Vietnam Overseas

09:19 07/10/2007

VietNamNet Bridge - Managers in the largest firms and business groups in Vietnam had decided how best to respond to policy changes that have resulted in increased competition and uncertainty but not all of them have the best choice, said a research of UNDP on 200 Vietnamese largest firms (Top 200).

Large firms in Vietnam are facing fierce competition and to thrive in the competitive global business environment of the 21st century they must make critical strategic choices.

“Given this context, some of Vietnam’s largest firms are moving into more complex and higher quality products, diversifying into related products and entering new business lines. They are establishing brands, expanding distribution channels and entering new markets,” said economist Jago Penrose, a member of the research group of UNDP.

The Binh Tien Consumer Goods Production Company (Biti’s), a private enterprise in the Top 200, has shown its capacity to respond to increased competition since 1990 when pioneering to build up its own brandname of Biti’s in the country. It is currently promoting its plans to penetrate into China, Cambodia and Laos. Such efforts have helped the company rake in approximately 1,000 billion VND per year in revenue in the last few years.

The Garment Company No. 10 ( Garco 10), a member of the Vietnam National Textile and Garment Corporation, decided daringly to move into higher quality shirts and suits that require more advanced technologies, more investment and skilled staff. This decision has helped Garco 10 compete with some foreign rivals, inherently famous from “normal products” or high volume, low margin and easy to produce garments, said Luong Thi Tuyet, Deputy General Director of Garco 10.

One of the strategic choices of large enterprises includes “diversifying into new business areas,” Economist Jago Penrose said.

He took an example of Biti’s which has recently established a subsidiary in the northern province of Lao Cai to operate in trade, hotels and tourism. Biti’s plans to replicate this in five other locations in Vietnam . Another instance is that the Vietnam Oil and Gas Group (PetroVietNam) is moving into shipping, once the domain of the Vietnam National Shipping Lines (Vinalines).

Meanwhile, developing capital markets, rising land prices and a booming real estate sector have proved irresistible to many of Vietnam’s largest firm.

UNDP’s research also showed that some other companies on the Top 200 have paid special attribution to the expansion of distribution channels since 1990. Noteworthy is the Vietnam Milk Joint Stock Company (Vinamilk) who is remarked as one of the companies having the country’s largest distribution network. Vinamilk now has 183 distribution agencies and 94.000 shops scattering in 64 cities and provinces nationwide.

Regarding contributions to the national economy, the research said Top 200, or Vietnam’s largest firms, is a locomotive for the country’s economic growth. It recommended that the state should encourage domestic firms to invest in core business areas or reinvest the gains into areas which will increase the productivity of Vietnam ’s industry and provide employment.

Garco 10’s decision to make more investment in advanced technologies and skilled staff, or Biti’s recent 3.5 billion VND project to build its owned training institute, have shown an urgent and increasing demand for skilled workers. The Vietnamese government can assist firms in the acquisition of skilled labour by improving the quality of universities and vocational schools, it said.

“Addressing them will facilitate the growth and development of Vietnam’s largest firms and the continued growth of the economy. Only with growing, competitive, large Vietnamese firms will be an impetus for the country to become an industrialised one by 2020,” Jago said.

(Source: VNA)

Top 200 firms: Right strategy - key for success

09:19 07/10/2007

VietNamNet Bridge - Managers in the largest firms and business groups in Vietnam had decided how best to respond to policy changes that have resulted in increased competition and uncertainty but not all of them have the best choice, said a research of UNDP on 200 Vietnamese largest firms (Top 200).

Large firms in Vietnam are facing fierce competition and to thrive in the competitive global business environment of the 21st century they must make critical strategic choices.

“Given this context, some of Vietnam’s largest firms are moving into more complex and higher quality products, diversifying into related products and entering new business lines. They are establishing brands, expanding distribution channels and entering new markets,” said economist Jago Penrose, a member of the research group of UNDP.

The Binh Tien Consumer Goods Production Company (Biti’s), a private enterprise in the Top 200, has shown its capacity to respond to increased competition since 1990 when pioneering to build up its own brandname of Biti’s in the country. It is currently promoting its plans to penetrate into China, Cambodia and Laos. Such efforts have helped the company rake in approximately 1,000 billion VND per year in revenue in the last few years.

The Garment Company No. 10 ( Garco 10), a member of the Vietnam National Textile and Garment Corporation, decided daringly to move into higher quality shirts and suits that require more advanced technologies, more investment and skilled staff. This decision has helped Garco 10 compete with some foreign rivals, inherently famous from “normal products” or high volume, low margin and easy to produce garments, said Luong Thi Tuyet, Deputy General Director of Garco 10.

One of the strategic choices of large enterprises includes “diversifying into new business areas,” Economist Jago Penrose said.

He took an example of Biti’s which has recently established a subsidiary in the northern province of Lao Cai to operate in trade, hotels and tourism. Biti’s plans to replicate this in five other locations in Vietnam . Another instance is that the Vietnam Oil and Gas Group (PetroVietNam) is moving into shipping, once the domain of the Vietnam National Shipping Lines (Vinalines).

Meanwhile, developing capital markets, rising land prices and a booming real estate sector have proved irresistible to many of Vietnam’s largest firm.

UNDP’s research also showed that some other companies on the Top 200 have paid special attribution to the expansion of distribution channels since 1990. Noteworthy is the Vietnam Milk Joint Stock Company (Vinamilk) who is remarked as one of the companies having the country’s largest distribution network. Vinamilk now has 183 distribution agencies and 94.000 shops scattering in 64 cities and provinces nationwide.

