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Now on BBC News, all the latest business news live from Singapore. | :00:00. | :00:14. | |
Taking off. Asia's airlines are turning a profit once again. We find | :00:15. | :00:24. | |
out why. US President Barack Obama visits Vietnam. What will this mean | :00:25. | :00:27. | |
for the country's fledgeling technology sector? Good morning, | :00:28. | :00:39. | |
Asia, hello world. It is Tuesday. Glad you could join us for this | :00:40. | :00:47. | |
edition of Asia Business Report. Let's start off with the Asia | :00:48. | :00:50. | |
Pacific airline industry and it is in the black again. After a few | :00:51. | :00:55. | |
difficult years, the Association of Asia-Pacific airlines say they have | :00:56. | :01:02. | |
recorded combined earnings of 6.9 billion US dollars last year. In | :01:03. | :01:08. | |
that compares with losses of $1.2 billion for 2014. So what has | :01:09. | :01:12. | |
changed for the airline industry in the region? I posed that question | :01:13. | :01:18. | |
earlier. The major thing behind this is that costs have come down. That | :01:19. | :01:23. | |
has been led by the lower oil price. Earlier this year although prices | :01:24. | :01:28. | |
have been down for some time a lot of airlines are rolling through | :01:29. | :01:30. | |
their previous hedges so they are taking advantage of those prices and | :01:31. | :01:34. | |
that is where we are seeing that profitability come about. It remains | :01:35. | :01:37. | |
a tough environment, very competitive. Especially for Asian | :01:38. | :01:40. | |
airlines are seeing that profitability come about. It remains | :01:41. | :01:42. | |
a tough environment, very competitive. Especially for Asian | :01:43. | :01:49. | |
airlines amongst the sign. Can this kind of proper profitability amongst | :01:50. | :01:56. | |
Asian carriers be sustained in 2016? At this stage it looks like it | :01:57. | :02:00. | |
will. Oil prices have come up slightly but around the $50 a barrel | :02:01. | :02:05. | |
mark which is where most airlines' business cases on the long-term have | :02:06. | :02:08. | |
been. In that sense it should sustain them through but again, | :02:09. | :02:12. | |
these airlines are still going to have to make smart moves to stay | :02:13. | :02:15. | |
ahead of the competition. They are going to have to invest in products | :02:16. | :02:20. | |
to make that a long-term, viable thing for them. What kind of smart | :02:21. | :02:24. | |
moves should these Asian carriers adopt? Are they keeping these | :02:25. | :02:29. | |
savings or are they passing them on to the passengers? At the moment | :02:30. | :02:40. | |
they are keeping a hold of I think longer term they will have to pass | :02:41. | :02:43. | |
those savings, particularly if this market remains quite competitive, | :02:44. | :02:45. | |
and so there is definitely an incentive for them to keep on | :02:46. | :02:47. | |
cutting fares. That will mean they have to keep investing in new | :02:48. | :02:50. | |
aircraft that will have to be more efficient, and look at ways of doing | :02:51. | :02:53. | |
things more efficiently, may be flying longer routes. For instance | :02:54. | :02:57. | |
Singapore airlines plan on flying non-stop began to the United States. | :02:58. | :03:01. | |
That will give them an advantage over a carrier which might have to | :03:02. | :03:05. | |
stop in the Middle East or somewhere along the way -- Singapore Airlines. | :03:06. | :03:12. | |
In other business is making headlines, American beverage giant | :03:13. | :03:16. | |
Coca-Cola has stopped producing soft drinks in Venezuela, because of a | :03:17. | :03:21. | |
sugar shortage in the country. Sugarcane production has been | :03:22. | :03:25. | |
falling off the back of rising cost. The company said it would | :03:26. | :03:29. | |
continue producing sugarfree drinks such as Coca-Cola light. It comes | :03:30. | :03:35. | |
after their biggest brewer close their facilities due to a bar Bali | :03:36. | :03:43. | |
shortage. Toyota is recalling 1.6 million vehicles in the United | :03:44. | :03:47. | |
States to replace potentially faulty airbag inflated as. The Japanese | :03:48. | :03:53. | |
automaker said the Japanese recall includes some but not all models of | :03:54. | :04:01. | |
the Corolla, Siena and Lexus. Toyota says it has recalled over 4 million | :04:02. | :04:09. | |
vehicles in America over airbags. Cash machines and convenience stores | :04:10. | :04:16. | |
across Japan may have been hit by fraudsters with $13 million taken | :04:17. | :04:19. | |
using credit cards created from information stolen from a South | :04:20. | :04:24. | |
African bank. Reports say the money was withdrawn in less than three | :04:25. | :04:29. | |
hours, from 1400 cash machines. Police suspect more than 100 people | :04:30. | :04:35. | |
were involved. India will invest $500 million to build and operate a | :04:36. | :04:39. | |
key uranium port following talks between Prime Minister Narendra Modi | :04:40. | :04:46. | |
and the President of Iran. The port is close to run's border with | :04:47. | :04:51. | |
Pakistan, and it would open a transit route to Afghanistan in | :04:52. | :04:55. | |
Central Asia, for Indian goods and products, avoiding the land passed | :04:56. | :05:01. | |
through Pakistan. When US President Barack Obama visits Ho Chi Minh city | :05:02. | :05:05. | |
later today he will be touring a shared office space called | :05:06. | :05:11. | |
