Vietnam to focus more on wind energy to power growth

Renewable energy sources remain largely untapped across the country.

Vietnam plans to increase the amount renewable energy contributes to national power consumption to at least 7 percent by 2020 -- up from the previous target of 4.5 percent.

The revision to the plan reflects the fact that Vietnam is increasingly turning to renewable sources, as stated in the National Action Plan on Green Growth 2014–2020, including wind power, solar energy, tidal energy, geothermal energy, biofuel and universal energy to combat climate change.

Vietnam, which relies heavily on coal and hydropower electricity, is seeking to boost renewable energy production, particularly wind and solar energy, to more than 10.7 percent by 2030, up from the previously planned 6 percent.

The country has set a target of producing around 6,000 mega watts (MW) of wind power by 2030, equivalent to 2.1 percent of total electricity generation.

Deputy Trade Minister Hoang Quoc Vuong said the country currently has three wind farms with a combined capacity of just 150 MW, implying that there is much more room for wind power in the country’s energy mix, the Saigon Times reported.

Earlier this month, Vietnam signed a $2.2 billion deal with an Irish energy firm to build and operate three more wind farms with a total capacity of 940 MW.

Under the deal, an 800MW wind farm, worth about $2 billion, will be developed in the Mekong Delta province of Soc Trang, with the first phase set to be completed in 2018. The other two wind farms in Binh Thuan Province, with an investment of $200 million, will also see the first phase completed in late 2018.

“Wind power now accounts for about 4 percent of total global energy consumption," said Steve Sawyer, secretary general of the Global Wind Energy Council, highlighting the need to shift towards renewable sources to reduce greenhouse gas. "It is expected to increase to 6-8 percent by 2020, 18-20 percent by 2030 and a fifth of total consumption by 2050.”

The country’s electricity demand is expected to continue to grow 13 percent annually in the next four years due to its fast-expanding economy, which has grown above 5 percent on average per year since 1999 and is forecast to reach 6.5-7 percent in the next four years.

Vietnam is trying to generate enough energy for economic growth and for the millions of people who still lack access to electricity while gradually shifting towards clean and low-carbon energy, said Tran Dinh Thien, director of the Vietnam Economic Institute.

To meet increasing power demands, Vietnam projects its output will need to increase to 330–362 billion kWh in 2020, and to 695–834 billion kWh in 2030.

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Reference resource:    E.vnexpress.net

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Vietnam’s logistics sector: low competitiveness despite rapid growth

The sector's progress could be derailed unless staff and infrastructure are upgraded.

Vietnam’s logistics industry has seen strong growth over the past few years but problems arising from the lack of infrastructure and the limited capacity of local businesses have put the brakes on its development.

Data from the Vietnam Logistics Business Association said that the sector is expected to record average growth of 20 to 24 percent over the next five to 10 years. In 2014 and 2015, 80 percent of logistics enterprises reached or exceeded their annual targets.

Despite recording significant progress, Vietnam’s logistics industry still lags behind other Southeast Asian countries. The country ranks 64th on the Work Bank’s Logistics Performance Index in 2016, much lower than Singapore (5th), Malaysia (32nd) and Thailand (45th).

Annual logistics expenses in Vietnam account for approximately 21-25 percent of the country's gross domestic product (GDP) per year, as opposed to 10 percent in developed countries and 18 percent in other developing nations.

Do Xuan Quang, vice chairman of the Vietnam Logistics Business Association, said that the country spends $37-40 billion on logistics each year, of which $30-35 billion flow into the pockets of foreign firms.

Domestic companies, mostly small and medium-sized, account for 80 percent of the country'slogistics firms but make up only 25 percent of the market share.

Companies are also struggling to find qualified workers, with 54.7 percent saying they lack staff with management and language skills.

Aside from these problems, infrastructure for logistics services in Vietnam is underdeveloped, said Tran Bao Ngoc, head of the Logistics Department under the Transport Ministry.

Being a long, narrow country with key economic zones located evenly from north to south, the country’s railway sector should act as the major means of freight transportation. However, in reality, the railway sector only accounts for one percent of the market share. Only 6.7 percent of Vietnam's 2,653 kilometers of railways meets international standards.

There is also a lack of connectivity between road, sea and railway transport due to the lack of dry ports and storage facilities, which play an important role in transiting and distributing commodities, Ngoc said.

