Ibsm Pregroup Proj(Final!)


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Presentation before departure for study trip to Vietnam, IBSM 2009

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  • "It's very meaningful for Vietnam, both practically and also spiritually - it can prove to the whole nation and Vietnamese people that Vietnam can build a refinery."

  • Government attributed slow growth in export turnover of footwear sectors to businesses' dependence on materials. Most of them do outwork for joint ventures or wholly foreign-owned companies. 

  • Foreign invested manufacturers focused on employing cheap, low-skilled Vietnamese workers
  • Main products
    Shrimps (50%)
    Pangasius from the Mekong – (25%), Squid
    Cuttlefish and Octopus (7%)
    Dried Seafish Products (5%)
    others (13%).
  • 80% privately owned.
    6% state-owned. Larger companies + more investments
  • Vietnam has about 2,520 wood processing establishments, of which 420 are foreign-invested, according to the association. The export target is US$3.2 billion for 2010.
  • Among the many local wood exporters, Khai Vy is one of the most successful, with four plants employing 4,800 workers and exporting over 500 containers of wood furniture each month.  Kaiser in Binh Duong province is also a major producer in the same class.

  • Vietnamese wood furniture products are exported to 120 countries, of which the US imports up to 30% of the country’s total wood furniture and forestry product value. The United States is Vietnam’s biggest importer of wood products, with the EU and Japan together representing 55% of imports. The global recession has lowered the purchasing power of the US and EU markets by 30%, and as a result fewer export contracts have been signed. A representative of the southern Binh Duong province’s Department of Trade and Industry said that about 95% of Vietnam’s wood furniture exporters faced difficulties because their partners had cancelled or reduced import orders. Contracts have fallen between 30% and 60% recently, compared to the same period last year, putting many companies on the brink of bankruptcy. Quyen also said that only 50% of those involved in the wood processing industry could withstand the downturn and the remaining half were in a danger of bankruptcy or experiencing severe hardships.
  • Ibsm Pregroup Proj(Final!)

