Financial support still pie in the sky for supporting firms
Nine years after the issuance of a Government decision that set out preferential credit policies to provide more financial support for Vietnamese firms in the supporting industry, few have been able to make use of said policies, industry insiders have said.
Tran Thi Thu Trang, director-general of Hanel PT, an electronics maker in northern province Bac Ninh said her company had given up on seeking access to the preferential credit policies after extensive research.
Trang said it was extremely difficult to meet Government criteria for preferential credit, even for HanelPT, a relatively well-known name among Viet Nam’s electronics makers with more than 20 years in the industry, as policies tend to favour newly-established firms over existing ones.
“Of course, we can always go to the bank but interest rate hikes in recent years scare us. Without support from the Government, firms will be reluctant to take big leaps in infrastructure investments”, she said.
“It has translated to lost opportunities. We have turned away a number of large orders, the kind of orders that could help us break out and transform our firm because we would need to expand our production capacity by five to 10 times, which was nearly impossible to achieve on our own,” said Trang.
Some Vietnamese firms have been forced to sell out to foreign buyers because they were unable to cope with the financial pressure, especially after having to make large investments in infrastructure and machinery to stay competitive.
Realising the difficulties firms in the supporting industry have been facing, in a report sent to the Government the Department of Industry under the Ministry of Industry and Trade has pointed out that supporting industry firms are in dire need of capital to invest in factories, technology and human resources.
The department said current policies provide little or no support to firms, who often have to borrow from commercial banks at higher rates due to their capital-intensive and labour-intensive nature, which, makes it difficult for them to balance costs and efficiency.
Small-to-medium sized enterprises (SMEs) were shunned even more in current regulations, which requires them to put down a deposit equivalent to 15 per cent of the loan amount. This is difficult and impractical for most SMEs due to their small size and limited finances.
In addition, firms must go to the Vietnam Development Bank (VDB), whose network of offices and support staff is somewhat limited to large cities, to apply for preferential loans. The department advised that commercials banks should also be included to provide firms with preferential loans. It said commercial banks, with their extensive networks and expertise, will help not only reduce the strain on VDB but also better assess firms’ ability to perform and pay their loans.
Slow development of resettlement zones blamed for Long Thanh Airport delay
Leaders in Dong Nai have criticised the provincial project management board for delays to resettlement zones for people who have to relocate for the construction of Long Thanh International Airport in the southern province.
This in turn has caused lengthy delays in land acquisition for the project.
The management board has failed to demonstrate active efforts to prepare the necessary legal documents for the start of technical and social infrastructure development at the Loc An – Binh Son and Binh Son resettlement zones, said Vice Chairman of the provincial People’s Committee Tran Van Vinh.
These components have lagged behind schedule, he said.
Vinh urged the board to fast-track legal procedures for work on the Loc An – Binh Son resettlement zone to start this April.
He also asked the board to prioritise demarcation and infrastructure development for 500 resettlement land lots so families living in the area designated for the project’s first phase can be relocated quickly.
It must also begin work on other components for the resettlement zones, such as schools, medical centres and markets, the vice chairman added.
The 5,580-hectare Long Thanh International Airport will cover six communes in Dong Nai’s Long Thanh district. To clear the site for the project, Dong Nai will have to acquire land from 18 organisations and nearly 5,300 local households.
Once fully operational, the airport is expected to reduce the load on Tan Son Nhat International Airport in Ho Chi Minh City. Its total investment is 336.63 trillion VND (14.45 billion USD), with construction divided into three phases.
In the first phase, a runway and one passenger terminal along with other support works will be built to serve 25 million passengers and 1.2 million tonnes of cargo each year. This phase, covering an area of 1,810 hectares, is expected to be completed by 2025.
In the second, another runway and another passenger terminal will be built to serve around 50 million passengers and 1.5 million tonnes of cargo a year.
After the third, the airport will be able to serve 100 million passengers and 5 million tonnes of cargo a year./.
Hanoi sees improved tourist numbers
More tourists have returned to Hanoi despite the on-going coronavirus fears, according to the municipal Department of Tourism.
