VietNam Business: local

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Sunday, February 13, 2011

Weak supporting industry threatens FDI

A Honda motorbike engine on display at an exhibition in Ho Chi Minh City. Vietnamese firms are able to meet only a very small part of the demand from Japanese investors for spare parts and accessories.

Vietnam faces a reduction in foreign capital inflow even as it implements free trade agreements with its partners because its underdeveloped supporting industries will be a discouraging factor, experts say.

The Japan International Corporation Agency (JICA) has said Vietnam would not be a choice for foreign investors interested in the ASEAN region to set up factories over the next five years, if the supporting industries developed very slowly.

ASEAN members including Vietnam will complete the Common Effective Preferential Tariff, cutting import taxes on most items to zero in 2015. Some tariffs will be removed three years later.

JICA expert Katsumata Teruhisa said investors would house their factories in countries where supporting industries are highly developed, and only consider the others as potential markets.

Vietnam’s supporting industries were far less developed than other ASEAN countries like Thailand, Malaysia and Indonesia, he said.

Vietnamese firms are at present able to meet only a very small part of the demand from Japanese investors for spare parts and accessories in the automobile, motorbike, electric and electronic industries.

The local content ratio was about 5 to 10 percent in automobiles, 20 to 40 percent in electrics and electronics and 70 to 80 percent in motorbikes, Teruhisa said.

Half the content in local motorbikes was provided by foreign traders or investors who’ve set up factories in the country, he added.

Le Tuan Anh, managing director of Cathaco, said it was not easy for local firms to start up supporting industries because of the capital and skilled labor force required. Moreover, those entering this business need to be patient about getting returns on their investment, he said.

Cathaco, one of pioneers in the industry since 1999, manufactures parts and components of television sets or computers for foreign-invested businesses.

Anh said many local firms were not patient enough to run supporting industries which require producers to take care of details. They typically wanted to see their profits very quickly with minimum trouble, he said.

“That is the reason why only a small number of small- and medium-sized enterprises are involved in the (supporting) industries and why they have developed slowly in the country,” he told Thanh Nien Weekly.

Anh said his company was seeking foreign partners in Singapore, Thailand, Malaysia or China to join a new project which aims to increase its capacity and competitiveness because it was difficult to find local partners.

More time needed

Viroj Sirithanasart, managing director of Thai Tool and Die Industry Association, said it takes at least 10 years for a country to develop its supporting industries and Vietnam would need more than that.

Government support with favorable development policies and the supply of skilled labor was necessary for this development, he stressed.

Sirithanasart said Thailand had started developing supporting industries for electronics, plastics and steel over 10 years ago and now the country is focusing on the automation industry.

Thai supporting industries mainly serve the automobile industry and their capacity, with about 50,000 firms in the fray, exceeds its export demand.

Vietnam should utilize support from France and Japan, he said, adding the latter has also helped Thailand to develop is supporting industries.

Thai businesses are looking to collaborate with Vietnamese partners to develop the industry in the country, he added.

JICA has said it is developing a project to help increase local content in products made by Japanese businesses in the automobile, motorbike, electrical and electronic industries.

The project, which will work with 100 businesses over four years from 2010, was surveying requests from local businesses in three main regions of the country, the agency said. It said 21 businesses have been selected so far to receive support from Japanese experts in the technical aspects of plastic production and die-casting as well as management activities.

Wednesday, February 9, 2011

Visiting Indian pharmaceutical firms seek local partners

Seventeen Indian pharmaceutical enterprises on Oct. 14 met with HCM
City partners during a trade-exchange programme to seek more
opportunities in the field.

The companies produce a wide range of pharmaceutical goods, including health food and veterinary medicine.

Pharmaceuticals are one of the major products that India exports to Vietnam .

Two-way trade between the two countries was more than 2 billion USD in 2009, with an annual growth of 20 percent.

From 2008-10, the Vietnamese pharmaceutical industry increased turnover by 12 percent annually.

Last year, the industry sold around 700 million USD of drugs on the
local market. The rest, which amounted to 50 percent of sales, was
imported medicine.

Vietnam also exported 40 million USD worth of drugs last year, an increase of 20 percent compared to 2008.

