the old proven, reliable Trade Agency.
Nowadays Trade Agencies have become, especially with the new In the face of the upcoming
ASEAN Free Trade Zone Agreements from 2015 with the TPP (Trans-Pacific Partnership), the
EU-Vietnam (Free Trade Agreement). The RCEP (Regional Economic Partnership) and AEC
(ASEAN Economic Community) European entrepreneur should be present in ASEAN. When
these trade agreements come into force, Vietnamese exports will be freely accessible to the
world’s largest markets
All kind of manufacturer and trader need the experienced Trade Agency to handle their business
on site.
www.produktionsservice-vietnam.com execute business in Vietnam Asean.
V - US investors interested in business expansion in Vietnam
VOV News , 24/03/2015
US-owned Intel Corporation recently announced plans to expand production in Vietnam
to enable it to produce most of its chips here.
Haswell is Intel's codename for the fourth generation of processing chips found in nearly every
laptop, desktop and mobile phone. The company plans to produce 80% of CPUs for the global
market in Vietnam by mid-2015, Sherry Boger, general director of Intel Products Vietnam, said.
In preparation for the expansion, the company has sent 105 Vietnamese engineers to its
Malaysian factory for training. Intel is just one of many US companies to increase investment
and expand production in Vietnam.
Last November clothing company Hanesbrands opened its third factory in Vietnam. The US$15
million plant is expected to hire 5,500-6,000 workers.
Oil and gas giant Exxon Mobil Corp is preparing to make a massive investment in a gas-fired
power complex in Vietnam. Do Van Hau, who retired as CEO of Vietnam Oil & Gas Group
(PetroVietnam) last October, said last year his company could reach an agreement in 2015 with
Exxon Mobil for a US$10 billion natural gas and power project, the country’s biggest of its kind.
Exxon is interested in investing in a gas field, a pipeline to bring the gas to shore and a
processing plant, Hau was quoted by Bloomberg as saying. “ExxonMobil is in ongoing
discussions with PetroVietnam and Vietnamese government agencies and businesses to
evaluate the feasibility of developing central Vietnam’s natural gas resources,” the US oil
company had said in a statement last August.
Talking about the reason for the trend of expansion by US firms, Nguyen Mai, chairman of the
Vietnam Association of Foreign Enterprises, said that country is boosting investment abroad
again amid a strong economic recovery.
Its economy is forecast to grow at 3.1% this year after 2.4% growth in 2014, according to the
New York Times. Between 2008 and 2012 the US government, to cope with unemployment
caused by the economic recession, stopped supporting businesses that invested abroad and
took fiscal stimulus measures to encourage companies to expand in the domestic market, Mai
said.
The trend is also attributable to a shift by US companies from China, where labor costs are
rising, to Southeast Asian nations, including Vietnam, he said. Besides, US firms expect more
opportunities as a result of the US-led Trans-Pacific Partnership (TPP), which is expected to be
signed this year. US firms in Vietnam will then have easier access to countries that are
signatories to the deal, with tariffs on Vietnamese exports to those markets reducing to near
zero.
The TPP is expected to throw up more opportunities for Vietnamese firms to expand
investment in the US. They are competitive in fields like telecom and construction. Some
Vietnamese firms in the US have won contracts for software development in Silicon Valley,
Dang Duc Dung, former deputy chairman of the Hanoi Young Entrepreneurs, said at a recent
conference.
Scott Thomas of Wolverine Worldwide, an American footwear manufacturer, said 75% of
the company’s inputs come from China, but that would fall to 33% by 2020. Vietnam,
which now supplies 14.5% of the inputs, would then fill the gap, he added.
Wages in Vietnam are equivalent to just 38% of that in China though workers here offer
the same productivity and even higher skills in certain fields.
Being the country with the largest investment abroad in the past several years, the US is likely to
become the top investor Vietnam, Mai, chairman of the Vietnam Association of Foreign
Enterprises, said.
According to the 2015 ASEAN Business Outlook survey by the American Chamber of
Commerce in Singapore that polled nearly 600 US firms, Vietnam is the second priority
market for US firms’ future business expansion after Indonesia.
Two thirds of the surveyed firms expected profits to increase in 2014, and this rose to 82% for
2015.
Corruption was their biggest concern, with 69% of the firms saying they were not satisfied with
the issue in Vietnam. Mai said: “Corruption has affected Vietnam’s FDI inflows. If it is not
resolved, Vietnam will become less attractive to foreign investors.
“Attracting investment from the United States is very important in the context that we want to
attract higher quality projects. Obviously, corruption can be found everywhere in the world, but
we should make more efforts to reduce it.” The growth in US investment in Vietnam is not
commensurate with the trade between the two sides, he said. Of the Association of Southeast
Asian Nations (ASEAN) member countries, Vietnam is the US’S biggest trade partner. Trade
between the two countries was worth some US$35 billion last year. Vietnam ranked behind
Singapore, Thailand and Indonesia in attracting US investment. By the end of last year the US,
with nearly US$11 billion in registered capital, was the seventh biggest out of 101 countries
investing in Vietnam, according to the Foreign Investment Agency.
“Initial interest from potential foreign investors too often does not materialize due to continued
problems with corruption, human resource constraints, and the country's overly-complicated,
restricted, and unclear licensing and regulatory environment,” Gaurav Gupta, chairman of the
American Chamber of Commerce (Amcham) in Vietnam, said. AmCham members look to the
government to foster a more competitive environment where decisions are made faster and
legal procedures are less complicated, rules are fairly enforced, and companies compete on
their merits -- including for access to capital, land and opportunities, he said.
V - Vietnam – Central Hub of ASEAN for Electronics Industry
Nam Pham, March 17, 2015
The world’s leading electronics companies have strongly invested in the construction of
manufacturing facilities in Vietnam, offering opportunities for domestic businesses to
strengthen cooperation and participate in the global value chain.
In the past, foreign investment capital into Vietnam’s electronics industry reached over US$10
billion with great projects of Samsung, Foxconn, LG, Panasonic and Intel, becoming an
attractive destination for the world electronics companies. In 2013 the electronics industry’s
export turnover reached about US$32.2 billion, up 57 percent year-on-year and ranked first
among Vietnam’s export sectors, according to the General Statistics Office (GSO). Vietnam’s
electronics industry has basically met domestic demand for consumer products and exported
products to nearly 50 countries in the region and the world, expecting export turnover in
electronics industry to reach US$40 billion by 2017.
Mr Vu Huy Hoang, Minister of Industry and Trade recently said at the National Assembly that the
policies to develop supporting industries had lagged behind reality, Vietnam’s policies to develop
supporting industries to help local enterprises participate in supply chains in the local market
have yet to create a favourable legal framework. Vietnam currently has only 656 enterprises
producing spare parts, compared to 58,000 businesses operating in the manufacturing industry
– a very small number. Vietnam sets the target to become an industrialized country by 2020, in
which the supporting industry will be crucial.
Mr Ling Sing Kok, Assistant Director, Sales and Service Division of Panasonic said: “We think
that in the next five to 10 years, Vietnam’s electronics manufacturing business will continue to
grow with more foreign direct investment form Korea, China and Taiwan, as we can already see
that their corporations are choosing to set up their factories in Vietnam. For our business, based
on this trend we see a potential growth in demand for surface mount technology machines by at
least 10 percent or more. We see a huge potential in Vietnam’s electronics industry, currently it
is very much focused on the production of mobile phones, certain local electronic products and
audio-visual products. There are still many more sophisticated electronic products such as
tablets, notebooks and industrial LCD panels which could be made in Vietnam in the future.”
“Most importantly, a strong presence of supporting industries such as electrical component
would enable us to respond to our customers’ needs with speed and flexibility, thus creating
customer value. Panasonic is definitely keen to expand its presence in Vietnam. As to why
Vietnamese manufacturers of electronic components are rare, such firms require substantial
technology and investment, which at this stage are yet to be viable in the Vietnamese market.”
Mr Duangdej Yuaikwarmdee, Deputy Managing Director and General Manager Vietnam of Reed
Tradex Co., Ltd. said that Vietnam electronics industry has developed rapidly in the past few
years and become the world’s manufacturing base for hi-tech devices, attracting big foreign
companies such as Panasonic, Samsung, Cannon, Intel, Fujitsu, LG and Nokia etc. to invest
their production bases in northern Vietnam, while Vietnam’s government also offers subsidies
and encouraging policies to attract foreign direct investment, which reflects that the government
has achieved its objectives and moved in the right direction.
For example, Samsung is currently one of the largest investors in Vietnam; they invested tens of
billions of US dollars in smartphone plants. Last year, they earned $23.9 billion in revenue for
exporting phones produced and assembled in the country for 18 percent of Vietnam’s total
export revenue. With 120 million of 400 million Samsung mobile phones sold globally
manufactured in Bac Ninh, together with Samsung’s plant in Thai Nguyen that recently began
operation, we see that Vietnam has become one of Samsung’s key manufacturing bases.
According to experts, the world electronics market would strongly grow in the upcoming time
with an average growth of 10-12 percent. Products forecast to grow strongly include digital
devices and computers, especially tablets and mobile phones. In particular, digital devices are
predicted to grow by 15-18 percent.With these positive statistics, we believe that in the next
three to five years, this will become the largest sector for the country’s export and Vietnam will
become the biggest electronics manufacturing hub in ASEAN, continuing tremendous growth.
According to the positive statistics above, we have decided to organize “NEPCON Vietnam
2015” in Hanoi during 17 - 19 September to promote supporting industries, especially in the
electronics sector. The show will serve as Vietnam’s Only Exhibition on SMT, Testing
Technologies, Equipment, and Supporting Industries for Electronics Manufacturing. Over 100
leading brands of SMT solutions from 10 countries will come together, and over 7,000 potential
buyers from the electronics manufacturing industry will discover the new technologies, solutions
and knowledge that could help them improve their productivity and quality. This is the event of
the year not to be missed for technology providers, entrepreneurs, and industrialists at every
level in the production line to get ready for the ASEAN Economic Community.
O - Coc Coc unveils plans for using German investment
VNS, 12/03/2015
Co-founder of Vietnamese company Coc Coc Le Van Thanh revealed the firm's plan for
utilising the US$14 million invested by German media firm Hubert Burda Media.
Coc Coc reveals its plan of launching a mobile browser version, and invest in sales and
customer services this year with investment from German firm Hubert Burda Media.
Photo zing.vn
This was the first time that he disclosed the amount of the investment.
Thanh said that besides improving the quality of its products, Coc Coc will carry out activities to
penetrate international markets this year, and will launch its mobile browser version. He added
that the company will also invest in sales and customer services. Thanh pointed out that it took
time to do market research. However, he did not reveal the time frame of the firm for entering
foreign markets. In Viet Nam, Coc Coc developed its products for nearly three years before
launching them. Therefore, the company needs to start now if it is targeting overseas markets,
he added.
Peter Kennedy, executive chairman of Hubert Burda Media in Asia, said that the amount of $14
million will be transferred to Coc Coc within 18 months. Of the amount, $10 million came from
the German firm and $4 million was from other investors, including high-level managers of the
company.
On being asked why his firm is investing in Coc Coc, Kennedy said that it was impressed by the
growth of Coc Coc customers and the quality of its products. He added that the level of
developers of the Viet Nam-based company was relatively the same as the best developers in
the world today.
He expressed the belief that if it is successful in Viet Nam, Coc Coc can succeed in other
countries, especially in the Asia-Pacific region.
Coc Coc was founded by three Vietnamese developers and Victor Lavrenko, the present CEO,
in 2012. Headquartered in Ha Noi, it has launched products such as the Coc Coc search engine,
Coc Coc browser, Coc Coc advertising platform and a geo-location application called Nha Nha.
By the end of 2014, the statistics of web traffic analysis tool StatCounter showed that Coc Coc
beat Firefox and Internet Explorer to be the second-most popular browser in Viet Nam, only
behind Google Chrome. It has had more than 44 million downloads since then.
V -Lotte Vietnam boosts investment
Inside Retail Asia, March 10, 2015
South Korea’s Lotte has acquired a majority share in a Ho Chi Minh City shopping centre,
office and apartment complex as it protects its Vietnam beachhead.