To increase the competitiveness of Vietnam’s logistics sector, economic experts said the government should form a national logistics committee to boost cooperation between different means of transportation. Small and medium enterprises should be granted preferential policies to access investment capital and support to train logistics staff.

Vietnam is aiming to climb to 4th on the Logistics Performance Index in Southeast Asia and 50th in the world by 2020.

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Vietnam scraps nuclear power project as costs spiral

Business insiders say investing in coal or oil power plants will be cheaper.

The National Assembly, Vietnam’s top legislature, decided to scrap the country’s nuclear power plans for the central province of Ninh Thuan on Tuesday after business insiders pointed to uncompetitive prices.

The Ministry of Industry and Trade proposed an end to the project on November 10, and the motion passed with 92 percent of legislators’ votes on Tuesday.

The project has been ended due to economic reasons, not safety or technological issues, heard a conference that followed the assembly’s vote.

Mai Tien Dung, chairman of the Government Office, said that Vietnam’s economy has gone through significant changes since the project was approved seven years ago.

The country now needs money to invest in infrastructure to boost socio-economic development and to solve problems caused by climate change.

“We want to focus our resources on strategic national projects,” Dung said, referring to the north-south expressway and Long Thanh Airport in southern Vietnam, which is expected to ease the burden currently faced by Tan Son Nhat Airport in HCM City.

In November 2009 legislators approved a project to build two nuclear power plants with a combined capacity of 4,000 megawatts, which was expected to meet 5.7 percent of the country’s total electricity demand by 2030.

The cost of the project has escalated from the original estimate of VND200 trillion (nearly $9 billion) to VND400 trillion.

Dung said Vietnam’s power supply will not be threatened without the Ninh Thuan project as the country has plans to invest in coal-firedand natural gas power plants with a total capacity of 6,000 megawatts by 2030.

Duong Quang Thanh, chairman of the state-owned Electricity of Vietnam, said that: “Other sources of energy such as coal and oil are cheaper, so investing in nuclear power is no longer competitive.”

Officials from the trade ministry said the infrastructure and personnel already in place for the nuclear power project will be put to use at other power plants.

Dung said the Russian and Japanese developers for the nuclear project respect Vietnam’s decision.

He said Vietnam’s withdrawal from the project will not affect its relations with these countries.

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Reference source: E.vnexpress

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Vietnam Technology Startup Attracts Foreign Enterprises

Technology startup in Vietnam is increasingly attractive. Many foreign enterprises are interested in this area and showing their desire to set up business in Vietnam.

According to Mr Mitchell Pham, president of the New Zealand Technology Association (NZTech) – who is known to be the 1^st native of Vietnam elected to become the chairman of NZTech, representing for over 400 technology enterprises New Zealand: “All trip participants were impressed with the development of science and technology in Vietnam. We are looking for specific opportunities for cooperation with Vietnam-tech enterprise”.

More information about the members of the delegation, Mr Mitchell Pham said that back to Vietnam this time, accompanied him are 6 young leaders of technology enterprises in New Zealand with a desire to learn and exchange with technology businesses in Vietnam, in order to create connection for long-term investment goals.

In terms of the favorable conditions, according to Mr Mitchell Pham, trade relations between New Zealand and Vietnam have the fastest growth rate in Southeast Asia with 120% in the period 2010 – 2015. Two-way trade of the two countries in 2015 has reached 1 billion USD.

Moreover, Vietnam is known as the country with the booming information technology market and the government is also trying to create more incentives for this sector. Meanwhile, technology businesses in New Zealand have experiences and large operating network, certainly the cooperation and investment in Vietnam will be intensified in the coming period.

According Chicilon Media, Vietnam technology market, especially Ho Chi Minh City is developing extremely powerful. Consumers is having trend to access to communication products and services via smartphones instead of traditional media such as TV, poster… Hence, this Company has strengthened their strategy focusing on channels to access information over the phone and access to a diverse range of partners such as the startup.

In parallel, the growth of mobile devices will continue in the coming years. Therefore, the approach to the users of mobile devices – who are moving to the final stage of the shopping journey and going to buy the product – becomes extremely important. Currently, marketing on mobile devices is evaluated as a simple marketing channels, rapid deployment and easy to access to customers.