The department reported that the city’s tourism number was now 60-70% of that before the coronavirus outbreak.
Since the epidemic outbreak, Hanoi has witnessed a considerable fall in Chinese visitors. However, those from other markets such as Japan and India have still increased.
Many tourism firms such as Hanoitourist, Vietrantour and Hanoi Redtour have boosted ways to attract tourists from European, American and Australian markets.
Thang Long Water Puppet Theatre’s managing director Chu Luong said despite the fall in Chinese visitors the theatre had still seen the usual numbers of European and American bookings. Many performances had sold out.
Nguyen Viet Hung, deputy director of Yen Vien Bus Company which operates Hanoi City Tour service, said that the number of tourists using the service had been on the rise over recent days. The company also provided masks free of charge for passengers.
More travellers have visited other Hanoi tourist attractions such as the Temple of Literature, Thang Long Imperial Citadel and Hoa Lo Prison.
Director of Hanoi Department of Tourism Tran Duc Hai said with fears of the epidemic, safety must be top priority. Local tourist sites have been requested to tighten control over sterilisation to ensure visitor safety.
Vietnam tourism copes with Covid-19
The number of tourists visiting Vietnam has fallen sharply since the outbreak of the Covid 19 epidemic. The country has responded with several measures to stimulate tourism including diversifying the tourism market.
In Khanh Hoa province tourism has been slowed by Covid 19. Local authorities have disinfected travel agencies, accommodations, and tourism facilities, distributed facemasks to tourists and checked tourists’ body temperatures and their itineraries.
Tran Viet Trung, Director of Khanh Hoa province’s Department of Tourism, said “Local administrators and businesses are working closely to carry out disease prevention measures to ensure a safe environment for visitors.”
Thua Thien Hue province has strengthened disease prevention measures to protect heritages and ensure health safety for tourists. The Center for Hue Relic Site Management has handed out more than 10,000 free facemasks at the Imperial Citadel and the Tu Duc, Minh Mang, and Khai Dinh monuments.
Dinh Manh Thang, President of the Thua Thien Hue Tourism Association, said “We have implemented measures to make the province a safe and friendly tourist destination.”
In addition to disease prevention measures, the Vietnamese tourism sector has also improved its services and increased cooperation to create travel packages more attractive to tourists.
Vu The Binh, Vice President of the Vietnam Tourism Association, said “We have for a long time paid little attention to human resource training and now we should take advantage of the current free time to improve our staff, upgrade tourism facilities and study the tourism market. We think this crisis time is a good time to focus on ways to improve our competitiveness when the epidemic is over.”
Travel companies and localities have expanded their markets to Russia, Western Europe, and India, increased their communications to promote the image of Vietnam’s land and people, and upgraded their facilities to ensure greater safety.
Air travel falls 20 percent on COVID-19 outbreak: authority
The outbreak of the acute respiratory disease caused by a new coronavirus (COVID-19) has resulted in a 20 percent drop in the number of the passenger flying via Vietnamese airports as compared to the same time last year, according to the Airports Corporation of Vietnam (ACV).
Chairman of ACV’s board of directors Lai Xuan Thanh worried that air travel would further decline in the next one or two months in the light of the outbreak, with sharp fall to major tourist destinations like Da Nang, Nha Trang, Ho Chi Minh City and Phu Quoc island.
Cam Ranh International Airport in central Khanh Hoa province is among the worst hit as Chinese nationals account for 60 percent of the total passengers there. Meanwhile, Noi Bai International Airport is the least, seeing around 530-540 flights each day, but anyway this is still a drop of some 100 flights compared to peak period of Lunar New Year (Tet) holiday, Thanh said.
As of February 13, 21 airports managed by the ACV detected 127 COVID-19 suspected cases that need medical quarantine, while refusing entry of 297 others coming from disease-hit areas.
All international airports in the country are equipped with body temperature scanners and medical facilities to find out passengers with fever.
Thanh said the disease may wreak havoc on the business results of the ACV and many airlines, therefore it needs to restructure its business strategy. One of the response to the crisis is receiving more flights from other markets rather than China, he suggested.
