Vietnam News in Brief: Weekly Roundup March 10
Vietnam Briefing keeps track of what’s happening in Vietnam business and economic news so that you don’t have to. Here’s what happened this week.
LNG may be coming to Vietnam very soon
Bloomberg is reporting that Vietnam is looking for its first shipment of liquefied natural gas (LNG). A recent draft of the Power Plan VIII had four LNG projects being added to Vietnam’s energy mix. However, LNG projects often struggle to get off the ground mostly due to bureaucratic hurdles and red tape. That said, an LNG terminal in Ba Ria-Vung Tau was 98 percent complete as of October 2022 and will presumably be ready to receive Vietnam’s first LNG shipment once it is secured.
Human Resources News
Australia seasonal job app enters Vietnam’s recruitment market
Weploy, a human resources app used to find seasonal workers, is entering Vietnam’s recruitment market after raising US$5 million in funding. Seasonal labor is in demand both in manufacturing in Vietnam where orders have become increasingly inconsistent (see: Vietnamese Garment Makers Hit Snag) and in agriculture in Australia where farmers are crying out for more workers.
Notably, 142,000 Vietnamese went to work abroad last year – Vietnam’s recruitment market could prove very lucrative if Weploy can do it right.
Real Estate News
Singapore’s Keppel plans US$502 million real estate development in Vietnam
Deal Street Asia is reporting that Keppel in Singapore has teamed up with a Vietnamese firm, acquiring three plots of land in Hanoi it intends to develop with its half-a-billion dollars investment. It plans to build residential apartments, detached houses, and around 1,000 condominiums. This is a positive sign for a real estate market that has been struggling to shirk off corruption allegations and restore investor confidence.
Gold hotel in Hanoi listed for sale
Hanoi’s gold hotel, which drew media attention from around the world as a result of its gold exterior and very-expensive, gold-plated interior, has been listed for sale. The company needs the money to pay its staff, according to its owner Duong Nguyen. The hotel reportedly cost US$100 million to build but Nguyen says he expects to get somewhere in the vicinity of US$250 million for it.
On the one hand, this hotel may have been a victim of bad timing – it opened just months after COVID-19 took hold, which decimated Vietnam’s tourism industry and left a lot of hotels without customers. On the other hand, this may be a sign that the extravagant consumer spending of Vietnam’s elite may be coming to an end.
Either way, what happens next could say a lot about the future of Vietnam’s tourism, luxury goods, and commercial real estate sectors.
China tourists allowed to travel back to Vietnam
The tourism sector is flying-high on news that Chinese tourists will be allowed to holiday south of the border once again from March 15. China accounted for about a quarter of visitors to Vietnam in 2019 so the tourism sector is expecting a fairly significant boost in numbers after a not-so-great year – Vietnam had just 3.6 million arrivals in 2022, a fraction of the 19 million it welcomed in 2019.
One of Vietnam’s newest airlines is up for sale already
Embattled real estate developer FLC, has announced it wants to offload its share of Bamboo Airways. The relatively new carrier has been in the air for barely a handful of years, but its parent company is in a bad way – FLC was delisted for the Ho Chi Minh Stock Exchange last month. Moving said shares, however, may be challenging with Vietnam’s airlines all struggling to make ends meet and all actively looking for more capital.
Korean giants expand R&D presence in Hanoi
South Korea’s LG is opening an R&D center in Hanoi. This follows on the back of a US$200 million investment by Samsung in its own R&D center in the capital. Driving this investment may be Circular No. 12/2016/TTLT-BK H CN-BTC, whereby enterprises can divert 10 percent of their pre-tax income into a ‘science and technology fund’. They do, however, have a set time period to spend these funds otherwise tax will fall due.
German-state run development fund invests in Vietnamese diaper maker
Known by its acronym DEG, this investment is valued at US$20 million but is to be split with a Thai bank. With a median age of 32 and the VIetnamese dream – a house, a spouse, and two kids – very much alive and well, coupled with greater disposable incomes – cloth diapers are on their way out. Disposables are on a path to their heyday.
Taiwanese ETF to add US$168 million to its VN stock market investment
Taiwan-based Fubon, which offers an ETF of Vietnamese stocks, has been approved to add US$168 million to its current fund. There are still one or two regulatory steps the firm needs to go through but if there are no major hurdles, the Ho Chi Minh Stock Exchange (HoSE) should receive a welcome boost.
The HoSE has been struggling post COVID with troubles in the bond market and real estate sector rattling investor confidence. The exchange has also struggled to enact much needed reforms that would see the HoSE move from a frontier to an emerging market.
Japanese firm forms partnership with Vietnam’s Vinamilk to build beef processing plant
Vietnam’s Vinamilk is set to beef-up beef production and processing in partnership with Japan’s Sojitz Group. A new plant will be built in northern Vietnam, with total investment in the project topping US$126 million. Demand for dairy is huge in Vietnam and domestic producers are scrambling to keep up (see: Vietnam’s Dairy Market: Udder-ly Plump with Opportunity).
Indian smart watch maker to invest US$1 million, entering Vietnamese market
Fire-Boltt, an Indian firm making smart wearables, intends to ramp up its presence in Vietnam with a US$1 million investment. The smart wearables market in Vietnam is currently dominated by Chinese firms Huawei and Xiaomi with Samsung, Apple, and Garmin rounding out the top 5. But with a population of 100 million people and a relatively slow uptake – just 140,000 units were sold in the second quarter of 2022 – there is ample room for more players.
See also: Vietnam FDI Tracker: Latest Update February 2023
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