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We strive to save your cost by guiding you towards economical solutions that comply with local legislation and procedures. We support you through early logistic solutions and carry you through as your business grows.  We aim to bridge the gap between international best practices and local cultures and assist foreign companies and organizations entering Vietnam market to overcome commercial and regulatory issues.

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Vietnam approves $60 mln wind power project

A Singaporean company plans to tap the potential for wind power in southern Vietnam.

Southeast Asia’s leading renewable energy developer, The Blue Circle, has been awarded an Investment Certificate from Vietnamese authorities for a 40 Megawatt (MW) Dam Nai wind project worth $60 million in the southern province of Ninh Thuan.

The Singapore-based wind energy specialist, along with its Vietnamese partner TSV, have received an investment allowance for the wind project as well as a Power Purchase Agreement with Vietnam’s national utility, EVN, after having been granted land-use permission by provincial authorities for 16 months, according to The Blue Circle’s official website.

The Blue Circle installed a 100 meter-tall meteorological mast on the 933-hectare site along National Highway No.1 in May 2015 to gauge wind velocity. The site was approved in Ninh Thuan's Energy Development Master Plan, along with grid capacity for the project.

The Blue Circle CEO Olivier Duguet said that: “This approval for 40MW is only the first phase of the total project. With the grid connection on site, as well as very good wind speeds, the Dam Nai project has all the attributes to succeed even in a low Feed-In-Tariff environment.”

“It is a great achievement and recognition of the professional development work which has been done by our team in Vietnam during the last three years,” the CEO added.

The company will conduct engineering studies as the following step and construction of the plant is scheduled to begin in 2017 for the first phase.

“With less than 120 MW of wind power installed in the country so far, the Dam Nai project will position The Blue Circle as one of Vietnam’s wind energy pioneers, able to significantly contribute to the ambitious target set by the government. We intend to fully participate in the wind power expansion in Vietnam going forward and make wind energy become a reality in a country with big potential,” explained Gilles Beau, chief evelopment officer of The Blue Circle.

In pursuance of the Paris Climate Conference signature, Prime Minister Phuc has set a new target of 4,000 MW generated from wind power by 2025 which positions the country as potentially the largest market for wind power in Southeast Asia.

The Blue Circle is a developer of renewable energy projects in Thailand, Vietnam, Indonesia and Cambodia. Based in Singapore, the company works to bridge the gap in project development in Southeast Asia by being vertically integrated with unique regional wind engineering capabilities.

Reference source: e.vnexpress.net

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We strive to save your cost by guiding you towards economical solutions that comply with local legislation and procedures. We support you through early logistic solutions and carry you through as your business grows.  We aim to bridge the gap between international best practices and local cultures and assist foreign companies and organizations entering Vietnam market to overcome commercial and regulatory issues.

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Vietnam, Ireland ink deals to build $2.2 billion wind farms

The farms, one in the central region and the other in the south, will have a combined capacity of 940 MW.

Companies from Vietnam, Ireland and the U.S. on Monday signed cooperation agreements to build two wind farms in Vietnam worth $2.2 billion.

The pacts are part of various deals reached by Vietnam and Ireland during the visit to Vietnam by President of Ireland Michael D. Higgins from November 5-14.

Vietnam’s Phu Cuong Corporation will join hands with Ireland’s Mainstream Renewable Power Ltd. and the U.S. giant General Electric to set up an 800-megawatt wind farm in the southern province of Soc Trang. The project will need $2 billion.

In the second project, Vietnam’s Pacific Corporation will cooperate with Mainstream Renewable Power Ltd. to build another 140-MW wind farm in the central province of Binh Thuan, which is worth $200 million for construction.

The same day Vietnam and Ireland also signed other agreements on poverty reduction, education and training, information and communications.

Vietnam has recently revised down the target for electricity generation by coal-fired thermal power plants from 56.4 percent of the total electricity generation to 53.2 percent by 2030.

The country is more focused on renewable energy, particularly solar and wind energy, targeting a renewable energy ratio of 10.7 percent by 2030.

But that will require a lot of investment in the coming years. Wind and solar powercapacity is estimated to account for only 0.8 percent and 0.5 percent of total electricity generation respectively by 2020.

With over 3,000 km of coastline and numerous islands, Vietnam has more wind power potential than most of other Southeast Asian nations with a total estimated capacity of 24,000 MW, the Vietnam News Agency has reported.

