작성일자: 2013.9.3

작성자: Ms. Nguyen Thi Sinh (nt.sinh@kotra-hanoi.org.vn)

 

 

1. Economic Trend

 

□ Gross Domestic Product(GDP)

 

 ○ Vietnam is a developing economy in the Southeast Asia. In recent years, the nation has been rising as a leading agricultural exporter and an attractive foreign investment. However, in 2012, problems and instabilities, which have existed for years in the internal economy, were not adequately solved. The lack of mobilized capital along with the decline in sales caused pressure for businesses, especially small and medium enterprises. The inflation was so high that Vietnam had to tighten the money supply during 2012. This policy drove many enterprises to suspend their operations.

 

Economic growth in 2012 compared to 2011

Indicators	2011 compared to 2010	2012 compared to 2011
GDP growth rate	+5.89	+5.03
Index of industrial production(IIP)	+6.8	+4.8
Total export turnover	+33.3	+18.3
Total import turnover	+24.7	+7.1
Average CPI in comparison with the previous year	+18.58	+9.21

Source: General Statistic Office(GSO)

 

 ○ Generally, the country’s economic growth in recent years has been mostly owing to the service’s contribution; the sectors of agriculture-forestry-fishery and industry-construction have met many difficulties in production and business. The table 1 shows that GDP in 2012 increased by 5.03% compared with 2011. According to statistic of GSO, within the national growth of 5.03%, the sectors of agriculture, forestry and aquaculture rose by 2.72%, contributing 0.44% points; the sector of industry and construction increased by 4.52% contributing 1.89%, and the services sector increased by 6.42% contributing 2.7%.

 

Figure 1: GDP growth rate in 2013 compared to the previous years

 

 ○ The figure 1 shows that the Gross Domestic Product(GDP) in Vietnam expanded 5% in the second quarter of 2013 over the same quarter of the previous year. Vietnam GDP growth rate averaged 6.21% from 2000 until 2013, reaching an all time high of 8.46% in December of 2007 and a record low of 3.14% in March of 2009. Overall, these figures demonstrate that Vietnam’s economy has not yet escaped difficult times. The Asian Development Outlook 2013(ADO) forecasted GDP growth of 5.6% next year if Vietnam achieves progress in strengthening its banking sector and large industrial economies recover. It also expected inflation to be around 7.5% this year 2013.

 

□ Vietnam industrial production

 

 ○ In Vietnam, industrial production measures the output of businesses integrated in industrial sector of the economy such as manufacturing, mining, and utilities. The index of industrial production in 2012 increased by 4.8% compared to 2011, in which the mining industry rose by 3.5%, the processing industry surged 4.5%, production and distribution of electricity and gas was up by 12.3%, and water supply management and waste water treatment increased by 8.4%.

 

 ○ Industrial production in Vietnam increased 4.4% in August of 2013 over the same month in the previous year. Vietnam industrial production averaged 9.85% from 2009 until 2013, reaching an all time high of 28.4% in January of 2010 and a record low of -10.1% in February of 2013

 

 

 ○ According to statistic of GSO of Vietnam, consumption index for the manufacturing in the first six months of 2013 rose 8.3% from last year’ same period. Stock index as of 01/7/2013 of the manufacturing rose 8.8% from last year’ same period. Its stock index in June was 71.4% and was 75.4% in first six months of 2013.

 

□ Sectoral issues

 

 ○ The followings aim to indicate situation of several main sectors which are supposed to have demand for different boilers in Vietnam.

 

 ○ Food and Drinks

  - A part from existing local manufacturers, Vietnam food industry attracts more regional players in 2012. Here are some typical examples.

   · Philippine food major Jollibee Worldwide, the wholly owned subsidiary of Jollibee Foods, in early 2012 acquired a 50% stake in Super Foods Group. The stake will include a 49% share in SF Vung Tau Joint Stock Company in Vietnam and a 60% share in Hong Kong-based Blue Sky Holdings.

   · Similarly, Japanese confectioner Ezaki Glico announced in early 2012 that it would acquire a 10% stake in Vietnam-based sweets maker Kinh Do Corp, reports Reuters. The company will purchase 14mn newly issued shares in the sweets maker. The company aims to expand its business presence in South East Asia through the expansion.