However, the local pharmaceutical industry is expected to continue to
produce only basic medicines, and will not manufacture specialised drugs
for heart or cancer diseases.

Most of the raw materials are imported from China (25 percent) and India (21 percent).

Last year, Vietnam spent 1.17 billion USD on imported medicines.

Demand for medicine per capita increased from 6 USD in 2001 to 16.5 USD in 2008, and is expected to reach to 25 USD in 2015./.

Friday, December 3, 2010

Exhibitors hopeful of deals at healthcare show

Entrepreneurs in a talk at the Pharmed & Healthcare Vietnam 2010 - Photo: Dao Loan

HCMC – Nearly 230 local and foreign pharmaceutical and healthcare firms are pinning high hopes on a healthcare exhibition that kicked off in HCMC on Wednesday.

While many local firms are introducing new medicines and materials at the four-day Pharmed and Healthcare Vietnam 2010, foreign participants seek deals to sell machinery, equipment and new technologies for drug production and clinics.

The fifth annual exhibition at Tan Binh Exhibition and Convention Center in Tan Binh District features some 370 booths of local and foreign firms, including those from the Netherlands, Russia, England, France, Germany and Canada.

Representatives of some local firms told the Daily that their companies want to promote new medicines and find foreign partners to export products while foreign enterprises are looking for local clients and distributors.

“We are promoting a new cough medicine made from herbal materials and want to find foreign partners here. We’ve met some potential partners this morning,” said Nguyen Thi My Hanh, deputy sales director of OPC Pharmaceutical Joint-Stock Company.

She said OPC has exported medicine to Laos, Cambodia, and Eastern Europe, and has just had a partner from Nigeria. However, the company wants to increase the export proportion in its total revenue.

Pham Duc Thinh, chief representative of Vietnam-Korea Medical Corporation, said the company wanted to boost sales of equipment and to seek partners from local hospitals.

“We’ve found some clients in last year’s exhibition. We hope to find some new clients here,” he said.

Petra Kopecka, head of international relations of BTL, a manufacturer of physical therapy and cardiology products, said the local market was growing and “that’s why the company has just opened an office in the country along with joining the exhibition to promote products and seek local distributors.”

“I’m very much positive about business in Vietnam,” she said.

Deputy Minister of Health Cao Minh Quang said, “Both local and foreign firms are having a big chance to develop business in the country.”

The ministry is carrying out a plan to build more hospitals in districts and provinces across the country, he said, so “there are huge investment opportunities for entrepreneurs because the sector has the high demand for infrastructure, health equipment and technology transfer,” he said at the opening ceremony.

The event is organized by the Vietnam Pharmaceutical Companies Association, Advertisement and Fair Exhibitions Co., Health Communication and Education Center, and Vietnam Medical Products Import-Export JSC.

Tuesday, November 30, 2010

Investors, authorities in Delta need to work together

CAN THO — Investors in the Cuu Long (Mekong) Delta provinces should foster closer ties with local authorities to benefit fully from their support, said business representatives at a conference on Cuu Long (Mekong) Delta Investment and Development in Can Tho City last week.

"Investors should place their trust in the local authorities," said Nguyen Thien Bao, general director of PetroVietnam Finance Corporation (PVFC). "They can solve the thorniest difficulties for them."

He cited the example of the Chevron gas pipeline that had to pass through six provinces. He said local authorities worked together to clear a huge tract of land for the project.

"They have both the power and the necessary means to achieve a company's goals," he said.

Meanwhile, Hank Tomlinson, chairman of Chevron Viet Nam, which runs the Lot B gas supply off southernmost Ca Mau Province and the gas pipeline, said: "It's a win-win relationship. It's very important to understand who your partners are and whether you work with central or provincial governments."

Vo Quoc Thang, chairman of the Association of Young Entrepreneurs, said businesses and local authorities should think of themselves as friends.

"They [local authorities] are more open-minded and more flexible than previously," he said.

Huynh Ngoc Quy, deputy director of Phu Quoc Island-based La Veranda Resort, said the local government had insured that investment in the area had gone smoothly. However, he said poor infrastructure on the island was still a problem.

Chairman of US-based Caterpillar Asia Kevin Thieneman said the Cuu Long (Mekong) Delta must reduce material and logistical costs.

