POTENTIAL OF VIETNAM WIND POWER

Located in the monsoon subtropical area with long coastline, Vietnam has fundamental advantages to develop wind energy. When comparing the average wind speed in the East Sea of Vietnam and the surrounding sea areas, the result showed that wind in the East Sea of Vietnam is fairly strong and seasonally change.

The World Bank (WB) conducted a detailed survey about wind power in Southeast Asia, including Vietnam. According to this study, among the four surveyed countries, Vietnam has the largest potential for wind power and better than the neighboring countries like Thailand, Laos and Cambodia.

Vietnam has 8.6% of the territory is rated as “good” and “very good” for the construction of large wind stations, while in Cambodia, Laos and Thailand, the numbers are 0.2%, 2.9% and 0.2% respectively. The total wind power potential of Vietnam is estimated to reach 513,360 MW, more than 200 times the capacity of Son La Hydropower Plant, and more than 10 times the total forecasting capacity of the power sector in 2020.

Vietnam has up to 41% rural areas that can develop small wind powers. Comparing this figure with the neighboring countries, the rural areas that can develop wind power in Cambodia, Laos and Thailand are 6%, 13% and 9% respectively.  It is indeed a privilege for Vietnam.

In Vietnam, the areas that can develop wind power do not spread across the entire territory. With the influence of monsoon, the wind regime is also different in each area. If the northern of Hai Van Pass, the strong wind season coincides with the northeast wind season, in which the most potential areas are Quang Ninh, Quang Binh and Quang Tri. In the southern part of Hai Van Pass, the strong wind season coincides with the southwest wind season, in which the most potential areas are the Tay Nguyen area, the coastal provinces of the Mekong Delta and especially the coastal areas of Binh Thuan, Ninh Thuan.

According to research conducted by the World Bank, in the territory of Vietnam, the two most potential areas for wind energy development is Son Hai (Ninh Thuan) and sand hills at the height of 60 – 100 meters from the west of Ham Tien to Mui Ne (Binh Thuan). The advantages of these areas are high average velocity wind, less storm and stable wind trend. They are the favorable conditions for wind energy development. During the monsoon months, the proportion of south and southeast winds are up to 98% with an average speed of 6 – 7m/s. It means that we are able to build the wind stations with capacity of 3 to 3.5 MW.

In fact, people in Ninh Thuan have also created a number of homemade small wind generators for the purpose of lighting. Both these areas are sparsely populated with hot and dry weather. Moreover, this is the ethnic areas with special difficulties of Vietnam.

Although there are many advantages as mentioned above, but when mentioning wind energy, we need to note a number of unique features to be able to develop it in the most effective way.

The biggest disadvantage of wind energy is the dependence on weather condition and wind regime. Therefore, at the design stage, the wind regime, terrain and type of wind without turbulence flows which badly affect the transmitter should seriously be studied. Moreover, although wind power is becoming more popular but it cannot be used as the main energy. However, the possibility of the combination between wind power and storage hydropower will open up opportunities for Vietnam to develop energy in areas such as Tay Nguyen, which has advantages in both of these kind.

Another noted point is that the wind power stations will cause noise pollution during operation as well as disrupt the natural landscape and could affect the signal of the radio waves. Therefore, when constructing wind power stations, it is needed to calculate reasonable distance to residential areas and tourist resorts in order not to cause negative impacts.

In order to meet the goal of ambitious growth, in the medium term, Vietnam should continue to exploit the traditional energy sources. In the long term, Vietnam needs to develop strategy and roadmap for the development of new energy sources. In this strategy, the economic costs (including internal and external expenses on the environment and society) need to be analyzed carefully, taking into account new developments in technology, as well as reserves and price movements of alternative energy sources. In these new energy sources, wind power has emerged as a worthy choice and therefore need to be fully assessed.

Vietnam has many advantages for the development of wind energy. If Vietnam does not invest in research and development of wind power will be a huge waste because the risk of power shortage is always permanent, affecting economic growth and national competitiveness. Meanwhile, the current national strategy for power seems only interested in hydropower and nuclear power – the energy sources with huge initial investment and many hidden risks on both environment and society.