Lotte Vietnam has bought out another Korean business’ 70 per cent stake in Diamond
Plaza, a high profile 20-story tower housing a multi-level department store, foodcourt and
other retail facilities, along with offices, a medical centre, cinema and apartments.
It was one of the first modern era shopping developments in the country’s largest city, although
its footprint is dwarfed by more recent developments such as Vincom and Union Square, also in
the CBD, and Crescent Mall in the Asian-expatriate hub of District 7. Lotte already has extensive
investments, and reach, in Vietnam, operating Lotte Mart hypermarkets, cinemas, a hotel on the
Saigon riverfront and a chain of Lotteria fast food outlets which was well established before US
rival McDonald’s debuted in Vietnam in late 2013. Diamond Plaza was opened in August 2000,
then valued at US$60 million. It was a joint venture between local developer Construction
Corporation No.1 and Korean steel company Posec, a subsidiary of steel maker Posco. Lotte
has bought out Posec’s interest for an undisclosed amount. In another transaction not officially
released, Lotte has purchased two Pico Plaza branded shopping centres in Hanoi and Ho Chi
Minh City and rebranded them Lotte after converting supermarkets into Lotte Mart
hypermarkets.
M - Western business not rushing to invest in Myanmar
Myanmar Times, 10 March 2015
Western investors appear reluctant to bid on open public tenders in Myanmar despite
having expressed some interest, say analysts examining government foreign investment
projects.
The government wants business giants from the West to bid on its projects to take advantage of
their state-of-the-art technology and experience. Due to lack of Western involvement, the
government has had to choose investors from among countries in the region.
"The situation right now is study time for investors and they are coming in and out," said Dr.
Wah Wah Maung, deputy director general from the National Planning and Economic
Development Ministry. "Reliable investors are needed. "International investors should be bidding
to win open tenders for joint ventures. If they don’t participate in bidding, a party participating in
the bid will be chosen."
Companies from China, Thailand, Hong Kong and Singapore are currently the biggest investors
in Myanmar. As of January 31, 2015, 37 countries were permitted to do business in Myanmar
with capital investment totaling about US$ 53.17 billion.
Economists have suggested that more foreign developers should be selected for the upcoming
Kyaukphyu Special Economic Zone projects. Myanmar will hold a general election late this year,
but the current government will give the go-ahead on these projects.
Meanwhile, American newspapers, including the influential Washington Post, have written that
many American investors have said that the unstable political climate in the country and
lingering sanctions are discouraging them from greater investment in Myanmar.
M - Foreign investment just under US$7 billion this fiscal year
MNS, Friday, 06 March 2015
Foreign investment in Myanmar reached just under US$7 billion in the 2014-2015 fiscal
year. This amount exceeds the foreign investment volume in the 2013-2014 fiscal year,
according to Directorate of Investment and Company Administration (DICA).
From April 2014 to the end of January 2015, foreign investment in Myanmar amounted to over
US$6.955 billion. The total foreign investment volume in the 2013-2014 fiscal year was $4.107
billion. Most foreign investment in Myanmar went into the energy sector. The smallest amount
went into the construction sector.
The government of Myanmar is currently trying to attract investment into its most labourintensive sectors, according to Myanmar Investment Commission (MIC).
Foreign investment has increased since the government allowed investors to rent privately
owned land instead of just state-owned land, permitted them to operate as independent foreign
investment firms without local partners and eased the process of transferring foreign currency
for investment.
The countries that have invested in Myanmar include China, Thailand, Hong Kong, Singapore,
the UK, South Korea, Malaysia, Vietnam, France, Japan, India, the Netherlands, the US,
Indonesia, Australia, Russia, Austria, Panama, the UAE, Canada, Germany, Sweden, Denmark,
Brunei, Cyprus, Luxemburg, Switzerland, Bangladesh, Sri Lanka and others.
Foreign investors are allowed to operate in Myanmar independently or form joint ventures with
local firms.
V - Foreign firms eye M&A deals as SOEs equitise
VIR, 3.3.2015
Foreign direct investment into Vietnam via mergers and acquisitions is on an upward
trend, underlining the growing appetite among foreign companies to acquire stakes in
existing companies as the fastest way to strengthen their foothold in the country.
Acquisition of Vietnam’s industry leaders helps foreign firms quickly build their foothold
According to the online market intelligence and finance news firm StoxPlus, 2014 recorded 265
completed merger and acquisition (M&A) deals with a total value of $4.6 billion.
Inbound M&A into Vietnam was valued at over $3 billion in 2014, StoxPlus reported. This
number accounted for just a seventh of total foreign direct investment last year, but represented
a 64.9 per cent bounce on the disappointing $1.83 billion of inbound M&A recorded in 2013.
“This is a growing global trend and Vietnam is no exception. This is one of the fastest ways to
expand business in Vietnam, particularly when the nation is going to enter a series of free trade
agreements like the ASEAN Economic Community, Vietnam-EU Free Trade Agreement and the
Trans-Pacific Partnership,” said Nguyen Mai, chairman of Vietnam Association of Foreign
Invested Enterprises.
Thai investors are leading inbound M&As. Thai consumer conglomerate Berli Jucker (BJC) last
August announced it had offered $876 million to buy the Vietnam cash-and-carry unit of
German’s Metro AG. However BJC shareholders in January rejected the deal because of
concern over financial risks, leaving TCC Holding – the largest shareholder in BJC – to carry on
its interest in Metro alone.
Leading French chocolate, biscuits, gum and sweets producer Mondelez International
announced last year it would acquire an 80 per cent stake in Kinh Do Corporation’s categoryleading snacks business in Vietnam.
Given the growing momentum in 2014, foreign direct investment through M&A activities have
also shown positive signs in 2015, with deals announced by Thai and Japanese companies.
Thailand’s Central Group in January announced it would acquire 49 per cent of Vietnam’s
electronics retailer Nguyen Kim. Japan’s largest retailer Aeon last month also announced it
would acquire two Vietnamese retailers Citimart and Fivimart, in line with the construction of its
own stores in the north and the south.
StoxPlus believes that inward M&A activities will keep on rising in 2015, given the acceleration
of equitisation of state-owned enterprises (SOEs). More than 300 SOEs are slated for
equitisation, offering huge opportunities for foreign investors to jump into the market. “From
2015, SOEs’ initial public offerings for telecommunications, construction and materials, retail,
and travel and leisure are all going to take place,” the company stated in a note, pointing to the
growing M&A opportunities.
According to a recent StoxPlus survey, 66 per cent of foreign investors were optimistic about
M&A opportunities from SOE equitisation process. “This indicates that there will be increased
foreign interest in SOE equitisations and state divestment in the coming year,” the company
states.
Foreign investors will also be encouraged by the changes in rules from July 1, when the newly
amended Investment Law will no longer require them to lengthy investment certificate
procedures when buying stakes in Vietnamese companies. This is expected to end years of
uncertainty and frustration faced by foreign investors eyeing Vietnam market entry or expansion
through M&As.
V - Medical firms to be equitised
Vietnam News, 2.3.2015
The Health Ministry is speeding up its equitisation plan, with eight medical enterprises
expected to be equitised this year.
One of them, the Central Pharmaceutical Joint Stock Company No 3 (Foripharm), has
completed its equitisation. The company made an initial public offering last December, and has
registered to be listed on the Hanoi Stock Exchange (HNX). Over the past few years, it has
posted an average revenue of more than 450 billion VND (21.4 million USD) per year, with an
average growth rate of more than 30 percent.
Regarding the equitisation plan, Deputy Health Minister Pham Le Tuan said that one of the key
problems facing the equitisation process was the calculation of the value of land and assets as
the basis for assessing the value of the enterprises. A number of these businesses are separate
from public service providers and the delimitation of the ownership between them is still unclear.
These medical firms also faced the challenge as to how investors could be attracted during
selling of stocks. For example, the Da Lat Pasteur Vaccine Company specialises in producing
the typhoid vaccine only, but the demand for this kind of vaccine is very low. However, it does
not mean that medical businesses are not attractive to investors, who are keeping a close watch
over their equitisation.
The Vietnam Pharmaceutical Corporation (Vinapharm), for example, is one among several
businesses that are drawing the attention of investors.
Vinapharm has a registered capital of more than 1.3 trillion VND (61.9 million USD). It recorded
a turnover of nearly 32.9 trillion VND (1.5 billion USD) last year, a year-on-year increase of five
percent.
Thereof see our February 2014 newsletter “Vietnam's healthcare chain”
http://produktionsservice-vietnam.com/news.php
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M - Myanmar’s trade deficit at record high
MM Times, 13 March 2015
Myanmar to suffer huge trade deficit of US$5 billion for fiscal year 2014-15 which ends on
March 31, according to figures conducted from April 1, 2014 to March 3 by the Commerce
Ministry.
The country earned about $10 billion in exports while $15 billion was spent on imports. This
year’s trade deficit sets a new record breaking last fiscal year’s $2.65 billion trade deficit.
Meanwhile, the country earned more from exports this fiscal year than last year due to the
crackdown on smuggling. “There are many things to consider what causes the trade deficit. It
can impact the local businessmen indirectly,” said a business owner.
The Ministry of Commerce is planning trade related projects such as Enhanced Integrated
Framework, National Export Strategy and National Trade Facilitation Implementation Plan to
help develop the country’s trade sector with assistance from abroad.
V - Vietnam’s banks listed in top 500 brands
VNA, 06/03/2015
The Vietnam Bank for Industry and Trade (VietinBank) and Joint Stock Commercial Bank
for Foreign Trade of Vietnam (Vietcombank) figure among the world's top 500 banking
brands.
Brand Finance, the world's leading brand valuation consultancy firm, ranked Vietinbank 437th
on the list, with a brand value of 197 million USD and a brand rating of A. The bank has a
market cap of 2,474 million USD.
VietinBank currently has nearly 661 trillion VND (31.48 billion USD) in total assets, second to the
Vietnam Bank for Agriculture and Rural Development. Its charter capital touched more than 37
trillion VND (1.76 billion USD) at the end of last year, the largest equity value in the domestic
banking system.
Meanwhile, C was ranked 487, with a brand value of $157 million and a brand rating of A+. It
has a market cap of 3,742 million USD.
Vietcombank has been operational for more than half a century, and has a charter capital of
26.6 trillion VND (1.26 billion USD).
This is the third time VietinBank and the first time Vietcombank have been named among the
world's 500 most valuable banking brands.
Topping this year's list is the Wells Fargo Bank of the United States with a brand value of more
than 34 billion USD.
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V - Real-estate enterprises flocking to smaller cities
VNS, 23/03/2015
Several property developers are flocking to invest in localities outside big cities due to
their favourable location, preferentials and low building costs.
A view of Nha Trang City. The south-central city is among localities becoming more
attractive to real estate investors. Photo abay.vn
Earlier this month, Vingroup proposed to build a new administrative centre in the central Thanh
Hoa Province. According to the plan, Vingroup would build a 25-storey commercial centre
spread over 5,500 sq. metres and a three-storey commercial building on an area of 44,740 sq.
metres at the site of the existing administrative centre in the province's Dien Bien Ward.
Vingroup committed that the project would be built according to requests made by the Thanh
Hoa People's Committee to convert it into a high-grade urban area. It completed a design for
submission to the provincial authorities. If the plan is agreed upon, Thanh Hoa would become
one of first two provinces in Viet Nam to have built a complex that includes a commercial centre,
hotels and pedestrian mall for tourists. The group said the project would be completed in
February 2016.
Last July, FLC Group had also started the construction of a residential complex in the province
with a total investment of VND1.2 trillion (US$57 million). This project would include a trading
and service centre and apartments spread over 16,022 sq. m in the centre of the city. The
project is expected to supply 400 apartments with an area between 45 and 100 sq. m per unit. In
addition, the group also signed a memorandum of understanding for investing in other market
segments in the province.
The Da Nang, Nha Trang, Quang Ninh, Ninh Binh and Thanh Hoa provinces have become more
attractive for big real-estate companies during recent years. However, property developers have
been careful about penetrating new markets.
Nguyen Quoc Hiep, chairman of GP Invest Company's management board, told vnexpress.vn
that the company had decided to invest in an urban area in northern Phu Tho Province because
of its central location. Hiep said the land clearance fund and completed infrastructure would help
businesses in reducing investment.