Thieneman said he was "pleased to see a continued focus on construction of national highways and expansion of existing roads," adding that he was excited by the prospect of a pan-Asian rail link.

Master plan

The master plan for infrastructure development in the region presented by Deputy Minister of Transport Ngo Thinh Duc includes a comprehensive national network of roads, railways and waterways, backed by a series of river and sea ports and international airports.

Vo Quoc Thang, who is also chairman of Dong Tam Brick Company, said it took just two and a half hours to travel from HCM City to Can Tho, a 200-km journey, made possible in such a short period of time because of the Sai Gon-Trung Luong Expressway and the Can Tho Bridge over the Mekong River.

"When the remaining section of the expressway from HCM City to Can Tho is completed, we will travel between the two cities in just one and a half hour," he said.

However, Duc complained that investors were not interested in infrastructure projects because it brought smaller returns than other forms of investment.

"The Government will mobilise all available resources and create favourable conditions to attract investment in infrastructure," he said.

Meanwhile, Dang Huy Dong, the Ministry of Planning and Investment's deputy minister, said a number of projects would soon be put out to tender under the Government's Public-Private Partnership model.

"The master plan is ideal, but we should accelerate its implementation," said Nguyen Xuan Thang, vice chairman of the Institute of Social Sciences.

He also stresses the need for policy integration and co-ordination.

"Inter-regional integration is a very serious and difficult problem in the Cuu Long (Mekong) Delta," he said.

"Provincial governments think in terms of local needs not regional development," he said.

"Leaders in the Mekong provinces should develop a common consensus and put regional benefits ahead of local benefits," he said.

"The enterprise network is disconnected and lacks co-ordination," he said. "Most enterprises are small – and medium-sized and not financially and technologically connected.

"We don't have supporting industries, and it is a fatal drawback."

Doan Duy Khuong, vice chairman of the Viet Nam Chamber of Commerce and Industry, said industrial integration was a prerequisite to improving a country's productivity. He said agricultural and aquacultural sectors needed to better integrate in the Cuu Long (Mekong) Delta. — VNS

Green Awareness Of Staff Is The Utmost Reward

On September 11, the seventh annual Green Day program will start at all six facilities of Victoria Hotels & Resorts in Vietnam and Cambodia, asserting its strong commitment to environment protection besides business. Eric Simard, managing director of Victoria Hotels & Resorts, has a talk with the Weekly about the program. Excerpts:

Q: Victoria Hotels & Resorts is going to organize the 7th annual Green Day Program at its facilities in Vietnam and Cambodia. What are some important points of the program this year?

A: As usual, our properties will work with local volunteers and authorities to launch various green activities. Victoria Sapa Resort & Spa will organize a clean-up around Sapa Lake, the stadium, the central square and tourist spots around the city such as Ta Van, Lao Chai and Cat Cat. Victoria staff will work alongside local school children, who are mostly from minority hill tribes, with the participation from local authorities and partners.

Along Vietnam’s coastline, Victoria Phan Thiet Beach Resort & Spa will divide the clean-up into two areas, the main road and the beach. The resort expects around 350 participants including the pupils of Phu Hai School, the youth and women organizations of Phu Hai Ward, and 150 Victoria staff. Meanwhile, Victoria Hoi An Beach Resort & Spa will be cleaning the streets, the river and beach areas with the help of Hoi An Eco Tour.

In the Mekong Delta, with the help of students from Thu Khoa Huan Secondary School, local residents and volunteers, Victoria Chau Doc Hotel is organizing a clean-up of Sam Mountain. Some 120km away, Victoria Can Tho Resort will be picking up garbage from the Hau River with the participation from hotel staff as well as Can Tho University and Can Tho Tourism College.

In the neighboring country of Cambodia, Victoria Angkor Spa & Resort will organize a clean-up along the river in Siem Reap as the hotel wishes to promote environmental consciousness among the local community.

It can be said that Victoria has organized the Green Day program successfully in the past six years. Why did the Victoria decide to organize the program annually from the onset?

As Victoria is possibly the pioneering international group of hotels to be established in these remote locations in Vietnam, the company felt responsible to inculcate environmental consciousness at early stages so that future generations can continue to enjoy these beautiful destinations in pristine conditions.

