Office-share company ramps up expansion in Southeast Asia where it sees its future
U.S. co-working space provider WeWork is expanding its business into the Vietnam as it strives to build a presence in the region’s largest economies by year-end.
According to a report by CLIFF VENZON, a Nikkei staff writer, the company revealed on Wednesday announcement of its expansion in Ho Chi Minh City where its first site will be in the E-Town building, near the city’s commercial center. The location will be one of WeWork’s largest in Southeast Asia, with room for more than 1,000 members, said Regional Managing Director Turochas Fuad.
The site, which will open in December, add to the existing offices in Jakarta and Singapore. WeWork expanded to Southeast Asia last year and its network now spans 12 locations with more than 6,000 members.
“The plan is to launch six markets by end of the year,” Fuad said, adding that expansion in Malaysia and Thailand is underway.
WeWork, which has allocated $500 million for its expansion in Southeast Asia and South Korea, will open more locations in Hanoi and other cities in Vietnam within the next year to meet increasing demand for co-working services.
WeWork is banking on the millennial work culture of mobility, the region’s growing number of startups, small- and medium-sized enterprises and multinational companies that require flexibility in choosing offices.
“This (Southeast Asia) is where the longer-term investments are going to be,” Fuad said.
Vietnam’s government has launched in the past few years a number of programs and incentives to support local startup communities and a growing information technology sector, as well as to open more markets to foreign investment. Vietnamese are encouraged to move to the cities to form entrepreneurial communities and establish international connections.
Vietnam is the region’s fastest growing economies and enjoy booming foreign direct investments.
According to a 2017 study by CBRE Research Vietnam, more than 90% of co-working space users in the country are under 35, compared with the global figure of 67%. And 54% of users are founders or employees of startups, while approximately 14% are freelancers and self-employed. These numbers reflect Vietnam’s young demographics and new working styles.
The sharing economy has gained popularity in Vietnam, which ranks highly worldwide in terms of internet access and consumer electronics exports. Growth in online services also stimulates related businesses in the creative and high-tech sectors.
“Our services will minimize the cost of running a working location for businesses and connect members to the world via our ecosystem,” said Fuad.
Vietnam’s co-working spaces have increased at an annual 55% rate over the past five years, with the total area expected to reach 90,000 sq. meters by the end of 2018. There will be 45 locations in Hanoi and Ho Chi Minh City, up from just 19 this April, run by dozens of local operators.
Toong leads the market with a 42% share, followed by Up and Circo at 13% each, and Dreamplex with 11%, according to the latest survey by CBRE Research Vietnam.
In April, WeWork spent $400 million to acquire Naked Hub, a China-based co-working space operator that also has locations in Vietnam. Hang Nguyen, WeWork’s community director in Vietnam, told the Nikkei Asian Review the company will incorporate Naked Hub’s facilities and open new ones, seizing the best locations as quickly as possible. WeWork adds eight to 10 locations to its network each month in major cities around the world.
AS DAWN BREAKS in Hanoi the botanical gardens start to fill up. Hundreds of old people come every morning to exercise before the tropical heat makes sport unbearable. Groups of fitness enthusiasts proliferate. Elderly ladies in floral silks do tai chi in a courtyard. In the shade of a tall tree, dozens of ballroom dancers sway to samba music. Others work up a sweat on an outdoor exercise-machine. Tho, an 83-year-old with a neat white moustache, says he comes to walk round the lake every day, rain or shine.
According to a report on The Economist, in the next few decades the gardens will become busier still. Vietnam has a median age of only 26. But it is greying fast. Over-60s make up 12% of the population, a share that is forecast to jump to 21% by 2040, one of the quickest increases in the world (see chart). That is partly because life expectancy has increased from 60 years in 1970 to 76 today, thanks to rising incomes. Growing prosperity has also helped bring down the fertility rate in the same period from about seven children per woman to less than two. In the 1980s the ruling Communist Party started to enforce a one-child policy. Though less strict than China’s, it has hastened the decline.
Demography is changing in similar ways in many Asian countries. But in Vietnam it is happening while the country is still poor. When the share of the population of working age climbed to its highest in South Korea and Japan, annual GDP per person (in real terms, adjusted for purchasing power) stood at $32,585 and $31,718 respectively. Even China managed to reach $9,526. In Vietnam, which hit the same peak in 2013, incomes averaged a mere $5,024. Indonesia and the Philippines are expected to reach the turning-point in the next few decades, with an income level several times higher than Vietnam’s.
This shift brings headaches. First, will the government be able to support millions more Vietnamese in old age? Only the extremely poor and people over 80 (together around 30% of the elderly) get a state pension, which can be as little as a few dollars a week. The most recent survey of the old, in 2011, found that 90% of them had no savings worth the name. Debt was common. Supporting them will become ever more expensive. The IMF predicts that pension costs, at the present rate, could raise government spending as a share of GDP by eight percentage points by 2050. That is faster than in any of the other 12 Asian countries it examined.
The problem is worse in the countryside, where most old folk live. Previously the young cared for their parents in old age. Today they tend to abandon village life to seek their fortune in the city. Surveys suggest that the share of old people living alone is rising, especially in villages. Many work until they die. Around 40% of rural men are still toiling at 75, twice the rate of city-dwellers. In Britain that figure is 3%. Often they do gruelling manual jobs, such as rice farming or fishing.