A representative from Thanh Dong Property Investment Company, which has invested in an
urban and tourism area in the Hai Duong and Ninh Thuan provinces, said harsh natural
conditions had affected construction progress despite active support from local authorities.
Tran Duc Dien, the general director of the Max Viet Nam Company, which has several ongoing
projects in the Nha Trang, Da Nang, Ha Long and Quang Ninh provinces, said a lack of
professional marketing staff in these provinces had led to difficulties in making sales.
V - Vietnam imports 15,000 cars in Jan-Feb, mostly from India: data
TUOI TRE NEWS, 03/21/2015
India has become the top car exporter top Vietnam in the first two months of this year,
accounting for nearly 30 percent of the total, according to customs data.
Vietnam spent US$320 million on importing 15,099 complete cars in the two-month period, a
146 percent increase in volume, and 173 percent rise in value compared to a year earlier, the
Vietnam Customs said in a report released earlier this week. Of these, 8,009 vehicles were cars
with nine seats and fewer, which are collectively worth $80 million, whereas imports of trucks
stood at 4,112 units and $102 million.
In February alone, Vietnam brought home 5,493 complete cars of all types, up 86 percent from
the same period last year. The imports were worth $133 million, a 160 percent year-on-year
increase. Both the rises in volume and value of car imports last month were the highest since
2009, according to the Vietnam Customs. Vietnam’s imports of car spare parts in two months
also rose 27 percent from a year earlier to $363 million.
South Korea exported the most cars to Vietnam in February, but the leader for the two-month
period was India, with a total export of 4,363 units, or 28.89 percent of the total figure.
The car imports from India were worth $25 million.
South Korea came second with 3,395 cars and a turnover of $67 million, followed by China,
2,878 vehicles and $114 million.
Imports from South Korea, China and India in February alone were 1,242, 1,189, and 1,100
vehicles, respectively. Even though it took the first place, the export value of India was much
lower than those of China and South Korea, as the statistics illustrate.
Neither India nor South Korea enjoys tax preferential treatment when exporting cars to Vietnam,
unlike such ASEAN countries as Thailand. Thailand is expected to be the largest source of cars
for Vietnam in 2018, when import duty is cut to zero under the ASEAN Free Trade Area (AFTA).
Vietnam only imported 2,070 cars from Thailand in the first two months of this year, even though
it doubled the figure in the same period in 2014. However, the statistics are not a surprise to
industry insiders, according to The Saigon Times Online.
Local car businesses said South Korean cars have seen stable growth in Vietnam thanks to
their competitive prices compared to similar vehicles made in Japan or the U.S., plus the young
design and numerous built-in features.
The Grand i10 produced by the Indian unit of South Korean carmaker Hyundai is attractive to
many Vietnamese customers thanks to its competitive price, according to The Saigon Times
Online.
The India-imported Ertiga, which sells at VND599 million ($27,915) in Vietnam, is also a good
choice for local consumers.
C - Boxing clever
By: Southeast Asia Globe Editorial , March 20, 2015
Packaging is said to be one of the most important aspects of sales – a fact that
Cambodian businesses are quickly learning
From the clean, minimalist box containing an Apple iPhone to the red and white logo on a CocaCola can, product packaging can be iconic. It can also make or break a company.
Skin deep: awareness is growing in Cambodian businesses, such as Bodia Nature, about the
importance of packaging
Picture the finest Kampot pepper stashed inside a muddy burlap sack. Now picture it on a shop
shelf in vibrant packaging. Which would first catch the customer’s eye first? “Since the
packaging is the first encounter between a consumer and a product, it should reflect the
product’s image and quality,” explained Christophe Lesieur, co-owner and managing director of
Farmlink Cambodia, a distribution and marketing company based in Kampot. “Today, Kampot
pepper is among the best quality and most expensive pepper in the world, so we produce
packaging that reflects its value and quality,” he said. As well as branding and marketing,
Lesieur added, packaging is also essential for a product’s integrity. A fragile electronic device
must be well packaged in order to protect it from damage, just as pepper must be preserved in
an airtight vacuum to ensure its freshness.
In 2012, the world’s packaging market was valued at $799 billion, according to a report by global
market consultancy Smithers Pira. It is expected to rise to $975 billion by 2018. Asia’s share of
the market is also predicted to rocket, from 36% in 2012 to 41% in 2018.
However, many companies in Cambodia continue to overlook the importance of packaging. Part
of this can be put down to the country’s capabilities. In 2011, a report by the Asian Development
Bank said that packaging was a significant cost for Cambodian businesses. Many were forced to
import materials or completed packaging from neighbouring countries.
Four years on, things are beginning to change. A slew of new packaging manufacturing
companies have entered the local market, while there has also been a growing consciousness
about the importance of the presentation of goods and services. “Initially we were selling
cosmetic products only in our spa to complement the service. But we wanted to expand our
sales and our product range,” said Nick Gale, commercial manager at Bodia Nature, the
country’s first natural cosmetics brand. As Bodia Nature expanded, carving out an international
reputation alongside the opening of new stores and products, they knew it was essential to
reinvent their packaging, said Gale. Out went the souvenir-style boxes and in came a
sophisticated, minimalist design. “The old packaging was catered to tourists as souvenirs, but
our new packaging is aimed at everyone. It has an international appeal,” Gale added.
After investing more than $15,000 on packaging between 2012 and 2013, Bodia Nature saw
sales increase by 67% last year, according to Gale, who added that while this improvement
cannot all be put down to new packaging, the company believes it was a significant factor.
The importance of na box, bag or packet cannot be overlooked. And many successful
businesses understand that beauty is not just on the inside. As Cambodian firms continue to
grow – whether it’s by selling mangoes, coffee or soap – striving for perfection in a product
means nothing if it is hidden away in an unattractive package.
Bibhu Pandey, chief credit officer of ABA Bank, discusses the importance of packaging
and what financial options there are for Cambodian businesses looking to invest
What would you say to a client who is concerned that packaging will just be yet another
expense? It’s an expense, but on a closer look we realise that it’s an investment for the
successful promotion of a product or service. The important thing is that a well-designed
package, for a product or even a service, provides additional value and distinguishes it from
competitors.
What types of loans and credit could a Cambodian business expect to receive from ABA
to invest in packaging? ABA Bank is always ready to support new businesses or help improve
existing enterprises. We offer Micro or SME loans as an investment loan, which can be
repayable in installments over a period when profit is generated from the business – generally
for a period up to five to six years.
Why would you advise a business to invest part of the funds in packaging
development? We always advise our loan applicants to think about the look and feel of their
products, and about the strategy of their promotion. Sometimes, the proper packaging plays a
vital role in a product’s positioning and promotion on the market. A good example here is the
production of bottled drinking water. Overall, the quality of water is relatively similar from one
supplier to another, but a company’s packaging and design can persuade a consumer to
purchase their bottle of water, which looks more attractive and unique. Another reason to think
about proper packaging is the outlook to sell the product abroad. We know many examples of
very high quality Cambodian products that cannot conquer the international market due to a lack
of good and attractive packaging design.
Those manufacturers who are targeting international markets must be sure to consider
packaging investments at the initial stage of setting up the business.
V - Race among high-end hoteliers heats up
VietNamNet Bridge – 19/03/2015
Many high-end hotels are expected to be put into operation in 2015, according to
Alternaty, a real estate consultancy firm.
The first group is led by Hyatt in terms of high room rate. The second group comprises
Renaissance, Rex and Sofitel, and the third includes 4-5 star internationally standardized hotels.
The number of high-end hotels in HCM City has increased to 16, which provide 5,146 rooms.
These include newly operational ones – Tan Son Nhat Saigon and Novotel which were put into
operation in 2013, and Pullman Saigon Hotel which opened in 2014. It is expected that two more
high-end hotels, The Reverie (old name Times Square) and Le Meridien, will open, and will
provide 636 rooms.
After that, another two high-end hotels would also become operational. One of them is a 424room hotel developed by Viettel, a military telecom group, and managed by a famous
international brand.
Meanwhile, Union Square Hotel has been scheduled to be opened in 2016, which would
diversify supply sources. The One and Lavenue will open by 2017 and 2018.
The expansion of Majestic Hotel and the upgrade of the Tax shopping center into Satra Tax
Center, expected to be completed in four years, will also add to the room supply.
When asked why so many high-end hotels are expanding, while the national economy is still in
recession, a real estate expert said all reports have predicted a surge in the number of foreign
travelers to Vietnam.
According to the Vietnam National Administration of Tourism (VNAT), the number of travelers to
HCM City has increased to 4 million per annum, which represents stable 11.4 percent growth
rate in 2009-2014. In 2014, HCM City received 4.1 million foreign travelers, a 7 percent increase
over the year before, which accounts for 50 percent of total foreign travelers to Vietnam. The
analyst went on to say that the hotel market has seen signs of recovery since 2012. Why highend hotels? The analyst cited a report as saying that the high-end hotel segment led the market
in 2013 and 2014 in terms of occupancy rate. The average occupancy rate of high-end hotels
was reported to be up to 71 percent in 2014, while Sheraton and Intercontinental hotels reported
the highest rate of 75 percent. “In general, the expected returns of high-end hotels are very
attractive,” he said.
O - British bag brand Zatchels eyes Asia
Inside Retail Asia, March 17, 2015
Hip British bag brand Zatchels says it plans to make inroads into Asia as its young brand
gains international awareness.
Zatchels was established in April 2011 and has its manufacturing base in Leicester, UK. A
multi-channel retailer, it has shops in York, Westfield London and now Bath. Now it says it wants
to enter Vietnam, Thailand, Cambodia and Singapore to make the most of their young
populations and a growing love of products made in Britain among southeast Asians.
The company manufactures and retails, with boutique stores in the UK. Overseas stores are
usually operated as concessions in department stores.
The manufacturer already exports a third of the designer satchels and bags made at its factory
near Leicester’s city centre to around 90 countries. It makes more than 25 styles of bags, turns
over £3.5 million annually and employs 70 people in manufacturing and retail.
The business has just hosted a visit by Douglas Barnes, HM Consul General to Ho Chi Minh
City and Director of Trade and Investment Vietnam, to discuss the opportunities available. MD
Dean Clarke, who founded Zatchels with business partner Brian Brady, said exports are a
growing and vastly important part of the company’s business plan for 2015 onwards. “We hope
to include Vietnam in those plans, along with other important areas of South East Asia and the
Pacific region,” Clarke said in an interview with the Leicester Mercury newspaper.
The Zatchels store in York.
Douglas Barnes HM Consul-General to Vietnam visits Zatchels with UK Trade and
Industry providing advice on overseas expansion.
“Meeting with Mr Barnes gave us the opportunity to further investigate this emerging high
growth country in more detail and potentially make influential contacts to help us grow our
business in this exciting market.” Barnes said Vietnam is one of the fastest-growing retail
markets in the world and there is a huge demand for products as consumer spending
power grows. “It has a young and dynamic population – with 60 per cent under the age of 30. I
am impressed with Zatchels’ hugely ambitious approach to exports which has placed them at
the top of their game and I’m keen to help them develop their business in Vietnam.”
Zatchels focuses on making quality leather goods, with each bag made to order. Zatchels
currently has 10 Collections designed for men, women and children as well as a range of
accessories.
O - Malaysians flocking to Cambodia to do business
Monday, 16 March 2015
For a number of entrepreneurs including K.C. Chang, the lure include cash transactions made in
no less than US dollars. He considers now as the best time as “the buying power has gone up
and people are ready to spend their money”. Chang set up his business in Cambodia’s capital
eight years ago and remembers well the dusty streets strewn with garbage and no streetlights.
Over the period, he has also witnessed the rapid transformation of the city with new areas being
cleared for development and the construction of condominiums. “Soon, a shopping mall was
being built right in front of my office-cum-budget hotel.”
The capital now has tarred roads and artisan cafes/eateries line the streets. Car showrooms
have mushroomed along the main road to the city while the skyline has transformed with the
construction of a Parkson building by the Lion group and an Aeon mall. Malayan Banking, CIMB
Group, RHB Capital and Public Bank have a presence in the country. Chang attributed the ease
of doing business in Cambodia to a mature banking system and the government policy to allow
businesses to be wholly-owned by foreigners. “We are not allowed to buy land but we can buy
condominiums from the first floor upwards,” he told StarBiz. On how he became involved in
Cambodia, Chang said: “It was in 2007 that I was informed of the government’s plan to develop
land at the location of the existing new airport. The project was too big and required international
funding. “Finally it fell through for us. By then the price of land in Phnom Penh had escalated
beyond belief,” he said, adding that Malaysians were the largest foreign community there then
but have since been overtaken by the Japanese. Chang stayed on to explore other business
opportunities and business ventures. A measure of his entrepreneurial success can be
measured by his taking four shoplots in the then newly-opened Aeon mall to run a bubble tea
stall, gift shop, money exchange and a phone shop. He also imported health food from Malaysia
under the Nature Pure brand.
