Thứ Ba, ngày 08 tháng 1 năm 2013

Starbucks to open first store in Vietnam

By Hoang Phi - The Saigon Times Daily
A Starbucks store abroad. Starbucks Coffee Company yesterday announced the opening next month of its fi rst store in Vietnam - Photo: Courtesy of Starbucks
HCMC – The U.S.-based Starbucks Coffee Company announced on Thursday it will open its first store in Vietnam next month via the partner Coffee Concepts Vietnam Limited.
Jinlong Wang, President of Starbucks Asia Pacific, told the Daily that the only partner licensed to operate Starbucks stores in the Vietnamese market was Coffee Concepts Vietnam, a subsidiary of Hong Kong Maxim’s Group.
The signing with Coffee Concepts Vietnam will maximize the growth potential of Starbucks in Vietnam as the partner has experience in managing 130 stores in Hong Kong and China.
The first store is scheduled to open in HCMC, making Vietnam the 12th market of Starbucks in Asia Pacific.
Starbucks has over 3,300 stores in China and Asia Pacific region.
Since studying the Vietnamese market since 1991, Starbucks has submitted intellectual property protection applications to the National Office of Intellectual Property of Vietnam, with up to 36 applications, according to the office.
Starbucks has made careful steps when entering a market which is one of the worlds’ leading coffee exporters. Wang said that Starbucks understood and respected Vietnam’s long and distinctive coffee culture.
According to some experts, the presence of Starbucks is a threat to existing local coffee store chains such as Trung Nguyen and Highlands Coffee as well some foreign coffee brands like Coffee Bean & Tea Leaf, Gloria Jean’s Coffee and Hard Rock Café. However, there are some positive views that it is not a threat but makes the market more exciting.
“When Gloria Jean’s Coffees and Coffee Bean & Tea Leaf entered Vietnam, many though that they would be able to overtake Trung Nguyen and Highlands Coffee, but in fact, Trung Nguyen is still growing well while the number of foreign brands is not high. Therefore, it is too soon to say whether Starbucks will succeed in competing with Vietnam’s traditional coffee shops or not,” an expert said.
Wang said that Starbucks respects all rivals in Vietnam, and its strategy was to bring unique coffee experiences to customers at Starbucks stores.
Such experiences, according to Wang, are built based on high-quality arabica coffee, products and especially passionate and experienced baristas.
Besides, Starbucks will boost the localization of stores in its business strategy in Vietnam to make Starbucks stores the third destination for local people, after their home and office.
“Starbucks provides much more than just the best cup of coffee, we will offer a place where people come together, connect with family and friends and celebrate the local Vietnamese coffee culture and heritage,” Wang said.
Starbucks has started to purchase high-quality arabica coffee in Vietnam and will continue seeking arabica coffee supply in Vietnam in the long term.
In addition, Starbucks will work closely with local coffee farming cooperatives to increase the quality of arabica coffee and introduce Vietnam’s distinctive coffee heritage to its global customers.