Providing health care for millions more old people is another worry. Alzheimer’s, heart disease and age-related disability are growing. In the botanical garden Toau, a 78-year-old in a white sports T-shirt, says he is there on doctor’s orders, before taking a pill for his bad heart and joining an exercise group. About a third of over-60s do not have health insurance, which is costly. Many provinces still have no proper geriatric departments in hospitals. Informal health-insurance groups have popped up to fill the gaps. For a fee, members get exercise classes and free check-ups. But few doctors are trained or equipped to treat more serious conditions.
The government is starting to implement policies to reduce the fiscal burden and improve the lot of the elderly. Last year it relaxed the one-child policy. In May it said it would increase the retirement age from 55 to 60 for men and 60 to 62 for women, and reform the pension scheme to provide wider coverage. Next year it plans to begin revamping the health-insurance and social-assistance systems.
But none of that will change the structure of the economy. Usually as countries climb the income ladder they shift from farming to more productive sectors, like services. By this yardstick, Vietnam is lagging behind its neighbours. When the working-age population peaked in 2013, agriculture accounted for 18% of the economy. At the same juncture in China, agriculture was just 10% of GDP. Worse, farmers’ output tends to decline with age, unlike, say, that of managers. This over-reliance on agriculture partly explains why three-quarters of Vietnam’s workers are in jobs where they become less productive as they get older. In Malaysia that is the case for only about half the labour force.
Boosting productivity will be tricky. The government is still wedded to statism. State-owned enterprises dominate many industries. Most university students, meanwhile, waste at least a year learning Marxist and Leninist theory. Many countries in Asia are ageing fast. But growing old before it becomes rich makes Vietnam’s problems all the greater.
By Destitute dotage
This article first appeared on The Economist
Thousand Oaks gunman was a Marine veteran who often visited the site of the shooting
Back in April, officers in Thousand Oaks, California, responded to a disturbance at the home where Ian David Long lived.
According to a report on CNN, Long, a 28-year-old who served in Afghanistan with the Marines, was acting somewhat irate and a little irrationally, according to Ventura County Sheriff Geoff Dean.
A mental health specialist with the crisis team met with him and felt he might be suffering from post-traumatic stress disorder. But after speaking with him, they decided not to detain him under laws that allow for the temporary detention of people with psychiatric issues.
Seven months later, officers swarmed his home again for a very different reason: a mass shooting.
Long was identified by police on Thursday as the gunman who killed 12 people and injured more than a dozen more in a sudden spree of violence at the Borderline Bar & Grill in Thousand Oaks. Authorities have no motive yet.
Authorities have identified a Facebook post believed to have been made by the shooter around the time of the attack, according to a law enforcement official familiar with the ongoing investigation.
In it, the writer says: “I hope people call me insane… (laughing emojis).. wouldn’t that just be a big ball of irony? Yeah.. I’m insane, but the only thing you people do after these shootings is ‘hopes and prayers’.. or ‘keep you in my thoughts’… every time… and wonder why these keep happening…”
When CNN read the post to a friend of Long’s, who did not want to be publicly identified, the friend said, “That does not sound like Ian to me at all. I don’t know what was going through his head when he wrote this. It must have been terrible.”
Shooter began firing outside
Survivors of the shooting said the gunman, dressed in black and wearing glasses, shot a security guard outside and then shot a young woman working at the counter just inside the door before opening fire on others.
One of the victims, Ventura County Sgt. Ron Helus, was fatally shot when he entered the bar and tried to stop the rampaging gunman, Dean said.
Police found Long dead of what Dean said he believed to be a self-inflicted gunshot.
One handgun, a legally purchased .45-caliber Glock, was at the scene. The gunman used an extended magazine in the shooting, Dean said.
He was a frequent visitor to the bar
On Thursday morning, Dean said he did not know of any connection between Long and the Borderline bar.
But Long’s friends told CNN he was there frequently.
Police identified Ian David Long as the gunman in the mass shooting.
“We would go to Borderline together. He really liked it,” said one woman who has been friends with Long for five years and does not want her name made public.
“I would make fun of him, because he would drag me there. Sometimes we’d go there to have a drink, sit and talk, listen to music,” she said.
Borderline, a Western-themed establishment known to regularly host country, salsa and swing dancing nights, was hosting a college country night on Wednesday evening.
“There was a community there. He was a part of that community. The whole bar is line dancing. People do choreographed dances for hours, cowboy boots and hats in the middle of the suburbs of Thousand Oaks,” the friend said.
A person who was a friend of Long’s until their early 20s and who did not want their name revealed publicly similarly said they used to go to Borderline together. The friend expressed shock that Long could be a killer.
“I don’t know what the hell happened. He was always happy. I never thought this would ever come from him. We used to go snowboarding all the time. He was a good guy,” the friend said.
A third friend who did not want to be publicly identified said Long stopped communicating two years ago but said the shooting was unlike him.
