VietNam Business: Minh City

Showing posts with label Minh City. Show all posts

Saturday, February 19, 2011

HCMC: hi-tech industry popular with investors

Many world leading hi-tech groups such as Intel from the US , Nidec
from Japan and German based multi-national Bosch are increasing the
scale of their investment in Ho Chi Minh City , an indication of how
attractive the hi-tech industry has become to investors.

Intel Vietnam said it would officially inaugurate the first phase
of its largest global micro-chip plant, with an investment capital of 1
billion USD, at the Ho Chi Minh City Hi-tech Zone later this month.

The first batch of Intel chips worth 120 million USD is expected to be exported later this year.

Also in October, Bosch Vietnam will have its software research and
production centre in Ho Chi Minh City up and running, the company’s
second major production facility in the Asia-Pacific region.

According to Bosch Vietnam ’s Managing Director Vo Quang Hue, by
the end of this year, the company will have begun the first phase of a
24 million USD auto-parts factory in Long Thanh district, Dong Nai. It
also plans to inject an additional 30 million VND to finish the factory
by 2015.

Vietnam is now the only Southeast
Asian market where Bosch are involved in all three stages, research,
production and sales.

Despite operating four
projects in HCM City , with a combined investment of nearly 500
million USD, Nidec President Nagomori Shigennobu still says his company
will continue with its investment, research and development activities
in the HCM City Hi-tech Zone, as well as call on its Japanese partners
to invest more in this field.

According to the
General Secretary of the Vietnam Electronics Businesses Association Tran
Quang Hung, the presence of foreign groups in the hi-tech industry
creates opportunities for Vietnamese workers to learn and improve their
skills and gradually expand the number of subsidiaries producing
components for overseas companies in the next 5-10 years.

Many small and medium sized Vietnamese companies investing in the
hi-tech industry could also become partners of foreign groups to
manufacture spare parts and help to improve the country’s
competitiveness in this sector, he added.

Vietnam
has several advantages over other regional countries, such as cheap
labour costs and a convenient location for transporting goods to other
markets in the Asia-Pacific region, said Hue, adding that in order to
develop its hi-tech industry, the country should define itself as a
destination for large manufacturers./.

Saturday, February 12, 2011

Sacomreal to list 100 million shares in Vietnam, chairman says

Sacomreal to list 100 million shares in Vietnam, chairman says Saigon Thuong Tin Real Estate Joint- Stock Co., a unit of the fourth-biggest bank on Vietnam’s main stock market, plans to list 100 million shares on the Hanoi Stock Exchange next month, the unit’s chairman said.

The shares will start trading on Nov. 9, Dang Hong Anh said in a telephone interview Thursday.

Vietnam’s stock market debuts, 75 percent of which rose in the first eight months of the year, have all dropped bar one since September, amid concerns that high interest rates will crimp lending and the currency will fall further. The benchmark VN Index dropped 6.9 percent this year and closed at 458.66 today.

Sacomreal, as the Ho Chi Minh City-based property developer is known, plans to go ahead with the listing as “we still believe in our future because we target a 30 percent increase in profit a year from 2011 to 2015,” company General Manager Thai Van Chuyen said Thursday.

Sacomreal, whose businesses include real-estate, property consulting and office rental, has since 2008 started construction on projects including Sacomreal Hoa Binh Residential Building, Office Building General Limex and Tan Thanh Urban Area in Ho Chi Minh City, it said in a statement on its website.

The company had a pretax profit of VND668 billion ($33.4 million) in the first nine months of the year, exceeding the target of VND650 billion for the whole of 2010, Chuyen said.

Demand for office space in Ho Chi Minh City continues to grow, though rents are expected to come down, especially in buildings with lower occupancy, according to the third-quarter report from CB Richard Ellis Group Inc.

The unit of Saigon Thuong Tin Commercial Joint-Stock Bank is trading from 30,000 dong to 40,000 dong per share in the so- called over-the-counter market, Chuyen said. Companies don’t have to set initial prices for the first trading day on the country’s second-biggest bourse.

Friday, February 11, 2011

Amid a flood of mall space, retail hits the skids

Amid a flood of mall space, retail hits the skids The retail market in Ho Chi Minh City is believed to have great potential – but that potential doesn’t always translate to success.

When it was opened last December, the Kumho Asiana Plaza in District 1 had some 30 stores selling luxury products. But after months of slow sales, many tenants decided to quit because they could no longer afford the rent.

Now there are only a few stores left in the mall – one of the biggest shopping centers in the city. The tenants continue to pay rent and management fees in the face of flagging sales.

The Kumho Asiana Plaza, operated by Colliers International Vietnam, is located in downtown Ho Chi Minh City. But store owners said even this location doesn’t translate to more customers.

Another shopping mall, Saigon Paragon in District 7, was temporarily shut down early this month.

Le Hoai Anh, general director of Kim Cuong Company, the operator of the shopping mall, admitted that the closure was caused by a failure to effectively run the mall. “We never managed a shopping mall before and that’s why there were mistakes leading to an unexpected business situation,” she told Thanh Nien.

Anh said her company has hired a management firm to run the mall, which is expected to re-open at the end of this year. Saigon Paragon cost US$30 million to build. It was opened April last year.