Thứ Ba, ngày 01 tháng 1 năm 2013

HAGL eyes multibillion-dollar revenue from Myanmar

Hoang Anh Gia Lai Group (HAGL) is expecting to earn billions of US dollars in the next 5 years from its $300 million initial investment in Myanmar this year.
The realty developer will give priority to the development of its $300 million complex in Yangon in 2013 following the groundbreaking of the project after the Lunar New Year, said HAGL chairman Doan Nguyen Duc.
HAGL and Myanmar’s Ministry of Hotels & Tourism on December 18 closed a BOT (build-operate-transfer) contract and a land leasing agreement to build the complex, the Hoang Anh Gia Lai Myanmar Center, consisting of a five-star hotel, shopping mall, office building, and apartments for lease.
HAGL said it had been granted permission to lease an 8 hectare land plot in downtown Yangon, adding that all legal procedures on the Myanmar side have been completed.
“If we hurry it [the project], we can pocket billions of US dollars when the real estate market of Myanmar gets hot over the next five years,” Duc said.
“Over the last 3 years, the real estate markets in Ho Chi Minh City and Hanoi have been at freezing point, 0 degrees Celsius, but the newly-opened Southeast Asian market is at 18-20 degrees Celsius.”
“It will be around 80 degrees Celsius by 2018, an ideal temperature for real estate developers,” he added.
Initially, the first phase of the project was planned to be finished in 2013-2015. However, Duc has changed his tactics so that HAGL can complete the first phase in 2013 and put it into operation in 2014.
Currently, HAGL is gradually exporting building materials from Vietnam to Myanmar. The project is expected to consume 30,000 tons of iron and 200,000 tons of cement and other building materials including wood, stone, glass, aluminum, and bricks sourced from Vietnamese firms.
Duc, the second richest man on the Vietnamese stock exchange, said it is cheaper to transport necessary building materials from HAGL’s headquarters to the building site than to Ho Chi Minh City, and the average wage for unskilled workers in Myanmar is half of what they are in Vietnam.
However, the appeal is not in the cost of construction material shipping, but in the high real estate prices there, which are 3-4 times higher than Vietnam’s due to scarce supply, according to a 2-year survey in the country.
Specifically, the rents for Grade A and Grade B offices in Yangon were $100 and $80 per m2 per month, 3.3 times and 4 times and higher than in Ho Chi Minh City.
The rent for a 60 m2 one-bedroom apartment is $5,000 a month, about 2.5 times higher than in Vietnam. The rate for 2-3 bedroom apartments for lease is up to $8,000 a month.
A stay at an old 4-star hotel costs $300-400 per night, and they are always fully booked due to a supply shortage.
With such rates, HAGL can earn $300 million annually from leasing 1,000 serviced apartments in the complex. It can rake in $100 million from a block of office buildings annually after the first project is completed.
A block of office buildings can be exploited over 7-10 years, so the income from this alone is some $700 million to $1 billion in total, he added.

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Thứ Bảy, ngày 01 tháng 12 năm 2012

Southeast Asian business groups buying into Vietnamese firms.

Southeast Asian business groups buying into Vietnamese firms

The merger and acquisitions (M&A) market in Vietnam is heating up thanks to the participation of big regional firms, who own majority stakes in local firms like Prime Group, Cai Lan, and Maybank Kim Eng Securities Co.
Thailand’s Siam Cement Group (SCG) has announced it will spend some $7.2 billion baht (US$240 million) to buy an 85 percent stake in Prime Group, a Vietnamese tile manufacturer.
Prime Group (Prime) is a multi-sector company focused in the fields of real estate investment and building materials production. It currently has a capacity of 75 million m2 of tiles per year and holds a 20 percent market share of the domestic brick sector.
As SCG’s valuation of Prime is at some $240 million, much higher than the actual value of the company, Prime’s current shareholders did not hesitate to sell their shares to the foreign firm.
SCG considers Vietnam to be a strategic market and has been expanding its operations in Vietnam since 1992. It currently has 17 companies with more than 2,300 employees in Vietnam. With total assets of more than $370 million, its annual revenue from Vietnam stands at $300 million.
In mid-2012, NawaPlastic, an SCG-related business, announced that it had collected a large amount of shares in Binh Minh Plastics and Tien Phong Plastics.
The two local firms are leaders in the field of construction plastics, while Nawaplastic Industries (Saraburi) Co Ltd is a subsidiary of Thai Plastic and Chemicals Public Co Ltd (TPC).
Thai Plastic Co. has purchased 9.82 million shares of Tien Phong Plastics, coded NTP, and 5.85 million shares of Binh Minh Plastics, coded BMP. Thus, the current holding rates of NawaPlastic in Tien Phong Plastics and Binh Minh Plastics are 16.7 percent and 22.7 percent, respectively, making it a major shareholder in both firms.
3. Wilmar and Vietnamese cooking oil/animal feed market
Singaporean firm Wilmar has a 68 percent stake in Cai Lan Oils & Fats Industries Co (Calofic), which accounts for over 55 percent of the local market share of bottled cooking oil, with well-known edible oil products including Neptune, Simply, and Meizan.
In 2011, Calofic earned more than VND10.5 trillion in revenue and VND250 billion in after-tax profit, far ahead of runner-up Tuong An, which achieved revenue and after-tax profit of more than VND4.4 trillion and VND25 billion.
Wilmar has a local subsidiary, Wilmar Agro Vietnam, which is headquartered in the Mekong Delta city of Can Tho, and works in rice bran and protein-rich rice bran. Its main producted is the Vang rice bran brand, which is supplied to local animal feed and aquaculture feed manufacturers.
In 2011, Wilmar Agro Vietnam earned nearly VND1 trillion in revenue and VND42 billion in post-tax profit.
4. Ayala and the HCMC water supply acquisition plan
In 2008, Ayala penetrated the Vietnamese market with a $44 million water loss reduction project in HCMC.
In November 2011, the consortium of Manila Water, Mitsubishi and Refrigeration Electrical Engineering Corp (REE) recommended that the Saigon Water Supply Co (Sawaco) implement a similar project in other areas of the city.
In December 2011, Ayala purchased a 49 percent stake in Thu Duc Water BOO Corp from the Ho Chi Minh City Infrastructure Investment Joint Stock Co (CII) for $42.6 million.
In May 2012, Ayala acquired a 10 percent stake in CII and Manila Water. A subsidiary of Ayala is also a partner of CII and the HCMC State Financial Investment Co (HFIC) in HCMC’s existing water supply and distribution networks.
5. Jollibee holds dominant stakes in Highlands Coffee and Pho 24
Highlands Coffee Co, a Vietnamese coffee shop chain and producer and distributor of coffee products, sold 50 percent of its stake in Pho 24 to Philippines-based Jollibee for $25 million after acquiring 100 percent stake of Pho 24 in early 2012.
The transaction, carried out via Jollibee Worldwide - a Jollibee Group member, is said to be the beginning of the foreign company’s plan to acquire full stakes in Highlands Coffee and Pho 24 for Jollibee’s long-term plan in Vietnam.
Highlands Coffee was established in Hanoi by a Vietnamese-American in 1998. This was the first time an Overseas Vietnamese was able to register a private company within Vietnam.
6. Maybank enters local banking sector
In August 2012, Malaysia’s Maybank bought Kim Eng Holding Singapore, which owns 49% of Kim Eng Vietnam Securities Joint Stock Co (KEVS), later renamed Maybank Kim Eng Securities Corp.
Now, Maybank is wishing to raise the 49% stake (worth US$14.4 million) to 100% to become the first foreign securities firm in Vietnam.
Operational in Vietnam since 2008, Maybank Kim Eng is one of the few companies in Vietnam that enjoyed profits from securities brokerage services in its first year of operation. Currently, Maybank Kim Eng is the 4th largest broker in Vietnam.
In addition to stocks, Maybank currently has a capital contribution rate of up to 20 percent in An Binh Joint Stock Commercial Bank.