Chang remains positive about Cambodia’s economic outlook, pointing out that status-conscious
Cambodians were hungry for consumer staples such as handphones. In fact, business has been
so good that his phone shop had to stock up on more iPhone 6. “My next focus is the property
business,” Chang said, pointing to the condominiums being built for the emerging middle-class.
He is planning to venture into the property management and renovation businesses together
with partners besides looking into exporting Cambodian agricultural products to Malaysia and
other countries in the region.
However, as in any emerging economy, there will surely be pitfalls. For Chang, the lack of
skilled workers and a completely different work culture remain challenges to doing business in
the country. “Wages for a local worker who does not speak English are US$140 a month but
those who speak English get US$250 a month,” he said, with employers forced to learn Khmer
language to get around this issue.
Chang advised those who plan to start businesses in Cambodia to have patience in teaching the
employees and keeping them happy. “If the government policy doesn’t change and it is
politically stable, I think this country is going to have a bring future.”
O - Asia retail ambition wanes
Inside Retail Asia, March 13, 2015
Germany remains the most popular global market for retailers in 2015 – not China.
While international expansion remains high on the agenda for retailers in 2015, despite
uncertain economic prospects and cost escalation, new research from global property advisor
CBRE shows waning enthusiasm for Asian forays.
Some 47 per cent of retailers surveyed in the annual How Active are Retailers Globally indicated
that unclear economic prospects and cost escalation, largely due to increases in rental costs
and lack of quality retail space, are the biggest concerns for 2015. However, despite these
challenges appetite for international expansion remains a strong focus as retailers continue to
invest in their store network throughout 2015.
Germany has retained its number one position for the second consecutive year as the most
popular retail market in the world with 40 per cent of retailers planning to open a store there in
2015. The UK is second with 33 per cent and France third with 31 per cent of retailers.
Meanwhile, Asia retail brands are more interested in South Korea (50 per cent) than China.
Forty-three per cent of US-based retailers are looking at Japan, China and Hong Kong.
Global retailers are said to be attracted to Germany largely due to the opportunity to target more
than 30 large cities with high purchasing power. Despite the huge interest in the German market
retail rents in most of the markets have remained stable or have seen a slight increase. The UK
also continues to be a popular target for overseas retailers as demand for store space remains
resilient, especially in London. This is evident from the strong prevailing rental growth and high
premiums.
France follows closely behind the UK attracting retailers due to its mature market with several
strong cities and a large number of very successful shopping centres across the country.
Retailers are generally attracted to the ability to get critical mass quickly, and have focussed on
Paris ]before expanding into other cities. Recent changes to Sunday trading days from five to
12 per year in some areas, and the creation of Zones Of International Tourism, which will allow
Sunday opening all year round is further improving the attractiveness of France to retailers.
V - Vietnam electronics sales surge
Inside Retail Asia, March 12, 2015
Vietnam is now the world’s fifth fastest-growing electronics market – and the fastestgrowing in Southeast Asia.
A survey by German market research firm GfK Group projects sales in Vietnam electronics
sales will total more than US$600 million in 2015. Vietnam is the only Southeast Asian country
ranked in the top-five, with Indonesia and the Philippines coming in at number nine and 10,
respectively, on the list, reports the Hong Kong Trade Development Council.
All of the top-10 growth markets singled out by GfK are emerging economies. Contrary to the
usual assumption that China is the strongest growth market in the technology sector, GfK
predicts that India will enjoy the most growth. For the Indian market – as in many others –
smartphones are seen as the main area of expansion, a move spurred in part by a fall in
handset prices.
In Vietnam, overall spending in the electronics sector in the first quarter of 2014 was up 27.5 per
cent on the same period in 2013. Other markets in the region also saw increases, but at a lower
rate, with Indonesia up 10.6 per cent and Singapore up 7.3 per cent year-on-year. Smartphones
and tablets remain the standout products, with phones accounting for some 40 per cent of total
expenditure in the sector.
The big players in the smartphone business in Vietnam are the FPT Group and Mobile World.
The single biggest player in the electronics retailing sector is Nguyen Kim, in which Thailand’s
Central Group recently acquired a 49 per cent stake. In the first six months of 2014, FPT
recorded steady growth in the software export sector, with its revenue up 21 per cent compared
to the same period in 2013. In telecommunications, its revenue was also up; a 17 per cent rise
exceeding expectations by a staggering 108 per cent.
FPT’s retail and distribution divisions also showed considerable improvement. In particular,
revenue from the distribution of iPhones was almost four times higher in the first half of 2014
than in the same period in 2013. (FPT is now an Apple retail partner). Meanwhile, the
company’s bid to expand its retail chain has also met with some success, with retail sales in the
first six months rising 81 per cent. In 2013, its retail arm actually recorded a loss.
Last November, Mobile World JSC was ranked 409th among Asia Pacific’s 500 largest retail
businesses. This list is based on success in meeting various key criteria, notably sales, retail
locations, total retail space and revenue per square metre. “We are excited that we remain a
major retailer, not only in Vietnam, but in the region as a whole,” said Tran Huy Thanh Tung,
head of Mobile World’s Supervisory Board. “This is a well-earned acknowledgment of our
success in raising the levels of convenience and service we offer our customers.” In a busy
month for Mobile World, November also saw the company open three new superstores.
Apart from the smartphone and tablet sectors, demand also grew for other items, especially
electronic/digital (televisions, speakers), refrigeration (refrigerators, air-conditioners), and
electrical appliances (cookers, microwave ovens). These sectors enjoyed an across-the-board,
20 per cent year-on-year increase in sales for the first quarter of 2014. According to industry
sources, Vietnam’s electronics sector is expected to remain buoyant in 2015, attracting several
new foreign firms to the market.
Samsung is already among the highest-grossing and most popular mobile phone brands in
Vietnam, with the country now also home to one of the South Korean giant’s biggest global
production centres. In 2013, Samsung Vietnam shipped more than 100 million units, with 97 per
cent of its output being exported. With a strong economic performance in 2014, consumer
demand in Vietnam increased significantly, with the door now clearly open to Hong Kong
businesses looking for new opportunities to invest.
“Vietnam has a population of 90 million people, 70 per cent of whom are young,” said Alain
Chevalier, a senior advisor on export enhancement for the Swiss Government. “Obviously, there
is very high potential in the electronic products market. It is also one of the reasons why foreign
direct investors in the electronics sector are increasingly focusing on Vietnam.”
V - Saigon Co.op to open many more stores this year
Business Times, Mar 11th, 2015
Saigon Co.op has plans to inaugurate an additional six Co.opmart supermarkets, 30
Co.op Food stores, one Co.op Xtra hypermarket and one Sense City commercial center
this year.
The ambitious expansion was unveiled by Nguyen Thi Hanh, general director of Saigon
Union of Trading Co-operatives (Saigon Co.op) at a review meeting in HCMC on March 9.
Hanh said Saigon Co.op targets total revenue of VND26.2 trillion (US$1.23 billion) this
year.
In addition to six new supermarkets planned in Dak Nong, Quang Binh, Bac Giang and other
provinces, Saigon Co.op is seeking locations for three more to bring the total to nine this year.
As for the Co.op Food brand, the enterprise will focus on HCMC and look for franchisees for ten
stores this year. Saigon Co.op plans to open a Co.op Xtra hypermarket in HCMC’s District 7 on
April 19, and one Sense City center in the Mekong Delta province of Ben Tre Province in the
third quarter this year.
Last year, Saigon Co.op opened six supermarkets, 17 Co.op Food stores, 30 Co.op shops and
one Sense City facility in the Mekong Delta city of Can Tho to raise the total number to more
than 365 nationwide. The establishment of Co.opmart Cao Lanh in Dong Thap Province helped
the enterprise complete its distribution chain of Vietnamese goods with stable prices in 13
provinces of the Mekong Delta. HCMC vice chairwoman Nguyen Thi Hong said Saigon Co.op
should expand its retail system to the city’s suburban districts to meet consumer demand there.
V - HPG enters fodder industry
VIR | 10/03/2015
Steelmaker Hoa Phat Group (HPG) has officially launched a new subsidiary, which will
produce fodder in the northern province of Hung Yen.
HPG Vice Chairman Nguyen Viet Thang has been appointed as the Hoa Phat Fodder
Production and Trading Ltd. Co.'s director and other officials of the group have also been
selected for key positions in the company, which will operate with the charter capital of VND300
billion(US$14.08 million). According to the group's representative, with a design capacity for
300,000 tonnes of fodder, the company is estimated to report revenue of VND3 trillion ($140.8
million) during the next three years. The representative said steel making is the core business
of the group, adding that entering manufacturing in the agriculture industry will be the long-term
strategy of the group's development. Thus, HPG will set a priority in finance and human
resources for the new field.
HPG Chairman Tran Dinh Long said even though the competition in the agriculture industry is
hard, he believed the group will be successful. The first batch of fodder is expected to be
dispatched to the local market in June 2015, while the company's fodder factory is set become
operational in 2016.
Last year, HPG reported a net revenue of VND26 trillion ($1.22 billion) and an after-tax profit of
VND3.2 trillion ($150.2 million), reflecting a 62 per cent year-on-year growth.
O - France becomes largest medicine provider for VN in January
VGP | 09/03/2015
France and India are the major medicine providers for Viet Nam in the first months of
2015, according to the Viet Nam Industry and Trade Information Center (VITIC) of
the Ministry of Industry and Trade.
Viet Nam’s medicine import turnover reached US$155.4 million, a year-on-year increase
of 9.86%.
France has surpassed India to become the largest provider of medicine for Viet Nam, making a
turnover of US$19.6 million, up 25.69% and accounting for 12.6% of the total.
Germany ranked third with US$14.7 million, up 12.71%.
The medicine import turnover from Poland and Japan rocketed, posting the growth rate of
174.48% and 151.1%, respectively.
Thereof see our February 2014 newsletter “Vietnam's healthcare chain”
http://produktionsservice-vietnam.com/news.php
V - Big year likely for Vietnam’s textile, garment exports
The Hanoitimes - 09 Mar 2015
Textile and garment exports are set for a boom this year, according to the Vietnam
Industrial and Trade Information Centre (VITIC), a Ministry of Industry and Trade agency.
In January exports were worth over 1.9 billion USD, marginally up from last year, but many
companies in the textile and garment industry have received orders to be executed in the first
and second quarters. The US topped the list of importers, buying textiles and apparel worth
nearly 926.7 million USD, or nearly half of Vietnam's total exports. Japan and the Republic of
Korea also bought more than 100 million USD worth of products. The full year's exports to the
US are expected to top 11 billion USD, a year-on-year increase of 13 percent.
Japanese firms' increasing investment in supporting industries in Vietnam has created
favourable conditions for the textile and garment industry, VITIC said. Exports to Japan are
expected to rise by 9 percent this year to 2.9 billion USD.
VITIC said once a free trade agreement with the EU is wrapped up, exports of textiles and
garments to that market would begin to rise, reaching 4 billion USD this year. The Vietnam
National Textile and Garment Group (Vinatex) plans to invest 9.4 trillion VND (441.3 million
USD) by 2017 in 59 textile, dyeing, garment and infrastructure projects, according to the
corporation.
They include 15 fibre production projects, 18 textile and dyeing projects,18 garment projects and
eight infrastructure projects. Under the plan, Vinatex will disburse 2.425 trillion VND (113.85
million USD) to develop these projects this year, with 805 billion VND (37.8 million USD) going
to fibre projects, 713 billion VND (33.5 million USD) to textile anddyeing projects, 726 billion
VND (34.1 million USD) to garment projects, and 181 billion VND (8.5 million USD) to
infrastructure in industrial zones for the textile and garment industry, reported the Dau tu
(Vietnam Investment Review) newspaper.