And needless to mention, such efforts can only be successful with the support from our dedicated team of local staff, provincial authorities, schools and various institutions.

Which are the most significant achievements the Victoria has made in past years from the Green Day program?

Apart from the numerous local and international awards our hotels has received for our green efforts, the most rewarding achievement is to see our local team of staff conscientiously being green every day within the hotel as well as in their own homes.

What are the real values of the meaningful program?

The ultimate purpose is to provide sustainable tourism in our destinations for future generations to enjoy. We have seen the negative impact of tourism development in many countries, and as more and more local communities become dependent on the tourism industry for their livelihood, it is crucial that we take the leading step in setting the perfect example in spreading the green message.

Personally, which is your most impressive memory about the program?

My most impressive moment was the Green Day event organized at Victoria Sapa three years ago as we worked with 1,500 pupils from 12 different schools from various remote villages. It took over two months of preparation with the school teachers for this large-scale cleaning-up event.

We had to supervise the children carefully to ensure they do not pick up any dangerous items such as sharp objects or broken bottles. It was particularly significant to me that we were able to participate in such an educational program on the importance of preserving the ecology systems within the northern mountainous region.

What will Victoria Hotels & Resorts do to strengthen its sustainable development in Vietnam?

We will ensure that all of our renovation and refurbishment within existing properties will take green measures as top priority, and we will also constantly seek improvement in implementing more green policies.

Each of our properties has an appointed Green Committee which consists of all leading department heads, and periodic meetings are held to ensure green initiatives are followed through.

Saturday, November 20, 2010

Beer imports rise on luxury tax cut

Beer imports rise on luxury tax cut Beer imports have increased sharply this year even though industry insiders say local production surpassed demand for the popular beverage.

Beer imports have increased sharply this year even though industry insiders say local production surpassed demand for the popular beverage.

At Cat Lai Port, which handles 80 percent of imported goods brought into Ho Chi Minh City and neighboring provinces, beer imports have reached US$282,661 so far this year. The imports, comprising more than 33,800 cases and 40,140 bottles, rose 55.2 percent in terms of value compared to the same period last year.

Customs officials at the port said tax cuts have driven a surge in imports this year. The luxury tax rate on beer products was cut to 45 percent from 75 percent last year. It is set to be lowered further to 30 percent in 2012.

According to the Vietnam Beer, Alcohol and Beverage Association, local beer consumption is around 28 liters per person per year. There are around 350 beer production factories around the country, with more than 35 major plants that have a capacity of more than 15 million liters a year.

A major beer producer who wished to be unnamed said Vietnam’s beer output has already outpaced local demand and many production lines are not running at full capacity.

Industry insiders have also questioned a recent decision by Ministry of Industry and Trade to allow a large volume of Heineken beer imports.

According to the decision, the import of 650,000 cases, equivalent to nearly 5.15 million liters, were meant for market study purposes.

However, industry insiders said the quantity was too big considering Heineken already holds a large market share and has production facilities in Vietnam. They suspect that the imports are meant for sale, given the preference among local customers for imported products.

The complaints have prompted the ministry to revoke the permission granted to Vietnam Brewery Limited, the producer of Heineken beer in Vietnam.

Thursday, November 18, 2010

Lending rate almost beyond enterprises’ reach: report

The organizers of the survey Vietnam Business Insight Survey announce the results at a conference in HCMC - Photo: Thu Nguyet

HCMC – Many local enterprises are taking out short-term loans with interest rate of more than 12% a year, which they say they can’t afford for a long time, according to a survey report released on Thursday.

The Vietnam Business Insight Survey, conducted among nearly 400 enterprises in the country, shows the current interest rate of short-term loans is nearly touching the unaffordable level for many local companies. It means many of them are hardly able to burden the high rate any longer.

The survey is made every quarter by the Vietnam Chamber of Commerce and Industry (VCCI) in co-ordination with the General Statistics Office and Asia Competitiveness Institute, under the financial support of the Asia Foundation.

In details, two-thirds of nearly 400 corporate respondents are borrowing short-term loans at an annual interest rate of more than 12%. About 60% of these enterprises say the lending rate is unreasonable, and 36% of them can’t afford the high capital cost loans in the long term.