Analysts said while Ho Chi Minh City is considered a great potential retail market, not all of its shopping centers are successful, especially those far from the city center.

Meanwhile, high rents (from $70 to $180 per square meter) make it hard to ensure profits.

More to come

More retail centers will continue to come online in the city.

According to the Industry and Trade Department, there are 102 supermarkets and 28 shopping malls in the city. The department expected the retail area in the city to reach 740,000 square meters in 2013 - double the current figure.

UK real estate services firm Savills issued a report last week that indicated three more centers would appear before the end of the year: the Crescent Retail, Bitexco Financial Tower and Thien Son Plaza. The trio will add a total of 50,000 square meters of retail space to the market.

The firm said the city’s retail market has “strong potential” in the mid-term.

But right now, some industry insiders aren’t happy.

Tham Tuck Choy, general director of Parkson Vietnam was quoted by Tuoi Tre as saying his company posted an average growth rate of 30 percent a year, but this is lower than expected.

He said, of the customers shopping at Parkson’s outlets, 15 percent are tourists and foreigners working in Vietnam while the rest are local consumers. The purchasing power of this local customer group is rising, but not steadily, Choy said.

A toy retailer who wished to remain anonymous said the retail market depends on the growth of the middle and upper class and their demand for expensive products.

But right now there are more window-shoppers than real buyers.

Sunday, January 23, 2011

Be original, add value

Local firms advised to realize economic potential of creative industries

Vietnamese footwear products displayed at a shopping mall in Ho Chi Minh City. Experts say local products need more distinctive designs to make a bigger mark in both export and home markets.

Local enterprises should get involved in and take advantage of creative industries to add value to their business, experts said at a meeting held in Ho Chi Minh City last week.

They said although the industries, which cover a range of activities like advertising, designing, performing arts, architecture, crafts, toys and games, were relatively nascent in Vietnam, they had the potential to make significant contributions to the national economy.

At the meeting organized by the Vietnam Creative Enterprise Network in HCMC, Edward Gomez, a Filipino design consultant, and Vietnamese fashion designer Ngo Thai Uyen shared their ideas about global market trends and creativity with participants from the textile, garments, advertising, plastics, furniture, communication and shoe-making industries.

Gomez said many buyers and consumers were seeking unique products that combine ethnic elements with contemporary designs.

He said competition at the low-end segment was strong and required significant production capacity while the luxury market focused more on distinctive designs, higher quality and smaller quantities with greater flexibility in pricing.

Gomez also said that buyers were now seeking other suppliers than Chinese firms that were now focusing on their home market.

Dang Vo, chairman of the network, told Thanh Nien Weekly that creative industries are becoming an increasingly important component of the national economy. The government should see it having the potential to make significant contributions to the country’s gross domestic product and issue policies to support its development, he said.

The development should start from training, said Tran Ngoc Danh, managing director of Arts and Design School, a member of the Creative Enterprise Network.

Danh said the school, supported by the British Council, would start its first training course next month that focuses on creative skills for designers in key export industries like furniture, garment, plastics, handicrafts and toys.

Tu Minh Thien, director of the Investment and Trade Promotion Center, said HCMC authorities considered the industries essential for growth.

“Authorities want the development of the city attached to the added value provided by creative industries,” he said at a meeting held July to announce the city’s Creative Saigon 2010 Plan to develop four of the creative industries, including communications, interior décor, information technology, and packaging and labeling.

Thien said the plan aimed to promote designing activities through training courses, fairs and contests.

The British Consul General in HCMC, Tim Brownbill, said his government considered assisting Vietnam in creative industries as a strategy to further its trade and investment relationship with Vietnam.

Britain is one of the European states with a strong development of creative industries, earning 5 percent of the nation’s total exports.

No parallel

Globally, creative industries rake in revenues of US$3 trillion and account for a significant part of national economies in Asia, said Thien.

Thien said the industries added 12 percent to Thailand’s GDP, 6.5 percent to Indonesia, 5.8 percent to Korea and 5 percent to the Philippines, but in Vietnam, this was miniscule.

Danh of the Arts and Design School said the furniture, interior décor and advertising industries have grown strongly in the country, luring investment from foreign firms and their supporting agencies.

However local industries were not making full use of the creative potential, he said.

Most export-oriented industries are implementing contracts where the importers supply the designs, and this is negatively impacting their own creativity and competitiveness, he added.

Vo Van Yen, deputy head of the Gia Dinh Textile and Garment Corporation’s Sales Department, conceded the corporation has not invested much in designs for both domestic and export markets.

“The designs that we create are mostly based on consumer trends or that used by other producers.”

The network’s chairman Vo said many local firms were yet to develop their design functions as they were afraid of being copied, while other firms worried about how much they would cost.

They were also not accustomed to outsourcing their design needs, said Danh.

Ong Din Han, country manger of Global Sources, said local firms should change their mindset about creative industries and invest in them. They would otherwise find it difficult to get new customers, he said. Global Sources is a Hong Kong-based service firm that connects buyers and sellers globally.

Vietnamese furniture was unique in the international market but other products like handicrafts did poorly in attracting customers, said Han. His company would hold a fair for Vietnamese export products next year to showcase their creativity, besides quality and prices.

Saturday, January 22, 2011