With the investment, Vinatex expects to increase this year its production capacity to 6,000
tonnes of fibre, six million metres of dyed cloth, two million vests and blazers and four million
trousers, as well as one million shirts and two million knitwear products.
Vinatex is currently considered to have the largest scale in production in the textile and
garment industry, with 100 member companies, and holds 15 percent of the total national
textile and garment export value.
However, the member companies of Vinatex still face difficulties in investment in sub-material
production, textile and dyeing projects. Vinatex General Director Le Tien Truong said that the
member companies don't have large investment capital, presenting a major challenge for local
textile and garment firms in increasing the localisation rate.
The Phong Phu Joint Stock Corporation is a member of Vinatex that has the largest capital
amount of 700 billion VND (32.86 million USD), while other large member companies have
lesser capital, such as Viet Tien with 200 billion VND (9.4 million USD), Garment 10 with 100
billion VND (4.7 million USD), and Nha Be with 150 billion VND (7.05 million USD).
The large garment companies could not invest in full supply chains, especially regarding the
production of materials and sub-materials for textile and garments, to receive export orders as
original design manufacturers (ODM), Truong said. Vinatex has equitised its operations from
January 1 this year, he added, so the group will promote management, investment and market
and staff development.
The parent company will also take on the role of a direct investor to increase production
capacity, especially self-reliance in material production, in a move to reduce dependence on
imports, rather than manage State-owned capital at its member companies, as it did before
equitisation.
The group has set a target for its parent company to earn 900 billion VND (42.25 million USD) in
revenue and 288.4 billion VND (13.54 million USD) in after-tax profit in 2015; 2.3 trillion VND
(107.98 million USD) and 342.3 billion VND (16 million USD) in 2016; and 3.26 trillion VND
(152.8 million USD) and 405.9 billion VND (19 million USD) in 2017 respectively.
V - Number of new property trading firms increases nearly 89 percent
The Hanoitimes, 09 Mar 2015
According to the General Statistics Office, the number of new realty companies
established in the two first months of this year increased by nearly 89 percent against the
same period last year.
In the real-estate sector, number of companies resuming operations rose nearly 53 percent in
the comparison to the same period a year ago.
The property sector was also the second most attractive destination for foreign direct investment
(FDI), reaching about 111.43 million USD, accounting for 9.3 percent of the total FDI into the
country during that period, according to the Foreign Investment Agency.
Thu Min
O - E-commerce in South-East Asia
The global online-shopping giants may not find it easy to conquer the region
Economist, Jakarta, Mar 7th 2015
TROPICAL rain pounds on the roof of a cavernous warehouse near Jakarta, Indonesia’s capital.
Inside, youngsters in orange T-shirts haul around clothes, luggage and electrical goods for
Lazada, an e-commerce firm, which has just moved in. The 12,000 square metre space is three
times the size of the depot it has vacated, but it already looks full. Three years ago Lazada’s
entire stock filled a storeroom the size of a studio flat, recalls Magnus Ekbom, its twentysomething boss in Indonesia.
Internet shopping accounts for less than 1% of all purchases in South-East Asia—a region twice
as populous as America, where the proportion is nearly 10%. But surging smartphone use and a
broadening middle class mean the market is set to multiply; perhaps fivefold by 2018, reckons
Frost & Sullivan, a consulting firm. Since it launched in 2012 Lazada has laid claim to six SouthEast Asian countries, largely unchallenged by e-commerce giants such as Amazon of the United
States, Alibaba of China and Rakuten of Japan. It may soon have to fight them for its territory.
Lazada was created by Rocket Internet, a Berlin-based investor and incubator that cranks out
startups designed to dominate emerging markets. Rocket still holds a 24% stake, though
Lazada has now raised more than $600m from investors including Tesco, a British grocer, and
Temasek, a Singaporean sovereign-wealth fund. These deals appear to value it at about $1.3
billion, which could well make it South-East Asia’s dearest technology firm. Like other Rocket
companies, Lazada is run by a gaggle of young European expatriates, plucked from finance and
consulting. It seems ready to stomach years of losses. In the first half of 2014—the only recent
period for which results are available—it lost $50m before interest, tax, depreciation and
amortisation, on revenues of $60m.
Again like other Rocket companies, its critics say it is just a copycat, in this case a mere clone of
Amazon. Lazada’s bosses say such charges underestimate the sophistication and gumption
required to succeed in places such as Thailand, Indonesia, the Philippines and Vietnam. Online
marketing is trickier there than in America or Europe, because locals use a much wider variety
of search and social-media sites. The region’s diversity means constant tweaking of online
portals to suit local languages and cultures. It also means battling a hotch-potch of customs
rules.
By far the biggest challenges are payment and delivery. Fewer than one in ten South-East
Asians has a credit card, and those that do have them tend not to use them online, for fear of
fraud. So a big chunk of Lazada’s customers prefer to pay in cash when their goods arrive,
which requires more sophistication from delivery partners. Postal services are often sluggish
and unreliable—especially in the vast archipelagos of Indonesia and the Philippines—and local
logistics firms are still unused to handling high volumes of small packages. About a third of
Lazada’s orders are delivered by its own fleet of vans and motorbikes, which now serve more
than 80 South-East Asian cities.
Lazada’s rapid growth has started to rouse competitors, including the big conglomerates whose
shopping centres dominate the region’s retail markets. On February 25th Lippo Group launched
MatahariMall, a new e-commerce venture, in partnership with the Matahari chain of department
stores, in which Lippo owns a stake and which are anchor tenants of some of Lippo’s shopping
centres.
Messaging services and web portals are turning to e-commerce to boost their profits. In
February, Line, a popular messaging app owned by Naver of South Korea, started selling
groceries in Thailand. Last October Softbank, a Japanese internet and telecoms conglomerate,
and Sequoia Capital, an American investor, put $100m into Tokopedia, a sort of Indonesian
eBay.
But the most serious threat to Lazada comes from the overseas e-commerce giants. After
Lazada was set up, Indonesia passed a law banning further foreign investment in e-commerce
firms which hold their own inventory (Tokopedia does not)—but politicians have recently talked
of repealing it. Amazon has begun offering free delivery to big-spending South-East Asian
shoppers who don’t mind waiting for wares shipped from America. Last month Alibaba opened
an Indonesian outpost of Aliexpress, which helps shoppers import goods from Chinese
manufacturers. In May it took a 10% stake in Singpost, Singapore’s state postal service—
perhaps in preparation for a more vigorous assault.
Max Bittner, Lazada’s overall boss, thinks it would take time for these firms to replicate his firm’s
local knowledge and delivery networks. One of his priorities is to expand relationships with
suppliers and manufacturers in China, the better to compete with the bottomless catalogue of
cheap products which Alibaba, in particular, could bring to the region. South-East Asia may still
prove big and diverse enough for several large e-retailers to co-exist—but investors will spill a
lot of red ink finding out, thinks Paul Srivorakul of aCommerce, which processes online orders
for consumer brands and retailers. “It could be a bloodbath,” he says.
V - High-tech application boosts agricultural production at Langbiang
VoV world, Quang Sang, March 6, 2015
Langbiang Plateau is not only famous for its tourism potential but also for effective new
rural development thanks to its high-tech application to boost agricultural production.
VOV’s Quang Sang reports….
Cil Nom of the K’Ho ethnic minority now owns a modern house and enjoys a comfortable life in
Bon Dung 1 hamlet in Lam Dong province’s Lac Duong district. 7 years ago, Cil Nom’s family
could not make ends meet from their 1 ha of rice cultivation, and was listed among the poor
households in Lac Duong district. With the local government’s financial and technical
assistance, his family switched to growing flowers and various kinds of vegetables instead of
rice and started earning 15,000 USD a year. Cil Nom’s investment 2 years ago in an automatic
watering system and greenhouse to grow high-profit flowers has now increased his family’s
income to 25,000 USD per year.
He told VOV: “We used to grow one crop a year which hardly fed us and we had to find extra
jobs to make ends meet. Since we switched to growing flowers and vegetables, we no longer
suffer from hunger and enjoy a much more comfortable life.”
A model of growing high-profit flowers in Lac Duong, Lam Dong province. Photo:
nongnghiep.vn
A number of local ethnic households have found stable outlets for their products. Pang Ting Sin
and his family in Dan Kia hamlet, Lac Duong district, were one of the pioneer households. After
signing contracts with a wholesale flower company, Pang Tinh Sin shifted 2 thirds of his
farmland to growing roses, earning his family 2500 USD a month.
Pang Ting Sin told VOV: “Growing flowers requires more investment and knowledge than
growing vegetables. But it brings us a higher profit and ensures that our production is
sustainable.”
Farmers in Lac Duong have applied high technology to 70% of their 1500 ha of farmland, mostly
to grow artichokes, flowers, strawberries, and vegetables, with increasing quality and quantity.
Nguyen Duy Hai is Chairman of the Lac Duong district’s People’s Committee: “Agricultural
restructuring with high-tech application has proved effective in local new rural development.
Growing flowers and vegetables has significantly improved local people’s living conditions. We’ll
do our best to expand effective models to support local ethnic people’s agricultural
restructuring.”
O - Asia to drive global retail sales
Inside Retail Asia, March 4, 2015
Asia-Pacific will account for the fastest growth in retail sales globally for the next five
years according to new data from PwC.
The professional services company predicts the rapid growth will drive the total retail
market in the region to exceed US$10.3 trillion by 2018. That will dwarf the US market’s $5
trillion and Western Europe’s $3.3 trillion.
The report, compiled in partnership with the Economist Intelligence Unit, predicts Asia-Pacific
retail sales to grow 4.6 per cent in 2015, and reach 4.9 per cent in 2018, even though China’s
growth is coming off the boil. Again, those figures dwarf more mature markets: Western Europe
will grow just 0.9 per cent in 2018 and North America by 2.6 per cent.
China and India will predictably lead the boom, says the report, but a surprise third place is
Vietnam, whose 94 million residents are experiencing a surge in disposable income. PwC and
the EIU predict 8.7 per cent retail sales growth in China in 2015, easing to 7.9 per cent in 2018,
while Vietnam is expected to grow by 8.4 per cent this year slowing to 6.5 per cent in
2018.
Other predictions for Asian markets in 2018 are:
India:……………….6.6 per cent.
The Philippines:… 5.5 per cent.
Indonesia:………...5.0 per cent.
Malaysia:…………..4.8 per cent.
Pakistan:…………..4.3 per cent.
Thailand:…………..4.3 per cent.
Singapore:………...2.9 per cent.
South Korea:……...2.9 per cent.
New Zealand:……..2.5 per cent.
Australia:………….2.2 per cent.
Hong Kong:……….1.3 per cent.
Japan:………………0.6 per cent.
The report expects Australian retail sales growth of 2.6 per cent in 2015.
V - Vietnam online shopping rises
Inside Retail Asia, March 3, 2015
Vietnamese may have been slower to adopt to online shopping than counterparts in other
southeast Asian countries – but they are starting to catch up.
Data released by the Vietnam eCommerce and Information Technology Agency (VECITA)
shows Vietnam online shopping was worth US$2.97 billion in 2014 with each consumer
spending an average of $145 during the year. Fashion and cosmetics accounted for 60 per cent
of sales.
While $3 billion may seem a lot, it amounted to just 2.12 per cent of the country’s gross retail
sales. In China, online shopping now accounts for just over 10 per cent of the total retail market.
One factor hindering Vietnam’s online retailing growth is the low penetration of credit cards. Two
thirds of purchases are paid for in cash upon the delivery of the purchases.
Other figures show about four in 10 of Vietnam’s 94 million population have access to the
internet, with penetration far higher in major cities. More than 50 per cent of people using social
networking also shop online. While major online portals like Lazada are building significant
market share, a huge percentage of Vietnam online shopping is conducted informally via
Facebook pages, Line and even WeChat. It is common for younger women, particularly, to bulk
purchase clothes, handbags, cosmetics and accessories and market them to fan bases online in
a way which is difficult for authorities to track or measure. The one shrinking sector online in
Vietnam is group buying. VECITA said just 35 per cent of Vietnam’s online shoppers bought
from group buying sites in 2014, down from 51 per cent in 2013.
Regionally, Vietnam ranks above only Indonesia, where the online market was estimated at $2.6
billion last year.