Vietnam condotel owners to get title deeds
Condotel owners are finally set to get titles to their properties with the government issuing guidelines to local authorities for the purpose.
Ownership of condotels and officetels will be valid for 50 years generally, and for 70 years in localities with difficult economic conditions.
Requests for extension will be considered after the period.
The guidelines have been issued following repeated requests by condotel developers and buyers to address the lack of a legal framework though development has been rampant since 2016.
Only in December last year the Ministry of Construction issued regulations for condotels and officetels.
The Ho Chi Minh City Real Estate Association said other property types such as shoptels should also be included, and there need to be clearer provisions to protect buyers in case of disputes with developers.
Last November thousands of condotel buyers were affected after the developer of a major project, Cocobay Da Nang, said it would stop paying buyers their guaranteed annual returns.
Local agricultural products set sights on Indian market
Vietnam’s agricultural products, including dragon fruit and pangasius, are likely to seek to make greater inroads into the Indian market in the future as opposed to the Chinese market due to the difficulties that the northern neighbour faces in the form of the novel coronavirus epidemic.
As a result, the industry and trade sector has been devising plans aimed at helping Indian businesses and consumers gain more insights into the local market in order to increase consumption of a range of the country’s agricultural and aquatic products.
On the sidelines of State Vice President Dang Thi Ngoc Thinh’s recent visit to India, Deputy Minister of Industry and Trade Cao Quoc Hung took part in a number of bilateral meetings.
These discussions took place alongside Indian agencies and associations, including Retail Consultant, Lots Wholesale, Om Shree Shubh Labh, Reliance Retail, and Mother Dairy in order to find ways of introducing domestic agricultural products to the Indian market and its 1.3 billion consumers.
Mohit Singla, Chairman of the India Trade Promotion Council, believes that Vietnamese dragon fruit are of a higher quality than those found in other countries. Despite this, many Indian consumers have little knowledge about this type of fruit.
He recommended that the nation should therefore move to intensify advertisements and branding of local fruit in the near future as a way of helping Indian consumers learn more about the product.
In addition, he noted that the country’s litchi, longan, and rambutan are also delicious fruits blessed with unique flavours that are able to compete for market shares in India.
Each year, India hosts between 40 and 50 fairs in the agricultural and food industry, which offers a opportunity for domestic firms to introduce their products. Most notably, Indus Foods represents one of the largest and most prestigious fairs in the sector.
Over the past two years, the Vietnam Ministry of Industry and Trade along with the Vietnamese Embassy’s trade office in India, have been active in organizing delegations of local enterprises to attend the fairs as a means of seeking partners.
January sees steel consumption plummet nationwide
Amid the gloomy global market, the domestic steel market suffered a downward trend during January in terms of both steel production and sales, with respective figures of 22.3 per cent and 31 per cent over the same period last year.
According to the latest statistics released by the Vietnam Steel Association, January saw the steel production of local firms reach 1,665,273 tonnes, a fall of 26.21 per cent in comparison to the previous month and a drop of 22.3 per cent against the same period last year.
In addition to these production figures, sales reached only 1,368,009 tonnes, down 31.83 per cent from the previous month, and representing a fall of 30.2 per cent on-year.
Elsewhere, steel exports suffered a decrease of 21.34 per cent to 283,134 tonnes compared to December 2019, representing a drop of 38 per cent against last year’s corresponding period .
This January decline can be attributed to a long Tet holiday which has served to affect the consumption of steel products.
According to data on January sales released by Hoa Phat Group, sales of Hoa Phat construction steel reached a modest level of 175,800 tonnes. In contrast to the figures seen during January last year, the firm’s sales of construction steel have dropped by approximately 30 per cent.
Despite suffering a decrease in terms of output, Hoa Phat group have stated that consumption of steel products in the southern region have still increased by over 41 per cent thanks to a fast and adequate supply of products that come from the Hoa Phat Dung Quat iron and steel production complex.
BIDV offers assistance to individual customers amidst coronavirus outbreak
The Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) has announced a credit package worth 5 trillion VND (215 million USD) for its individual customers hurt by the acute respiratory disease caused by a novel coronavirus (COVID-19).