“He wasn’t unhinged, he wasn’t violent. He was a sweet guy who served his country and was using his GI Bill to go to college and get a degree to help more people,” the friend said. “Out of our group of friends I thought the highest of him.”
He was in the Marine Corps
The gunman was a corporal in the Marines from August 2008 to March 2013, according to Defense Department records.
He went to Afghanistan from November 2010 to June 2011.
Thomas Burke, a pastor who served with Long in the same US Marine Corps regiment, said Long’s battalion arrived during intense fighting in Helmand province.
But Burke warned against too quickly blaming Long’s actions on trauma experienced during war.
“PTSD doesn’t create homicidal ideation,” Burke said. “We train a generation to be as violent as possible, then we expect them to come home and be OK. It’s not mental illness. It’s that we’re doing something to a generation, and we’re not responding to the needs they have.”
Long posted information about his military service on a special forces forum called ShadowSpear in March 2017.
Under the name “doorkicker03,” Long said he was an infantry machine gunner while in the Marine Corps for 4½ years, and was an instructor in Okinawa in Japan.
Photos: In photos: Mass shooting at California bar People comfort each other near the scene of a mass shooting at the Borderline Bar & Grill in Thousand Oaks, Californina, early Thursday, November 8. | @ CNNPhotos: In photos: Mass shooting at California bar Matt Wennerstorm, still wearing a blood-stained shirt, talks to members of the media outside the Borderline Bar & Grill. | @ CNNPhotos: In photos: Mass shooting at California bar Police vehicles block an intersection near the shooting in an image from aerial video. | @ CNNPhotos: In photos: Mass shooting at California bar An American Red Cross Disaster Relief vehicle is seen outside the Thousands Oaks Teen Center where people have come for family assistance following the bar shooting. | CNN
Reporting by Eric Levenson, Jose Pagliery and Majlie de Puy Kamp.
Read full article on CNN here
According to Vietnamnews, Hà Nội aims to reduce the use of plastic bags in the traditional markets, supermarkets and trade centres to protect environment as well as ensure the sustainability of the ecosystem.
This is the action plan of the Hà Nội People’s Committee that aims to implement the sustainable production and consumption programme by 2020.
The city also plans to increase the percentage of enterprises in industrial parks and complex applying eco-friendly technologies to 60-70 per cent.
Under the plan, Hà Nội will raise public awareness on the use of plastics, urge and educate enterprises to trade plastic products and nylon bags for recyclable materials instead.
Most of the city’s markets and supermarkets do not use eco-friendly plastic bags, the Lao Động (Labour) newspaper reported.
Đỗ Thị Mai, a fruit shop in Lĩnh Nam Ward, Hoàng Mai District, said she consumed over 1kg of nylon bags a day.
“I know using plastic bags will pollute the environment but I still have to use everyday because customers need. We will stop when there is a ban,” she said.
Regarding the use of plastic bags and the long-term effects of them, the Ministry of Natural Resources and Environment said plastic bag waste has a serious impact on the environment and human health.
Việt Nam is among the top five polluting countries worldwide, which together contribute as much as 60 per cent of all plastic waste that enters the world’s seas.
Only two large cities, Hà Nội and HCM City discharge about 80 tons of plastic and plastic bags each day, of which most plastic bags are difficult to decompose, according to the ministry.
“If 10 per cent of plastic waste is not recycled, the amount of plastic discharged in the country will reach 2.5 million tonnes per year,” a representative of Ministry of Natural Resources and Environment was quoted by the newspaper as saying.
Traditional, non-biodegradable plastic bags are subject to an environmental tax of VNĐ40,000 (US$1.70) per kg. Tax is set to increase to VNĐ50,000 ($2.10) as of January 1, 2019 while plastic bags are sold at the markets at VNĐ35-40,000 per kg.
Price of plastic bag is equivalent to environmental protection tax, tax loss is clear, the newspaper said.
Legal loopholes have enabled widespread tax evasion that has caused huge financial losses for the State and limited the effectiveness of the tax.
To avoid tax losses with plastic bags, it is needed to amend the regulations related to environmental protection tax, according to Phạm Đình Thi, director of the Ministry of Finance’s Tax Policy Department.
Dr Nguyễn Minh Phong, an economic expert also agreed.
Raising public awareness about the harmful effects of plastic bags was a solution to reduce plastic use but would not solve the root of the problem, he said.
It was necessary to amend regulations so that supermarkets and trade centres would not supply plastic bags for free so customers have to spend their own money to buy them when they shop, adding that it was a measure adopted by many countries to reduce the use of plastic bags, said Phong.
Hoi An City in the central province of Quang Nam is facing challenges in the development of the local tourism sector.Municipal authorities held a forum to seek ways for Hoi An’s sustainable tourism development on Thursday, attracting the participation of representatives from dozens of travel firms and their partners.
According to Hoi An City’s Culture and Information Department, Hoi An welcomed more than 3.3 million visitors last year, including nearly two million foreigners.
In the first nine months of this year, the city served 4.55 million tourists, including 3.4 international travellers.
However, the city is struggling with sustainable tourism development.
At the forum, Nguyen Van Son, vice chairman of Hoi An City People’s Committee, said that European visitors to Hoi An have tended to sharply decrease. Particularly, the rate of travellers who did not return the city has been on the rise.
