Vietnam has a way of attracting hundreds of billions of dollars more each year

19 - 11 - 2020

Mr. Johnathan Hanh Nguyen - Chairman of Imex Pan Pacific Group (IPPG) - said that developing financial centers and non-tariff zones can help attract hundreds of billions of dollars to Vietnam each year.

The financial center is the blood source supplying for the non-tariff zone.

Originally a financial inspector of Boeing, Mr. Johnathan Hanh Nguyen was the one who supported the opening of an official flight route between Vietnam and the Philippines in 1985.

As one of the first overseas Vietnamese to return home to invest, his Imex Pan Pacific Group (IPPG) has invested and cooperated in 30 projects with a total capital of more than 280 million USD. These projects bring in about 460 million USD in annual revenue and create jobs for more than 25,000 workers in Vietnam.

With his experience and capabilities, he and five other partners were assigned to implement the project of the international passenger terminal under Cam Ranh International Airport.

He has cooperated with partners such as DFS, SASCO, AUTOGRILL to invest in opening a series of duty-free shops, souvenir shops, fast food and many non-aviation services across Vietnam's airports and the Philippines.

IPPG has also invested 40 million USD in the Rex Arcade high-end shopping center located in the Rex Hotel, one of the French-style architectures and a symbol of Saigon built in 1927. In addition, the company also invested 400 billion VND to renovate the Trang Tien Plaza shopping center in Hanoi.

Mr. Johnathan Hanh Nguyen - Chairman of IPPG

On June 10, 2020, IPPG won the bid for the project in the Phu Quoc non-tariff zone. With a total land area of ​​101 ha, the total expected cost is 6,830 billion VND, the completion time is 5 years, one of the requirements given in the pre-qualification dossier is that the investors must have experience in complex construction projects, in which there must have a non-tariff zone or duty-free shop business area (the investor must be allowed to be the official distributor of the world's major brand names in Vietnam).

Mr. Hanh Nguyen said that the northern area of ​​Van Phong Economic Zone was studied by the group two years ago. Estimated amount of investment capital in this area is about 40 billion USD, IPPG can call for big foreign investors to invest in strong fields.

Share about the potential of the non-tariff zone and financial centers, a new thrust for Vietnam right after the pandemic, during the meeting with HUBA's businessmen on the 4th anniversary of HUBA Entrepreneur Café, Mr. Hanh Nguyen said that choosing 2020 to come up with a project prepared for 5 years, the group has been supported by the Prime Minister for the project to establish a non-tariff zone.

Investing 30 million USD focused on the high-end brand business 30 years ago, he is now a distributor of more than 108 international brands, which is a prerequisite for winning the bid and developing the non-tariff zone.

Outdated products are only from six months to one year but the prices are many times lower, which is a strong attraction for Vietnamese consumers. Normally, when domestic goods are exported to a non-tariff zone, the VAT rate of 0% is applied to them. This creates favorable conditions for strong development of tourism, accommodation, resort and shopping, stimulating the growth of tourism in Phu Quoc in particular and the provinces after the pandemic.

The domestic non-tariff zone is a place where tourists can find and buy branded goods at prices that are up to one-third cheaper than the original prices. This is also the business model that Phu Quoc is in need for tourists to combine rest, play, eat and spend on high-value goods.

On August 28, 2020, a decree on the non-tariff zone was signed and piloted the first in Phu Quoc.

“We have to build non-tariff zones in many places like Phu Quoc, Bac Van Phong, etc. China has 6 special zones and in the near future, they will have 10 special zones. Why do they love doing non-tariff zones, because of duty-free goods? Because billions of visitors to China will spend hundreds of billions of dollars on purchases.

Unfortunately, the decree strengthened key financial centers in Ho Chi Minh City and Danang have been interrupted. I suggest the Government should establish a financial center in the non-tariff zone as soon as possible, that point is very important. The NTZ would not be successful without having a financial center.

We will be the leader, continuing the mission of connecting with domestic and foreign businesses. I cannot deal with individual businesses directly, but I will work with HUBA to plan ahead when to press the button to approve 1/500 planning. Cooperation, accompanying, and development of the financial center together, because this is the blood source supplying for the non-tariff zone.