In the world, the development of wind power is a major trend, showing the highest growth rate compared with other energy sources. Unlike nuclear power which needs a complicated technical process and strict supervision, the construction and installation of wind power does not require such rigorous processes. With the experiences of successful development of wind power in India, China, Philippines and the geographical advantages of Vietnam, Vietnam can completely develop wind power and contributing to the overall development of the economy.

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BANKING SECTOR IN VIETNAM

1. Overview

Vietnam’s banking sector has shown significant improvement which results from stable inflation and interested rate, favorable environment for foreign direct investment and a shift from deficit to surplus of the country’s current account. This sector plays a crucial role in Vietnam’s economic development in recent years.

2.Banking system

There are two tiers in banking sector in Vietnam. The first one is State Bank of Vietnam (SBV) which is responsible for monetary policy and supervision/regulation of the banking system in Vietnam. The second one consists of commercial banks, financial companies, credit co-operatives, people’s credit funds, and insurance companies. The main activity driving banking system is commercial bank which includes 5 state-owned commercial banks, 33 joint stock commercial banks, 5 joint venture commercial banks and 5 wholly-owned foreign owned bank.

State owned commercial banks (SOCB) account for more than 40% of market share. The largest bank in terms of total assets, network and still 100% state owned share is Agribank. And four other SOCB areVietcom bank, Viettin Bank, BIDV and MHB.

Joint stock commercial banks (JSCB) have small capital/deposit base and more diversified shareholding structured compared to state owned commercial banks. There are currently 33 JSCB, which the leading ones are SaiGon Joint Stock Commercial Bank (SCB), Military Joint Stock Commercial Bank (MBB), Vietnam Export Import Commercial Joint Stock Bank (EIB), Asia Commercial Bank (ACB) and SaiGonThuong Tin Commercial Joint Stock Bank (STB)

Also SBV had granted 5 licences to permit HSBC, Standard Charter Bank, ANZ Bank, Shinhan Bank and Hong Leong Bank to establish as wholly-owned foreign banks

3.Potential opportunities for foreign investment

There are solid evidences to prove that Vietnam’s banking sector has such a huge potential for foreign investment

• Government effort of reforming banking system

• Trade agreements facilitate foreign ownership and investment

• Vietnam- a destination of foreign investment in South East Asian market

• Market Entry

• Tax Advice

• Legal Advice

• Outsourcing Services

SBV suggested that merge and acquisition of loss making and incompetent bank would be necessary to improve efficiency within the industry. For example, in 2015, SBV forced merge of loss making Vietnam Construction Bank to Vietcom bank with purchasing share price for 0 VND. By forcing merge and acquisition of incompetent banks, SBV has increased exploitation of economies of scale and the reduced burden on regulators

Have taken part in variety of trade agreement such as Trans Pacific Strategic Economic Partnership (TTP),  Association of Southeast Asian Nations (ASEAN) and Free Trade Agreement with different countries, Vietnam has made restructuring move to standardize banking system which will be compatible and accessible to other countries. Vietnam is required to have bilateral arrangement which eliminate the challenges of foreign establishment of banking services.

The government also encourages foreign investors to hold shares for five year period and partnering with the local bank to enhance management, capacity or new development. With the 30% limit of oversea ownership to domestic banks, the strategic foreign investors are allowed to acquire up to 15% of share in a bank, and up to 20% with Prime Ministerial approval. HSBC has also invested in a leading local bank, possessing a 20% stake in the Vietnam Technological and Commercial Joint Stock Bank—Techcombank. It is also the sole foreign strategic partner of the BaoViet Finance-Insurance Group, Vietnam’s largest insurance company. In a vote of confidence in the insurer, HSBC increased its stake to 18% in October 2009.

There is a huge untapped market in Vietnam. According to SBV, only 20% of more than 90 million citizens in Vietnam hold bank accounts and 3% of the population have credit cards. With 87% of the population under the age of 54, there is a great opportunity for retail banking activity development in Vietnam.