Meanwhile, rapid urbanisation has exerted pressure on local transport infrastructure and the environment. Apart from this, the so-called Zero VND tours have catered an increasing number of tourists to the city that have caused huge losses to local tourism revenue.
Son added that the shortage of new tourism packages and quality human resources in the sector has also affected the city’s tourism development. The locality also needs to deal with the overcharging and environmental pollution at tourism sites.
Participants at the event recommended the city consider accelerating electronic entrance ticket selling, and providing tourists with necessary information about the city, including maps and introduction of cultural relic sites.
The city would attract more visitors if the city could stop street vendors from cheating tourists or soliciting them to buy their wares, and ensure order in the tourist hub. It is also necessary to develop high-quality tourism products by enhancing co-operation among travel firms and improving capacity of staff as a significant measure to attract visitors from traditional markets and those willing to spend more.
In the age of modern technology and social media, it’s hard to imagine the possibility of losing touch with a cherished friend.
But that’s what happened to Sargent Dick, a Vietnam War veteran currently living in Chesapeake, Virginia, who lost touch with a fellow soldier who became his best friend.
“I am seeking information on the location of Nguyen Hiep who was a solder in ARVN. If he were alive he would be about 80 years old”. Dick said in his first message to Facebook page of Vietnam Insider, a fast-growing news channel with deep finance, enterprise, tech, travel, life and other industry verticals.
“This is the photograph of Nguyen Hiep taken about 1961. I was with him in Can Tho the same year. His wife and children lived with his father and mother in Saigon/Cholon Nextdoor to a temple where his father was a caretaker. He would remember me as Mister Dick or Sargent Dick. I appreciate your assistance in finding him for me.” Dick told Vietnam Insider.
Vietnam and the United States have finished the cleanup of dioxin contamination at Danang airport caused by the transport and storage of the herbicide Agent Orange during the Vietnam War.
The 30 hectares (74 acres) of land cleansed of the toxic chemical were handed over to Vietnam at a ceremony Wednesday where Vice Defense Minister Nguyen Chi Vinh praised the U.S. government’s involvement in the cleanup.
“It is proof that we are opening a future of good cooperation between the governments of Vietnam and the United States,” Vinh said. “Today marks the day that Danang airport is no longer known as a dioxin hotspot, the day that Danang people can be assured that their health will not be destroyed by chemicals left over from the war.”
Large amounts of Agent Orange, which contains dioxin, were stored at Danang airport during the war and sprayed by U.S. forces to defoliate the countryside and deny communist fighters jungle cover. Vietnamese still suffer from the effects of the spraying.
U.S. Ambassador Daniel Kritenbrink called the joint cleanup a significant milestone in the expanding partnership between the two countries.
“This project truly is a hallmark of our countries’ shared vision to be honest about the past, deal responsibly with remaining legacy issues and turn a point of contention into one of collaboration,” he said.
Kritenbrink said working together on the issues of the past “builds strategic trust and enables us to further strengthen our forward-looking partnership that advances shared interests and strong people-to-people ties.”
Between 1962 and 1971, the U.S. military sprayed roughly 11 million gallons of Agent Orange across large swaths of southern Vietnam. Dioxin stays in the soil and in the sediment at the bottom of lakes and rivers for generations. It can enter the food supply through the fat of fish and other animals.
Toxic defoliant has been linked to birth defects, cancers and other deadly diseases from which millions suffer to this day | @ Wikipedia
Vietnam says as many as 4 million of its citizens were exposed to the herbicide and as many as 3 million have suffered illnesses caused by it — including the children of people who were exposed during the war.
The U.S. government says the actual number of people affected is much lower and that Vietnamese are too quick to blame Agent Orange for birth defects that can be caused by malnutrition or other factors.
Last month, U.S. Defense Secretary Jim Mattis visited Bien Hoa air base north of Ho Chi Minh City, the former Saigon, another dioxin hotspot.
The U.S. Agency for International Development will soon begin a soil restoration project at the base that is estimated to take several years and cost $390 million.
Vietnam has planned to lift some limits on the foreign ownership of listed companies, in a move analysts said could boost overseas interest in one of Asia’s fastest-growing economies.
“A draft securities law presented by Vietnam’s finance ministry at a forum held in Hanoi on Wednesday would broadly remove the existing 49%foreign ownership cap on most local companies” Said the country’s stock market regulator
“We expect the new law to encourage the development of the market in a faster, stronger and more sustainable manner,” deputy minister of Finance Ministry Huynh Quang Hai said at the forum.
According to a report by Khanh Vu on Reuters, The draft law is expected to be submitted to lawmakers for approval next year and would take effect in January 2020.
A government decree issued in 2015 had already removed the foreign ownership limit on some companies, but only a handful of firms, including Vietnam’s largest dairy company Vinamilk, raised limits after the decree was issued.
Foreign ownership caps on companies operating in “sensitive and important” sectors such as security, defense, telecommunication and insurance, will be kept at 49%, according to Nguyen Quang Viet, an official in the State Securities Commission’s legal department.
The limit for banks will remain at 30%, he added.