   · Thai consumer food and agribusiness firm Charoen Pokphand Foods(CPF) in late 2011 acquired a 74.18% stake in Vietnam-based feed business and agribusiness services firm CK Pokphand.

  - Vietnamese Soft Drinks Sector trends to move towards consolidation.

   · Per capita consumption of soft drinks in Vietnam is low but growing. The soft drinks sector is dominated by multinationals The Coca-Cola Company and PepsiCo, which jointly command an estimated 88% share of the market. The major focus of the multinationals is on carbonated soft beverages, with small local drinks firms producing other types of drinks and fighting it out for the remaining market share. The largest of the other players is Saigon Beverages Joint Stock Company(Tribeco), with an approximate 6% market share.

   · The announcement in late 2012 of a tie-up between Suntory and PepsiCo in Vietnam looks like it could prompt further consolidation in the industry. Tan Hiep Phat was established in 1994 and is a strong player in energy drinks and the market leader in ready-to-drink tea. The group's brands include Barley Lemon Green Tea, Zero Degree(green tea), Laser, Dr Thanh and Number One, and the firm registered an average growth rate of 40% between 2007 and 2010. This growth has pushed the firm to invest in capacity, and in September 2012 Tan Hiep Phat Group began construction of a new plant in northern Ha Nam province. The factory, which will have annual capacity of 600mn litres, is expected to focus on the production of the Number One energy drink brand. Indeed, it has been reported that local drinks group Tanh Hiep Phat is looking for an international partner to help it to maintain its competitive position, and they mentioned the Coca-Cola Company, but the representative of Coca-Cola had not commented on the idea so far.

 

 ○ Shipbuilding industry

  - Vietnam had more than 60 shipbuilding and repairing yards owned by the Ministries of Defense, Fisheries and Transport. In early 2009, Vietnam was able to build the biggest ship with the capacity of 56,000 DWT and repair ships with the capacity of 100,000 DWT. The local shipyards mainly produced steel vessels for cargo transport and offshore fishing.  The bigger shipyards - like Nam Trieu and Halong Shipyard in northern Vietnam – focused on building shipyards up to DWT 53,000 - and plan to develop further to enhance capacity up to DWT 100,000. Some 50 minor shipyards were able to build cargo ships of 6,500 DWT.

     However, Vietnam's shipping sector has suffered from a number of factors, including antiquated infrastructure, a byzantine bureaucracy, inflation, a trade deficit and a weak currency. The problems currently experienced at Vinalines are indicative of a deeper malaise in the Vietnamese shipping sector. State-owned shipbuilder Vinashin was bailed out in 2010 when its US$4.5bn debt threatened to bring down the entire Vietnamese economy.

 

 ○ Vietnamese fish sauce market

  - According to Nielsen Vietnam, major food manufacturers such as Masan Consumer, Hung Thinh Co., Ltd, Acecook Vietnam, and Lien Thanh Co., Ltd successfully captured market share of 65.3%, 4.6%, 2.6%, and 2.1%, respectively, in 2010. In 2010, the top five brands together accounted for 76.6% of the total fish sauce retail market in Vietnam. Besides, the others players are running small business, and for such fish sauce manufacturers, boilers are not in urgent need.

  - Outstanding competitors are listed as below together with their contact details in Vietnam.

 

Massan Consumer     Masan Consumer is one of Vietnam’s largest consumer product companies with leading market share positions in the condiment, convenience food and instant coffee categories. Massan’s key brands include Chin-su (soya, fish and chili sauces), Tam Thai Tu (soya sauce), Nam Ngu (fish sauce), Rong Viet (chili sauce), Omachi, Tien Vua, Oh Ngon, Kokomi (instant noodles), Vinacafé (coffee) and De Men (instant cereal).     - Contact details:    · Address: 8th Floor, Central Plaza, 17 Le Duan, District 1, Ho Chi Minh City, Vietnam    · Tel: +84-8-6256 3862    · Fax: +84-8-3827 4115    · Website: www.masanconsumer.com/ www.masanfood.com

