The Nation December 20, 2014 1:00 am
Prapharat Siriwattakanon, president of Quickcote Products.
Firm studies expansion into CLMV markets
After spending the past 20 years developing its business, Quickcote Products Co, a Thai producer of mortar and skim coating and owner of the Pendulum brand, is set to expand in both Thailand and the CLMV markets - Cambodia, Laos, Myanmar and Vietnam.
President Prapharat Siriwattakanon said the company, which just celebrated its 20th anniversary on Wednesday, has set a two-year (2015-16) investment budget of about Bt500 million. It will go towards a new cement plant, warehouses and logistics centres, as well as acquisition possibilities.
"We will invest about Bt200 million in a new skim-coating plant to be constructed on a 50-rai plot close to our existing cement plant in Ratchaburi province. The new plant will be completed within two years. The company also expects to increase its operational staff at its cement plant from 200 currently to 300 people within two years."
She said that at present, the company was able to produce about 500,000 tonnes a year of mortar and skim coating, at its own plant and two outsourced manufacturers in Ratchaburi and Saraburi provinces via OEM (original equipment manufacturing) contracts.
Half of the production capacity will be from OEMs. The company is running at about 80 per cent of its full production capacity.
"We are also looking to set up our first warehouse on our 35-rai vacant plot in Vientiane to be a distribution centre for our cement products in Laos, Cambodia and Vietnam," she said. "Personally, what I dream for the future is for all of our staff to have good working and living conditions," Prapharat said. She added that the company's new six-storey headquarters, worth about Bt140 million, on Nakhon In Road in Nonthaburi was under construction and would be officially opened at the end of next year.
The company employs about 60 office people currently.
Rachan Sotarat, marketing manager of Quickcote Products, said the company was looking for potential dealers and business alliances in CLMV markets.
"The Asean Economic Community will be effective next year and as a local player we need to cash in on the coming opportunity," Rachan said. He added that the company would conduct feasibility studies of particular CLMV markets on the logistics costs and whether it would be able to sell its cement products at competitive prices.
Rachan said the company currently earned no revenue from exports, but shipments of its products, mainly from CLMV markets, would contribute about 30 per cent of the total turnover within five years.
Last update 09:08 | 19/12/2014
VietNamNet Bridge – It is time for Viet Nam to restructure its national budget collection, economic expert Vu Dinh Anh told Thoi bao Kinh te Viet Nam (Viet Nam Economic Times).
How are falling global oil prices affecting the Vietnamese economy?
The drop of crude oil prices in the international market will positively affect our economic recovery. I believe that our national budget revenue from business production and exports will increase. Such an increase will compensate for any losses incurred from oil extraction, crude oil exports and oil imports. It might lead to the surge of the national budget thanks to declining inflation and price increases of commodities and services.
Contributions from crude oil account for more than 10 per cent of budget revenue. Should we be worried about the falling oil price?
Last week, the oil price dropped 33 per cent and then 38 per cent. If the price keeps falling, it will raise an alarm regarding our national budget structure. As we all know, our national budget depends significantly on the extraction of mineral resources and import-export activities. These industries depend very much on the international market and drain our nation's natural resources, labour resources and financial resources.
Revenue from business production, not natural resource extraction, should be the mainstay in the national budget.
Revenue collection for this year has been completed. So don't you think the falling oil price will only be a concern next year?
According to reports from the Ministry of Finance, our 2014 budget collection was fulfilled in November and revenue from crude oil surpassed 13.2 per cent of the target. Therefore, the current drop in the oil price will not have adverse impacts on the 2014 budget collection. But it will affect the 2015 budget collection. At a recent National Assembly meeting in November, the deputies unanimously adopted a projection of the crude oil price at $100 per barrel.
If the crude oil falls to, say, $40 per barrel in 2015, Viet Nam will lose about VND120 trillion ($5.7 billion) from crude oil exports. Therefore, our national budget will lose VND 60 trillion ($2.85 billion) from crude oil contributions, excluding the shortage from low prices of imports and consumption of oil and petroleum.