Also it is agreed that SME and rural areas have had challenges to access bank investment and loan. The data of Asian Development Bank shows that “lack the capacity to assess the risk of investment into SMEs and find bankable projects” and lack of knowledge about loan and lending systems for rural citizens are the main reasons leading to currentunder-banked circumstances.

The stable economic with GDP growth of around 6% to 7%; low wage costs; a large population with a high savings rate and lack of innovative approach to the market are advantages for foreign investors to accelerate financial and industrial development in Vietnam market.

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:

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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HOW TO MANAGE RISK?

Depending on the size and characteristics of the enterprise that they may establish a risk management department consists of experienced professionals, or at least they should use the risk management services of professional consulting and law firms with extensive experiences in this field. The risk managementde partments have to perform many tasks but should focus on three main functions: risk identification, risk analysis and risk response.

First, we need to identify the risks. It is the process of gathering information, data and analysis of factors that may impact negatively on the achievement of goals, including the inside and outside, macro and micro factors. We can use analysis tools such as brainstorming, interviewing, root-cause analysis, checklist, SWOT analysis… along with other tools that are used in the strategic planning process. Enterprises need to create and regularly update the information and data system to serve for the analysis.

The next process is risk analysis, in which we need to analyze to assess risk that has been identified at the main aspects: the root causes of risk, risk probability and condition to occur, scope and displaced persons entitled to, impact of the risks, factors that change the level of impact…

Finally is the process of responding to risks. More specifically, it is the process of choosing the way to respond to risk, which may include measures to: (i) risk aversion (abandon risky activities); (ii) risk prevention (eliminate the root causes of risk); (iii) reduce the likelihood of risk; (iv) eliminate the negative impacts; (v) reduce the negative impact; (vi) risk sharing; (vii) risk transferring (buy insurance, use derivative instruments); (viii) take risks and preparing resources to overcome the consequences.

Principles

Risk management must ensure the main principles: (1) create value (cost of risk management has to lower than benefit that it brings); (2) is an integral part of the business activities; (3) attached to the decision making (all important decisions have to consider risk management); (4) to be systematic and follow a throughout process (5) are regularly evaluated and improved.

It can be said, at the present, only the financial institutions and the banks are interested in risk managementactivities (although not enough) while most other companies have not focused on this activity. Towards the sustainable development, enterprises cannot just “take risks” in the passive and desperate ways, they should be towards to manage risk in proactively and wisely ways.

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“Bun cha” of Hanoi

“Bun cha” is a signature dish of Hanoi people with special and delicious taste; it is certainly an indispensable dish for Hanoi cuisine lovers.

“Bun cha” is made with familiar ingredients such as noodles, pork, vegetables, fish sauce.

“Bun cha” with slices of grilled pork, grilled chopped pork, add a few pieces of green papaya, enjoy with raw vegetables and fish sauce. In some places, we can also enjoy “bun cha” with traditional spring rolls.

“Bun cha” of Hanoi is voted by CNN into the list of the world’s most delicious summer dish. Earlier, “bun cha” is also included in the list of 10 best street foods in Asia by CNN.

“Bun cha” is not only preferred by foreigners but also many generations of Vietnamese people enjoy it. “Bun cha” is the traditional dish of Vietnam.

Further information   

Risk Prevention in Vietnam

 Trade promotion in Vietnam

Fraud Management in Vietnam

Due diligence corporate investigations

Vietnam entry strategy

Vietnam market intelligence

 Business consultants in Vietnam

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VIETNAM AND EUROPEAN UNION WILL ELIMINATE OVER 99% IMPORT TARIFFS ON EACH OTHER

At a press conference on October 30^th in Vietnam informed of important agreements between Vietnam and European Union (EU), Mr. Bruno Angelet – Ambassador, Head of Delegation of the European Union (EU) said that early August 2015, the EU and Vietnam has announced the conclusion of negotiations but the negotiation group continues to resolve the remaining technical issues, while improving documents.

Once completed, the Agreement must be approved by the National Assembly of Vietnam, the Council and the European Parliament. Accordingly, Vietnam and the EU will eliminate over 99% of import tariffs.

