A new circular issued by the Ministry of Planning and Investment takes effect on April 1 guiding the supervision and assessment of foreign investment in Vietnam.

Regarding assessment of foreign investment, Circular 02/2022/TT-BKHDT regulates the contents subject to final assessment, including the pace of contribution of charter capital, legal capital and investment capital by foreign-invested economic organizations to foreign-invested projects.

The mobilization of capital and the use of mobilized capital is also subject to assessment as are the pace of project implementation in comparison with set schedule; the use of land and labour in the investment projects; the compliance to environmental protection regulations; and the performance of financial obligations to the State.

The supervision and assessment of investment in the stock market will be carried out in line with legal regulations governing the securities industry.

Petrol prices down by over 1,000 VND per litres from April 1

Retail petrol prices fell by more than 1,000 VND per litre from 0:00 on April 1 following the latest adjustment by the Ministry of Industry and Trade and the Ministry of Finance.

Accordingly, the retail price of RON95 bio-fuel dropped by 1,039 VND to a maximum of 28,153 VND (1.23 USD) per litre, while that of E5RON92 was adjusted down by 1,021 VND to no more than 27,309 VND per litre.

Meanwhile, the prices of diesel 0.05S went up 1,447 VND per litre to 25,080 VND, and that of kerosene also increased by 1,519 VND per litre.

This is the second decline following seven consecutive hikes of petrol prices in 2022, with total increases amounting to over 6,500 VND per litre.

Supporting small enterprises with digital transformation

Hundreds of thousands of small and medium-sized enterprises will receive support for making the digital transformation from the Vietnam Software and IT Services Association (VINASA).

The association has a digital transformation guideline framework in 26 fields.

The set of evaluation criteria and documents that SMEs need to know will be publicly released on the website www.dx4sme.vn.

They can download the documents and directly register to connect and seek advice on the website.

VINASA staff and experts and businesses would provide them with support for digital transformation, an association spokesperson said.

For the digital transformation programme, Ho Chi Minh City has built the city Support and Consultation Centre for Digital Transformation (DXCenter) and gradually put into operation.

Contracts signed on projects serving import of electricity from Laos

The Power Project Management Board 2 (PPMB) under Electricity of Vietnam (EVN) on March 31 signed contracts on construction and equipment supply and installation for two projects to serve the import of electricity from Laos.

One project will build the Bo Y 220kV switching station in the Central Highlands province of Kon Tum and 220kV transmission lines connecting the Nam Kong 1, Nam Kong 2, Nam Kong 3 hydropower plants with Vietnam's national grid. The project is expected to be operational in the fourth quarter of this year.

In the other project, the 220kV Dak Ooc switching station will be built in the central province of Quang Nam along with 220kV transmission lines to connect the Nam Emoun hydropower plant in Laos with Vietnam's national grid. It is to be put into operation in the first quarter of 2023.

The total investment for the two projects is estimated at over 500 billion VND (21.6 million USD), with EVN the investor.

Investors updated on HCM City’s incentives

Information on investment procedures and incentives were updated to businesses and investors at a dialogue organised by the Department of Industry and Trade of Ho Chi Minh City on March 31.

According to Vice Director of the department Le Huynh Minh Tu, the country's biggest hub is home to nearly 1,900 representative offices of foreign traders, many have made remarkable contributions to the city's socio-economic development in particular and Vietnam in general.

Statistics show that so far this year, over 74.8 trillion VND (3.27 billion USD) of investment was disbursed in HCM City, up 7.3 percent year-on-year.

Foreign investors poured 406.6 million USD into HCM City from January 1 – March 20. Notably, the capital from Singapore, the Republic of Korea, and Japan accounted for 74.4 percent of the total of newly-registered capital.

The city had 10,533 valid investment projects worth 52.89 billion USD as of March 20.

HCM City int’l travel expo to take place in September

The 16th International Travel Expo – Ho Chi Minh City (ITE HCMC 2022) will take place at the Saigon Exhibition and Convention Centre (SECC) in District 7 on September 8 – 10, heard at a press conference in Hanoi on March 31.