Revenue from crude oil includes taxes levied from natural resources and enterprises' income tax. In 2014, this revenue accounted for 11 per cent of estimated national budget collection or about VND85.2 trillion ($4 billion).Compared with the 2013 budget contribution, the figure was reduced by almost 15 per cent. So no doubt, if the price of the crude oil keeps falling, it will adversely impact the 2015 national budget.
In your opinion, what consequences will it have?
A steep drop of crude oil, oil and diesel will of course have serious impacts on our expenditure plan for 2015 – for both recurrent expenditure and debt services. This is a heavy task on the shoulders of the government and particularly the Ministry of Finance.
What measures should we adopt to cope with the situation?
While we do not have a strategy to restructure our 2015 national budget collection, it is imperative that all functional agencies work out their own response measures. The Ministry of Finance needs to develop various scenarios based on several ways the oil price might fall in 2015. At the same time, the ministry should work closely with other agencies to come up with comprehensive plans for dealing with the adverse impacts of low crude oil price on business production in Viet Nam, as well as on exports and consumption. These projections should be as precise as possible, as they are the foundations for the Ministry of Finance to develop their plans. In the meantime, Viet Nam should think carefully about the possibility of not increasing the volume of crude oil extraction or exports or petrol/diesel imports.
Friday, 19/12/2014 - 04:55 PM (GMT+7)
Thanh Thuy-Tianbao checkpoint
NDO - Vietnam and China have agreed to upgrade the Thanh Thuy-Tianbao checkpoint to an international border gate in a move to boost trade between the two countries and the ASEAN region.
The announcement was made on December 19 by the Ha Giang People’s Committee and the People’s Government of Yunnan.
Vietnam’s Deputy Minister of Foreign Affairs Dang Minh Khoi said the upgrade is significant for promoting international integration of Ha Giang and Yunnan provinces as well as strengthening connection between countries in ASEAN and China.
The Thanh Thuy-Tianbao is the first Vietnam-China checkpoint to become an international border gate since the two countries completed land border demarcation.
Deputy Minister Khoi asked the Ha Giang authorities to co-ordinate with the Yunnan government to improve infrastructure and simplify customs clearance procedures to stimulate cross-border trade through the Thanh Thuy-Tianbao checkpoint.
Vice Governor of the Yunnan People’s Government Gao Shuxun said the upgrade of the Thanh Thuy-Tianbao checkpoint will open new opportunities for co-operation between border provinces of the two countries and help build a border of peace, stability and development.
The Thanh Thuy-Tianbao border gate officially opened in June 1993.
Last update 08:00 | 15/12/2014
VietNamNet Bridge - Subway, McDonald's, Starbucks, KFC, Burger King, Pizza Hut, Dunkin Donuts, Domino's Pizza, Dairy Queen and Papa John's are 10 well-known fast food brands around the globe, with thousands of stores and revenue reaching a few billion to tens of billions USD in 2013. Of these, only Papa John's is absent from Vietnam.
A McDonald' store in HCMC.
Vietnamese consumers, especially young people in urban areas, have been exposed to brands such as KFC, Lotteria, Pizza Hut, and BBQ for almost 20 years and have formed a new consumption style: young, dynamic and friendly. They have never been as “crazy” as they were when McDonald's and Starbucks in Vietnam in the past two years.
With the arrival of McDonald's and Starbucks, the youth became crazy expressing their “high-class style”, their ‘wealth” in opposition to the average income of most of the population.
Meanwhile, people at Starbucks and McDonald's in HCM City share their joy each passing moment, with many more comments appearing on their Facebook pages showing the expectation to have more stores in Vietnam.
A population of 90 million with 65 percent under 35 years of age, rising incomes, increasingly busy lifestyles - these are the factors supporting the strong growth of the fast food industry in Vietnam.
More importantly, the restaurants entered Vietnam with the belief of bringing a new style for young consumers. With global thinking and local action strategy, fast food brands have succeeded somewhat in the Vietnam market. To select the time to lay the first bricks in Vietnam, they took a lot of time to research the market, to find appropriate partners and to observe consumer tastes. An expert on marketing and brands, Vo Van Quang, said: "McDonald's entering Vietnam at this moment shows their artfulness.”
