VN to open up booming express delivery market

HA NOI — As part of its accession plans in the World Trade Organisation, Viet Nam has committed to liberalising the express delivery market to level the playing field for both local and foreign express delivery companies.

Viet Nam plans to open its market in 2012 to allow joint-ventures to be made with 51-per- cent foreign investment capital or to establish wholly-foreign companies in the next five years, according to Paul Needham, chief editor of CEP-Research, the first internet portal specialised on the courier, express and postal market.

The country's revenue in express delivery has grown steadily from US$50 million in 2007 to around $200 million in 2010. In urban areas where the abundance of enterprises means express delivery is in high demand, expenditure is estimated to reach between VND10-100 million per unit (US$512-$5,120).

According to HCM City's Department of Planning and Investment, the increasing number of businesses joining in express delivery service are not yet accounted for.

Big domestic and foreign companies including VNPost Express, Saigon Post, Viettel, and multi-nationals like TNT, DHL, FedEx and UPS are operating in a joint-venture model.

These companies are more powerful in technology and finance than the remaining small-scale companies in the country.

Meanwhile, companies with domestic prestige like Tin Thanh, Netco, Nasco, Hop Nhat, 247 Express and 365 Express account for 20 per cent of the market share.

The domestic companies are experienced with long-term development from three to 10 years; however, they are unable to compete with foreign express delivery companies who have powerful international networks.

The country's exports are expected to reach 8.8 per cent in 2010 and the swift movement of goods both domestically and internationally is key to facilitating and enhancing economic growth that will generate more opportunities for express delivery services.

The four leading express delivery companies, DHL, TNT, FedEx and UPS, have expanded their network in Southeast Asia in order to get a firm foothold in this market.

They have invested in their network, equipment and services as well as expanded their aviation network in Singapore, Indonesia, Malaysia, Thailand and recently Viet Nam – a newly emerging market.

International express delivery companies have entered the logistics services market, which has been growing quickly in Viet Nam.

Onno Boots, regional managing director of TNT Southeast Asia and India, said "Viet Nam has tremendous growth potential and occupies a strategic position in Asian trade being so close to China."

In Southeast Asia and Viet Nam, TNT has been expanding its network and service in a unique way. It has focused its efforts on developing a cost efficient road network service that links seven countries and 127 cities across Southeast Asia and China, including Viet Nam – a total distance of more than 7,650km.

Its unique road network is linked to its air network, thereby enabling customers to choose from a wider variety of transports that suit their needs – by air, road or a combination of both.

Today, TNT has launched an expanded and newly-designed integrated air and road hub located at ICD My Dinh, Ha Noi, to handle soaring freight volumes. — VNS

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Indonesia's Telkom eyes acquisitions in SE Asia

JAKARTA - PT Telekomunikasi Indonesia, Indonesia's biggest phone firm, said on Thursday it is looking at acquisitions in Southeast Asia as it sees its domestic market maturing.

Indonesia, Southeast Asia's biggest economy, has become one of the world's most crowded telecommunications markets, with 11 operators fighting for custom in a population of 237 million.

"Telkom is looking for acquisition opportunities in Southeast Asia, including mobile phone providers as our market is starting to mature," said CEO Rinaldi Firmansyah.

"We need a new market but we will not go to Africa. It's too far...But in Asia we're open for any acquisition possibilities," he said on the sidelines of a conference.

Telkom, which rarely comments on regional expansion, tried last year to acquire a stake in Iran Telecom but failed as it lacked backing from Indonesia's government.

Firmansyah did not say how big the firm's warchest would be, but said earlier on Thursday that it sees capital expenditure in 2011 at about US$2 billion.

"We see the same capex for next year at about $2 billion to finance our infrastructure projects as well as maintenance," said Firmansyah.

Telkom needs to invest heavily in telecoms infrastructure such as towers, and is also shifting its focus to data services to earn higher profits as Indonesian subscriber growth slows.

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Vietnam SE Asia’s second largest beer consumer

Brewers are trying to capitalise on Vietnam's beer market which is forecast to be one of the region's largest

Photo: AFP

Euromonitor International has predicted that Vietnam’s beer market will continue to grow by 5.6 percent in the next few years, following Laos and Cambodia in Southeast Asia.

