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DRY BULK MARKET: CAPSIZE INDEX ON THE MEND
Wednesday, 03 April 2019 02:48

 

Capesize

The Baltic Capesize market shrugged off its recent negative sentiment to post daily incremental improvements over the last week. Pacific-led gains were seen early in the week. As the market drew to a close on Friday, higher Atlantic rates were being traded. Demand from all the major miners saw West Australia/China rates lift above $5.00 last week, rising to the mid-$5.00s mid-week, and over $6.00s as the week closed out. Timecharter rates rose sharply, with the Baltic Capesize Index (BCI) route C10 finishing at $8,117. A well-described 180,000-tonner fixed in the mid $10,000s. East Australian coal shipments too lent support. Transatlantic rounds traded mid $4,000s early in the week, rising to mid $6,000s as the week closed out. A well described modern Capesize, spot Gibraltar, fixed a Colombian round at $9,000. There is cautious optimism for the new week, but Brazil cargo has remained in short supply, with no end in sight to Vale’s woes. There was some limited cargo booked from Itagaui to Qingdao at $12.00 for prompt dates.

 

Panamax

A relatively uneventful week finished with a positive outlook. It began slowly, with rates everywhere except South America coming under pressure. Surplus tonnage in the North Atlantic coupled with dwindling fresh enquiry in the Pacific continued this week. Prompt tonnage seeking to remain in the Atlantic was forced to face Arrival Pilot Station (APS) rates, mainly from North Coast South America.

Kamsarmaxes were fixed at $11,500 with no ballast bonus, but vessels willing to do trips to the East were able to fix from an active South American market. Rates rose slightly, with modern tonnage fixed in the upper $14,000s plus high $400,000s ballast bonus. Rates in the North Pacific dropped initially before recovering some ground later in the week, but mainly for the better described units, with tonnage fixing North Pacific rounds at approximately $9,500. With a change in tone on the paper market, charterers began to ask for period tonnage again, however, there were few trades evident.

 

Supramax

It was a flat week for the Baltic Supramax Index (BSI) with little movement. Period activity remained limited, but an Ultramax, open Japan, was fixed at $12,500 for six to eight months trading. The Atlantic market remained static, with limited fresh enquiry from the East Mediterranean-Continent areas. East Coast South America appeared more active, with better levels achieved. A 58,000dwt vessel fixed delivery for an Up River trip to the Arabian Gulf at $14,000 plus $400,000 ballast bonus. The US Gulf was finely balanced, with a 52,000-tonner fixing in the mid $10,000s for a trip with petcoke to the Mediterranean. Demand remained strong in Asia, however, tonnage availability was high, so as the week ended, rates eased. A 56,000dwt ship fixed delivery for a Singapore trip via Indonesia, redelivery China, at $10,000. Further north, an Ultramax fixed a North Pacific round, delivery Japan, in the $10,000s. The Indian Ocean saw activity, with a 57,000dwt vessel fixed delivery Damman for a trip to Kosichang at $10,750.

 

Handysize

Rates climbed again in both basins in the past week and the Baltic Handysize Index (BHSI) was well supported. It is now above 430, improving over 100 points since mid-February. On the period front, a 38,000dwt ship, delivery in Southwest Pass with prompt date, was booked for four to six months at $10,300, with redelivery in the Atlantic. A similar-sized vessel, also open in the US Gulf region, was booked for a grain trip to Morocco at $9,850. A 30,000-tonner was fixed for scrap cargo to the East Mediterranean at $8,000, delivery Tampa. From East Coast South America, a trip to the Mediterranean was reportedly concluded in the high $9,000s on a 32,000dwt vessel, and in the mid $8,000s for a coastal trip on a 28,000dwt vessel. A couple of fixtures were concluded in the $4,000s for a run from Iskenderun/Canakkale to E

gypt. In the East, the Pacific market remained firm in general, with improved numbers discussed and fixed. A small Handysize vessel was paid $7,500 basis Indonesia delivery for moving alumina, via Australia, to Singapore-Japan range. A 38,000dwt ship open CJK was fixed at a rate in the low $9,000s for redelivery in Southeast Asia.
 
NESTLÉ VIETNAM LAUNCHES CUTTING-EDGE DISTRIBUTION CENTRE IN HUNG YEN
Wednesday, 27 March 2019 09:02

Swiss-backed nutrition firm Nestlé Vietnam inaugurated its Hung Yen distribution centre yesterday, its biggest in the northern region, as testament to the company’s commitment to long-term investment, sustainable and inclusive development in the Vietnamese market.