“But the new law would remove the limit on companies operating in many of more than 200 of the conditional sectors,” said Viet, who added that it would pave the way for more foreign investment in the market.
In Vietnam, “conditional sectors” refers to industries subject to additional regulations which would override the limits set out by the securities law.
Can Van Luc, a government economic advisor, said the government would consider raising limits on the foreign ownership of banks on a case-by-case basis.
Vietnam’s stock market was Asia’s top performer last year, growing 48%, backed by strong exports growth and robust foreign investment inflows.
The Finance Ministry of Vietnam said in a statement last month the new law would also pave the way for several local companies to be included in the MSCI emerging markets index.
In July, there were more than 1,500 companies listed on local stock markets in Vietnam, with a total market capitalization of 3,881 trillion dong ($166.4 billion), accounting for 77.5% of the gross domestic product, according to data from the Finance Ministry.
Foreign investor holdings stood at $34.2 billion in the same period, the ministry said. ($1 = 23,324 dong)
Reporting by Khanh Vu; Editing by James Pearson & Simon Cameron-Moore
Read full report on Reuters now
During rush hour traffic, Hanoians have begun walking with their motorbikes on pavements to save time.
Near the junction of To Huu and Trung Van streets, west of downtown Hanoi, many people have been driving on the opposite street lane or sidewalk, worsening traffic jams.
If the drivers follow the right lane, they have to travel for a quite some distance to reach a space that allows a U-turn. To avoid the jammed street and the extra distance they would have to cover, they would choose to drive on the sidewalk.
But when more traffic police officers were assigned to manage the traffic chaos, motorbike drivers adopted a new strategy: walk their bikes on the pavement in the direction opposite to the traffic.
Typically, this walk commences at around 6 a.m. and lasts until 8:30 a.m. every day.
Traffic authorities have taken several measures to prevent violations, like blocking the space between the street dividers for drivers to make u-turns at places prone to major traffic jams, but if they do this at one spot, the traffic jam shifts to another.
It is not that people are not aware of the law, but overpopulation in the area makes the problems intractable. Hence the police can only stand and watch the bike walkers do their thing.
On a 2-kilometer stretch of To Huu, there are 40 apartment buildings. And on this narrow street, one lane has been dedicated to the bus rapid transit system. During rush hour, it takes motorbike drivers around 20 minutes and car drivers around 40 minutes to travel 300 meters.
Traffic congestion is a daily problem in Hanoi, which has 5.2 million motorbikes and around 550,000 cars, besides some 1.2 million brought by immigrants, according to police figures. Data showed 4.6 percent of annual increase in individual vehicles while traffic land in the city has only expanded 0.4 percent a year. A survey by market research firm Audience Project and Uber last year showed that a person in Hanoi lost an average one hour to traffic jams per day.
At the intersection of To Huu and Mo Lao streets, hundreds of people try to cut through the traffic flow, which is already jam-packed, and travel on the opposite side to avoid getting stuck for too long.
Some even damage the street divider to make space to get to the other side.
On a bumpy part of the sidewalk, drivers on the right lane have to yield space for drivers to walk in the opposite direction.
Hanoi traffic police can fine drivers in the wrong lane, but there is no regulation to fine the motorbike walkers, Nguyen Duc Thang, a traffic police officer, said.
For now, the motorbike walkers are sticking to their routine, getting a morning exercise that they’d never really planned.
Continued caution on the morning of November 7 saw the VN-Index fluctuate on low liquidity.
Selling pressure was not too strong but demand was weak, with fluctuations remaining minor.
Matching orders of more than 1 million units made on HSX included STB, HSG, OGC, HQC and HAG.
The VN-Index inched up during the session, on similar liquidity to yesterday morning.
The HSX had 115 advancers and 136 decliners, with the VN-Index gaining 1.60 points (0.17 per cent) to 923.65 points. Total trade reached over 69.2 million shares, worth VND1.4 trillion ($60.07 million), down 3 per cent in volume but up slightly in value compared to yesterday morning. Agreement trade contributed over 6.33 million units worth VND213.7 billion ($9.1 million).
Nearly all major stocks moved sideways, while VNM increased 2 per cent, BID 2.2 per cent, MSN 1.7 per cent, and STB 4.1 per cent, with the latter leading in trading volume, with nearly 7 million units.
Meanwhile, VIC lost 0.7 per cent, VHM 0.7 per cent, GAS 0.2 per cent, and SAB 0.85 per cent.
HNX saw 37 gainers and 46 losers in the morning, as the HNX-Index rose 0.28 points (0.26 per cent) to 104.83 points. Total trade was over 16.1 million shares valued at VND223.62 billion ($9.5 million). Deals totaled more than 815,000 units worth VND6.5 billion ($278,840).
The UPCoM-Index fluctuated sharply, moving around its reference level before gaining slightly at the close.
After nearly two years of receiving investment from Mekong Capital’s Mekong Enterprise Fund III, F88 made a milestone in officially opening two new stores in Ho Chi Minh City, on Cach Mang Thang Tam Street, District 1, and Au Co Street, Tan Binh district, on November 11.
F88 Chairman Mr. Phung Anh Tuan said the expansion to Ho Chi Minh City is within the long-term development plan of the pawn shop chain, as it holds major potential in consumer finance loans and could handle three times more shops than Hanoi.