The ITE HCMC, the largest and most established travel event in the Mekong Delta region, will be held under the theme “Growing Forward Together” as part of the efforts to revive inbound tourism.

The hybrid event will feature more than 200 exhibitors, including airlines, hotels and resorts, tour operators, foreign travel promotion agencies, and enterprises from 45 Vietnamese cities and provinces.

It also expects to attract 150 international buyers who are leaders of travel agencies and MICE organisers from major markets, such as Southeast Asia, the Europe, Japan, the Republic of Korea, the US, Australia, and New Zealand.

Various events will be held on the sidelines of the expo, for example a MICE travel forum, ITE HCMC 2022 Travel Awards, and Travel Fun Fair Day with lots of discounts and promotional deals offered.

Agro-forestry-fisheries exports triple in H1

Vietnam’s agro-forestry-aquatic product export and import turnover was estimated at 22.6 billion USD in the first quarter of this year, up 6.3 percent compared to the same period last year, according to the Ministry of Agriculture and Rural Development (MARD).

Of the figure, around 12.8 billion USD was worth of exports, an increase of 15.3 percent while about 9.8 billion USD was from imports, a decline of 3.5 percent against last year, resulting in a trade surplus of roughly 3 billion USD, up 3.1 times year-on-year.

In March alone, the export value reached over 4.7 million USD, up 6 percent month-on-month and 47.1 percent year-on-year.

In January-March period, exports of major farm produce hit nearly 5.5 billion USD, a rise of 12.8 percent, while that of major forestry products reached about 4.3 billion USD, up 4.4 percent; aquatic products nearly 2.4 billion USD, up 38.7 percent; and animal husbandry roughly 75.6 billion USD, down 22.4 percent. 

Vietnam International Travel Mart 2022 opens

The Vietnam International Travel Mart (VITM) 2022 opened in Hanoi on March 31 with the theme of “New Normal – New Opportunities”.

The four-day event attracts the participation of 500 businesses from 52 provinces and cities nationwide and Japan, the Republic of Korea, Thailand, Malaysia, Taiwan (China), and Turkey.

A wide range of activities will be held within the framework of the fair, including a national forum themed “Recover Vietnam Tourism – New orientation, New activities”.

Ministry adopts measures to boost sale of agricultural products

The Ministry of Industry and Trade (MoIT) is carrying out a number of measures to assist farmers in selling their products.

Coffee, rice and aquatic products posted high growth of between 38 and 50 percent. However, difficulties remain in the sale of some groups of commodities and at some specific times, he said, citing the export of fruits to China through border crossings as an example.

To deal with the problem, the MoIT has compiled a draft plan on shifting from unofficial and small-scale shipment to export through official channels and submitted it to the Prime Minister for approval, Hai said at a press conference on March 30.

The ministry also established a steering committee led by the Minister of Industry and Trade Nguyen Hong Dien to solve the congestion of agricultural products at border gates.

Trade promotion activities launched to bolster pepper exports

The Ministry of Industry and Trade is actively carrying out a wide range of trade promotion activities aimed at enhancing market connectivity as a way of creating additional opportunities for pepper enterprises to boost exports.

The opening two months of the year saw the country’s pepper exports record contrasting growth as output dropped by 11.2% but grew by 43.8% in value over the same period from last year. The reason was that the export price of Vietnamese pepper grew by 61.9% on-year to reach US$4,681 per tonne. The Import-Export Department under the Ministry of Industry and Trade forecasts that global pepper prices will continue to increase due to falling output and high transportation costs.

In terms of the domestic market, in late February, the price of black pepper also increased sharply, from VND500 to VND1,500 per kg compared to the same period last month, while the price of white pepper stood at VND121,000 per kg, VND1,000 per kg lower than the beginning of February, although it rose sharply compared to the price of VND72,000 per kg during the same period from last year.