Tuoitre News

New success for long - term development

Mr Jung Seop Hyun, General Director of Korea Life Vietnam, spoke about the company’s business expansion and its development plans for 2012.
Mr Jung Seop Hyun, General Director of Korea Life Vietnam, spoke about the company’s business expansion and its development plans for 2012.

Can you tell us about Korea Life Vietnam’s business results in 2011?

Although Korea Life Vietnam is only a new player we have recorded impressive achievements in recent times. With our superior products and customer services, we have rapidly become an organisation with 150 staff and 6,000 agents, representing employment growth of 200 per cent.

In 2011 Korea Life Vietnam opened many new customer service centres, in Hai Phong, Hai Duong, Tuyen Quang, Cam Ranh, Quy Nhon, Dak Nong, Binh Phuoc and Thai Binh. We have expanded our sales network of 17 customer service centres and general agencies nationwide.

In term of business results, in 2011 we achieved total premiums (AFYP) of around VND90 billion ($4.3 million), an increase of 34 per cent over the same period of 2010. Korea Life Vietnam is now trusted by 17,000 policyholders in Vietnam. In continuing to enhance our customer service quality, we have entered into cooperative arrangements with prestigious partners such as Vietcombank, Dong A Bank, and Sacombank, to bring more benefits in premium payments to our customers.

In the context of the high inflation and economic difficulties in Vietnam, the local insurance market has to gradually change to match economic development. How has Korea Life Vietnam changed to attract more policyholders in Vietnam?

According to a recent assessment by Research & Markets, Vietnam’s insurance market is one of the world’s fastest growing and now creates many opportunities for foreign investors. The “Forecast for Vietnam’s Insurance Sector to 2014” report shows that the market has enjoyed double digit growth over the last few years and is expected to continue to do so in the years to come. The annual growth rate is forecast to be 22 per cent in the 2011-2014 period.