The capital is prioritised for customers operating in the fields of agriculture, export and tourism.
Customers are able to take BIDV loans for production and trading of agricultural products such as dragon fruit, watermelon, jack fruit and banana as well as several aquatic products like tra, basa and cat fish.
The package also includes support for operators of restaurants and hotels, while aiding those with trade activities with China.
Under the package, customers will enjoy a stable annual interest rate of 5.5 percent in a maximum four months since the first disbursement.
The epidemic could cause losses of 5.9-7.7 billion USD for the domestic tourism sector in the next three months, according to the Vietnam National Administration of Tourism (VNAT).
The tourism sector has estimated a 90 percent decrease in the number of Chinese visitors due to the disease, and a 50-70 percent drop in holidaymakers from other countries. The number of domestic holidaymakers is also likely to suffer a fall of 50-70 percent.
Besides, the country could lose up to 600 million USD of exports to China in the first quarter of 2020, the Ministry of Industry and Trade has warned.
In a forecast in the first regular cabinet meeting of the year, the ministry said it expected that exports to China in the first quarter could drop by 5-8 per cent compared to the same period last year. Such an estimate would involve the ongoing epidemic being put under control in less than three months since it began in late January./.
Napas reduces switching fee to promote cashless payments
The National Payment Corporation of Vietnam (NAPAS) announced exemptions and reductions on service fees on electronic switching for local banks.
Napas said the move would cause losses of at least 15 per cent in revenue this year, but it will help fight the novel coronavirus, or Covid-19.
Napas said it will start the programme from February 25 to help develop local cashless payments and promote the Government’s plans to encourage electronic payments for public services during the epidemic.
Napas will apply free switching for online transactions, including payments for public services performed on the national public service portal, public service portals of ministries, department and local authorities until December 31, 2020.
It will also apply a reduction of 72 per cent for switching fees on interbank quick currency transfers worth VNĐ500,000 (US$21.3) and less. This means a reduction from VNĐ500 to VNĐ1,800 for each transaction.
In response to Napas, the State Bank of Việt Nam (SBV) requested banks formulate a similar policy for its e-payment clients. The central bank appreciated the firm’s efforts in actively coordinating and supporting local cashless payments.
Nguyễn Tú Anh, chairman of Napas, said the programme can contribute effectively to the banking system, enterprises and especially people during the epidemic.
Anh said: “2020 is the time to promote payments of public services, and Napas and the local banks should take responsibility in sharing free services with the Government.”
Anh thought the increase in cashless transactions would not only change consumer habits but also help government agencies reduce management and operation costs.
Established in 2004 from the Việt Nam National Financial Switching Joint Stock Company (Banknetvn), Napas has been developed as the national retail payment infrastructure with 49 per cent of SBV’s stake.
The firm is administering and operating a switching system interconnected with more than 18,600 ATMs, 261,000 POS machines and 300 electronic payment companies in the fields of aviation, telecommunications, hotels and tourism, and serving over 100 million cardholders of 48 domestic and international commercial banks operating in Việt Nam.
Restructuring markets for sustained growth
The coronavirus epidemic is pushing Vietnam to boost economic restructuring, diversify export markets, and apply urgent measures in favour of the business community and the people.
Together with numerous enterprises and business associations, the Vietnam Tourism Advisory Board last week met with the Ministry of Planning and Investment (MPI) to talk about their member companies’ woes caused by the rampant novel coronavirus (COVID-19) epidemic.
According to the board, prior to the outbreak, Vietnam welcomed about 700,000 Chinese tourist arrivals a month. Their monthly spending amounted to VND7 trillion ($304.3 million). Last year, 5.8 million Chinese came to the country, accounting for 32.2 per cent of all international tourists. However, no Chinese person visits Vietnam now.
The board estimated that if the COVID-19 emergency ends in the first quarter of 2020, the total direct loss for the tourism industry in the first three months of 2020 could be $6-7 billion. However, if the epidemic is contained in the second quarter of the year, the total direct loss of the industry in the first half of the year may be $15-18 billion.