According to Hoang Thi Lien, chairwoman of the Vietnam Pepper Association (VPA), global demand for pepper has soared by 3% compared to last year, although the output of other pepper growing countries is decreasing day by day. This creates a special advantage for pepper exports, particularly with the price of Vietnamese export pepper in the opening months of this year witnessing a drastic upturn.

Bright future for Vietnam blockchain industry: Globe Newswire

Blockchain technology is booming in Vietnam and a bright future lies ahead for the industry, according to US-based Globe Newswire, one of the world's largest newswire distribution networks, specialising in the delivery of corporate press releases, financial disclosures and multimedia content to media, investors, and consumers worldwide.

Globe Newswire said that many Vietnamese enterprises attended the Vietnam Blockchain Expoverse, held in Dubai on March 27. The event was an opportunity for blockchain enthusiasts and companies to share their experiences and views on blockchain’s vision, potential, challenges and technology applications.

Gwendolyn Regina, Investment Director of BNB Chain Fund, said that Binance Chain had experienced rapid growth in the last year. Blockchain technology was widely applied, especially to Defi (Decentralised Financed).

She predicted that the interference of Defi, GameFi, and NFT will appear in the next five years. Tokens will be a valuable long-term asset in the future instead of just being a currency or a means of trading. It is currently known as a digital asset that is issued and operated on a blockchain platform of available projects without owning its own blockchain.

Meanwhile, James Wo forecast that blockchain technology would be even more common, with the market expanding ten times larger. The number of users will be as many as the number of Internet users.

According to Lynn Hoang, Binance SEA Director, Binance is also making efforts to promote the development of blockchain technology in Vietnam

She said Vietnam will soon become the frontrunner in the global blockchain industry. The country is in the top 10 on Binance for various aspiring blockchain projects and products that attracted attention from the global community.

Tran Dinh, CEO of AlphaTrue, a Vietnamese company specialising in Blockchain products, said Vietnam has abundant human and technology resources and a large blockchain community.

HCM City credit growth rebounds in Q1

HCM City’s credit growth has rebounded, growing by 3.65 per cent as of the end of March, up 13.1 per cent year-on-year, according to the State Bank of Viet Nam’s HCM City branch.

Nguyen Duc Lenh, deputy director of the branch, said credit growth had rebounded as the pandemic had been put under control and the economy returned to normal.

He added that credit growth was expected to give extra leverage to post-pandemic economic recovery.

The banking sector would continue to offer credit support programmes to help firms restore production based on the guidelines and regulations of the Government and the central bank.

The measures include debt restructuring, interest rate exemption and reduction.

Mixed fortunes for rubber industry

While some rubber firms are aiming high this year, others have had to lower profit targets due to various risks.

According to the Vietnam Rubber Association, rubber materials shortages have recently pushed up latex prices, bringing higher profits to rubber firms.

In the first two months, rubber exports rose by 7.4 per cent compared to the same period last year, leaving many firms optimistic about the future.

Phuoc Hoa Rubber JSC announced an after-tax profit target of VND744 billion (US$32.5 million) for 2022, up 56 per cent year-on-year.

Southern Rubber Industry JSC followed suit with a target of VND136 billion, breaking from its regular double-digit profits since 2017.

Da Nang Rubber JSC spent over VND900 billion on production expansion and set its Q2 profit target 11 per cent higher than the previous quarter.

However, some firms are more cautious about making optimistic forecasts, reducing their targets on the grounds of several risks.

Dak Lak Rubber JSC expects its pre-tax profits in 2022 to be 9.5 per cent lower than last year due to exchange rate uncertainties.

Its subsidiary in Laos, Daklaoruco (DRI), incurred a loss of VND40 billion in Q4/2021 as the Laotian kip fell to the lowest in 15 years against the dollar.

Since the world currency market is expected to remain volatile, DRI believes it will not improve its performance year, causing its parent company to adjust its profit target.