I believe that “there is always opportunity in every difficulty”. Especially in a period of economic and financial uncertainty, every individual and family needs to focus more on financial planning and unpredictable risks in the future. Korea Life Vietnam will focus on developing life insurance products that better satisfy our customers’ practical demands for investment-savings as well as protection-prevention.

Together with product development, we will actively expand our distribution network in 2012. At present, life insurance companies in the market have put an emphasis on new distribution channels under the forms of bancassurance, group life and general agencies, etc. This year Korea Life Vietnam will diversify its new distribution channels to bring the best products and services to both Vietnamese customers and Korean people living in Vietnam.

How do you view awareness among Vietnamese of the benefits and significance of life insurance over recent years?

Only 5 per cent of Vietnam’s population now has life insurance, which it is still quite modest, while in Korea it is 98 per cent. This shows that the growth potential here is huge. However, due to the specific characteristics of the life insurance product, which is an “invisible” product, many people are still confused about its benefits and significance.

Recently, life insurance companies have launched many active communications strategies aiming to change and improve awareness among Vietnamese people about the importance and vital role of life insurance. This is a very active sign in the life insurance sector. It will help customers gain a comprehensive view of the benefits that life insurance brings - protecting them against unpredictable risks.

In addition, to make it closer to Vietnamese people, companies like us will put a strong focus on enhancing service quality, from consultancy, customer care, underwriting and claims procedures to customers, to promote the human meaning and protective value of life insurance among Vietnamese people.

Most Korean businesses in Vietnam are actively participating in social activities. What is Korea Life Vietnam’s approach to these activities?

2011 marked an important milestone for Korea Life Vietnam in the local community. We have taken part in many charity activities for women, children, old people and the disadvantaged in Vietnam. One of the most significant activities is “Korea Life - Day of Love”, for young patients at the National Hospital of Paediatrics in Hanoi, and the Hospital of Paediatrics No 1 and the Hospital of Paediatrics No 2 in Ho Chi Minh City. “Korea Life - Day of Love” also supports teachers and pupils at schools for disabled children, such as the Nguyen Dinh Chieu Blind School in Ho Chi Minh City, the Hai Phong Deaf School, and the Khanh Hoa Rehabilitation-Education Centre for Disabled Children.

The spirit of kindness is a corporate cultural characteristic to be proud of at Korea Life Insurance. Thanks to this we have successfully organised a blood donation day for our staff, and other charity programmes carried by our employees include charity programmes at the Chanh Phu Hoa Social Protection Centre, and a Christmas charity programme at Hospital of Paediatrics No 2.

Through those programmes Korea Life Vietnam hopes to give a hand to bring a better future to the community and society in Vietnam.

Heading into 2012, what are the company’s specific product development plans to serve customer demands?

In 2011 Korea Life Vietnam was proud to be a company with a fairly balanced rate of product allocation, having many new products meeting the full demands of our Vietnamese customers in investment and protection. Some products launched in 2011 include An Khang Dac Loc Tron Doi (Universal Life), Critical Illness rider, and Hospitalisation rider. Korea Life Insurance has ceaselessly improved our products to meet the increasing demands of our customers.

In 2012 we expect to continue to conduct research and implement many more pre-eminent products and expand our insurance scale with more suitable insurance premiums. With a full understanding of customer demands, we’ve planned to focus more on the Critical Illness product, especially for children’s health, to provide true peace of mind.

We hope that our initial successes in the past will be a firm foundation for Korea Life Vietnam to keep growing in the long term and to nurture the dreams of Vietnamese people.     