According to the MPI, COVID-19 has negative impacts not only on tourism, but also on almost all industries, which heavily rely on imports and exports to and from China. For example, the manufacturing industry has been feeling the pinch from the outbreak. Many major technological and manufacturing groups in China such as Toyota, Hyundai, Foxconn, Samsung, LG, and Apple have temporarily shut down their plants in China.
Hyundai has decided to extend a $1 billion package to support companies globally that supply materials and equipment. The package is implemented in the form of loans or technical support. In another case, Apple is reported to be suffering from a loss. Though it does not conduct any direct manufacturing in Vietnam now, it has many partners in the country such as LG and Foxconn. In its initial plan, Apple was to heavily increase its exports from Vietnam-based partners remarkably. However, the outbreak may undermine this plan this year, a representative of the MPI’s Foreign Investment Agency said.
According to the MPI, all enterprises in industries such as textiles and garments, electronics, automobiles, and pesticides are facing difficulties due to material shortages, 30-60 per cent of which are imported from China. “Enterprises’ material stock can help them maintain production until late February. If material shortages continue, they will have to halt production in March,” stated a report from the MPI’s Agency for Enterprise Development. “The hindered production will take a heavy toll on economic growth, budget revenue, employees, and the whole society.”
The MPI estimated that if COVID-19 ended by April, Vietnam’s first-quarter export turnover would be $53.9 billion, down 8.3 per cent on-year, with turnover from China being $6.8 billion, down 9.5 per cent on-year. Vietnam’s first-quarter import turnover would be $55.5 billion, down 3.2 per cent on-year, with turnover from China being $14 billion, down 13.6 per cent on-year.
In case of the epidemic lasting until late June, Vietnam’s second-half export and import turnover would hit $58.5 and $62 billion, respectively, down 8.1 and 3.1 per cent on-year.
With such negative impacts, if the epidemic was eradicated in the first quarter, the GDP for 2020 would likely rise by 6.25 per cent on-year, with the climbs of the first, second, third, and fourth quarters being 4.52, 6.08, 6.92, and 6.81 per cent, respectively. If COVID-19 was brought under control in the second quarter, the GDP this year would likely ascend by 5.96 per cent on-year, with the growth rates of each quarter being 4.52, 5.1, 6.7, and 6.81 per cent, respectively.
Minister of Planning and Investment Nguyen Chi Dung said that despite great difficulties, now is the time for Vietnam to review its health and resilience, and boost economic restructuring, with less dependence on a single foreign market. “This is also a chance to find ways to diversify export and import markets, increase public investment, and spur on growth, laying a foundation for 2021 and beyond,” he said.
Minister Dung ordered all relevant departments and agencies in his ministry to review investment projects. Procedures for all major projects invested by the state and the private sector must be expedited so that they can become operational. “While private investment has slowed down, increasing public investment will help businesses recover production,” he said.
Currently, VND227.45 trillion ($9.89 billion) worth of public investment for 2020 remains undisbursed. The MPI also sees that, amid the COVID-19 outbreak, many sectors can benefit, such as e-commerce, online shopping, delivery, and ICT.
The Central Institute for Economic Management (CIEM) is now compiling a special report on economic restructuring, which will be submitted to the MPI before being submitted to the prime minister. “Regulations for e-commerce and ICT must be improved, facilitating the operation of enterprises,” said CIEM director Tran Thi Hong Minh.
Last week, Prime Minister Nguyen Xuan Phuc confirmed the 6.8-7 per cent economic growth target for 2020. “We have an opportunity to reorganise production and restructure the market, as well as to focus more on the domestic market and diversify and expand export markets,” he stressed.
Tiki will spin off a logistics firm after rumoured M&A with Sendo
Tiki will open a logistics company that could serve as an in-house provider of essential services for its e-commerce operations, appreciating its standing in the merger negotiations that it is rumoured to be having with Sendo.
Tiki recently announced to stop its on-demand fulfilment model (vendors taking goods to the storehouse) to shift to a new form where Tiki takes goods from vendors without intermediaries and delivers goods through a subsidiary specialised in delivery.