Therefore, instead of borrowing from banks, they resort to other capital sources to support their operations and production, which negatively affects their investment strategy. According to the survey, about 94% of business respondents say under-12% lending rate is reasonable for them.

Besides the expensive loans, the survey found many local companies are facing challenges from lack of electric power and skilled labor, and traffic congestion.

In addition, local companies are coping with obstacles from the current business environment, said Vu Kim Hanh, vice chairwoman of Leading Business Club, at a conference to release the survey in HCMC.

Hanh explained that they suffered fierce competition from fake, cheap and smuggled goods. Hence, some of them stopped their production and were having their products outsourced to China then labeled “Made in Vietnam” to reduce costs of the products.

“Even some companies recognized as producers of high-quality Vietnamese products are outsourcing to China and label the goods as domestically made,” she said.

Hanh added that local enterprises also told her that they were burdened by un-official fees but didn’t give any details. Costs for after-sales services, promotion and environment protection are challenging local producers.

The survey also shows local enterprises’ trade and production improved in the second quarter of this year compared with the first quarter.

Wednesday, November 17, 2010

Lending rate almost beyond enterprises’ reach: report

The organizers of the survey Vietnam Business Insight Survey announce the results at a conference in HCMC - Photo: Thu Nguyet

Besides the expensive loans, the survey found many local companies are facing challenges from lack of electric power and skilled labor, and traffic congestion.

“Even some companies recognized as producers of high-quality Vietnamese products are outsourcing to China and label the goods as domestically made,” she said.

The survey also shows local enterprises’ trade and production improved in the second quarter of this year compared with the first quarter.

Sunday, October 24, 2010

Saigontourist arranges MICE tour for 1,500 guests

HCMC – Saigontourist Travel Service Company will on Thursday start the MICE (meetings, incentives, conventions, exhibitions) trip in the coastal city of Nha Trang for the first batch of a big group of 1,500 staff of Prudential Vietnam, the tour operator said.

Doan Thi Thanh Tra, marketing manager of Saigontourist, said that during three days, the first group of 500 guests would join team-building activities, sight seeing tours, and social activities among others.

She said along with the big group from Prudential Vietnam, Saigontourist was also arranging MICE tours for 20 other groups of 8,000 local travelers this month. The number of such guests is increasing more this month because as season for local MICE guests is coming.

According to Tra, the demand for MICE tours from local guests has been increasing strongly in recent years.

The company has served 40,000 local and international MICE travelers in the January-August period, up 20% year-on-year. The segment of local MICE guests posted stronger growth at 32.2%, she said, adding locals prefer destinations like Phan Thiet, Nha Trang, Danang, and Hoi An.

Sunday, September 19, 2010

‘Hold us to higher standards’

In a somewhat ironic development, local jewelers are asking the government for tighter control over their business

A jewelry shop in Ho Chi Minh City. Many jewelry companies said they are undercut by competitors who do not care about the quality of their products.

All that glitters is not fully gold.

This is what many local jewelers are saying as they call for the government to intervene with a quality management policy that they feel is needed to protect their business and reputation in both domestic and export markets.

The jewelers are troubled by unfair, corner-cutting practices by some of their peers who they say are not paying enough attention to quality or credibility.

Cao Thi Ngoc Dung, director of Phu Nhuan Jewelry (PNJ), said she was worried whenever her firm launched new products because they could be undercut by counterfeits offered at lower prices.

Dung said competitors were “dumping” their products to win consumers and in order to do this they compromised on the quality of their products to lower production costs.

There was no national standard for jewelry that they needed to adhere to, so they are able to deceive consumers, she said.

Nguyen Van Dung, director of My Linh Ngan Jewelry, said it was easy for consumers to buy rings, chains and other jewelry with lower gold content than claimed in several jewelry shops in Vietnam.

For example, he said, 18-carat jewelry should have 75 percent gold content but jewelry sold in many shops had a lower content of the precious metal at just 65 to 68 percent, and in some cases, even 51 percent.

Along with China and India, Vietnam is among the world’s largest consumers of gold and local consumers prefer 14, 18, 20, 22 and 24 carat jewelry. Typically, jewelry cannot be made with 24 carat gold. It is mixed with other substances to make it stronger. Some jewelry shops claim that their items are made with 24 carat gold when the actual content could be 23 or 22 carats.