The world is 20 years ahead of us, we keep saying smart city, city 4.0, but the important thing is Expocity city like Long Thanh airport, it is easy to do. It does not mean getting the shirt cut again, but that is all about recondition, to have a whole new city.

To establish a financial center, I could not do it by myself. There were billionaires to do that with me for Danang. We have a 500 million USD project targeting 200 million customers for Danang", said Mr. Hanh Nguyen.

Strategy to Overcome the Pandemic

Referring to the business situation of IPPG during the pandemic, contrary to the concerns of many people about the decline in purchasing power, Mr. Hanh Nguyen said, brand purchasing power has not decreased. Previously, the Vietnamese rich people had to fly abroad to buy branded goods, now they can buy them in their home country.

Facing the difficult situation of flying to foreign countries, he instructed his staff to send new branded products photos, announced that they were in Vietnam and could deliver them immediately if needed. IPPG sells their products online and serves the customers at anytime and anywhere. Without having to open a new store, increasing staff numbers, the company has cut costs by 20% and revenue increased 15%.

"This is unprecedented, helping to increase the profits of IPPG during this pandemic", said Mr. Hanh Nguyen.

Not as favorable as selling on e-commerce sites, Tan Son Nhat Airport Services Joint Stock Company (SASCO) and Cam Ranh International Airport Terminal were negatively affected by Covid-19.

The project at Cam Ranh airport suffered the most damage with 25,000 workers. However, by transferring all 335 billion VND of profit last year as a backup fund, the airport terminal will still be safe in the next 5 years. About SASCO, the company has two segments: domestic and international. Due to the epidemic crisis, it has shifted staff from the international segment (currently unemployed) to the domestic to share the work instead of cutting staff numbers. SASCO's profit of over 300 billion VND was also retained, only partly divided.

“It is important to always speculate the situations and have the backup fund when doing business. The group has a reserve fund of more than 2,000 billion VND, so that it will be used when needed. However, looking back at this moment, we still do not need to use it because every company can save its own life”, Chairman of IPPG added.

Sharing about the conditions for consumers to buy low-priced branded goods right in the Ho Chi Minh city without having to fly to Van Don or another place, Mr. Hanh said two conditions are needed. Firstly, TP. HCM currently has an advantage when the TPP comes into effect, the tax rate from European countries will be 0, and those companies selling branded goods will reduce the price accordingly. However, because the US has withdrawn from the TPP, so among the two major sources of supplies from Europe and the US, we currently only get half the advantage.

“Why do not we negotiate bilaterally with the US for a strategic partnership opportunity with more breakthroughs in import and export? The bilateral agreement with the US helps us to be very safe for development, so that businesses do not fall into this recent situation any more”, Mr. Hanh Nguyen asked.

“I reiterate that the non-tariff zone will not sell 100% foreign goods, international visitors love Vietnamese handmade crafts. I have proven through the international airports, of which more than 50-60% are Vietnamese sales. Entrepreneurs should feel assured because we accompany and always have positions for Vietnamese businesses”, Mr. Hanh Nguyen affirmed.

Proposing to the Government, the Chairman of IPPG emphasized the role of the association in influencing the Government in institutional reform.

“We are still in trouble, the Government should save the businesses that are more in difficulty, do not split the money to all businesses. Enterprises like us do not need to save, because they already have backup funds. The biggest obstacle is administrative procedures, the Government needs to focus on saving them by drastic reforms, not saying in general.

Businesses more than ever should be calm during this tough time, reaching out to association presidents such as HUBA, VCCI for them to bring the problems to the Government. Those associations are the lifeline of the business, especially during this period. I hope the Government will work wholeheartedly for the business. We do not ask for money from the Government, we just need a mechanism.

35 years ago, we helped open a flight route from the Philippines to Vietnam, with experience and capability, I built a strategy for the business for the next 35 years, reaching out to all provinces and cities, accompanying the country to development”, said Chairman of IPPG.