The Bong Sen centre, located on the premises of the Nestlé Bong Sen production plant in Thang Long II Industrial Park in Hung Yen province’s My Hao district is kitted out with most state-of-the art production and management technologies, such as Obiter Robot and SAP, helping the company to optimise storage, while reducing workplace risks for workers.

 

Nestlé Vietnam is the first company in Vietnam to make efforts to use cutting-edge automation technology Obitor Robot in its Vietnamese distribution system.

 

The new centre will help significantly shorten distribution time of the company’s products to consumers in the northern and north-central regions, while propelling the development of the local economy.

 

The new centre will help significantly shorten distribution time of the company’s products to consumers in the northern and north-central regions, while propelling the development of the local economy.

 

Also on the occasion, Nestlé Vietnam announced the plan to add MILO instant drink production lines to its Nestlé Bong Son plant, helping to double the plant’s production capacity.

 

The plan helps scale up Nestlé Vietnam’s total investment in Hung Yen province to more than $100 million by 2020.

 

Addressing the event, Bui The Cu, Deputy Chairman of the Hung Yen People’s Committee, hailed the company’s significant contribution to the province’s budget despite its short operations from May 2017.

 

“With the new distribution centre, Nestlé’s quality products will come to consumers faster and more hygienically, while reducing transportation time, costs, and related risks,” said Cu.

 

He also praised Nestlé for its leading role in 4.0 technology application – through the application of Obiter Robot technology in the distribution centre – to optimise the use of land and assure labour safety.

 

“I hope Nestlé will be an example for other enterprises to follow,” Cu added.

According to Beatrice Maser Mallor, ambassador of Switzerland to Vietnam, Nestlé’s long-term investment vision for and commitment to Vietnam reflects the country’s potential as an increasingly attractive business location.

 

“Nestlé in Vietnam is much more than just a range of popular consumer goods. The Nestlé brand is intrinsically linked to some of Switzerland’s core values. Among these is an uncompromising commitment to the highest possible quality standards.”

 

“This new distribution centre, with modern facilities, including the use of robotics, will contribute even more to better food hygiene in Vietnam, thus enabling the healthier and happier lives of Vietnamese consumers,” she said.

 

Nestlé Vietnam’s managing director Ganesan Ampalavanar said the launching of the Nestlé Bong Sen distribution centre is a testament to the company’s commitment to long-term investment, sustainable and inclusive development in Vietnam.

 

“We are happy to see that the Nestlé Milo brand recorded an impressive growth in the northern region nearly two years after the Nestlé Bong Sen plant was put into operation in Hung Yen, and that it is listed among the premium nutritional drinks by consumers,” said Ampalavanar.

 

In Vietnam, Nestlé operates six factories with more than 2,300 employees. Through continuous investment expansion, the company’s total investment capital in Vietnam has reached $560 million.

 

Nestlé Vietnam was conferred a certificate of merit by the Ministry of Planning and Investment for its outstanding achievements in Vietnam’s 30-year foreign investment journey and was listed as one of the 10 most sustainable businesses in Vietnam in 2018.

 
LOGGING ON TO E-COMMERCE
Monday, 18 March 2019 04:46

 

Figures show that online shopping has already reached 60 per cent of the Vietnamese population in 2019 so far, dominated by only a handful of e-commerce websites and social media pages. Richard Burrage, CEO of market research firm Cimigo Vietnam, discusses the trends.

Cimigo recently interviewed 300 men and women from Hanoi and Ho Chi Minh City, aged between 18 and 55. Results showed that food and ­beverage purchases are still by far the most common online purchases, being made by shoppers every three days on average. This represents a huge ­cultural shift in Vietnam’s eating and dining habits.

In fact, taking all online food and beverage items into account, the figure rises to almost 20 purchases a month. This is remarkable, considering that food delivery companies only begun to gain traction in Vietnam around five years ago, when there was very little scope for online ordering of general food and drink items.

As Vietnam zooms ahead of the novelty stage of e-commerce, there is really nothing that cannot be ­purchased online and Vietnam’s online shoppers are taking full advantage of the choice available to them. On the back of the familiarity and security of ordering food online several times a month, consumers now have ­confidence and trust in the wider ­shopping services available to them online and via mobile devices.

Two key factors are driving this ­retail revolution. Firstly, as commonly reported, Vietnam’s economy is ­booming and we are in an era of young professionals having larger disposable incomes. Alongside this are the ­technological advances that not only give us the platforms to shop on but the means to access them, in the form of mobile devices.

However, most purchases are still low in value. Currently, almost half of the transactions have a value of under VND300,000 ($13), with less than 10 per cent of purchases being over VND2 million ($87).

Websites versus apps

Currently, Vietnam’s online market for general purchases is dominated by four companies – Lazada, Shopee, Tiki, and Sendo – who have each built huge online marketplaces supported by ­sophisticated web technology and apps.