DreamPlex, which has been described as Google needs Vietnam. It plays | :05:12. | :05:16. | |
host to a vibrant technology start-up scene with increasing | :05:17. | :05:19. | |
interest from foreign investors. As just one example, the Silicon Valley | :05:20. | :05:26. | |
companies are starting a $500 million fund dedicated to Vietnam. | :05:27. | :05:33. | |
This is the first of an Apple launched in 2012. The tech savvy | :05:34. | :05:43. | |
start-up entrepreneurs had an eye on the key market in so far so good. | :05:44. | :05:49. | |
Four years on it has 600,000 registered users with 4 million | :05:50. | :05:52. | |
unique visits every month and they have attracted international | :05:53. | :06:00. | |
investment. TRANSLATION: The company itself received funding from | :06:01. | :06:03. | |
Singaporean and Japanese investors. They saw an opportunity to invest in | :06:04. | :06:06. | |
a Vietnamese start-up and from that developed the product within the | :06:07. | :06:10. | |
Vietnam market to expand into the region. And Lozi is not the only | :06:11. | :06:18. | |
example of Vietnam's thriving start-up sector. There has been a | :06:19. | :06:23. | |
boom in new players since the gaming sensation Flappy Bird was released | :06:24. | :06:30. | |
three years ago. 30 million internet users and a lot of excitement around | :06:31. | :06:33. | |
what we can build for them so they are around 3 million start-ups in | :06:34. | :06:40. | |
Vietnam, but we estimate there will be 1000 start-ups per year in the | :06:41. | :06:50. | |
next few years. Brodev is another start-up, its owner estimates its | :06:51. | :06:53. | |
revenues will hit $2 million this year, mainly from the United States. | :06:54. | :06:59. | |
TRANSLATION: The advantage is cheap Labour. Besides, Vietnam has an army | :07:00. | :07:02. | |
of Labour. Besides, Vietnam has an army | :07:03. | :07:10. | |
engineers, who are notably more skilled. It bodes well for the | :07:11. | :07:13. | |
future growth of what is already a rapidly expanding start-up immunity. | :07:14. | :07:21. | |
For more on Vietnam's technology sector we are joined now by webcam | :07:22. | :07:28. | |
by the CEO of a software testing company. Thank you for joining us on | :07:29. | :07:32. | |
Asia Business Report. The start-up industry, the technology sector, has | :07:33. | :07:37. | |
really taken off over the past five to seven years. That's right, thank | :07:38. | :07:43. | |
you for having me. I believe that the ICT industry of Vietnam started | :07:44. | :07:49. | |
around 15 years or so ago. But for the last five or seven years has | :07:50. | :07:54. | |
been taking off quite rapidly. I have seen the research that has | :07:55. | :08:00. | |
indicated that the growth rate from now to 2019 could be at 11% compound | :08:01. | :08:08. | |
growth rate, so that is quite a remarkable figure. Indeed, and an | :08:09. | :08:15. | |
influx of funds from the United States are coming into Vietnam but | :08:16. | :08:19. | |
of course on the flipside there are some success stories and some | :08:20. | :08:23. | |
failures. For international investors in Vietnam. So what will | :08:24. | :08:27. | |
it take for the foreign companies to be successful in the country, | :08:28. | :08:32. | |
particularly in the technology industry? Should you really have | :08:33. | :08:37. | |
connections with the government, or is the competent governance and | :08:38. | :08:38. | |
transparency sufficient in Vietnam for them to be successful? Yes, I | :08:39. | :08:45. | |
think it is quite interesting. I think because you look at ICT in | :08:46. | :08:52. | |
Vietnam, the last five years, the start-ups really have been taking | :08:53. | :08:57. | |
off, and I think it is probably attribute it to some of the failures | :08:58. | :09:02. | |
due to not having the full understanding of the culture is and | :09:03. | :09:08. | |
also partly it is because the start-ups, the young workforce, they | :09:09. | :09:15. | |
used to work with lower order organisations, and coming in | :09:16. | :09:20. | |
building start-ups, maybe that is a new experience for them. So I think | :09:21. | :09:24. | |
it is the fact that the investors and the people and engineers need to | :09:25. | :09:31. | |
learn to work with each other more effectively. And I think things are | :09:32. | :09:35. | |
going to turn around very quickly. And briefly, before we let you go, | :09:36. | :09:41. | |
what are the success and the pitfalls of LogiGear doing business | :09:42. | :09:45. | |
is in Vietnam? I think that the success is really in the vibrant, | :09:46. | :09:51. | |
young, very talented, very eager to learn, fast learners, and that has | :09:52. | :09:57. | |
been a huge success for us. I think there is still some struggles with | :09:58. | :10:06. | |
getting the scale of the top, talented workforce. So that is still | :10:07. | :10:11. | |
a challenge for us there. But overall it is a wonderful experience | :10:12. | :10:17. | |
for us, and we really appreciate the engineers and the workforce in | :10:18. | :10:20. | |
Vietnam, it is really turning us around. After the dot-com boom in | :10:21. | :10:26. | |
the 2000. Thank you very much and congratulations on the success of | :10:27. | :10:31. | |
LogiGear in Vietnam, Hung Nguyen. Thank you very much for investing | :10:32. | :10:36. | |
your time with us. I am Rico Hizon. See you soon. | :10:37. | :10:45. |