“We are confident about bringing a whole new pawn service to the city, with friendly service and responsible lending,” he said. “We expect to open 200 stores in the time to come.”
The management, operations and development experience gained in major cities in the north will be the foundation of the company rapidly expanding its network in the south, he added.
F88 was launched in 2013 as a startup operating in the pawn service sector. It now offers a variety of collateralized loan services on motor cars, motorbikes, telephones, and laptops for short, small value loans.
It operates similar to a finance company, with appraisal, approval, and management of loans, but in terms of operations more resembles a retail business,
Evaluation is the core activity, Mr. Tuan said, and in addition to building an appraisal board, with specialists from many fields, F88 has also invested in appraisal technology capable of keeping updated market prices.
F88 is keen to expand its chain after opening 45 pawn shops in six northern cities. Total disbursement in 2017 stood at VND600 billion ($25.7 million).
Coffee shipments from Vietnam will set a new record this year, supported by global demand for its key robusta variety.
Exports of all varieties are likely to top 1.8 million metric tons, according to Do Ha Nam, the chief executive officer of Intimex Group, the largest shipper in the country. Nam is also vice head of the Vietnam Coffee and Cocoa Association, the main industry grouping in the world’s largest robusta grower.
“The world market has consumed all the coffee shipments from Vietnam,” Nam said in an interview. “Supplies have been insufficient to meet demand.”
Coffee Craving
Vietnam’s exports are forecast to hit a record
Global consumption of robusta, mainly used by companies including Nestle SA to make instant coffee, is forecast to climb to a record this season, supported by growing demand for the instant variety in developing markets. That’s good news for farmers in Vietnam, who enjoyed a 10 percent jump in local prices in October as global benchmark futures rebounded.
To feed that demand, Intimex this year added three robusta processing plants with a combined capacity of 180,000 tons, bringing its total capacity to 750,000 tons, Nam said last week. The company expects its overseas sales to grow 20 percent to an all-time high of 510,000 tons this year. As well as being an exporter, Vietnam imports beans for re-export and for domestic use.
Harvest Progress
Vietnam’s production in the 2018-19 year that started last month may climb just over 2 percent to 1.83 million tons assuming normal weather, according to the median estimate of 14 traders surveyed by Bloomberg. That compares with 1.82 million in a previous survey, and a 1.8 million ton forecast by Intimex and Simexco Dak Lak, the second-largest exporter. The country’s agriculture ministry in July said production would surpass 1.8 million tons.
Harvesting began in Dak Nong in late October. Other key areas, including the coffee “capital” Dak Lak, will start collecting beans around the middle of November, RCMA Asia Pte said in an emailed report.
RCMA expects a slight reduction in the estimated record crop triggered by fungus diseases mainly in Dak Nong and unusual cherry droppings in Gia Lai. The group earlier projected that 2018-19 season output would rise to 1.92 million tons. It sees exports at a record 1.76 million tons this season.
Instant Market
More key information:
Global demand for robusta coffee will rise to an all-time high of 71 million bags this season, compared with 64 million tons in 2016-17, according to an RCMA Group forecast.
The worldwide market for instant coffee is set to expand 4.7 percent a year through 2023 to $14 billion from $10.4 billion in 2017, market research company IMARC Group said in a report.
Demand in emerging markets is expected to grow significantly in the next five years, IMARC noted in a separate report.
Recent mostly dry and sunny weather in Vietnam is favorable for harvesting and drying of new-crop beans, according to RCMA.
Precipitation in the Central Highlands, the major coffee-growing belt, is expected to be 20-50 percent below average from now through April, the national forecasting center said on its website.
Farmers end-season reserves are in line with a year ago and the five-year average, the traders’ survey from late October shows.
Growers probably sold 1.75 million tons by end-October based on production of 1.785 million tons last season, or 98 percent of the crop.
Stockpiles in warehouses in and around Ho Chi Minh City are estimated at 100,000 tons as of Oct. 31, according to the median of 6 respondents. That compares with 169,000 tons a year earlier and the five-year average of 167,500 tons.
Growers probably collected 4 percent of the new crop as of end-October, compared with 5 percent a year earlier, the survey shows.
Vietnam International Bank (UpCom stock code: VIB) has just been approved to increase its chartered capital to VND7,834 billion in 2018 from VND5,644 billion by the State Bank of Vietnam (SBV) and had relevant dossier endorsed by the State Security Commission of Vietnam. Accordingly, VIB’s shareholders will receive bonus shares with the ratio of 41.13%, equivalent to 411.3 shares for every 1,000 shares they owned. The final date for registration is November 19, 2018.
After completion of the chartered capital increase in November 2018, VIB’s Basel II Capital Adequacy Ratio (CAR) will increase positively, maintaining safe gap with CAR minimum requirement of 8% as regulated in Circular 41 issued by SBV. In the list of 10 commercial banks to pilot Basel II implementation, to date, VIB is one of two banks that have finished the implementation and registered for applying the Basel II standards in 2018.