Hung Thinh Trading Production Fish Sauce Co. Ltd     This is one of famous fish sauce manufacturer in Phu Quoc     - Contact details:    · Address: G13/22 Hamlet 7, Le Minh Xuan Ward, Binh Chanh Dist., Ho Chi Minh City, Vietnam    · Phone: +84-8-3766 1156    · Fax: +84-8-3766 1468    · E mail: Hungthinh-co@hcm.vnn.vn/ hungthinh84phuquoc@yahoo.com    · Website: www.hungthinhfishsauce.com.vn/ (under construction)

Acecook Vietnam     The Company specializes for noodle, vermicelli, fish sauce, beverage, and detergent. The company commands a skillful and dedicating workforce of more than 5,000 employees, and its annual sales volume is US$100 million. Acecook Vietnam's revenue has dramatically increased, which is over 30% per year. The company serves not only domestic but also foreign markets. Products of Acecook Vietnam are sold in over 40 countries throughout Asia, Europe, America, Africa and Middle East.     - Contact details:    · Factory Address: Lot II-3, Road No. 11 – Tan Binh Industrial Park, Tay Thanh Ward,                                  Tan Phu District, Ho Chi Minh City    · Tel: +84-8-3815 4064 / +84-8-3815 0969    · Fax: 84-8-3815 4067    · E mail: acecookvietnam@vnn.vn    · Website: www.acecookvietnam.com

Lien Thanh Seafood Processing Joint Stock Company     Established in 1906, the company has carried on fish sauce business as a way to preserve national identity. And they still keep to traditional method of making fish sauce.     - Contact details:    · Address: 243 Ben Van Don, Dist 4, Ho Chi Minh, Viet Nam    · Tel: +84-8-3943 0790/ +84-8-3511 7455    · Fax: +84-8-3826 7435    · Website: www.nuocmamlienthanh.vn

 

 

2. Supply and Demand

 

□ Supply

 

 ○ Currently, there are two biggest local players, that is, Vietnam Boiler Joint Stock Company (VBC) and Dong Anh pressure equipment Joint Stock Company.

 

Vietnam Boiler Joint Stock Company(VBC)     Vietnam Boiler Joint Stock Company(VBC) is Vietnam's leading boiler and pressure equipment manufacturer. The company is specialized in designing and manufacturing steam boilers, pressure equipment, over-sized, over-weight steel structures and other mechanical products. They are trading in and imports-exports of boilers, pressure equipment, machines, equipment, materials(steel plates, steel tubes), accessories(pumps, oil burners, valves) for specific purpose. They have capacity of supplying and installing of important machinery and equipment through the country, supplying over 3,000 boilers and more than 40,000 MT of products.   Here are their typical products: oil/ gas fired boiler, coal fired boilers, multi-fuel boilers, and heat recovery boilers.     - Contact details:    · Address: Dong Anh, Hanoi, Vietnam    · Tel: +84-4-3968 9030    · Fax: +84-4-3968 2330    · E mail: duan@noihoivietnam.com.vn – Project Center    · Website: www.noihoivietnam.com.vn

Dong Anh pressure equipment JSC     Dong Anh pressure equipment JSC is the biggest boiler manufacturers in the North of Vietnam. The company is specialized in manufacturing pressure tanks, steam collectors and pressure equipment. They are manufacturing steam boilers, coal fired boilers, oil boilers, gas boilers.     - Contact details:    · Address: No. 23, Doc Van, Mai Lam, Dong Anh, Hanoi, Vietnam    · Tel: +84-4-3961 0170    · Fax: +84-4-39611 523    · E mail: info@noihoidonganh.com / info@apluc.vn    · Website: www.noihoidonganh.com

 

□ Demand trend

 

 ○ Three types of boilers in Vietnam are coal fired boiler, oil fired boilers and type of boilers using electricity. It is supposed that coal fired boiler is still the most favorable in Vietnam.

 

 ○ Reasons: Coal price in Vietnam is low compared with price of other energy sources. Vietnam is a country which is rich in natural resources. Among them, coal is one of the most important resources. Not mention that the Government ever provided subsidies to coal, and thus coal price ever was the cheapest energy source in Vietnam. According, most building, and manufacturing factory owners tend to prefer coal fired boiler with purpose of saving cost and expense.

 

 ○ The low growth of Vietnam’s economy in general, and slow growth of equivalent industry of boilers during last years discussed as above caused less demand for boilers in Vietnam.