"This is a nascent and growing market, and we think the opportunity is ripe for McDonald's penetration into Vietnam. We have never thought of being a latecomer in any market. We are looking for opportunities to build the brand, to meet consumer tastes in regions," Mr. Don Thompson, McDonald's CEO, told American media when the first McDonald's store opened in HCM City last year.
McDonald's currently has three stores in Saigon and has no plans to go to Hanoi. However, McDonald's hamburgers are not more favored than Starbucks coffee by Vietnamese youth. After sweeping HCM City market, early this year the storm of Starbucks flew over Hanoi, a picky market.
Within three months, Starbucks opened four stores in Hanoi, with an area of 150 to 350 m2. Three of them are located around Hoan Kiem Lake and one in Cau Giay District. Starbucks currently has a total of 12 stores in Vietnam and it aims to reach 100 stores in the next five years. Jff Hansberry, Chair of Starbucks Asia – Pacific, said Hanoi is the market that Starbucks is determined to win.
However, a quick interview with 100 young people born in 1990 or later in Hanoi and HCM City by reporters of Dau Tu Newspaper revealed unexpected results. Different from Starbucks and McDonald's expectations, 90% of respondents said they did not like fast food, like cooking at home, and they would visit these fast food stores once only.
In particular, the story of 24-year-old female Tran Phuong Linh is positive and negative for Starbucks. At the age of 15, Linh went to New Zealand to study. After the course, she tried to work at financial institutions overseas and then Linh decided to return to Vietnam.
In over 10 years living abroad, Linh was a loyal customer of Starbucks but things changed when she is returned to Vietnam. Linh said farewell to her Starbucks to return to the traditional coffee of Vietnam.
When Starbucks opened four stores in Hanoi, Linh visited all of them but she was disappointed with the coffee taste there.
"They said they are seeking ways to offer the drink that adapts to Vietnamese consumers but these things do not suit the taste of Vietnamese. If Starbucks keeps the flavor and quality in the overseas market, it may be able to retain loyal customers who are former overseas students, foreign tourists and foreigners working in Vietnam," Linh said.
For the prices, in New Zealand, Europe, and Australia, the price of Starbucks is a little higher than other drinks, so the consumers can still accept them. But in Vietnam, that price is too expensive relative to the income of Vietnamese people. The average price for a Starbucks coffee is more than VND100,000 (nearly $5), while it is only VND20,000 ($1) for a fragrant traditional black and milky coffee cup.
"I like strong coffee, it makes me more creative in life and work. If I live abroad, I will remain loyal to Starbucks, but in Vietnam, why should I have to pay three times higher for a Starbuck glass while its quality is not as good as the local one," Linh said.
Linh said that Starbucks may still exist in Vietnam because of its famous brand, but to have loyal consumers, it will be very difficult. Most consumers go to Starbucks for the nice view rather than to enjoy good coffee.
"Young Vietnamese can be obsessed with something new, but after a very short time, everything will get saturated and dissipated, to be replaced by a new movement," she added.
Bui Cong Khanh (Hanoi) who is studying in the US, in his most recent vacation in Saigon, went to a McDonald's store in HCM City but he ate only a single piece of the hamburger and threw it away.
"I was satisfied with the quality of McDonald's hamburger in many countries but the quality seems to be different in Vietnam. This is the first and also the last time I will stop at a McDonald's store in Vietnam," said Cong Khanh.
After the initial sweep, the consumption trend of Vietnamese seems to be back to normal. But like many other food and beverages brands in Vietnam, Starbucks expects to boost sales in the last three months.
"This time, the people of Vietnam and foreigners usually spend more during the Christmas and New Year holidays. This is an opportunity for us to earn higher revenue to compensate for the previously gloomy months" said a Starbucks representative.
According to Dau Tu, Starbucks stores based at the New World Hotel in HCM City and the Indochina Plaza Hanoi building are the two locations with high revenue.
The rents in Hanoi are higher than in HCM City, but sales are not as high as Saigon’s because the spending style in Hanoi is more frugal.
Meanwhile, McDonald's is also very cautious in its expansion plan in Vietnam. Mr. Don Thompson admitted that it is a challenge for McDonald's to multiply its stories in Vietnam and to be sure that it can expand its quality of service, food and hygiene.