Similarly, Tay Ninh Rubber JSC anticipates that its subsidiary in Cambodia will run at a loss of VND62 billion in 2022.

Accordingly, the company forecasts less profitability in the financial year, at around VND65 billion, down 41 per cent against 2021.

Meanwhile, Dong Phu Rubber JSC added VND200 billion to its profits in Q4/2021, thanks to the disposal of its rubber trees planted before 1999.

However, as the company did not plant new rubber trees between 1999 and 2002, the number of old trees for sale are expected to fall in the short-term, effectively dragging down its profits.

Additionally, its revenues of VND377 billion derived from land compensation in Bac Dong Phu Industrial Park will not be recognised this year but in the financial year 2023.

As a result, the company estimated profits at VND361 billion in 2022, lower than the figure in 2021 of VND449 billion.

Likewise, Tay Ninh Rubber JSC forecast that it will earn VND75 billion in profits this year, 33 per cent less than last year.

The Association of Natural Rubber Producing Countries said it sees a bright prospect for rubber industries worldwide in 2022.

Talent, legal framework needed for blockchain development

Viet Nam is taking the lead in blockchain technology trends, but attention must be paid to developing the talent and legal framework to ensure development and a sustainable blockchain ecosystem.

This was highlighted at the Vietnam Blockchain Expoverse, held within the three-day Binance Blockchain Week Dubai 2022, which closed on Wednesday.

Nguyen Dung, a senior expert in the innovation ecosystem under the Ministry of Planning and Investment, said that Viet Nam was a hot spot of the world’s blockchain map.

The Vietnamese Government always accompanied businesses and the blockchain community to bring technologies to create sustainable values, Dung stressed.

Guidelines on supervision, assessment of foreign investment issued

The Minister of Planning and Investment has issued a circular giving guidelines on the supervision and assessment of foreign investment activities in Viet Nam.

Accordingly, Circular 02/2022/TT-BKHDT is applicable to state management agencies related to foreign investment activities, including ministries, ministerial-level agencies, provincial-level People's Committees, investment registration agencies, agencies tasked with state management of investment in accordance with legal regulations on investment, foreign-invested economic organisations and projects operating in Viet Nam.

The circular stipulates the principles for foreign investment management, one of which is not to hinder or affect the normal operations of foreign-invested organisations and projects during the process of supervision and evaluation.

The Ministry of Planning and Investment (MoPI) is authorised to supervise and evaluate the enforcement of state management of foreign investment; conduct overall supervision and assessment of foreign-invested projects; and inspect foreign-invested projects that are approved by the Prime Minister and the National Assembly, large-scale projects with great influence on socio-economic development, and other projects under the direction of the Government or the Prime Minister.

Warning over electricity shortages due to coal supply difficulties

The Electricity of Vietnam (EVN) has been concerned about the power shortage from next month amid the tight coal supply.

Vietnam National Coal - Mineral Industries Group only provided 4.49 million tonnes of coal in the first quarter of this year for EVN's coal-powered plants out of the 5.85 million tonnes pledged in signed contracts between the two sides.

Because of the coal shortage, by late March, many EVN power plant turbines have had to suspend operations. For instance, Nghi Son 1, Vung Ang 1, Vinh Tan 2, Duyen Hai 1 are now running one turbine at 60-70 percent capacity. The same situation has occurred at the Haiphong coal power plant.

HSBC lowers Vietnam’s 2022 GDP rate to 6.2%

The Hong Kong & Shanghai Banking Corporation (HSBC) has moved to lower Vietnam’s GDP growth rate for the year from the previously-projected 6.5% to 6.2% amid fears of rising oil prices globally.

Despite this fall, the bank said Vietnam remains likely to be one of the countries recording the highest growth rate throughout the region.

HSBC also raised the country’s inflation for this year to 3.7%, a rate which still falls below the 4% target previously set by the State Bank of Vietnam.