For the few remaining tariffs, both parties will grant each other tariff quota or tariff reduction. This can be seen as the highest level of commitment that Vietnam has achieved in the FTA has been signed so far.

In the investment sector, the commitments to ensure an open business and investment environment to help promote high quality investment flows of both the EU and other partners in Vietnam. Thus, Vietnam has the opportunity to become the connection for trade and investment activities between EU and other countries in the region.

In addition, the commitments related to investment, liberalization of trade, service, Government procurement and intellectual property protection… will also open up opportunities for both sides to approach each other’s market sand ensure balance overall benefit.

EU can become the best partner in the future of Vietnam because Vietnam is also becoming one of the most dynamic countries and have good relationship with EU in the region. EU can support Vietnam in many fields such as governance models and provide excellentservices in the field of infrastructure, training and education, the judiciary and law, health, social insurance and sustainable energy.

Further information   

Risk Prevention in Vietnam

 Trade promotion in Vietnam

Fraud Management in Vietnam

Due diligence corporate investigations

Vietnam entry strategy

Vietnam market intelligence

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CAN THO GRANTED LICENSE FOR 5 NEW FDI PROJECTS

In 10 months of this year, Can Tho has granted license for 5 new foreign direct investment (FDI) projects with a total investment of about 17.1 million USD.

These projects focus on sectors as manufacturing dried rice bran for export; repair and maintenance of agricultural/industrial machinery, commerce, processing industry and cinema.

Also in the past 10 months, Can Tho adjusted 38.4 million USD capital increases of 4 FDI projects, in which Lotte hypermarket project adjusted increase of 31 million USD. Currently, the accumulated until early of November 2015, Can Tho has 66 FDI projects with total registered investment capital of 954.6 million USD, implemented capital reached 346 million USD, accounting for 36% of registered investment capital.

According to the Department of Planning and Investment of Can Tho, total FDI capital into Can Tho till October 2015 was 55.7 million USD, reaching 75% of year target. These are positive signs in FDI attraction of the city.

In particular, Can Tho is reviewing and approving project to establish Pegasus international university with an investment of about 15 million USD and life-skills training school of Singapore. This will be the first international university and life-skills training school in Can Tho and the region, contributing to improve the quality of education and training for pupils and students, promoting education and training development, create high quality human resources for Can Tho and the provinces of the region.

As evaluated by the Department of Planning and Investment of Can Tho, in the near future, investment activities of Can Tho will prosper while many investors come to survey the investment environment in areas such as: resort, 5-star hotel, thermal power plant, solar power, project to produce and sell cosmetics, textile, waste treatment plant, hospital…They are big projects, using many workers will contribute to local and region economic development, creating jobs for local people, increase revenues of the city when implemented.

With the advantage of supplying raw material as seafood and agricultural products, Can Tho City is a potential land and ideal destination for investors come to build processing plants to serve domestic and international demand. In particular, the incubators with technology of Vietnam – South Korea in Tra Noc Industrial Zone promise to help develop mechanical engineering industry, agricultural and aquaculture processing in Can Tho.

Further information   

Risk Prevention in Vietnam

 Trade promotion in Vietnam

Fraud Management in Vietnam

Due diligence corporate investigations

Vietnam entry strategy

Vietnam market intelligence

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CONTRACTS SIGNED WHEN PRESIDENT OBAMA VISITS VIETNAM

There have been series of cooperation contracts that are signed between the AmCham (American Chamber of Commerce in Vietnam) members and Vietnam businessesafter the first day that President Barack Obama visits Vietnam.

On the trip to Vietnam of President Obama, AmCham and VCCI jointly organized the corporate event in Hanoi. At the event, the signing of agreements between member companies of AmCham and Vietnamese partners are took place.

In particular, the signing of treaties on climate change and clean energy includes 7 records:

– Memorandum of GE on the development of 1000MW of wind power: Estimated that in 2025, there will be 1,000 megawatts from wind power projects. With that capacity, wind power will be enough to supply for 1.8 million households in Vietnam over the next 10 years.