However, Nguyen Bao Hoang, CEO of Good Day Hospitality, which holds the franchise rights of McDonald's in Vietnam, expects that in the next 10 years, the company will open at least 100 McDonald's stores in Vietnam, similar to the number in many other Southeast Asian countries (Singapore has over 100 stores, the Philippines has 400, although these countries have a smaller population than Vietnam). However, McDonald's has no plans to open stores in Hanoi in the next two years.
Monday, 15 December 2014 13:15
Posted by Shoaib-ur-Rehman Siddiqui
HANOI: Vietnam saw a trade surplus of $438 million for November, compared with an initial estimate of a $300 million deficit, Vietnam Customs said on Monday.
November exports fell 6 percent from October to $13.23 billion and imports decreased 9.1 percent to $12.79 billion, the customs department, which operates under the Finance Ministry, said in a report on its website.
Earlier this month, Prime Minister Nguyen Tan Dung said Vietnam's exports this year could hit a record $150 billion, up 13 percent from 2013, on track to register a trade surplus of $1.5 billion.
Monday, 15/12/2014 - 04:53 PM (GMT+7)
The Saigon Newport Corporation held a ceremony to inaugurate the first phase of the Tan Cang–Hiep Phuoc terminal. (Credit: hanoimoi.com.vn)
NDO – A ceremony was held on December 15 at Hiep Phuoc industrial park, in Nha Be district, Ho Chi Minh City to inaugurate the first phase of the Tan Cang–Hiep Phuoc terminal after nearly 11 months of its construction.
On the same day, the terminal received its first ship named SAIGON BRIDGE of the SITC International Holdings Limited Company.
The first phase of the Tan Cang–Hiep Phuoc terminal consists of a 300 metre wharf which is able to receive the 50,000 DWT vessels, four barge berths with a total length of 253 metres and 12 hectares of container yard.
The second phase, including a 120 metre wharf, eight hectares of container yard and other devices, is set to be completed in June, 2015.
The project is considered the extension of the Tan Cang – Cat Lai terminal which is managed by the Saigon Newport Corporation.
The Tan Cang – Hiep Phuoc terminal, located upstream of Soai Rap River, is expected to become a container connecting point of countries in Central Asia region.
Last update 07:50 | 10/12/2014
Nokia Vietnam Co. Ltd., which now operates under Microsoft Vietnam, is the most attractive firm to job seekers as shown by the country’s leading online recruitment provider VietnamWorks.com.
In average, nearly 549 candidates apply for each position that the company recruits.
Following Nokia Vietnam are Panasonic Vietnam, Orion Food Vina Co. Ltd., Posco E&C Vietnam Co. Ltd., Sei Electronic Components Vietnam Ltd., and DHL Express Vietnam.
According to the result announced yesterday by VietnamWork.com, among the top 50 companies attracting most applicants on the site this year are 13 production enterprises, 21 companies with 51-300 employees and only two firms with more than 300 employees.
Over 87% of the jobs offered by those leading companies require candidates to have two to five years of working experience. Administrative secretary and accounting are the most sought jobs for applicants, making up 20% and 18% respectively of the total jobs offered by the top 50 firms.
Nearly 90% jobs offered by those firms are in HCMC and Hanoi.
More than 8,000 companies have counted on VietnamWorks.com to find employees this year.
List of 15 most attractive employers for job seekers on VietnamWorks.com
1. Nokia Vietnam Co. Ltd.
2. Panasonic Vietnam Co. Ltd.
3. Orion Food Vina Co. Ltd
4. Posco E&C Vietnam Co. Ltd.
5. Sei Electronic Components Vietnam Ltd.
6. DHL Express Vietnam
7. Topcom Investment Joint Stock Co.
9. Dai Co Viet Logistics Joint Stock Co.
10. Mitsubishi Electric Vietnam Co. Ltd.
11. North America Foreign Language
12. Training Private Enterprise
13. VietJet Aviation Joint Stock Co.
14. Hansol Electronics Vietnam Co. Ltd.
15. LG Electronics Vietnam Co. Ltd.
16. Sony Electronics Vietnam Co. Ltd.
Tuesday, 09/12/2014 - 05:00 PM (GMT+7)
Minister of Planning and Investment Bui Quang Vinh speaking at the meeting (Source: VNA)
NDO – Over its 11 years of operations, the Vietnam-Japan Joint Initiative has reached its target of improving Vietnam’s investment environment and increasing the competitiveness of the country’s economy.