In the year ahead, HSBC noted that Vietnam has enjoyed a good start with GDP in the first quarter growing steadily at 5% year on year, a figure which is higher than the bank’s 4.7% projection. This means the country’s economic recovery is on track and is gathering full steam.

Steady pace in bond market despite persistent legal barriers

According to fresh figures from the Vietnam Bond Market Association, corporate bond issuance to the public totalled VND5.5 trillion ($240 million) and nearly VND22.2 trillion ($964.6 million) in the first two months of this year, a growth of 31 and 51 per cent on-year, respectively.

The real estate group currently composes 56.04 per cent of the market structure. The second-largest issuer was the construction companies, which accounted for 28.6 per cent of the overall issuance value, which was buoyed by indications of an economic rebound. Recent statistics from data analyst FiinGroup showed that despite the lingering crisis, bond market growth has continued at a steady pace over the past two years, with some industries, such as real estate, witnessing a rise of 60 per cent.

Le Hong Khang, head of Credit Rating Services at FiinRatings, noted Vietnam’s bond market is now comparable to 15 per cent of GDP. In comparison to other regional peers such as Malaysia (the bond market accounting for over 50 per cent of GDP), and Singapore (more than 40 per cent), the domestic landscape still has tremendous opportunities for improvement.

Japanese investors seeking increase of localisation ratio

Japanese enterprises are promoting more connections with domestic partners to increase the localisation ratio.

Statistics published by the Foreign Investment Agency under the Ministry of Planning and Investment showed that at present, Japanese groups are investing in nine sectors in Vietnam, focusing on the manufacturing and processing sector with the total registered investment capital of $42 billion.

More than 55 per cent of 700 surveyed Japanese enterprises in Vietnam are seeking to expand their operations in the country in the next one or two years, according to a survey conducted by the Japan External Trade Organization (JETRO) and published in January. They are also keen to expand localisation efforts in Vietnam because their ratios remain low.

At present, only 0.2 per cent of one million domestic businesses have joined the supply chain of supporting industries. The localisation ratio for automobiles is between 5-20 per cent, the electronics sector at 5-10 per cent, and mechanical processing at 15-20 per cent. Meanwhile, the localisation ratio of the high-tech sector is 1-2 per cent only.

According to JETRO, businesses operating in Vietnam depend on imports for more than 60 per cent of production inputs, while the impact of the pandemic continues to disrupt supply chains and increase transportation costs.

Singapore's SP Group partners with CJ OliveNetworks Vina set up rooftop solar power

Sustainable energy solutions provider SP from Singapore and CJ ONS, a subsidiary of South Korea's CJ OliveNetworks in Vietnam, signed an MoU to develop up to 50MWp of rooftop solar projects across Vietnam over the next two years.

The partnership includes its first project to operate a 2.5MWp rooftop solar unit at CJ Vina Agri Co., Ltd.'s plant by June.

CJ ONS will take on the engineering, procurement, and construction for all joint solar projects with SP.

CJ Vina Agri, which will host the first solar unit under the MoU, specialises in the production of high-quality livestock, poultry, and aquaculture feed.

The deployment of the 2.5MWp rooftop solar solution for CJ Vina Agri marks the company’s first large-scale injection of solar power into its energy mix.

Transport Ministry disburses nearly 7,500 billion VND in first quarter of 2022

The Ministry of Transport disbursed an estimated 7,492 billion VND (327.5 million USD) worth of public investment in the first quarter of 2022, equivalent to 14.7% of the full-year target.

In 2022 the Prime Minister allocated 50,328 billion VND (2.2 billion USD) to the ministry, including 45,451 billion VND in domestic capital and 4,877 billion VND in foreign funding.

The ministry has assigned 41,955 billion VND to investors and project management units (PMUs), accounting for 83.4% of the allocation.

About 2,300 billion VND (100.8 million USD) was spent on the first stage of the north-south expressway project. ODA projects received a total of 730 billion VND (32 million) while other key urgent projects were provided with 390 billion VND (17.1 million).