VnEconomy NEWS

Swimming in new world

By Simon Speakman Cordall in Phu Quoc
Phu Quoc Harbourx
Hovering, seemingly weightless, less than a meter above the fantastically shaped and colored coral of Phu Quoc is an experience many visitors to Vietnam will not readily forget. The coral reefs of Phu Quoc are amongst the very finest of Vietnam’s many natural wonders and are a sometimes overlooked stop on many Vietnamese tour itineraries.
Located in the Gulf of Thailand, Phu Quoc itself is an island archipelago located around 40 kilometers of the coast of Vietnam, with its rich coral beds providing home and habitat to a seemingly limitless abundance of marine life. While the best spots to see and explore the coral beds aren’t immediately apparent, there are many companies offering snorkeling and diving tours of the reefs. Most will take visitors anywhere up to an hour out of Phu Quoc City harbor to reach the best locations. Once there, divers and snorkelers are free to explore the wildly diverse and colorful coral beds at their leisure.
Divers explore the reefs off Phu Quoc
The coral itself is unlikely to disappoint, with its impossible structures shaping themselves into fantastical and brightly colored constructs straight out of science fiction. Against this spectacular backdrop, brightly colored fish make their way across the reef. It’s estimated that seventy one different types of reef fish make their home within the coral reefs of Phu Quoc and even the briefest of swims will be enough for visitors to catch sight of angelfish, lionfish and the occasional barracuda. In all, Phu Quoc has some of the most expansive and best preserved marine life within the region , Neil Plater, dive manager at Flipper Driving Club described the conditions, “We have warm water, steady currents and, on the whole, good visibility.” All the ingredient, it would seem, for a fantastic aquatic cocktail.
A local fi sherman looks on - Photos: Simon Speakman Cordall
In some of the deeper locations, all that’s needed is a couple of solid kicks with the flippers provided to propel swimmers to the sea’s floor. In terms of sheer exhilaration, swimming at depth amongst the innumerable fish and coral, with the bright canopy of the sea’s azure surface meters above, provides a rush that is hard to match. However, for those less confident in the water, there are facilities and wonders ample enough to make the trip worthwhile. “While some swimming ability is obviously helpful” Plater explained, “we do have flotation devices to help anyone struggling. We also have constant supervision. We have people in the water, as well as a Dive Master permanently stationed on the boat, making sure that no one gets into trouble.”
Nearly all tours include a complimentary meal, cooked aboard ship on the return leg. It’s a welcome sight after what can be a pretty exhausting day. However, while tiring, it’s an experience whose memory will long outlast the occasional ache. After all, it’s not every day that you get explore a whole new world. 
Most tours will cost between US$15-US$25 a day. You can find out more about Flipper Diving Club and the marine life of Phu Quoc at:

Plan to succeed

Mr Howang Yu Nam, General Director of the Daewon-Thu Duc Housing Development Company - the name behind the Cantavil brand - shares his views on Vietnam’s real estate market.
The global economic crisis has seriously affected not only the development of almost all enterprises around the world but also forced many out of the market, especially companies with long production processes and weak finances. Real estate is also affected, because projects are constructed over a long period of time and investors usually receive money from partial payments by customers in addition to bank loans to fund their projects.

During an economic crisis sales can be very slow and customers may struggle with their payments, and this problem obviously creates difficulties for real estate enterprises. In the same business field as the Daewon Group in Vietnam, other large South Korean construction companies dropped off their investment in the country because they could not arrange bank loans to continue. Other investors suspended their projects for long periods and preferred to sell them to someone interested in the project, and most foreign companies in Vietnam reduced their foreign employees because of high management costs.

The economic crisis is a real threat to the sustainability and development of investors but also brings them opportunities to prove themselves. It also allows people in the same market to see who the market leader is. In particular, advertising fees are cheaper but the benefits from advertising are greater. With a small amount spent on advertising during a normal economic period, you would not be able to promote your company’s image to a high level, but if you continue with such advertising your image becomes ingrained in customers’ minds. Belief in a brand name will bring the company more loyal customers.

Clear strategy
One of the important factors helping enterprises to overcome any difficulties is a clear company strategy that’s adaptable and pilots the enterprise. Forecasting potential markets is also very important. Along with market research a serious business attitude also contributes remarkably to the success of an enterprise in any business period with high competition, like the period of economic crisis.

Human resources always play a key role in the success of an enterprise. With stable and strong human resources, a company can approach their goals and be successful at an intangible level, so how to have strong human resources and how to maintain them are always a major questions for talented enterprise leaders.

Movement of key personnel from one enterprise to another is mostly due to employment conditions rather the work itself. In order to exist, people nowadays have many different skills to adapt promptly to changes in the job environment and any new circumstances. These skills also supplement each other with regard to work demands.

A long term investment plan also helps large enterprises have self control when problems occur from time to time or in the short term, because losses from these events are still in the plan of enterprises.