ANT Consulting is here to assist you from the outset; providing corporate intelligence, risk advisory, management consulting services that assist market entrance, and ensure efficient business start-up operation.  Our services are as following:

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We strive to save your cost by guiding you towards economical solutions that comply with local legislation and procedures. We support you through early logistic solutions and carry you through as your business grows.  We aim to bridge the gap between international best practices and local cultures and assist foreign companies and organizations entering Vietnam market to overcome commercial and regulatory issues.

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Vietnam’s pharma market booms amid short supply

The country spent $2.1 billion on imported drugs last year.

Vietnam’s pharmaceuticalmanufacturers met less than half the nation's demand for drugs last year, experts said at a seminar on Monday.

From 2010 to 2015, local pharmaceutical firms saw annual growth rates of 17-20 percent, according to Le Van Truyen, former deputy health minister.

Truyen called Vietnam the largest pharmaceutical growth market in the region with a value that's expected to hit $7.2 million in 2020 -- up 71 percent from 2015.

“Vietnam is considered to be emerging within the pharmaceutical world,” Truyen said, adding that the recent expansion of social insurance boosted demand for free drugs.

Domestically-manufactured medicines only met 45 percent of demand last year, causing frequent supply shortages at local hospitals.

Data from Vietnam’s General Statistics Office revealed that the country spent $2.1 billion importing meds from external sources in 2015 compared to a mere $1.1 million in 2009.

“This is an impetus for international pharmaceutical corporations to purchase shares or transfer technology to Vietnamese companies,” Truyen said. 

In June, Japanese drug manufacturer Taisho Group paid around VND2.2 trillion ($98 million) for a 24.4 per cent stake in Vietnam’s leading drug maker Hau Giang Pharmaceutical Joint Stock Company.

Global healthcare company Abbott announced in September that it acquired Vietnam's third-largest publicly traded drugmaker, Glomed, but didn’t disclose the details of the deal.

Dang Tran Hai Dang of Vietinbank Securities said that Vietnam's publicly-traded pharma firms saw good growth, both in terms of revenue and profit, during the first nine months of 2016.  

Pharmaceutical stocks have caught the interest of investors, though most of the listed firms have run out of room for foreign ownership, said Dang.

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Japanese investors ready to pour $2 bln into Vietnam’s real estate market

Property firms are confident of the growth fundamentals in Vietnam.

Japanese real estate companies are looking outside the domestic market for a potential investment destination, and Vietnam is looking like an ideal candidate with annual returns of up to 20-25 percent.

Vietnam's Real estate

Japanese companies are planning combined investment of up to $2 billion in the Southeast Asian country, said Than Thanh Vu, president of a merger and acquisition consulting company.

A large number of Japanese groups, including Sumitomo, Sanyo Homes, Daiwa House, Aeon and Toshin, are searching for large scale mixed-use developments comprising apartments, serviced apartments, retail and office space in major cities like Hanoi and Ho Chi Minh City, Vu said, citing the $100 million office building project funded by Sumitomo as an example.

Investor interest is being fueled by Vietnam’s economic growth, which has on average been above 5 percent since 1999, Vu continued.

There are other factors driving the inflow of Japanese investment into Vietnam’s property sector. Japanese investors want to tap into the potential of Vietnam’s growing population which will lead to a rapidly expanding demand for real estate. With their domestic market shrinking as population is aging rapidly, Japanese companies are increasingly looking at Vietnam as a promising market.

Japanese investors are entering the local market through mergers and acquisitions, Vu said, explaining that as long-term investors, Japanese companies prefer acquiring stakes in local property developers gradually over time so that they can gain a better understanding of the local market. Mergers and acquisitions also allow foreign investors to quickly gain a foothold without going through the massive amount of complicated paperwork involved in the real estate sector.

Industry experts forecast a surge in mergers and acquisitions (M&As) in the real estate inHanoi and Ho Chi Minh City.

“Japanese companies are financially strong and vastly experienced in property developments, so it will be easy for them to take the projects at some of the most sought-after locations from local developers,” said Vu, adding that given extremely low interest rates and limited economic growth in Japan, these investors are sitting on huge cash piles and have little option but to invest overseas.

Japanese investors have just laid their eyes on Vietnam’s real estate market, said Masataka Sam Yoshida, chief executive of Tokyo-based Recof, which is mainly involved in M&A consulting.

In the past, Japanese companies were very cautious about making real estate deals in Vietnam due to the high risk of speculation, lack of transparency and information, Masataka explained.