L - Yves Rocher offers botanical beauty in Laos
Vientiane Times February 26, 2015
The famous French cosmetic brand Yves Rocher is making a name for itself in Vientiane
with its natural and friendly products and its proponents see a bright future in the
country as it becomes better known among Lao skin care lovers.
Yves Rocher has more than 4,000 outlets around the world. In Asia it has a presence in
Vietnam, Thailand, Laos, Philippines, Malaysia, India and China and is starting to develop its
business in Laos. In Laos, Yves Rocher health and beauty products are imported by Annam
Fine Foods, a subsidiary of the French group Apple Tree located in Southeast Asia.
"Laos is a country that is developing, opening the business environment for foreigners to do
business here. So we also want to play a part to develop the French business in Laos. Recently,
we have presented many beauty products to Lao people and to foreigners who live in Laos,"
said the country manager of Yves Rocher in Laos, Marion Mollin. "We are pleased to present
the botanical beauty for Lao people to have healthy skin and beautiful appearances like we do in
France" she added. Open for two years already, the Yves Rocher boutique has built its image
around a goal of promoting nature’s benefits. It offers women services related to beauty
products while preserving the environment. Products available in Laos are the same as those
offered in France. They are made from more than 1,100 plants grown in the Gacilly garden in
Brittany.
"Passionate about the vegetation world, our ambition at Yves Rocher has always been to work
in harmony with the environment, as each tree and each plant does in nature," Mollin said. "This
vision, dedicated to the beauty of women began in the beautiful land of La Gacilly, France, and
guides us every day across the world and is embodied in our unique botanical beauty."
"You know Yves Rocher’s brand, it’s the number one in cosmetics in France, for skin care,
fragrance, makeup, and body care. We want as many people as possible in Vientiane to
discover the Yves Rocher quality." Those who love our brand have no need to go to find it in
Thailand, we have everything you need here. And the new boutique will open soon at Vientiane
Centre at the end of March. Yves Rocher has a variety of treatments, makeup and perfume on
offer for customers and also has a spa treatment available for all types of skin.
Yves Rocher boutique is located on Pangkham Street, Xien Gneun village. And the product is
also available at B-Well Heath and Beauty Store (Saylom village and Talat Sao Shopping Mall
2). You can also find its products at Poppy’s Pharmacy in Vientiane and Luang Prabang.
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O - Weaker Euro concerns Vietnamese exporters
VietNamNet Bridge, 24 March 2015
The depreciation of the euro against the greenback amid a struggling European economy
has begun to worry Vietnamese exporters.
The euro has declined to a 12-year low. On March 16, one euro was equivalent to
US$1.0451, with a loss of 25 percent of value over the last year.
Like the other exporters specializing in exporting products to European markets, Vu Quang
Thanh, director of the HCM City-based Thanh Hai Food Processing Company, complained that
his company still had not signed contracts for the year because of euro price fluctuations. “We
are still negotiating new contracts,” Thanh said. “The European partners have been very slow in
replying to our proposal.
The euro price fluctuations could be a reason behind the tardiness.” As Thanh is not sure if he
can sign contracts with European partners, he is trying to look for new clients in the US, Japan,
South Korea and the Middle East. Nguyen Thi Anh, chair of Song Tien Seafood, said the
company’s European catfish importers had informed him that they would place orders if Song
Tien agreed to lower the prices. However, Anh cannot slash the selling price, saying that the
catfish export price has been at a low of $2.6 per kilo, and that a drop of 10-12 penny per kilo
would be enough to bring losses.
The catfish price in the domestic market is now at VND23,500 per kilo. Anh said she needs
three kilos of materials to make one kilo of filet. “As we cannot sell at a loss, we decided to
refuse many orders, accepting the high inventory,” Anh said. In order to reduce input costs,
Song Tien has been farming fish. It is now time for harvesting, but the company still does not
have export contracts. “We still have to harvest and process fish now, hoping to sell fish later
when it can go for a good price. This is the optimal solution for us now,” she said. The euro price
fluctuations are important as European countries are Vietnam’s major export markets.
Garment and footwear exporters have complained that their European partners have insisted on
price decreases. Truong Thi Thuy Lien, director of Lien Phat Company, said her partners had
asked to reduce prices by over 10 percent. The director of a shoe company in Binh Duong
Province said that European partners had only signed short-term (six-month) contracts instead
of long-term ones for fear of currency-price fluctuations. TBKTSG
V - Garment exports up 18% in two months
VGP | 16/03/2015
Viet Nam earned US$3.4 billion from exporting apparels in the first two months of 2015,
up nearly 18% against the same period last year, according to the recent statistics from
the Ministry of Industry and Trade.
The sector sets the goal to achieve an export turnover of US$28-28.4 billion in 2015, up
around 16% compared to the previous year.
The US, Japan and the Republic of Korea are the three largest importers of Viet Nam’s garment.
Apparel exports to the US are expected to reach US$11 billion this year, attaining a growth rate
of 13%.
When the EU-Viet Nam Free Trade Agreement is signed, tariff reduction, from 12% to 0%,
will facilitate Viet Nam’s apparel exports to the EU.
Viet Nam exported 36,000 tons of cashews, gaining US$261 million over the past two months of
2015, up 14.2% in volume and up 36.8% in value compared to the same period in 2014,
according to the Ministry of Agriculture and Rural Development. In February alone, 13,000 tons
of cashews were sold abroad, worth US$100 million.
The US, China, and the Netherlands are the largest cashew importers of Viet Nam, accounting
for 27.8%, 24.24% and 8.06%, respectively.
O - US holds potential for local wood products
The Hanoitimes, 14 Mar 2015
Vietnam has opportunities to expand exports of wood products this year, especially to
the US market, delegates said at a conference on March 12.
Despite global economic difficulties, the wood processing industry has enjoyed an average
growth of 15 percent over the past seven years (2008-14), said Huynh Van Hanh, Deputy
Chairman of the Handicrafts and Wood Industry Association of Ho Chi Minh City (Hawa).
Last year the country earned 6.2 billion USD from the export of wood and wooden products, a
year-on-year increase of 11.5 percent, Hanh told participants at a conference on Export to the
US Market: Opportunities and Challenges.
The United States, Japan and China were the three largest markets for Vietnamese timber in
2014, accounting for 65.13 percent of the national total export value of timber and forest
products.
Hanh said exports to the US market increased strongly in recent years from 1.39 billion USD in
2010 to 2.23 billion USD last year, with bedroom, kitchen, and office furniture being among key
export items. The recovery of the US economy has increased consumption of furniture products
in the market, said Tran Quoc Manh, Hawa's executive board member and chairman of the
Saigon Trade and Production Development Corp.
The upcoming Trans-Pacific Partnership agreement will open up export opportunities for
Vietnamese firms to the market, including those in the wood industry.
Vietnam's furniture export value currently accounts for just 2.68 percent of the total figure of 70
furniture exporting countries.
Wood and wood products exports are expected to grow by at least 15 percent this year,
reaching at least 7.2 billion USD, Hanh said, adding that export revenue was 1.049 billion USD
in the first two months of the year, up 14 percent over the same period last year.
O - Exports to Italy surge in January
VGP | 10/03/2015
Viet Nam's exports to Italy reached $249 million in January, surging 36.39%.
Key Vietnamese exports to Italy included phones and phone components, footwear, and coffee,
growing between 14% and 66% from the same month in 2014.
Trade between Italy and Viet Nam has increased steadily by 25-30% annually, hitting $3.6 billion
in 2014, according to the Information Centre under the Ministry of Industry and Trade.
In 2016, the figure is expected to reach $5 billion, as the southern European nation is now an
important export market for Viet Nam.
O - Exports to Laos up 48%
VGP By Thuy Dung | 04/03/2015
The exports of iron and steel led Viet Nam’s commodities exported to Laos, bringing
home US$13.49 million, up 116.97% against the previous year and accounting for 25% of
the total export turnover.
According to the Viet Nam Industry and Trade Center (VITIC), under the Ministry of Industry and
Trade, Viet Nam earned US$53.43 million from exports to Laos in January, up 47.96%.
The export turnover of vehicles and spare parts and oil and gas came in second and third
positions with US$6.24 million and US$5.58 million, up 58.25% and down 50.79%, respectively.
In the first month of 2015, other commodities witnessed a sharp export growth, such as plastics
up 100.78%, machines, equipment and tools up 73.81%, coal up 111.26%, electrical wires and
cables up 125.17%, and pottery up 172.91%.
Particular Reports
O - Relocation of production from Europe + US to China towards zero
The track of manufacturers leads now after Vietnam
Compiled by Dipl.-Ing.Alex Narr. March 27th, 2015
Manufacturing is undergoing a state of transformation, with two practises – smart
manufac-turing and green manufacturing becoming the buzz word around the
industry globally. Companies are increasingly looking at automation and utilizing
cutting edge IT and techno-logy on the shop floor, thereby increasing efficiency,
and at the same time conserving energy and resources and consequently reducing
costs.
The global manufacturing industry is currently in the midst of a geographical shift.
Companies are increasingly looking at automation and utilizing cutting edge IT and
technology on the shop floor, thereby increasing efficiency, and at the same time
conserving energy and resources and consequently reducing costs.
For the best part of the past two or three decades, companies across manufacturing sectors have
moved production to low cost countries. China (ASIA) has, for long, been the global manufacturing
hub for a vast number of products, primarily due to the low cost labor advantage it offers.
However, with continuous rising labor costs its position is under ongoing strong threat. While it
continues to be a preferred location, countries in the ASEAN region such as Vietnam, Cambodia
and Indonesia http://www.produktionsservice-vietnam.com/Englisch/country-ranking.php are
emerging as attractive low cost alternatives for countries that are looking at moving out of China
(ASIA).
China is the global leader in textile production, with a processing capacity of approximately 41.3
million metric tons of fibers in 2010 (about 52 percent of the global total). Clothing exports totalled
$212 billion in 2010, representing 34 percent of the worldwide total. In terms of garment imports in
the European Union and the US, China accounts for nearly 50 percent and 41 percent,
respectively. The country is well established as an important source of clothing products, with the
presence of leading players, a strong supply chain network and manufacturing expertise in apparel
and textile products.
A number of Southeast Asian (ASEAN ) countries are capitalizing on rising labor costs in China. In
addition, manufacturers are seeking to shift operations to alternative locations due to the high cost
of raw materials and an appreciating currency. Wages have increased yearly by 20 percent over
the last years in China which has lowered the competitiveness of several units in the international
market. In recent times, India has been a strong competitor, but the emergence of Vietnam,
Cambodia and Indonesia has had an adverse impact on the Chinese textile industry.
In 2011, Japan’s Morito Group, which provides textile components to Adidas, Nike, Gucci and
D&G, announced plans to invest $15 million in Ho Chi Minh City’s. This was part of the company’s
initiative to gradually shift garment and textile production from China to Vietnam. A 10 percent tariff
is levied on Chinese garment exports to Japan, whereas Vietnam has not imposed any tariff
currently. As a result, Japanese textile manufacturers have made substantial investments
(approximately $190–200 million) in the country over the last few years.
Another beneficiary of the transition from China is Cambodia. The latter exported garments worth
nearly $3.3 billion in 2011, an increase of 35 percent year-on-year. Cambodia has an abundant
supply of low wage labor; moreover, no other industries are in direction competition with the
garment industry in terms of absorbing labor. The country also enjoys excellent preferential access
to most global markets. Apparel produced in Cambodia enjoys duty free access to the EU,
Canada, Japan and China. Recently, Top Form International Ltd, an innerwear manufacturer in
Hong Kong, relocated its production facilities from China to Cambodia. The company plans to
manufacture 80,000 innerwear products per month for export to the US and European markets,
with the Cambodian unit accounting for about one-third of the total production.
While several companies have relocated to Indonesia, concerns exist about whether these
countries can match China’s supremacy in supply chain efficiency, distribution networks and
technical knowhow. According to industry experts, creation of a regional supply chain of textile
and garment producers in the Association of Southeast Asian Nations (ASEAN) would be the
ideal solution. Though Vietnam does not produce denim up to now (but started already to build up
several high quantity denim and dyeing facilities). Indonesia is involved in its production that is
exported to tariff-free countries within ASEAN to be sewed into jeans. This is one step closer to
achieving the transformation of ASEAN into a single market by 2015.