Dung of My Linh Ngan, who is also chairman of the Saigon Jewelry Association, said it was difficult for local consumers to assess gold content in jewelry or other products because there was no state monitoring agency to protect them.

He said producing and trading in gold jewelry that was “under standard” has become an accepted practice in Vietnamese shops, and shopkeepers agree to sell jewelry despite knowing that the claims of gold content are wrong.

Typically, explained one shopkeeper, they only buy back from customers the jewelry they themselves have sold, and if the item is from another shop or source, they check the gold content before making payment.

The government should issue national standards for gold like governments in Hong Kong, the US, Malaysia, India and Singapore to protect consumers and the jewelry industry alike, Dung said.

Pham Van Tam, deputy chairman of Vietnam Gold Association, said national quality standards for gold products and jewelry would increase liquidity in the market because it would boost confidence among both consumers and shopkeepers.

As of now, jewelry products are priced lower in Vietnam than in other markets because local consumers were unwilling to pay high prices for products that they used as assets, and not for fashion purposes, said local firms.

They said lowering the gold content in jewelry allowed cheaper prices and higher profits.

Hoarding gold in the form of jewelry is sometimes preferred to gold bars and coins because they are easier to transport, one shopkeeper explained.

Such practices impacted the export market because importers would not believe in the quality of jewelry made by local firms, major jewelers and traders complain.

Vietnam exported US$900 million worth jewelry in the first five months of 2010, the Vietnam Gold Association said without releasing any comparative figures. The country shipped $2.3 billion worth of gold bars and materials last year.

About 3,000 businesses process and trade in gold products in Vietnam, employing 10,000 workers, according to the Saigon Jewelry Association.

Jewelry industry ignored

Nguyen Thanh Long, chairman of Vietnam Gold Association, said although local jewelers were developing the industry and adding value to the national economy, they did not get any support from the government.

Long said local firms were installing the latest technology to develop the industry in the domestic market and to boost exports.

Gold should be considered a commodity like any other, rather than a “currency,” like US dollars, which must be controlled and put on restricted lists, he said.

The Chinese government had changed its mind to open the gold market for its businesses and the Vietnamese government should follow suit, he added.

Dung of PNJ said the gold industry created more value in a product and brought in more foreign exchange than the garment industry, so it deserved to be supported by the government.

The country’s biggest gold jewelry firms earned thousands of billions of Vietnamese dong from jewelry a year, she asserted.

Late March, the government banned gold trading on exchange floors in Vietnam and imposed quotas on gold imports in a bid to control the rising trade deficit.

Thursday, September 2, 2010

Vietnam economy to become ‘important’: 3M CEO

3M CEO greeting local staff upon arrival

George Buckley, global chief of the US-based consumer and industrial conglomerate, visited Vietnam for the first time Thursday and spoke to TuoiTreNews about Vietnam’s role in 3M’s global value chain, reverse innovation, and training future business leaders.

What is the purpose of your trip to Vietnam?

Several times a year, the head of international operations and I travel to several countries, usually large ones such as China, Japan and India. From time to time I take a detour through places that are just beginning to get going and that we think will be very important in the future. And of course Vietnam fits into that category.

I think in particular, Vietnam and Indonesia are two countries of enormous potential for us. So we’d like to invest our time and money early.

This is also a chance for me to personally witness what happens in Vietnam. When I am here, I am astounded by how many young people there are. Along with that is the vibrancy and modern way of thinking. Of course the right investment and giving people the right focus would generate a lot of good growth.

3M is probably most famous for its innovation culture. How does the firm encourage and reward innovations?

We have had a culture of innovation for many years. To build it, first of all you need great technical competencies. Second you must provide the appropriate tools such as lab equipment. Once you set up the physical aspect you have to create an environment that encourages innovation. That means promoting a spirit of curiosity, investigation, and discovery.

In addition, we accept that in the journey to discovery there are failures. We investigate in markets that haven’t been built or technology that hasn’t been developed before. So we count those journeys as experiments. We do not immediately characterize things that don’t work as failures because we know well enough that we have to invent maybe 100 patents before the technology is sufficiently robust and viable for us to achieve economic success.

Can you give me an example of a 3M policy that encourages innovation?