But things have changed, he said.

One of Japan's largest builders, Kajima Corporation, has formed a joint venture with Indochina Capital to channel funds worth $1 billion into property developments in Vietnam over the next 10 years. The 50:50 partnership has plans to acquire several local projects in the pipeline.

Vietnam is currently viewed among the top markets in Asia for foreign direct investment, said Keisuke Koshijima, market development executive at Kajima, adding that the company has identified the Southeast Asian country as the next key driver for its growing business in the region.

ANT Consulting is here to assist you from the outset; providing corporate intelligence, risk advisory, management consulting services that assist market entrance, and ensure efficient business start-up operation.  Our services are as following:

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We strive to save your cost by guiding you towards economical solutions that comply with local legislation and procedures. We support you through early logistic solutions and carry you through as your business grows.  We aim to bridge the gap between international best practices and local cultures and assist foreign companies and organizations entering Vietnam market to overcome commercial and regulatory issues.

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Ho Chi Minh City ranked among top 5 real estate markets in Asia-Pacific

Investors expect annual returns of 20-25 percent.

Ho Chi Minh City is in the top five of the Asia-Pacific region for real estate investment and development prospects, with annual returns expected to be up to 25 percent, according to a new report.

Emerging Trends in RealEstate Asia Pacific 2016, jointly published by the Urban Land Institute and consulting firm PwC, has ranked the city fifth for investment and fourth for development. Tokyo is at the top, followed by Sydney and Melbourne. Osaka and Ho Chi Minh City are neck and neck.

The Vietnamese city has emerged as one of the most promising markets in the region over the past two years, jumping from the 19th place in 2014 to one of the top five this year.

Foreign investors, mainly from Japan, South Korea and Singapore, are interested in the city's property market on expectations of an annual return of between 20 and 25 percent, according to the report.

The report also attributes the city’s rise as an attractive destination to the government’s efforts to stabilize the local currency, control inflation, ease property lending and improve market access for foreigners.

Global investors prefer entering Vietnam’s real estate market through mergers and acquisitions. They are laying eyes on a wide range of projects, from beach resorts, serviced apartments, residential buildings to hotels, mostly in the three major cities Hanoi, Ho Chi Minh City and Da Nang.

For instance, Singapore-based investment fund Frasers Centrepoint Limited has acquired a 70 percent stake in a luxury residential apartment project from a local realestate developer. The $100-million project, namely G Home, covers a one-hectare area in downtown Ho Chi Minh City.

Emerging Trends is based on the opinions of 343 internationally renowned real estate professionals, including investors, developers, lenders, brokers and consultants.

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We strive to save your cost by guiding you towards economical solutions that comply with local legislation and procedures. We support you through early logistic solutions and carry you through as your business grows.  We aim to bridge the gap between international best practices and local cultures and assist foreign companies and organizations entering Vietnam market to overcome commercial and regulatory issues.

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Set-up Limited Liability Company in Vietnam

Limited Liability Company is a form of enterprise which is established by contributing of members.  A member shall be liable for the debts and other property obligations of the enterprise within the amount of capital that he/she has undertaken to contribute to the company.

Set-up Limited Liability Company in Vietnam

Limited liability companies are regulated by two types:

• One member Limited Liability Company is an enterprise owned by one organization or individual;
• Limited Liability Company with two or more members is an enterprise owned by organizations or individuals, in which the number of members shall not less than two members and not exceed fifty.

Organizational and management structure of Limited Liability Company normally comprise of a Member’s Council, General Director or Director.

A limited-liability company established by foreign investors may take the form of either:

• 100% foreign-owned enterprise (where all members are foreign investors); or;

• foreign-invested joint-venture enterprise between foreign investors and at least one domestic investor.

ANT Consulting is here to assist you from the outset; providing corporate intelligence, risk advisory, management consulting services that assist market entrance, and ensure efficient business start-up operation.  Our services are as following:

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We strive to save your cost by guiding you towards economical solutions that comply with local legislation and procedures. We support you through early logistic solutions and carry you through as your business grows.  We aim to bridge the gap between international best practices and local cultures and assist foreign companies and organizations entering Vietnam market to overcome commercial and regulatory issues.

We could be reached at email: ant@antconsult.vn or tel: +848 3520 2779 .  To learn more about us, please visit www.antconsult.vn

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