According to Nguyen Viet Hung, a key opinion leader in local technology startups, this will add more value to Tiki and make it a more valuable prospect for the merger with Sendo, or even the initial public offering (IPO) planned for the near future.
“Halting the old delivery model will help Tiki optimise its revenue and improve the shopping experience for customers,” said Hung.
Using lessons from SARS to combat new epidemic
How the local economy pulled through the SARS outbreak back in 2003 is now believed to be the very experience helping it rebound from the COVID-19 epidemic this time around.
With the coronavirus sweeping through China and its neighbouring countries like Vietnam, it is not only the spread of the dangerous virus that worries many people, but how it threatens economic growth prospects. In the 2002-2003 period, the widespread severe acute respiratory syndrome that originated in China killed some 800 people. Known as SARS, it decelerated the Chinese economy, slashing its annual growth rate to just over 9 per cent in the second quarter of 2003, from 11 per cent from the previous one, before eventually ending in June that year.
Also with a local outbreak of SARS at the time, Vietnam quickly acted to contain the outbreak within its borders and became the first country to be removed from the transmission list in April 2003.
The nation rounded up its first half with GDP adding 6.9 per cent, 0.4 percentage point higher than in the same period of 2002. The end of 2003 subsequently witnessed the GDP growth topping 7.24 per cent, a five-year record.
Picking up right after the virus was contained, the value of production and manufacturing rose by 15.7 per cent on-year in the first half of the year, data from the General Statistics Office showed. Exports swelled by 32.6 per cent on-year, taking up 48.7 per cent of total GDP. Climbing consumption was said to be the driving force behind the upbeat figures.
Capital mobilised for development was also up by more than 23 per cent on-year, with 70 per cent alone arriving from the domestic sector.
Tourism weathered a severe hit, rolling with an incessant drop in visitors as hotel occupancy rates barely met 30 per cent in the first two quarters. Yet promotions and campaigns were run aggressively by tourism authorities in a bid to entice tourists back in the remaining months. For the whole year, Vietnam welcomed some 2.4 million international visitors, equivalent to 89.4 per cent of the 2002 record, which was relatively strong performance, taking into account the lower tourism activity in the first quarter.
But can Vietnam do it this time when global economic growth is slowing down and the world is even more connected than it was 17 years ago? It is spring time, the season for various cultural festivals in Vietnam – yet many have been cancelled or shrank in scale to prevent the spread of the coronavirus.
Fewer tourists are seen in Hanoi these days, and it is the same for other prominent destinations including Danang, Halong Bay, Hoi An, and so on.
Many stores have extended their holiday until further notice. Shopping malls are almost empty, with the exception of supermarkets where people still come to stock up on food, groceries, and other necessities for everyday life.
Flights to and from China have been halted and visa issuance for international visitors who have previously travelled to China have also been provisionally suspended over the coronavirus concerns. The sector is indeed suffering, and the services, retail, and transportation industries trail along.
Undoubtedly, GDP growth in the first quarter of 2020 will be negatively impacted by lower tourism. The blow has been estimated by economists to take out up to 0.4 percentage point from the period’s GDP figure.
Factory disruptions in certain parts of China, meanwhile, will disrupt the global supply chain. Many local businesses now feel the pain after their intermediate parts imported from China were delayed at least until factories in China resume business. This will unfortunately take away another 0.4 percentage point from the projected GDP growth that Vietnam was looking forward to achieving.GDP growth of less than 6 per-cent could thus be expected for the first quarter.
But as past figures suggest, Vietnam can and will rebound vigorously as it has done once already, if the outbreak is quickly contained within weeks or months – and the government is making every effort for that.
Seventeen years on from the SARS epidemic, the world has seen the rise of advanced technologies which are reshaping the way we live and work.
Times when the fear of touching cash that could be contaminated with the virus is overcome by the use of e-wallets to make payments. Times when schools close to prevent infection risk, but students can attend online lessons and take tests. It is the era for humanity and disruptive technologies to learn to work together.
And it is time for Vietnam to reduce its reliance on China for intermediate inputs as local producers ought to seek for other markets to maintain production and find new markets for their agricultural exports.