    1. 1. Vietnam’s Industries & Industrial Park Done By: Plan
    2. 2. Industrial Parks..
    3. 3. Location of the Industrial Parks  71 industrial parks including 67 industrial zones (IZs), 3 export processing zones (EPZs), and 1 high-tech park  Among these, almost all projects (93%) are engaged in manufacturing while the rest provide infrastructure services inside these parks  Noi Bai Industrial Zone  Dai An Industrial Zone  Phu Dien Industrial Zone
    4. 4. Vietnam’s infrastructure  Investing more than one third of its GDP  9% goes into infrastructure  Seaports and electric power - most important factor now for firms considering investment in Vietnam  Large scale infrastructure such as (ports, airports, major highways, national power grids) and local infrastructure such as (road access, apartments, water plants, power substations, etc.) are both necessary in the long run.
    5. 5. Investment incentives Tax  Exempt from payment of import duty on equipment, materials, means of transportation and other goods for implementation of investment projects in Vietnam.  Entitled to investment incentives in corporate income tax under the law on corporate income tax. Land Investors shall be entitled to exemption from or reduction of land use tax, land use fee, land rent.
    6. 6. Investment incentives  Carry forward losses  Losses by the investors can be carried forward to the following year. The amount of such losses shall be set off against taxable income for the purposes of corporate income tax  Construction of infrastructure systems inside fences of industrial zones, export processing zones and high-tech zones
    7. 7. Top Currency Earners..
    8. 8. Rice World’s 2nd leading rice exporter Supplies 5.2 million tones of the commodity to the world market annually  Year 2008 revenue= 610 million USD
    9. 9. Crude Oil Major crude oil exporter in Asia World's 30th largest oil-producing nation. 40 years of experience in operation and development
    10. 10. Crude Oil  US$2.5 billion to construct FIRST oil refinery  Named Dung Quat, located in the central province of Quang Ngai  Annual processing capacity of 6.5 million tones  Significant moment in the country's development and energy security
    11. 11. Garment and Textiles World's 16th biggest garment and textile exporter Largest manufacturing export in Vietnam Government encourages the establishment of more garment enterprises to create more jobs
    12. 12. List of 15 Asian countries importing Vietnam's textile Order Country Value Import percentage 1 Japan 325,048,758 46.551% 2 Taiwan 197,529,175 28.289% 3 South Korea 75,953,429 10.877% 4 Singapore 55,796,225 7.991% 5 Hong Kong 26,629,782 3.814% 6 Malaysia 7,570,083 1.084% 7 Laos 3,151,433 0.451% 8 China 2,599,437 0.372% 9 Thailand 2,145,586 0.307% 10 Philippines 967,007 0.138% 11 Combodia 590,550 0.085% 12 Iran 106,202 0.015% 13 Iraq 92,995 0.013% 14 India 73,013 0.010% 15 Indonesia 12,390 0.002% Total 698,266,065 100.00% Source:GeneralDepartmentofCustoms.
    13. 13. Footwear Sold overseas, mainly in the EU, Japan and the U.S Footwear revenue worth more than us$3 billion in 2005 yearly rise of 11.7 per cent
    14. 14. Footwear European Union anti-dumping measures Number of leather shoes exported decreased from 120 million (2005) to 107 million pairs (2006) and slumped further to 91 million pairs (2007) Diversion: Strive to penetrate more deeply into Japan instead Export revenue suffered a 6.3% decrease Anti dumping law is…  Disallowing foreign producers to sell their products to an importer in the domestic market at prices lower than in their own national markets, or at prices below cost.  The sale threatens to injure a domestic industry producing similar products and retards the establishment of potential industries.  It is a form of price discrimination between two national markets.
    15. 15. Electronic Goods Lack of strategic planning Over-focused on employing cheap, low-skilled Vietnamese workers Failure to train high-tech engineers Serious imbalance in production
    16. 16. Seafood Main Products Shrimps 50% Pangasius 25% Squid, Cuttlefish & Octopus 7% Dried Seafood Products 5% Others 13%
    17. 17. Seafood 23% 33% 16% 28% Seafood Export Markets USA Japan European Union Others
    18. 18. Wooden products 5th largest hard currency earner 2008’s export value of $2.8 billion 5th largest wood-product exporter in the world after China, Malaysia, Indonesia and Thailand. Drastic drop in exports in 2009 due to global downturn (U.S-> core importer)
    19. 19. Plastics Industry..
    20. 20. Introduction  50 years of history  Infant stage of production  2700 plastic corporations in Vietnam  Main center of distribution: Ho Chi Minh City
    21. 21. In the recent years, demand for Vietnam’s plastic goods had increased significantly as compared to other countries. Has an annual growth rate of 30%! Introduction
    22. 22. Industry Characteristics  Labor intensive industry  Unskilled workers  Outdated machines Low level of Technology
    23. 23. Plastic Import Industry  2nd largest importer of raw plastic materials in Asia in 2004  1.5 – 2 million tons  Major exporters to Vietnam:  China, South Korea, Japan and Taiwan  Types of imported raw materials:  Polyethylene (PE), polypropylene (PP), polyvinyl chloride E (PVCE) and polyvinyl styrene (PS)
    24. 24. Plastic Export Industry  Clients of Vietnam’s plastic goods:  Cambodia, Laos, India, Sri Lanka, Japan, China, the EU, Taiwan and the US
    25. 25. Automotive Industry..
    26. 26. Introduction One of the youngest in the ASEAN region  local assembling of cars started at the end of the last century  open for imports of new cars on a larger scale only since 2003  used cars to a certain age maximum are allowed for import only since 2006 Low cost manufacturer of automotive components Hence, Vietnam’s car penetration is one of the lowest in the world
    27. 27. Imports To protect the local automotive industry  Import licensing scheme  High customs duties on CBUs  Various taxes and fees applicable when buying new cars
    28. 28. Pre-WTO  The government’s decision to  reduce tariffs on imported cars  imports of used cars and their tariffs are also lowered  Hence, stiff competition between the car makers in Vietnam  respond to these government’s new rulings by immediately dropping their prices!
    29. 29. Pre-WTO Gauged to be a potential yet underdeveloped market, the Vietnamese automobile industry is becoming increasingly attractive to the foreign carmakers  Hyundai publicized the transfer of its automobile engine production technology to its Vietnamese partner  An automobile factory, producing Hyundai buses and trucks, was inaugurated in northern Bac Giang province
    30. 30. Furniture Industry..
    31. 31.  Leading country in manufacturing furniture in the Asia market  Country’s fifth largest hard currency earner  Domestic wood processing industry  Inexpensive  High in quality
    32. 32.  2,520 wood processing establishments  420 are foreign-invested  Export target for 2010 is US$3.2 billion
    33. 33.  Specializes in production of outdoor and indoor furniture, mainly made of wood and aluminum  Employing 4,800 workers  Exporting over 500 containers of wood furniture each month  Headquarter in Ho Chi Minh City
    34. 34. •Since 2005 •980 Employee •Total investment of US$10 m •Since 2004 •927 Employee •Total investment of US$7 m •Since 1995 •858 Employee •Total investment of US$3m •Since Aug 2001 •520 Employee •Total investment of US$15 m KHAIVY HCMC FACTORY DUYEN HAI 1 FACTORY KHAIVY QUINHON DUYEN HAI 2 FACTORY
    35. 35. However..  Purchasing power of the US and EU market (make up to 55% of imports)have lowered by 30% due to the global recession!  Export dropped drastically in 2009! ...So we will need investment incentives to overcome this!
    36. 36. Investment Incentives  Government to stop collecting export taxes on wood products temporarily  Export promotion of wood products  Wood processors’ debt repayment periods to be extended  Companies to be provided with easier access to loans
    37. 37. THANK YOU ! - Plan B