We give our researchers 15 percent free time to do what they want. Theoretically, they could say ok, maybe I can work on something irrelevant, but actually it doesn’t happen too much. There is always some peer pressure which keeps them focused around certain activities.

We also have a policy that anytime an economy becomes sufficiently large for us, we establish a lab there to encourage localization. We believe that locals are the best people to decide what is right. In Vietnam, for example, that would be the Vietnamese, not the Americans. We can develop some basic technology but ultimately the best people to decide the right market direction and what special features to include in a product are the people in the local market.

How about reverse innovation whereby a product invented in a developing country can become successful in a developed market?

This happens to us all the time. Our headquarters in St. Paul, in the US, was the original hotspot of innovation. But we have developed about 36 labs all over the world. Initially the labs adapt maybe American, German, or British products for the local market and give advice to customers. But gradually, the local market will begin to modify American products and then progressively begin to formulate ideas and invent local products.

Ultimately, the labs will become worldwide centers of excellence. For example, for us, America is the worldwide center of excellence for material sciences-surface chemistry, German and France for telecommunications, Japan and Germany for automotive technology. Before technology or ideas came from the US while now other centers supply those technologies to the mother countries. This is how we accelerate growth.

Innovation and inventions can’t come happen without leadership. So how do you develop leaders for 3M?

The only way to learn to lead is by doing it. We are providing formal training at multiple levels to our leaders to then place them in circumstances where they can experience real life challenges with real risks.

To become global leaders, employees from a local office like Vietnam, I think, need to be willing to relocate. That would be a great chance to build skill sets, not only in the environment in which they are comfortable with, but also in one where they are not.

3M is very open-minded in terms of choosing its leaders. Let me just give you an example of our leadership team. It’s an American corporation.

I am British and the majority of the people who report directly to me are not American. In fact the head of our consumer and home improvement business, the next level down, is Vietnamese. Two thirds of our sales are outside the US. We are genuinely international. Personally, I’d like for local people to be in charge. But obviously as you move up the level in the organization, it is very diverse. If I think of the top 100 people in 3M, 65 percent were born outside the US.

Wednesday, September 1, 2010

IFC grants loan to local securities firm

IFC grants loan to local securities firm The International Finance Corporation (IFC), the World Bank’s private-sector funding arm, will provide Thien Viet Securities with a US$5 million loan to help the local firm develop investment banking services for small- and medium-sized enterprises in Vietnam.

“We have invested in a number of Vietnamese banks before, but this is IFC’s first engagement with a securities service provider in the country,” said Rashad Kaldany, IFC’s deputy president for Asia, Eastern Europe, the Middle East and North Africa, at the signing ceremony on Monday in Hanoi.

The loan has a three-year term and can be converted into shares of the company, according to a release issued on August 16 by the IFC.

The World Bank unit will advise Thien Viet Securities on risk management and corporate governance practices to help the emerging capital market player build its merchant and investment banking operations.

By helping the securities firm enhance its capacity to meet international standards, IFC will be able to replicate these practices in other sectors of the economy, particularly small and midsize enterprises that are currently overlooked by foreign investment banks, according to representatives from the IFC.

Thien Viet Securities offers investment banking services to local private companies seeking to gain access to capital market financing.

VietNam Business

Sunday, February 13, 2011

Weak supporting industry threatens FDI

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Wednesday, February 9, 2011

Visiting Indian pharmaceutical firms seek local partners

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Friday, December 3, 2010

Exhibitors hopeful of deals at healthcare show

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Tuesday, November 30, 2010

Investors, authorities in Delta need to work together

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Green Awareness Of Staff Is The Utmost Reward

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Saturday, November 20, 2010

Beer imports rise on luxury tax cut

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Thursday, November 18, 2010

Lending rate almost beyond enterprises’ reach: report

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Wednesday, November 17, 2010

Lending rate almost beyond enterprises’ reach: report

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Sunday, October 24, 2010

Saigontourist arranges MICE tour for 1,500 guests

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Sunday, September 19, 2010

‘Hold us to higher standards’

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Thursday, September 2, 2010

Vietnam economy to become ‘important’: 3M CEO

3M CEO greeting local staff upon arrival

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Wednesday, September 1, 2010

IFC grants loan to local securities firm

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