  - In the food & beverage industry, and fish sauce market: Most of manufacturers have already purchased enough boilers for their production line. Only some big companies, who have plans to expand their business capacity, may have demand for more boilers to serve their new production line.

  - Shipbuilding industry: Currently, it is not positive to enter Vietnam marine boiler market as the shipbuilding in Vietnam is experiencing very difficult situation, which is explained under section I above. Besides, huge number of food and beverage manufacturers went bankruptcy during last year. The buyers have another choice with used boilers.

 

 

3. Import Tariff

 

□ Importation Trend

 

 ○ As there have not been any official and specific statistics related to the importation of each type of boilers, the following table only describes the import value of HS Code 8402 Item which are steam or other vapor generating boilers (other than central heating hot water boilers capable also of producing low pressure steam); supper-heated water boilers.

 

Table 2: Import value of Product 8402

(Unit: US Dollar thousand)

Country/ Year	2007	2008	2009	2010	2011	2012
Total	153,912	113,687	29,678	62,577	274,312	285,208
China	12,016	31,062	11,887	22,235	248,581	239,041
Korea	10,889	3,506	3,190	26,197	4,351	26,268
Chinese Taipei	7,378	7,778	2,409	3,090	4,252	3,634
Indonesia	4,274	347	0	1,004	3,623	583
Germany	4,681	10,606	2,583	1,867	2,852	2,585
Japan	84,910	36,873	1,901	907	1,374	2,110
Others	29,764	23,515	7,708	7,277	9,279	10,987

Source: ITC calculations based on UN Comtrade statistics, 2013

 

 ○ The import volume of HS Code 8402 item fluctuated during last six years. As of 2012, the total import value dramatically increased by around 4.3% to US$ 285,208 compared to 2011. China is the leading exporter of HS Code 8402 item to Vietnam, which sky-rocketed from the 2007’s exported value of US$ 12,016 to US$ 239,208 in 2012. The main reason is price of completed boiler originated in China is cheap. Republic of Korea with export value of US$ 26,268 in 2012 ranked the second though the import value did not account a big part of total import value.

 

 ○ For the importation of HS Code 8402 items, as of 2012, the market share by countries is illustrated in the following pie-chart. China mostly dominated boiler market in Vietnam.

 

Import Share by Countries in 2012

 

□ Import Procedure

 

 ○ As normal, it is required to present the following documents for customs clearance:

  - Contract

  - Certificate of origin(C/O)

  - Bill of Lading(B/L)

  - Certification of Quality(C/Q)

  - Packing List(P/L)

  - Commercial Invoice

 

□ Import Tax

 

HS code	Description	MFN	AKFTA	VAT (%)
8402	Steam or other vapor generating boilers (other than central heating hot water boilers capable also of producing low pressure steam); supper-heated water boilers.
	- Steam or other vapor generating    boilers:
840211	-- Water tube boilers with a steam      production exceeding 45 t per hour:
84021110	--- Electrically operated	0	0	10
84021120	--- Not electrically operated	0	0	10
840212	-- Water tube boilers with a steam      production exceeding 45 t per hour:
	--- Electrically operated
84021211	----- Boilers with a steam production           exceeding 15 t per hour	3	3	10
84021219	---- Other	3		10
	--- Not electrically operated:
84021221	----Boilers with a steam production        exceeding 15 t per hour	3	3	10
84021229	---- Other	3	3	10
840219	-- Other vapor generating boilers,      including hybrid boilers:
	--- Electrically operated
84021911	----Boilers with a steam production        exceeding 15 t per hour	3	3	10
84021919	---- Other	3	3	10
	--- Not electrically operated:
84021921	----Boilers with a steam production        exceeding 15 t per hour	3	3	10
84021929	---- Other	3	3	10
840220	- Super-heated water boilers:
84022010	-- Electrically operated	0	0	10
84022020	-- Not electrically operated	0	0	10
840290	- Parts
84029010	-- Boilers bodies or shells	0	0	10
84029090	-- Other	0	0	10

Note:

MFN: Most Favored Nations (Korea belongs to this group of nations)

CEPT: Common Effective Preferential Tariff (ASEAN 10 member countries)

AKFTA: ASEAN-Korea Free Trade Area

Source: Export–Import Tariff and VAT on Imports Book (Ministry of Finance)