ASEAN manufacturers are entering into alliances. For example, Phongsak Assakul, which owns a
textile mill in Bangkok, ships its pre-dyed fabrics by road to Cambodia, where they are cut and
sewed into summer blouses at another factory. Thereafter, the merchandise is supplied to
Benetton, an Italian brand. Though there is a definite shift in textile manufacturing from China and
increased investments in ASEAN countries, the fact remains that the country‟s dominance is set
to last for a few more years. While China’s competence on low labor costs strong declining, the
12th Five- Year Plan (approved in March 2012) focuses on encouraging domestic consumption,
and shifting toward higher value-added manufacturing.
Though countries in Southeast Asia (ASEAN) are emerging as attractive options for specific
products, mix of scale, speed and flexibility would ensure China remains the dominant force in the
global market in the near future. However, the country’s position is likely to be more and more
under strong threat from these emerging nations.
The ASEAN domestic market is increasingly attractive for Japanese companies facing a mature
consumer market and declining population in Japan. ASEAN has many "pull" factors - factors that
are attracting or "pulling" investment into a country - and are attractive for Japanese
multinationals.
With GDP in the ASEAN region having reached 2.4 trillion USD in 2014, a total population of 635
million people and a rapidly growing middle class, the region offers one of the fastest-growing
market opportunities over the next two decades. Moreover, the bloc is achieving GDP growth of
around six percent per year, thus creating a fast-growing market for Japanese companies across
many sectors.
China Manufacturers Survive by Moving to Asian Neighbors
Idle equipment at Lever Style's factory in Shenzhen, China. The firm, whose clients include
Uniqlo, has cut its employees in China by a third. Thomas Lee for The Wall Street Journal
China—In a corner of a sprawling factory in the coastal southern city Shenzhen, sewing
machines that stitched blouses and shirts for Lever Style Inc.'s clients now gather dust. As the din
on the factory floor has dropped, so, too, has the payroll. Over the past two years, Lever Style's
employee count in China has declined by one-third to 5,000 workers. The company in April 2014
began moving apparel production for Japanese retail chain Uniqlo to Vietnam, where wages can
be half those in China. Lever Style also is testing a shift to India for U.S. department-store chain
Nordstrom Inc. and moving production for other customers.
It's a matter of survival. After a decade of nearly 20% annual wage increases in China, Lever
Style says it can no longer make money here.
"Operating in Southern China is a break-even proposition at best," says Stanley Szeto, a former
investment banker who took over the family business from his father in 2000.Companies from
leather-goods chain Coach Inc. to clogs maker Crocs Inc. also are shifting some manufacturing to
other countries as the onetime factory to the world becomes less competitive because of sharply
rising wages and a persistent labor shortage. The moves allow the companies to keep consumer
prices in check, although competition for labor in places such as Vietnam and Cambodia is
pushing up wages in those countries as well.
At Crocs, 65% of its colorful shoes are expected to be made in China this year through third-party
manufacturers, down from 80% last year. Coach will reduce its overall production in China to
about 50% by 2015 from more than 80% in 2011 so the handbag maker isn't too reliant on one
country, a spokeswoman says.
Manufacturing companies are bypassing China and moving factories to cheaper locales in
Southeast Asia. Lever Style's Stanley Szeto explains why his company is gradually moving
production to Vietnam and Indonesia.
Some migration of apparel manufacturing from China is expected, and even encouraged by the
government, as the country's economy matures. As other Asian nations become efficient at mass
manufacturing, China must embrace research and high-technology production to transform its
economy as South Korea and Japan once did. But healthy economic growth requires that China
expand its service sector and create higher-skilled manufacturing jobs at a rapid clip to
compensate.
"If costs continue to rise, but China is unable to become more innovative or develop
home-grown technologies, then the jobs that move offshore won't be replaced by
anything," says Andrew Polk, a Beijing-based economist for the Conference Board, a research
group for big American and European companies.
Big changes under way in China
China continues to be the developing world's largest recipient of foreign direct investment,
attracting $112 billion last year. But that was down 3.7% from a year earlier. And exports still are
rising in the double-digit percentages. Growth is slowing.
Here in the manufacturing hub of Guangdong province, Lever Style's factories provide a glimpse
into the future of China's apparel industry.
The company, which is based in Hong Kong, used to manufacture its clients' clothing at three
factories in China. But rising labor costs have forced the apparel maker for Armani Collezioni,
John Varvatos and Hugo Boss to focus on what it does best: helping clients develop clothing
while the company outsources a growing part of production.
In five years, Lever Style expects about 80% of its production to be outsourced to factories it
manages throughout Asia, and half its clothing to be made outside China.
As it shifts production to Vietnam, Lever Style says it is able to offer clients a discount of up to
10% per garment. That is attractive to U.S. retailers, whose profit margins average 1% to 2%,
according to the U.S.-based National Retail Federation.
This shift is already well under way. Lever Style expects that a few years from now, 40% of the
clothes it makes for Uniqlo, one of Lever Style's biggest customers, will come from Vietnam and
60% from China.
As China production slows for Uniqlo and other clients, Lever Style plans to return one factory
here to the landlord and consolidate its shrinking workforce at the other two.
Uniqlo, the biggest apparel chain in Asia, says it makes 70% of its clothing in China but would like
to cut its production in the country to two-thirds, mainly to reduce costs. A spokesman for parent
company Fast Retailing Co. says the retailer has an "ongoing dialogue" with contract
manufacturers of its 70 factories world-wide about where to produce its clothing.
Nordstrom, which works with 450 factories in nearly 40 countries, says cost is important but so
are product quality and factory working conditions. The company hasn't seen a "material change"
in how much of its apparel is being made in China in recent years, a spokesman says.
Many retailers are less concerned about where a product is made than about price, delivery and
quality, says Lever Style's Mr. Szeto. Still, he says, while China's transformation of its economy is
"the right move for the country, I see this as a huge challenge for us as a company."
Within ASEAN, Vietnam is the strongest competitor for inheriting low value-added textiles and
apparel manufacturing from China. In contrast to other leading textile exporters in the region
(Indonesia, Thailand, Malaysia), the share of Vietnam’s textile exports against its total exports
has grown in recent years, based on WTO figures. As of 2012, there were over 3800 companies
in the industry in Vietnam, the majority of which are cut-and-sew enterprises. The industry’s
comparative lack of upstream suppliers, where various fabrics and accessories must be imported
from outside Vietnam, makes it a prime candidate for regional integration.
Textiles consistently ranks among Vietnam’s leading export industries, employing upwards of 1.3
million workers in directly related jobs and more than 2 million with auxiliary work included. The
country’s voracious demand for cotton (400,000 megatonnes consumed in 2012) is primarily fed
by the U.S., India and South Africa.
Vietnamese-produced yarn is then exported to buyers in China, Korea and Turkey. Vietnam has
set targets for 2020 of increasing investment capital in its textiles industry to US$25 billion and
the related workforce to 3 million.
Cambodia’s textile and apparel industry faces similar problems as that of Vietnam in terms of
moving up the value-added chain, albeit on a smaller scale. Nevertheless, the country’s
production capacity exceeds 500 factories staffed by upwards of 500,000 textile and apparel
workers. Low wages and weak enforcement of labor laws, however, have led to endemic volatility
in the industry and hesitation on the part of foreign investors to continue sourcing from the
country.
Overall, challenges remain for creating an intra-ASEAN comprehensive supply chain for the
textiles industry capable of competing on a global footing. Such is the aim of the Source ASEAN
Full Service Alliance (SAFSA) established in 2010 by the ASEAN Federation of Textile Industries
(AFTEX). Within the region, the Thai and Vietnamese apparel industries are already very closely
tied: bilateral trade in garments reached US$160 million in the first half of 2014, which was
heavily weighted toward imports into Vietnam.
Leading manufacturers expand production in Vietnam
In addition to having significant market potential, Vietnam has great significance as a production
site for leading manufacturers such as LG and Panasonic. LG plans to invest US$1.5 billion in
expanding its production plant in Hai Phong, to manufacture washing machines, fridge freezers
and air conditioners. It is expected that the production line will start running by the end of 2014.
LG plans to combine the plant in Hung Yen with the plant in Hai Phong, to make production more
efficient.
Similarly, in 2013 Panasonic expanded its production of washing machines in Thang Long
Industrial Park II, Hung Yen province, to produce 600,000 washing machines annually by 2014.
Production for LG and Panasonic in Vietnam is intended for both local market and exports.
Vietnam is one of the most politically-stable countries in Asia Pacific, governed by a single party,
giving confidence to manufacturers and foreign investors to invest in the country. Also, labour
costs in Vietnam are very attractive, amongst the lowest in Asia Pacific, with a minimum wage of
US$79/ month. http://www.produktionsservice-vietnam.com/Englisch/country-ranking.php
Vietnam also has a key strategic location, close to the major markets of China, South Korea.
Given rising labour costs of production in China, companies can relocate some production lines
to Vietnam.
Vietnam posted the second largest absolute volume growth in Southeast Asia for major
appliances after Indonesia. Vietnam is expected to remain one of the leading Southeast Asia
markets in major appliances due to many factors; increased disposable incomes, low penetration
rates of major appliances, and increased trading up to premium products among high-income
consumers. Asian manufacturers will continue to benefit from labour cost advantages and political
stability.
In Vietnam apparel, shoes, electronic, IT, automotive, food stuff indeed are the main
products.
It is rarely reported about the comprehensive group of many small craft shops and
manufacturers (SME’s) that produce only with some special tools, much skill and mainly
manual work lots of monetary value luxurious products which are economically no longer
possible to produce in US or Europe because they simply much too labor intensive
therefore get to costly.
To name just a simple traditional example: Classic and designer style handbags, business
briefcases, document wallets, cell phone etui’s, everything from the finest leather/
materials, carefully selected superior accessories, all in high quality workmanship
produced only in small series. Required start-up investment € 150.000 - 200.000.
Result: If properly implemented high double-digit return on investment is achieved. Just
one of the lots of business possibilities Vietnam can offer not only for export.
Furthermore, with the 2015 coming different Free Trade Agreements (FTA’s) Vietnam will
play an significant role as a production hub, exporting more consumer products to neighbouring
countries, as well as increasingly - mainly by duty-free- to US, Australia and Europe then
anybody else in ASEAN.
- EVFTA (EU-Vietnam Free Trade Agreement)
- AEC (ASEAN Economic Community) Cover the Asia/Oceania portion of the Pacific coast
- TPP (Trans-Pacific Partnership) will be the golobal most potential Free Trade Agreement,
ratified 2015. The member countries are: Australia, Brunei, Canada, Chile, Japan, Malaysia,
Mexico, New Zealand, Peru, Singapore, USA, Vietnam
- RCEP Regional Comprehensive Economic Partnership)
Productionservice-Vietnam handles in Vietnam and Indochina all business activities practicecompliant and reliable. No problems with authorities, site selection, staff recruitment and training.
Our controlling also has the costs and potential returns in grip. We can offer interim manager too.
Interested investors / companies we give an free first time estimate of the requirements,
possibilities and project costs http://www.produktionsservicevietnam.com/Englisch/leistungen.php
Source: Thidathip Tawichai. Kathy Chu. Thomas Lee Wall Street Journal. Andrew Polk Beijing.
Euromonitor International. VIETNAM BUSINESS NEWS – The Economic Mirror of Indochina.
O - Game of zones
The Economist, Mar 21st 2015 |
Regional trade deals aren’t as good as global ones but they are still beneficial
AFTER years of missed deadlines, the coming months will be decisive for international trade
talks. Much hinges on whether Congress gives the president “trade promotion authority” by
waiving its right to reopen trade deals that have already been approved by America’s negotiators.
This would help clear the path to an agreement among Pacific countries and to an AmericanEuropean pact. Completion of these deals, in turn, would be evidence that regional trade
negotiations are capable of success where global talks have foundered. With that, an old debate
will begin anew: do regional deals lead to freer trade globally, or do they obstruct it by Balkanising
the world?