The increased chartered capital will help VIB operate more safely and have more capacity to cope with potential risks, including risks from credit, market and the bank’s operation activities. Also, VIB is one of five banks which repurchased all bad debts that they sold to Vietnam Asset Management Company (VAMC).
In addition, the financial capacity enhancement and CAR increase will help the bank grow more sustainably, providing its customers with better experience of financial services and preferable offers and ensuring long-term benefits of VIB’s shareholders.
Earlier, VIB announced its 10-month business statement with its profit before tax reaching VND1,956 billion, up 187% year-on-year, fulfilling 98% of the full-year target. Accumulated revenue increased by 47% year-on-year, in which interest income and non-interest income up 49% and 40%, respectively. VIB continues to become one of the biggest retail banks in Vietnamese market as the bank’s accumulated individual lending reached VND69,000 billion, up 55% year-on-year.
VIB ranks 27th in top 500 private businesses with largest earnings in 2017, according to Profit500 report issued by Vietnam Report in October 2018.
In June, Bamboo Airways announced it signed a deal worth US$5.6 billion to acquire 20 Dreamliner commercial jets from Boeing after the airlines inked a similar deal costing US$3 billion with Airbus.
Bamboo Airways, the would-be fourth Vietnamese airline, has not received the license to take off due to matters relating to aviation security, Minister – Head of the Government Office Mai Tien Dung said last weekend.
The Civil Aviation Authority of Vietnam (CAAV) will be in charge of granting the license basing on the Law on Civil Aviation, Dung explained.
The Government Office is seeking feedback from concerning ministries and agencies before making the final decision regarding this issue in the upcoming regular government meeting, he said.
Bamboo Airways is a project of FLC Group, a publicly-traded resort and housing developer in Vietnam. The airlines was set up in mid-2017 with registered capital of VND700 billion (US$30.17 million) to offer standard aviation service and budget passenger carrying service. It raised the registered capital to VND1.3 trillion (US$60 million) after a year.
The carrier targets to run on 24 domestic and 16 international routes by the end of 2023, mainly to destinations where FLC is operating its own resorts, including central provinces of Binh Dinh, Quang Binh, and Thanh Hoa.
In June, Bamboo Airways announced it signed a deal worth US$5.6 billion to acquire 20 Dreamliner commercial jets from Boeing after the airlines inked a similar deal costing US$3 billion with Airbus.
The news has surprised aviation industry and international experts.
Henry Harteveldt, a commercial aerospace analyst at Atmosphere Research, said that the purchase of twenty Boeing 787 airplanes indicated a degree of confidence, some would say arrogance, and a willingness to ignore basic financial planning for an airlines, where you usually buy a few and wait for the market to materialize. “It’s a very bold, very risky move,” he added.
Vice President and analyst at Teal Group Richard Aboulafia said that a newly-established airline should begin with small airplanes like Airbus’s A320 meanwhile wide-body airplanes built for long-haul flights like Boeing 787 are not suitable. He was skeptical that Vietnam’s aviation market can sustain another airline.
A local expert told newswire Zing.vn that Bamboo Airways itself may be aware of risks when investing in a large plane fleet, but it may be a necessary move to prove its willingness to start up in the aviation industry.
Bamboo Airways had been expected to take off on October 10, 2018. But the date for the first flight remains uncertain as Minister Mai Tien Dung said that the government will “cautiously consider” granting the license.
Currently, low-cost airline VietJet Air which debuted in late 2011 holds around 43% of the market share while Jetstar Pacific Airlines, the budget carrier of the country’s biggest carrier Vietnam Airlines, claims over 10% of the market share.
Some foreign airlines like Malaysia’s AirAsia and some Chinese low-cost carriers are targeting Vietnam’s airline market which sees a growth of more than 20% annually on the back of the country’s growing middle class.
Vietnam is one of the world’s leading producers and exporters of rice, but wheat consumption is growing. Imported grains and oilseeds play an important part in supplying the country’s big livestock sector.
There is no wheat produced in Vietnam. The International Grains Council (IGC) estimates its 2018-19 corn crop at 4.7 million tonnes, down from 4.9 million the year before.
According to a report by Chris Lyddon on world-grain.com, the IGC puts Vietnam’s total grains imports in 2018-19 at 14.7 million tonnes, up from 13.7 million the year before. The figure includes imports of 4.4 million tonnes of wheat, down from 4.6 million the year before, and 10.2 million tonnes of corn, up from 9 million a year ago.
The IGC puts Vietnam’s 2018-19 rice production at 28.6 million tonnes, up from 27.9 million the year before. The IGC points out Vietnam’s main crop is harvested in the first half of the following year.
Vietnam’s rice exports in calendar 2019 are forecast at 6.7 million tonnes, compared with 6.5 million the year before, making it one of the world’s five major exporters.
In oilseeds, Vietnam produces soybeans, with the IGC putting the 2018-19 crop at 1.6 million tonnes, up from 1.5 million the year before. It is forecast to import 4.8 million tonnes of soymeal, compared with 4.7 million in 2017-18.
“Wheat is the second staple food, after rice, in Vietnam,” the USDA attaché in Hanoi explained in an annual report on the grains sector. “In large cities, people consume many wheat-based foods, and in recent years the demand for bread/baguette and other baked goods and wheat-based foods has risen.