Regarding contributions to the national economy, the research said Top 200, or Vietnam’s largest firms, is a locomotive for the country’s economic growth. It recommended that the state should encourage domestic firms to invest in core business areas or reinvest the gains into areas which will increase the productivity of Vietnam ’s industry and provide employment.

Garco 10’s decision to make more investment in advanced technologies and skilled staff, or Biti’s recent 3.5 billion VND project to build its owned training institute, have shown an urgent and increasing demand for skilled workers. The Vietnamese government can assist firms in the acquisition of skilled labour by improving the quality of universities and vocational schools, it said.

“Addressing them will facilitate the growth and development of Vietnam’s largest firms and the continued growth of the economy. Only with growing, competitive, large Vietnamese firms will be an impetus for the country to become an industrialised one by 2020,” Jago said.

(Source: VNA)

VNECONOMY updated: 23/08/2007

The domestic seaport system remains underdeveloped and under used, with many ports operating without necessary infrastructure, according to Government officials.

To improve profits in the marine sector, the Government has developed a seaport development plan that is expected to add substantially to economic growth.

Along Viet Nam’s 3,200 km coastline there are more than 100 seaports – 14 of which are crucial to the country’s economic development.

However, none of the domestic seaports can receive medium-sized vessels of 50,000 DWT (dead weight tonne) or 2000-TEU container unit, according to Ho Kim Lan, general secretary of the Viet Nam Seaports Association (VSA).

Experts say seaport development is ad hoc.

The northern region alone has Hai Phong port and Cai Lan deep water port, while two more ports – Lach Huyen and Hai Ha – are planned for Quang Ninh province. These last three ports will be within 100 kilometres of each other.

A similar situation is seen in the central region, which in the 1990s had just two ports – Da Nang and Quy Nhon. Now, however, there is Nhon Hoi port, which is close to Quy Nhon and just 200 km from Dung Quat, which is under construction.

Meanwhile, Chu Lai Open Economic Zone has the Ky Ha deepwater port. Da Nang has the Tien Sa deep water port and Thua Thien-Hue province the Chan May deepwater port.

Due to the density of seaports and the limited supply of goods, most do not run at full capacity, resulting in significant losses.

Experts also blame poor design and a lack of accountability for the industry’s inefficiency.

Cai Lan port in Quang Ninh province, for instance was originally planned to welcome 50,000-tonne ships and 3,000 TEUs but is only able to serve ships of 10,000-20,000 DWT.

Cai Lan Port Deputy Director Nguyen Quang Dao said: “Although the water line at the Cai Lan Port is at a level that allows the entry of 50,000-tonne ships, the depth of passage to the berth is capable of handling vessels less than 25,000 tonnes. Others have to dock at distant trans-shipment points.”

“Trans-shipment costs 7 USD for each tonne of goods, resulting in a loss of hundreds of billions of dong after three years of putting the port into operation,” Dao said.

Dredging the Cai Lan port’s 7.5 km passage will cost up to 300 billion VND (18.8 million USD), he said.

There are similar problems at Cai Cui port in Can Tho City and the Dinh Vu port in Hai Phong.

The limited size and shortage of infrastructure at seaports means that goods travelling from Viet Nam to major international markets such as the US and the EU have to be trans-shipped to larger ports, such as Hong Kong and Singapore. The additional handling costs offset Viet Nam’s lower labour costs.

A 40-foot container carrying cargo to Los Angeles from Hong Kong for example costs 28 percent less than when it is shipped from HCM City.

According to general director of Viet Nam National Shipping Lines (Vinalines) Mai Van Phuc, around 80 percent of the domestic marine transport market is conducted by foreign merchant shipping.

This also affects supplies of logistics-related services, which could theoretically create profits worth dozens of billion of US dollars a year, Phuc said at a recent seminar.

“Viet Nam alone each year has to spend about 8 –11 billion USD for logistics services, nearly 60 percent of which is for marine transport-related services,” he said.

Nguyen Ngoc Hue, deputy director of the Viet Nam National Maritime Department, said: “The most effective way to avoid the scattered investment situation is to have a professional seaport development scheme that has a strategic vision of some dozens of years ahead. Seaport planning must include details for the rear of ports, and must have transparent feasibility.”

Nguyen Van Tiem, the former director of the Viet Nam Ocean Shipping Company (Vosco), said the marine transport industry must go public, and that State companies should be equitised.

Domestic enterprises involved in marine transport should join forces with each other to better compete with foreign rivals, Tiem added.

Source: Vietnam Agency

Source: Vietnam Economic Time Aug 16

Vietnam Ocean Shipping Company (Vosco), a member of Vietnam National Shipping Lines (Vinalines) will auction 50.18 million shares, or 35.85% of Vosco’s chartered capital, in its IPO at Hanoi Securities Trading Center on September 12.

The share sale is part of the company’s equitization plan.

The shares will be offered at a starting price of VND15,000. Foreign investors are not allowed to buy the shares.

After privatization, Vosco will have a registered capital of VND1.4 trillion ($87.5 million), including State holdings of 60%, staff 2.08%, and strategic partners 2.07%.

The company netted VND36.5 billion in profit in 2006 and VND26 billion in first half of this year, and gained revenue of VND1.4 trillion and VND833 billion, respectively.

Vosco is the state-owned leading shipping company in Vietnam, with a fleet of 22 vessels and four oil tankers with total load of 421,730 DWT.