Minister of Planning and Investment Bui Quang Vinh made the statement at a final evaluation meeting of the Vietnam-Japan Joint Initiative Committee in Hanoi on December 9 to review the fifth phase of the initiative.
The outcomes of the initiative represent joint efforts of Vietnamese and Japanese Government agencies as well as Vietnam’s consistent policy on improving its business climate, he said.
The fifth phase of the initiative included 26 items and 104 sub-items focusing on 13 groups of issues like taxation, customs, transport, intellectual property, macroeconomic stabilisation, infrastructure development and food safety. According to the committee’s report, 95 of the sub-items were well implemented or in progress, while the remainder have not yet been deployed.
During the fifth phase, launched in July of last year, around 40 policy dialogues were held to create venues for agencies from the two countries to exchange and discuss main contents of the action plan to realise the initiative.
The Japanese side has suggested many positive proposals to their Vietnamese partner to complete the legal framework and policies on facilitating the implementation.
Japanese Ambassador Hiroshi Fukada said that the initiative, first launched in 2003, provided a co-operation mechanism to work out proper policies for Vietnam to develop its industry and attract more foreign direct investment.
Japan will continue its support to boost the development of Vietnam and the ASEAN region in general during the sixth phase of the initiative, stressed co-chairman of the Vietnamese - Japan Economic Committee, Takahashi Kyouhei.
HANOI, Dec 10 (Bernama) - The Ministry of Transport plans to mobilise 960 trillion Vietnamese dong (US$45 billion) from various sources to invest in infrastructure in the 2014-2020 period, Vietnam News Agency (VNA) reported.
The Management Board of the Public Private Partnerships (PPP) said the funds will be derived from three main sources: official development assistance (ODA), state budget and government bonds.
"About 47 percent will come from ODA and the state budget and the rest will be acquired from private investments," PPP said.
Every year, the transport sector is allocated around 20 trillion dong (US$950 million) from the state budget and government bonds accounting for only half of the demand.
Last update 09:52 | 08/12/2014
VietNamNet Bridge – The State Bank of Vietnam (SBV) has sold dollars to commercial banks in an effort to stabilize the dong/dollar exchange rate amid the year-end dollar demand increase.
The dollar sale has been confirmed by a high ranking official of the bank.
The official declined to reveal the amount of dollars sold, but said SBV only sold dollars to commercial banks which reported a negative foreign currency position.
The banks with positive foreign currency position were not eligible for buying dollars from the central bank.
Thoi bao Kinh Te Sai Gon has quoted the deputy general director of a HCM City-based bank as saying that the sale started in early December, estimating that about $1.5 billion has been sold so far.
The banker confirmed that the central bank sold dollars at VDN21,400 per dollar, or VND60 per dollar lower than the ceiling price.
The ceiling price is understood as the highest possible price level at which commercial banks can sell to clients.
The deputy director of a commercial bank well known for funding import/export deals also confirmed he received the registration form for purchasing foreign currencies provided by the central bank in early December.
The bank has bought “a small amount” of dollars to improve its foreign currency position, preparing to satisfy businesses’ increasing dollar demand at the end of the year.
On November 27, Nguyen Thi Hong, governor of the State Bank of Vietnam, at a meeting with the local press, said the central bank had revealed the plan to sell foreign currencies.
“We are considering demand from commercial banks to determine how much we will sell to stabilize the market,” Hong said at the meeting.
Some economists, anticipating low purchasing power, predicted that the imports of consumers goods in the last months of the year would be modest, which means that businesses would not need to buy dollars in large quantities to make payments for imports.
However, Thoi bao Kinh te Sai Gon has quoted bankers as saying that the dollar demand has been increasing since late October, and that many businesses have registered to buy dollars to import products for the year-end and Tet sale seasons.
There are some other factors which have pushed the dollar price up, according to the bankers. Some portfolio investors have tried to buy dollars as part of their plan to withdraw from the stock market. Also, as global oil prices have fallen, Vietnamese enterprises are increasing imports, thus pushing dollar prices up.