According to the global market research company, Vietnam is currently the second biggest consumer of beer in Southeast Asia after Cambodia. In 2009, the country consumed 1.6 billion liters of beer, a surge of 56 percent over 2004.

These days, most of the world biggest beer producers are present in Vietnam, including Budweiser, Sappora, San Miguel and Fosters.

Most recently, Asia Pacific Breweries (APB) from Singapore teamed up with Vietnam’s Saigon Trading Group (SATRA) to set up a joint venture called Vietnam Breweries Ltd (VBL) in central Da Nang City.

Last weekend, the VBL commissioned a production line with the capacity to produce 50,000 bottles of ‘La Rue’ beer an hour.

As one of the first beer producers in Vietnam, right after the country opened up its doors 20 years ago, APB plans to invest US$100 million in Vietnam’s beer industry over the next 18 months.

Japan’s Sapporo also plans to link up with Tobacco Vietnam to produce beer from 2012.

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US-ASEAN economic ties 'priority' despite no-show

HANOI - Economic ties between the United States and Southeast Asia are "a high priority", an embassy spokesman said Saturday despite the absence of US officials from a key regional trade meeting.

Ministers from China, Japan, India and other leading trade partners of the 10-member Association of Southeast Asian Nations (ASEAN) attended the annual talks which ended Friday in the central Vietnamese city of Danang, but US officials were absent.

Analysts blamed domestic US political factors for the no-show.

"US government economic and trade officials maintain constant and active dialogue with their ASEAN counterparts," the embassy spokesman told AFP.

"And we consider the US-ASEAN economic relationship to be a high priority."

The spokesman, who declined to be named, added that representatives of the US-ASEAN Business Council -- which includes executives from major corporations -- did attend the Danang meetings.

"The American business community is a strong partner for ASEAN," the council said in a statement. It has participated for more than a decade in the annual ASEAN economic talks.

On a visit in June to Vietnam, deputy US trade representative Demetrios Marantis said the US is the biggest foreign investor in the country, which currently chairs ASEAN.

Vietnam and two other ASEAN members, Brunei and Singapore, are part of talks with the US and others aimed at forging the Trans-Pacific Partnership trade deal.

ASEAN Secretary General Surin Pitsuwan said in Danang that "we are disappointed" the US could not attend the annual economic discussions but he described Washington's commitment to the region as "quite strong".

Surin said there were "many levels of engagement", and economic ministers from the bloc had visited the US in March.

The US is Southeast Asia's fourth-largest trading partner, with two-way commerce worth more than US$149 billion last year, according to ASEAN data.

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Vietnam, Indonesia top US companies’ Southeast Asia plans

Vietnam and Indonesia are the top investment destinations in Southeast Asia for US businesses, according to the American Chamber of Commerce.

Companies are “much more positive” on the prospects for regional growth, even as dissatisfaction over corruption increased, according to a business outlook survey published by the chamber Thursday. Improved economic links within Southeast Asia and higher profit expectations are among the reasons prompting businesses to consider expansion, the survey showed.

Asia’s rebound is outpacing much of the rest of the world as exports boost earnings and domestic demand strengthens, benefitting companies including Singapore Airlines Ltd. and Malaysia’s Sime Darby Bhd. The Association of Southeast Asian Nations said its 10-member nations drew 3.6 percent of global foreign direct investment in 2009, up from 2.8 percent in 2008.

Most companies surveyed “continued to expand or expand significantly in Asean over the past two years” and more plan on doing so over the next two years amid optimism about growth, the chamber said. “This business expansion is directed most strongly towards Vietnam, Indonesia, Thailand and Singapore.”

US businesses were mostly satisfied with the availability of low-cost labor except in Singapore and Malaysia, the report showed.

The greatest concern for companies in most countries is corruption, except for Singapore and Thailand. Respondents cited the city-state’s housing costs and the stability of the Thai government as the main worries in those two nations.

“Corruption continues to be a source of great dissatisfaction for respondents, many of whom cited it as a barrier to doing business in Asean,” the chamber said. “The level of local protectionism also remains a concern in a range of countries -- Malaysia, Thailand, Vietnam, and Indonesia.”

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