This should be the time when the private sector in Vietnam enhances its involvement in the country’s development, as it is where the brain lies.
LG to stop producing television panels and smartphones
South Korean manufacturer LG has just made the decision of stopping the production of television panels and smartphones on its home soil and will move capacity abroad to stem losses.
LG Display CEO Jeong Ho-young announced at last month’s CES electronics expo in Las Vegas that the company will end the domestic production of liquid crystal display panels for TVs by the end of the year, with the capacity to be shifted to its production base in Guangzhou, China, according to Nikkei Asian Review.
The manufacturer posted a net loss of roughly KRW2.87 trillion ($2.4 billion) last year – not the first time it slipped into the red in the past eight years, but a new record low. Chinese rivals ate into the company’s profitability, with the final blow coming from the losses stemming from weak deliveries of OLED panels for Apple.
Besides, LG’s smartphone arm once had the fourth-largest global market share but has now fallen to ninth place. The segment suffered a roughly KRW1 trillion ($836.24 million) in operating losses in 2019, marking its fifth consecutive year in the red.
LG Electronics, which oversees smartphones, decided last year to shut down its mobile phone factory in South Korea and move capacity to Vietnam. CEO Brian Kwon said the company’s growth strategy will prioritise earnings.
The production line recently wrapped up its relocation to northern Vietnam, where workers’ wages are less than what is collected in South Korea.
LG Electronics runs mobile phone factories in China, India, and Brazil as well. The goal is to turn a profit next year, said Kwon.
The once-proud LCD and smartphone businesses are struggling due to missteps in investments and in reading consumer demand. LG poured copious funds into making OLED panels but customers remained attached to LCD televisions.
Purchases of OLED televisions failed to rise as anticipated. Only 3.3 million OLEDs were delivered last year, or 1.1 per cent of the 287 million TVs delivered overall.
LG used to lead the way among smartphone manufacturers in balancing quality with affordability, but that distinction has been taken over by the likes of China’s Oppo and Xiaomi. The sudden slowdown in smartphone purchases has resulted in a vicious cycle in which LG is unable to raise development expenses.
The sudden slowdown in smartphone purchases has resulted in a vicious cycle in which LG is unable to raise development expenses.
Local enterprises need to focus on IP protection
Amid increasingly sophisticated and complex intellectual property (IP) violations, Vietnamese businesses remained slow to register their products and protect their rights, said experts.
According to industry insiders, strong IP protection paved the way for a long-term economic development strategy, and was also mandatory for the current economic integration process.
However, Do Huu Quang, former leader of the Market Management Department in the south of Vietnam, told local media: “Trademarks of local products are being violated as firms don’t pay enough attention registering their IP.”
Quang added the value of intangible assets and brand value accounted for three-quarters, and in some cases 90 percent, of the company’s asset value. However, the registration and protection of intellectual property rights had gone largely ignored by domestic enterprises.
According to PwC Vietnam, the average proportion of the value of intangible assets in total enterprise value worldwide in 2016 was 53 percent, but this proportion among Vietnamese enterprises was only 26 percent.
IP registration of intangible assets aims to ensure they are exclusively used to promote the enterprises. Importantly, it is weapon to proactively combat counterfeit and pirated goods, and protect market shares for goods and services domestically and internationally.
Statistics show that the number of applications for trademark protection filed at the Intellectual Property Office of Vietnam (Ministry of Science and Technology) is increasing. Before 1990, only about 300 to 2,000 applications for trademark protection were made each year. From 1990 to 2005, an average of 4,500 applications were filed annually. Since 2010, that figure has risen to 32,000-50,000.
However, Quang said: “These numbers are still too low, especially compared to the number of enterprises in the country.”
According to the newly published White Book on Vietnamese Enterprises, at the end of 2018, the number of operating enterprises was 714,755, with the number of newly-established enterprises rising sharply. In the first nine months of this year, the Government Statistics Office counted more than 100,000 newly-established enterprises nationwide.