– Agreement on nuclear safety training: US will help Vietnam to train the human resources, equipped with the knowledge of nuclear procurement, design and build factories, licensing and safety checks of nuclear reactors in the future. At the same time, US experts will also advise about the effectiveness of this technology as well as economic benefits when developing.

– Memorandum of Understanding between the Vietnam Oil and Gas Group and Murph Oil Company: Murphy has participated in oil and gas exploration in Vietnam since 2012 and currently is cooperating to exploit gas in Nam Con Son. This memorandum will open up many opportunities for cooperation between the two sides in oil and gas, energy joint venture, accelerating the negotiation of the project in Tho Chu Island and many other contracts.

– Cooperation agreement of the solar energy projects between First Solar and Thien Tan: Thien Tan Investment and Construction Company have signed two major contracts to purchase solar panels worth 35 million USD to serve the solar photovoltaic plant, which has started construction since mid 2015. The plant has a capacity of 19.2 MW with total investment of 800 billion VND and is built on an area of 24 ha in Quang Ngai.

– Memorandum of Biomass Minnesota Plant: Tin Thanh Electricity Company cooperates with US businesses, negotiating the terms related to design and build of boiler biomass power. That helps saving of 10 – 20% electricity, reducing 200,000 tons of carbon each year.

Along with other agreements such as joint researching on lower Mekong, Memorandum of Understanding on climate change in the Mekong Delta…

The signing ceremony of the future investment projects includes the Memorandum of Understanding that The Grand Ho Tram Strip develops its 2nd hotel tower; Memorandum of Traffic Safety Program.

Accordingly, The Grand Ho Tram Strip has signed a Memorandum of Understanding with the Cotec Construction Joint Stock Company (CotecCons) on the expansion of The Grand Ho Tram Strip worth 75 million USD.

The construction of the 2^nd hotel tower with 559 rooms of The Grand Ho Tram Strip will be undertaken by CotecCons, bringing the total number of room of The Grand Ho Tram Strip to 1,100 rooms when completed.

After the completion of the hotel building, the actual total investment for the whole project has reached 1 billion USD.

In addition, in a memorandum on traffic safety program, the US will pour about 1 million USD to help Vietnam solving the challenges of traffic safety problems such as accidents, give helmets for citizens…

In the aviator industry, Vietjet Air (Vietnam) and Boeing (US) have signed contract worth 11.3 billion USD in the presence of President Tran Dai Quang and President Obama. With this contract, Vietjet Air will buy 100 Boeing 737 MAX 200 from Boeing.

Besides the contract signed with Boeing, Vietjet Air also signed contract with United Technologies Corp to buy engines for the aircrafts that Vietjet has signed and ordered with aircraft suppliers. The signed contracts worth up to 3.04 billion USD.

According to the executive director of the US Trade Association (AmCham), the visit of President Obama will further promote cooperation relations between the two countries in many fields; including economy, friendship between the two countries, security, human right, global and area issues of mutual interest.

The timing of the trip to Vietnam of President Obama has very important meaning because this is the time Parliament is preparing to consider ratification of the Trans-Pacific Partnership (TPP) at the end of this year.

AmCham believes that the TPP will bring many benefits and opportunities for companies, investors, workers, farmers and consumers in both the US and Vietnam. When fully deployed, the TPP will pave the way for the digital economy, strengthen the creative industries; contributing to a fair play ground for businesses and investors.

In addition, TPP will bring many important changes to the business environment in Vietnam and opens up many new opportunities, helping Vietnam to speed up in the industrialization, modernization and globalization process. This Agreement will help the private sector to have more opportunities to reach important markets, stimulating competition, attracting foreign investment and contributing to the construction of supply chain infrastructure; from that creates great opportunities for Vietnam enterprises, creating jobs and raise incomes for Vietnamese employees.

Further information   

Risk Prevention in Vietnam

 Trade promotion in Vietnam

Fraud Management in Vietnam

Due diligence corporate investigations

Vietnam entry strategy

Vietnam market intelligence

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