In 2018, these four online retailers enjoyed significant uptake of their apps, but this area is still dominated by the big social media companies in the country, Facebook and Zalo. Around 80 to 90 per cent of online shoppers have these apps installed, giving them immediate access to ­shopping at the swipe of a finger.

Mobile apps for online retailers, unsurprisingly, don’t come close to these percentages but around 40 per cent of online shoppers across all ages have installed the Lazada and Shopee apps. In the case of Shopee, over half of shoppers aged 18-35 have ­downloaded its mobile app.

With apps becoming such a ­fundamental part of our lives, we have to believe that online retailers will look to these channels as a way of increasing market share in what will become an increasingly competitive arena.

From Cimigo’s research, ­Facebook is now commonly used for fashion, which accounts for almost two-thirds of purchases made through the portal. The social media giant ­enjoys an omnipresent position and the ease with which independent retailers can create fan pages and online stores. As a result, it is not surprising that younger, fashion-conscious shoppers are migrating to Facebook instead of the malls.

Online platforms are finding their niches as well. Lazada relies heavily on fashion sales but nearly a quarter of their sales are from electronics, including gadgets and accessories, making them the leading marketplace in this sector.

Meanwhile Shopee is also big on fashion, and they are the strongest marketplace when it comes to ­cosmetics and personal care items. However, if we want to look at an ­online company that has truly captured a market segment then that would be Tiki, whose books and stationery ­market share exceeds all other ­marketplaces combined.

With online shopping still in its ­infancy in Vietnam, these channels have the opportunity to both strengthen their areas of specialisation as well as gain sizeable growth in the smaller segments. Product lines that are maybe not eye-catching now could well provide significant revenue streams as more Vietnamese ­consumers shop online.

Lazada under crossfire

Last week was a difficult one for Lazada.vn as the platform’s administrative oversight allowed the trading of dangerous toy guns. Several inspections have been conducted to clarify the origin of the goods, their distribution channels, as well as the identity of the sellers and buyers of the prohibited goods.

Several days ago, the Ho Chi Minh City Department of Industry and Trade visited the headquarters of Recess Co., Ltd., the operator of Lazada.vn to stage an inspection related to the selling of these toy guns and components that could cause serious physical injury.

“We have asked this company to provide documents and data. When the investigation is finished, we will report to the Ho Chi Minh City People’s Committee,” said a representative of the department.

Meanwhile, the Department of E-commerce and Digital Economy, in collaboration with the General Department of Market Surveillance under the Ministry of Industry and Trade, are also considering looking into the severity of the violation.

Earlier, dozens (even hundreds) of toy guns and components were displayed on e-commerce websites like Lazada.vn and Shopee.vn. These JinMing toy guns are 1:1 plastic replicas of M4A1 rifles produced in China and can shoot bullets made of plaster. The toy guns pack quite a punch as they can puncture beer cans at close range or break a plastic case – which means they are more than capable of causing bodily harm.

A question of loyalty

As online retail finds its feet, it is understandable that shopping ­platforms and online stores make ­massive investments in technology and marketing. Winning customers, and keeping them loyal, is key. ­However, in this period of early ­success for e-commerce in Vietnam it seems customers are responding more to convenience and pricing than ­customer service and brand loyalty.

Indeed, savvy Vietnamese ­consumers will put their purses and wallets ahead of brand loyalty; they understand the importance of ­comparing prices, and looking for ­bargains and promotions. With so much information available at the touch of a screen or click of a mouse, it is quick and easy to compare prices between products as well as brands. Online shopping allows for much ­easier browsing and comparison than the traditional brick-and-mortar ­shopping ­experience.

In Cimigo’s research around 30 per cent of shoppers rated their preferred channel or marketplace highly, leaving a very large chunk of business ­potentially lost. Online shopping ­platforms have an average net promoter score of only 19 in Vietnam. In the United States, the score is 45. The dynamics and technology of online shopping in Vietnam may be hugely different from traditional shopping but customer service and loyalty is not.

The fact is that no single ­e-commerce website has yet cracked it. With companies continuing to understand the very new market of Vietnam, ­diverse strengths and weaknesses are apparent, making it interesting to see whether they continue to play to their strengths or look to improve in weaker areas in order to build market share.

Feedback from online shoppers shows that customer service is the one area where e-commerce providers can make significant improvements. As with other online services, customer satisfaction is of course ultimately the key to success and should not be ­ignored for the sake of revenue.

The signs are that where there is a wide product selection, backed up with strong search and comparison ­functionality, shoppers are happy to stay with one marketplace and not hop around looking for better prices.

 

 
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