For example, since 2015, the rate of filing for registration of designs in Japan has increased thanks to the Lahay Agreement on international registration of industrial designs, managed by the World Intellectual Property Organisation (WIPO). Since then, 50 percent of applications filed in Japan have been from foreign companies. Having joined the agreement a month ago, not many Vietnamese enterprises have bothered to take advantage of it.
The Intellectual Property Office said the number of industrial design registration applications of Vietnamese enterprises in foreign countries accounted for a very small portion. For example, there are only 10 registered designs in the United States and 166 in the European Union.
Quang urged: “Enterprises should register to protect their IP. At the same time, they should build and follow an IP strategy, and set up an IP data system to track updates with competitors so they can prevent infringements.”
Current IP enforcement was mostly done by State agencies, without active participation of businesses and consumers. He told businesses not to avoid or be afraid to sue when there was an IP infringement.
Tran Giang Khue, in charge of the southern branch of the Intellectual Property Office, said enterprises needed special teams to deal with the issue. “It is either register now or lose your trademark,” Khue said./.
Vinh Phuc strives to boost tourism industry in Tam Dao district
The northern province of Vinh Phuc is looking to capitalize on the potential of the local Tam Dao district, a popular resort destination, in the hope of turning it into a driving force for the local economy.
The district’s authorities are also making efforts to further boost local tourism industry.
The district has intensified management of destinations and tourism complexes and accelarated promotion and improved service quality of local restaurants and lodging providers.
The local People’s Committee has adopted a plan for the implementation of tourism activities and successfully hosted the launching event of Tam Dao tourism season this year. A committee has been set up with the task of organizing activities to promote the district’s cultural identity at the pedestrian street around Hoan Kiem Lake in the capital city of Hanoi.
The district People’s Committee has also been crafting support and incentives to engage more businesses and the locals in community-based tourism in Tam Dao township and Dao Tru commune. As a result, homestay and villa renting services are rapidly expanding in Tam Dao township to meet increasing demand of holiday-makers.
By the end of September this year, Tam Dao district welcomed over 1.08 million visitors; about 311,000 of whom came to Tam Dao township while the remainder visited Tay Thien Landscape Site.
Tam Dao town, the capital of the district, is a small mountainous township at an altitude of 1,000m in Vinh Phuc with cool weather throughout the year like Da Lat and Sa Pa. It is also just 70km from Hanoi, which makes it an ideal summer destination for visitors at weekends.
Although the town is small, there are plenty of options here for tourists to escape the usual busy city life.
Young newlyweds can choose spots to take wedding photos, since Tam Dao offers an ancient stone church, silver waterfalls, jungles, pagodas, sunsets and poetic overcast vistas. Visitors can stay at small mansions, looking down the valley from their perch at one of the resorts.
Climbing mountain in Tam Dao is an unforgettable experience. The place is where many athletes choose to practise climbing.
If you are in search of a short weekend away, or simply wish to be far from the maddening city crowds, then throw your stress away and head to Tam Dao.
The Tay Thien site locates in Dai Dinh commune, Tam Dao district, 75km northwest Hanoi. It spans 148 hectares on the Thach Ban Mountain within the Tam Dao range.
It is well-known for its ancient religious buildings, such as pagodas, temples, as well as beautiful forests, streams, waterfalls and grottoes. The site was recognised as a national historical relic site in 1991 and a special national relic site in 2015.
There are numerous temples in the site, including Thuong temple, Tam Toa Thanh Mau temple, Co Chin temple and Thong temple.
The site hosts Tay Thien Festival, one of the major spiritual events in the north, on the fifteenth day of the second lunar month annually to commemorate Mother Lang Thi Tieu, who made great contributions to national defence and agricultural development during the era of Hung Kings.
Another big attraction of the district is the Tam Dao National Park, which covers an area of 36,883 hectares, including more than 23,000 hectares of forests. The park is covered by a rich flora, consisting of 490 species from 34 genera and 130 families.
The park is also home to 281 species of fauna from 281 genera, 84 families and 26 orders belonging to 4 main classes: animals, birds, reptiles and amphibious ones.
Nowadays, the National Park of Tam Dao is a place of interest not only for tourists, but also business people and researchers./.
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