Foreign companies in Vietnam have long term plans but legal restrictions and procedures still make it difficult for investors to develop planned projects because not everything is defined clearly by law. In particular, real estate projects have to go through many different departments and it takes a long time to complete their procedures.

Thanks to its long term development plan in Vietnam and its clear mission and vision, the Daewon Company has step by step overcome the difficulties of the global economic crisis although we still face certain difficulties. The Daewon Group has emerged as one of the leading companies in the real estate market, with the Cantavil brand name, earning the belief of customers.

VnEconomy NEWS

Welcome changes

Hopes are high that recent moves by authorities will make Vietnam’s real estate market become more transparent and stable in the future.

The Prime Minister recently signed Decision No 80/2010/QD-TTg on freezing construction fees for all projects throughout the country, to take effect on February 2. The decision was issued based on recommendations from the Ministry of Finance (MoF) in early September on abolishing construction charges and fees imposed on companies or individuals.
Construction fees are currently calculated under Circular No 97/2006 from MoF, charged at a certain percentage depending on the type of construction and the location.

However, according to the Ministry of Construction (MoC) and MoF, some localities have implemented different fee levels. To encourage investment, some localities issue preferential policies for certain construction projects, such as low-income housing or buildings for education, health, culture, or sports.

MoF said that freezing construction fees will help to reduce the administrative burden on organisations and individuals. It will also help to reduce the overall cost of investment projects, encourage investment in the construction sector and create a favourable investment environment and ensuring the social welfare policies of the State.

The Prime Minister’s decision is a good sign for investors. Mr Nguyen Van Duc, Director of Dat Lanh Real Estate Co., Ltd, said that freezing construction fees will result in easier administrative procedures and save time. “Many enterprises spend a lot of time and ‘extra’ money on these procedures, so further reduction would be even better,” he said.

A representative from the General Department of Land Administration also said it was a welcome move. Many of the existing fees and costs are unreasonable and create problems for individuals or investors. 
Meanwhile, a scheme to raise legal capital at real estate businesses is also being deployed by MoC and will be applied next year. According to Law on Real Estate, businesses need a minimum of VND6 billion ($307,000) to be registered.  

Deputy Minister of Construction Nguyen Tran Nam said that the level of legal capital now required is inadequate because real estate projects, even small-scale ones, involve huge amounts of capital. Therefore, leaders at MoC believe that many investors are “empty-handed investors”, wanting to develop projects even when they do not have the capital to do so.

Without increasing the legal capital it will be difficult to manage the operations of enterprises. “To mitigate these shortcomings and make the market more transparent and stable, MoC will soon complete a regulation on increasing the legal capital required by real estate companies,” Mr Nam said.

Statistics from MoC show that as at the end of October there were more than 2,500 real estate projects in urban areas and business ventures in real estate on some 80,000 ha of land in all provinces, which are mainly concentrated in Ho Chi Minh City, with 1,400 projects, and 800 projects in Hanoi. Some 250 condominium projects are currently waiting for approval by Hanoi authorities.

Many real estate experts say that by increasing the legal capital the real estate market will become more professional and only feature companies with sound financial capacity. “Capital is always a difficult question in Vietnam,” one expert said. “When investing in real estate, the focus shouldn’t just be on their capital but also on their ability to access loans and their collateral.”

In order to assess the operational result of enterprises, it is necessary to check their financial reports to determine how their capital is invested and used. 

One expert from the Ho Chi Minh City Economics University pointed out that businesses follow a very complicated procedure when having their legal capital certified. Under Circular No 13 issued by MoC, enterprises must have proof from banks about money deposited by founding members of the company.

He said that here he can see some misunderstanding between the concepts of “legal capital” and “deposited money”. When shareholders contribute capital in assets there must be certificates regarding a valuation of those assets. In other cases, enterprises must show certificates from audit firms. “The regulations make procedures for certified legal capital very complicated and time consuming,” he said.

New policies are to encourage the real estate market to develop more in the future, but much more needs to be done. At a conference in 2010 on housing and real estate market development, Deputy Minister Nam said that the area of housing and real estate development still has many shortcomings that need to be overcome.

The legal framework for the real estate market, he said, though gradually improving, still has many problems that need further attention, such as important mechanisms and policies like those on long-term financial mobilisation for real estate market development, transaction levies, property taxes, incentives for rental housing and so on. 
VnEconomy NEWS

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