“The changes reflect the increasing pace of urbanization and increasing familiarity of consumers with convenience foods. The growing presence of fast-food chains in Vietnam, such as McDonald’s, Dunkin’ Donuts, and Burger King; western-style cafes; and, the presence of foreign convenience stores, such as Circle K, Aeon, 7-Eleven, and GS 25, are also key factors in boosting the use of wheat-based foods.”
The trend to consume wheat-based foods is largely limited to the big cities, but it is spreading.
“As a result, the consumption of milling wheat is still small but has seen slight and steady increases,” the attaché said. “This includes an increase in demand for top-quality wheat used for higher quality wheat-based products introduced by western food outlets.”
That means a steady increase in demand for U.S. wheat.
“Australian milling wheat has traditionally dominated the wheat import market in Vietnam,” the attaché said. “On average, Australian wheat accounts for over 70% to 80% of Vietnam’s total wheat imported volume.”
The USDA in Hanoi estimates the current level of demand for milling wheat at about 2 million tonnes a year. It puts Vietnamese milling capacity at about 3.4 million tonnes a year, which, with consumption of 2 million to 2.1 million, means that the mills are running at about 60% capacity.
“This leads to strong competition in the wheat milling sector and also demonstrates industry is anticipating future wheat consumption growth,” the USDA said. “The Vietnam milling industry is expected to not only supply its milled flour domestically, but also regionally to other countries in Southeast Asia.”
There are around 20 flour mills in Vietnam. The biggest mills include Binh Dong Flour Mill Co., with a capacity of 920 tonnes (wheat equivalent) a day, Dai Phong Co., Ltd, with a capacity of 200 tonnes a day, Lua Vang (old name Hiep Luc) Flour Mill (capacity 250 tonnes per day), Interflour Vietnam Co., Ltd. (1,000 tonnes a day), Mekong Wheat Flour Processing Company (800 tonnes a day), Sai Gon Flour Mill/Phuoc An (200 tonnes a day), Tien Hung Co., (400 tonnes a day), Uni President Flour Mill/Uni President Enterprises Corp (250 tonnes a day), Vietnam Flour Corporation (VIKYBOMI) (Việt Nam Kỹ Nghệ Bột Mì) (300 tonnes a day), Vietnam Flour Mill (two mills, with a capacity of 800 tonnes and 500 tonnes a day), Vimaflour (1,500 tonnes a day).
Imported grains are of vital importance to the country’s big livestock industry.
“Vietnam is one of the world’s top pork consuming nations and stands second in Asia after China,” the attaché said. “Subsequently, the Vietnam hog industry is the key driver of the local feed industry.”
In 2016, pork prices fell below production costs, forcing many small farmers out of business.
“Currently, the market is only for big players with a more fully integrated production cycle, as they are able to continue production on a very tight margin,” the attaché said. “For corn, local producers are facing challenges from competitively-priced corn from major producers, such as Argentina and Brazil.”
World market corn prices have been lower than the domestic price since 2014 and the attaché forecast that imports of corn would rise. Feed wheat imports have risen in the past two seasons, but the attaché points out that wheat cannot totally replace corn in feed.
“Currently, due to the competitive price of feed wheat, it is becoming a crucial ingredient in producing compound feed for both aquaculture and livestock,” the report said.
Corn production has become less attractive to farmers, resulting in reduced area.
“Local corn production has been unable to meet demand in recent years, and coupled with low imported corn prices, this has resulted in increasing volumes of imported corn brought into Vietnam,” the attaché said. “Local corn production faces stiff competition from major corn producers like Argentina and Brazil, and most recently from Eastern Europe countries, and cannot compete with imported corn on cost and quality.
“This discourages farmers from expanding corn area and forces them to find alternative cash crops. Young corn plants from some local corn production areas are also used to feed beef cattle, as prices for corn plants lead to higher incomes compared to traditional corn production.”
Rice, oilseeds and biotech
Rice is Vietnam’s main staple food.
“Vietnam’s decline in per capita rice consumption is consistent with other countries in Asia,” the attaché said. “As the economy develops, consumers have greater purchasing power and more access to other foods, and per capita consumption declines.”
The report cited data from the Food and Agriculture Organization (FAO) showing average rice consumption at about 145 kilograms. Even so, population increase, use in feed and use for processing, notably for beer and wine, means demand is rising by some 500,000 tonnes a year. The attaché pointed out that rice is one of the main ingredient sources for home-made feed for pigs, fish and poultry, especially in the Mekong River Delta area.
In an annual report on the sector, the attaché explained that Vietnam’s soybean production has been falling because of low yields and farmers switching to more profitable crops.
“Soybean production continues to fall well below the demand from the food, and livestock and aquaculture feed sectors,” the report said.
In 2017-18 and the year before, the United States remained the biggest exporter of soybeans to Vietnam.
In a report on agricultural biotech in Vietnam, published in December 2017, the attaché put the area of biotech crops in 2016 at 35,000, all of it corn, representing around 3% of cultivated area.
“Vietnam remains a major importer of key biotech plant products such as corn, DDGS, soybeans for animal feed production and cotton for textile industry,” the attaché noted in its report.