In classical economic theory, free trade boosts prosperity by encouraging nations to focus on
their relative strengths. The reality of regional deals is messier. Jacob Viner, a Canadian
economist, showed more than 60 years ago that customs unions sometimes divert rather than
create trade by inducing consumers to buy from inefficient producers. A hypothetical example:
Thailand makes widgets more cheaply than Mexico, but Americans buy them from Mexico due to
lower tariffs on Mexican goods. Such a diversion hurts the global economy, keeping resources
from the places where they would be used most productively. Jagdish Bhagwati of Columbia
University expanded on this with his observation that regional deals might be stumbling, not
building, blocks towards freer trade worldwide. Many had hoped that regional agreements in the
early 1990s would lead to global pacts. But Mr Bhagwati argued that less efficient producers
would lobby for regional accords, seeking protection inside them.
At first glance, the past 20 years bear out his warnings. Since 1994 there have been more than
ten regional deals a year on average but only one global deal: the World Trade Organisation’s
underwhelming “Bali package” of 2013. Moreover, forecasts about the regional deals now under
negotiation highlight the dangers of trade diversion. According to a controversial study by
Germany’s Ifo Institute, the Transatlantic Trade and Investment Partnership (TTIP), a mooted
deal between America and the European Union, would boost America’s GDP by 13.4%. But it
would leave the economy of Canada, which is not part of the pact, 9.5% smaller than it would
otherwise have been. Other studies reach similar, if less dramatic, conclusions about the
Transpacific Partnership (TPP), which links 12 countries in Asia and the Americas.
On closer scrutiny, though, regional deals do not look so bad. One indication that the stumblingblock claim was true would have been a proliferation of preferential tariffs following the explosion
of regional agreements in recent years, as trading partners lowered barriers for each other
exclusively. There has not been one. As of 2008 less than 17% of global trade flows were subject
to any preferential treatment. Instead, there has been a spectacular decline in tariffs in general.
The average rate applied by Latin American countries fell from 13.1% in 1996 to 4.8% in 2012,
according to the World Bank. Developing countries in Africa, Asia and Europe have also slashed
tariffs.
The trade-diversion argument is also wanting. Despite the gloomy forecasts for countries
excluded from TPP and TTIP, regional deals have a good record in practice. Almost all have
boosted trade for non-members, albeit not by as much as for members. The reason is that trade
deals nowadays have relatively little to do with tariffs; they focus instead on deeper regulatory
issues such as rules governing capital flows and competition policy.
Richard Baldwin, a trade economist, explains their benign external impact by way of two
examples. First, America and Peru, in their free-trade deal, promised that one another’s firms
would get just as good access to telecoms services as local companies. That may sound like a
non-tariff preference for American firms in Peru, since, say, Japanese companies do not get the
same guarantee. But the nationality of firms is malleable: Toyota USA qualifies since it is
incorporated in America. Second, aligning regulations is more like a public good than a
preference, since countries outside the deal also benefit. The European Union’s shared
standards on mobile telecoms, for instance, make life easier for all firms doing business in
Europe, wherever they are headquartered.
In predicting trouble for those outside TTIP, the Ifo study did not consider the positive spillovers
from harmonised regulation. The Centre for Economic Policy Research, which did, forecast small
income gains for non-members. To be clear, truly global deals would deliver even greater gains.
But this research suggests that regional agreements, especially big ones, should be welcomed as
productive alternatives.
Block and tackle
The European example reveals another dimension to regional deals. Although third parties may
benefit from a common mobile standard, it is Europe that sets the standard, with the interests of
its companies in mind. Those inside trade zones get to draft rules that outsiders must adhere to.
This helps to explain America’s decision to exclude China from TPP at the outset, Shintaro
Hamanaka of the Asian Development Bank argues in a new paper. America is pushing, among
other things, for severe restrictions on state-owned firms, which are central to China’s economy. If
TPP is completed, America could then invite China to join, presenting the limiting provisions as a
fait accompli. China, meanwhile, is trying to craft an Asian free-trade pact, with America on the
outside. Describing regional deals as stumbling or building blocks often misses their real
importance. They are also power bases. Countries use them to project their vision of free markets
on to the global economy.
V - New Immigration Law introduces 20 New Visa Categories
Compiled by Dipl.-Ing.Alex Narr Productionservice-Vietnam, 19.03.2015
After the 2013 implementations of a new Labor Code and a new decree on the management of
foreign workers in Vietnam, the Vietnamese National Assembly has now approved a new
immigration law that will come into effect on January 1, 2015. Most notably the new law
introduces 20 different visa categories, appears to ban in-country conversion from one visa
category to another, and provides new conditions under which a foreign national will be barred
from entering or exiting the country.
What’s Changed? New Visa Categories
The 20 new visa and Temporary Resident Card categories that will be implemented in January
include several different categories for various types of foreign employees. The ones most
applicable to Pro-Link GLOBAL’s clients are likely to be:
• DN – applicable to foreign workers who will work as a local hire at a Vietnamese company, valid
for up to 12 months.
• LĐ – applicable to Intra Company Transfers, as well as employees coming to work in Vietnam
based on a contract between a foreign employer and a Vietnamese company, valid for up to 2
years;
• NN2 and NN3 – applicable for company heads and other staff, respectively, of representative
offices in Vietnam, valid for up to 3 years.
The other work-related visa types include separate visas for managers of NGOs (NN1 – up to 12
months), journalists (PV1 and PV2, for longer term and short term assignments, both valid for up
to 12 months) and for foreign investors and foreign lawyers practicing in Vietnam (ĐT, up to 5
years). Note that a work permit is still required in combination with all of these mentioned visas.
Foreign nationals who come to Vietnam to engage in general business activities and/or to attend
conventions or conferences will be able to apply for an HN visa (valid up to 3 months).
It is important to note that the above reflects the current interpretation of the new law. However,
since the official law does not go into much detail regarding which category of visa applies to
which specific type of foreign worker, it is likely that the interpretations of these visa categories
will change upon the authorities’ release of more detailed instructions. For example, this
ambiguity is especially evident in the visa types DN (“Issued to people who come to work with
companies in Vietnam”) and LĐ (“Issued to people who come to work”).
In-Country Change of Status
While the in-country change of status from tourism or business to work was previously
commonplace, the new law does not seem to allow such a conversion anymore. Therefore, it is
expected from January 2015 onwards it will no longer be possible to enter Vietnam on non-work
status with the purpose of filing a work permit, and remaining in-country once issued.
Rather, the employee should first apply for a work permit and, upon its issuance, obtain the
appropriate visa to enter the country. This process can take 1 to 2 weeks from date of application
at the Ministry of Foreign Affairs or the Immigration Department by the sponsoring entity in
Vietnam. Depending on the nationality and home country of the employee, the visa can then be
collected either at a visa-issuing authorities (e.g. consulate) in the employee’s home country or at
a border checkpoint.
Exit and Entry Prohibitions
The new law also provides reasons why a foreign national may be banned from either entering or
departing Vietnam.
ACTION ITEMS FOR EMPLOYERS
Companies who plan to sponsor foreign employees, either coming on assignment or on local
contract should be aware that new visa categories and in-country change of status may no
longer be possible. As a result, the work permit will normally need to be obtained prior to the
employee obtaining their visa and therefore a delay in the start date of employment from date of
issuance of the work permit can be expected.
O - Asia’s dominance in manufacturing will endure. That will make
development harder for others
Scoopnet, Mar 14th 2015
BY MAKING things and selling them to foreigners, China has transformed itself—and the world
economy with it. In 1990 it produced less than 3% of global manufacturing output by value; its
share now is nearly a quarter. China produces about 80% of the world’s air-conditioners, 70% of
its mobile phones and 60% of its shoes. The white heat of China’s ascent has forged supply
chains that reach deep into South-East Asia. This “Factory Asia” now makes almost half the
world’s goods.
China has been following in the footsteps of Asian tigers such as South Korea and Taiwan. Many
assumed that, in due course, the baton would pass to other parts of the world, enabling them in
their turn to manufacture their way to prosperity. But far from being loosened by rising wages,
China’s grip is tightening. Low-cost work that does leave China goes mainly to South-East Asia,
only reinforcing Factory Asia’s dominance. That raises questions for emerging markets outside
China’s orbit. From India to Africa and South America, the tricky task of getting rich has become
harder.
China’s economy is not as robust as it was. The property market is plagued by excess supply.
Rising debt is a burden. Earlier this month the government said that it was aiming for growth of
7% this year, which would be its lowest for more than two decades—data this week suggest even
this might be a struggle. Despite this, China will continue to have three formidable advantages in
manufacturing that will benefit the economy as a whole.
First, it is clinging on to low-cost manufacturing, even as it goes upmarket to exploit higher-value
activities. Its share of global clothing exports has actually risen, from 42.6% in 2011 to 43.1% in
2013. It is also making more of the things that go into its goods. The World Bank has found that
the share of imported components in China’s total exports has fallen from a peak of 60% in the
mid-1990s to around 35% today. This is partly because China boasts clusters of efficient
suppliers that others will struggle to replicate. It has excellent, and improving, infrastructure: it
plans to build ten airports a year until 2020. And its firms are using automation to raise
productivity, offsetting some of the effect of higher wages—the idea behind the government’s new
“Made in China 2025” strategy.
China’s second strength is Factory Asia itself. As wages rise, some low-cost activity is indeed
leaving the country. Much of this is passing to large low-income populations in South-East Asia.
This process has a dark side. Last year an NGO found that almost 30% of workers in Malaysia’s
electronics industry were forced labour. But as Samsung, Microsoft, Toyota and other
multinational firms trim production in China and turn instead to places such as Vietnam, Myanmar
and the Philippines, they reinforce a regional supply chain with China at the centre.
The third advantage is that China is increasingly a linchpin of demand. As the spending and
sophistication of Chinese consumers grows, Factory Asia is grabbing a bigger share of highermargin marketing and customer service. At the same time, Chinese demand is strengthening
Asian supply chains all the more. When it comes to the Chinese market, local contractors have
the edge over distant rivals.
Deft policy could boost these advantages still further. The Association of South-East Asian
Nations (ASEAN) is capable of snapping up low-end manufacturing. China’s share—by volume—
of the market for American shoe imports slipped from 87% in 2009 to 79% last year. Vietnam,
Indonesia and Cambodia picked up all the extra work. But ASEAN could do far more to create a
single market for more complex goods and services. Regional—or, better, global—deals would
smooth the spread of manufacturing networks from China into nearby countries. The example of
Thailand’s strength in vehicle production, which followed the scrapping of restrictions on foreign
components, shows how the right policies can weld South-East Asian countries into China’s
manufacturing machine.
Unfortunately, other parts of the emerging world have less cause to rejoice. They lack a large
economy that can act as the nucleus of a regional grouping. The North American Free-Trade
Agreement has brought Mexican firms into supply chains that criss-cross North America, but not
Central and South American ones. High trade barriers mean western Europe will not help north
Africa in the way that it has helped central and eastern Europe.
And even when places like India or sub-Saharan Africa prise production from Factory Asia’s
grasp, another problem remains. Manufacturing may no longer offer the employment or income
gains that it once did. In the past export-led manufacturing offered a way for large numbers of
unskilled workers to move from field to factory, transforming their productivity at a stroke. Now
technological advances have led to fewer workers on factory floors. China and its neighbours
may have been the last countries to be able to climb up the ladder of development simply by
recruiting lots of unskilled people to make things cheaply.
Exports still remain the surest path to success for emerging markets. Competing in global
markets is the best way to boost productivity. But governments outside the gates of Factory Asia
will have to rely on several engines of development—not just manufacturing, but agriculture and
services, too. India’s IT-services sector shows what can be achieved, but it is high-skilled and
barely taps into the country’s ocean of labour.
Put policy to work
Such a model of development demands more of policymakers than competing on manufacturing
labour costs ever did. A more liberal global regime for trade in services should be a priority for
South America and Africa. Infrastructure spending has to focus on fibre-optic cables as well as
ports and roads. Education is essential, because countries trying to break into global markets will
need skilled workforces.
These are tall orders for developing countries. But just waiting for higher Chinese wages to push
jobs their way is a recipe for failure.
O - Burning rubber
By Max Burt, March 18, 2015
Your statistical sat-nav to transport in Southeast Asia
Fairs & Exhibitions
O - VIETNAM - CAMBODIA - LAOS – MYANMAR.
Our link: http://www.produktionsservice-vietnam.com/Englisch/messen.php shows all trade fairs
in VIETNAM, CAMBODIA, LAOS, MYANMAR with organizer contact datas.