The disbursement of other domestic transport projects was estimated at 960 billion VND (42.1 million USD).

Hanoi breaks ground on second WTE plant

Work on the Seraphin waste-to-energy (WTE) plant project at the Xuan Son landfill in Hanoi’s Son Tay Town began yesterday, March 30.

The project, whose investor is the Seraphin Green Environment Technology Company, under AMACCAO Group, costs VND3.5 trillion (US$152 million) in investment.

The plant will have a designed capacity of burning 1,500-2,000 tons of waste per day. It is expected to be put into service after 20 months.

To Van Nhat, vice chairman at AMACCAO, said the plant will use European technology to burn waste to produce electricity. The facility will neither discharge wastewater, release dust, nor emit noise and odor into the environment.

Vinaconex to divest stake in Vinh Phuc Co.

Vietnam Construction and Import-Export JSC (Vinaconex), which lists its shares on the Hochiminh Stock Exchange under the code VCG, is set to divest its entire stake in Vinh Phuc Urban Infrastructure Development Company.

As of December 31 last year, VCG had held a 20% stake in the firm, the local media reported.

In the fourth quarter of 2021, VCG obtained over VND2.1 trillion in revenue and VND173.7 billion in after-tax profit, up 22% and down 27.4% year-on-year, respectively.

The reduction in its profit was mainly due to the hike in its financial and administrative expenses, according to VCG.

In 2021, the company’s revenue amounted to over VND5.7 trillion, up 3.4% against 2020, while its after-tax profit reached VND531.5 billion, dipping by 68.6%.

VinFast to build first electric vehicle factory in U.S.

Vietnamese automaker VinFast has signed a memorandum of understanding with the government of North Carolina in the United States to develop its first electric vehicle (EV) factory in North America, which has been hailed by U.S. President Joe Biden.

President Joe Biden said in a statement posted on the White House website on March 29: “Today’s announcement that the electric vehicle maker VinFast will build an electric vehicle and battery manufacturing facility in North Carolina – $4 billion to create more than 7,000 jobs and hundreds of thousands of electric vehicles and batteries – is the latest example of my economic strategy at work.”

The factory will cover some 800 hectares in the Triangle Innovation Point industrial park in Chatham County. There will be three main areas: electric car and bus production and assembly, EV battery production, and ancillary industries for suppliers, the local media reported.

HCMC begins collection of seaport fees

Related to the start of seaport infrastructure fee collection in Ho Chi Minh City, a representative of the Inland Waterway Port Authority of HCMC, on the afternoon of March 31, informed that enterprises had actively made declarations on the system according to regulations.

According to the toll collection scheme, after deducting costs for toll collection, the entire revenues of infrastructure fees will be remitted into the city budget. The Department of Finance cooperates with the Department of Planning and Investment to advise the city to allocate toll revenue for investment and maintenance of transport infrastructure connecting seaports according to the annual proposed category of the Department of Transport, approved by the People's Committee and the People's Council of HCMC. It is expected that the total fee revenues used for infrastructure works, service works, and public utilities in the seaport border gate areas in the 2021-2025 period under the scheme are about VND15 trillion.

On the same day, Deputy Director of HCMC Department of Transport Bui Hoa An said that, from April 1, the city would begin to collect seaport infrastructure fees with the lowest fee of VND15,000 per ton of goods not packed in containers (imported and exported goods that open customs declaration in HCMC), and the highest fee of VND4.4 million per 40-foot container (goods for temporary import for re-export, goods in bonded warehouses, border-gate transfer of goods).

Vietnam wants to buy UAE crude oil

Vietnam is seeking materials for its two oil refineries while the construction plan of the third is on the way.

Vietnam’s Minister of Industry and Trade (MoIT) Nguyen Hong Dien has visited the United Arab Emirates (UAE) to seek direct import sources of crude oil, gasoline, and petrochemical products direct import.

The Vietnamese official expected direct trading between the two nations’ companies without the third party during his visit paid to UAE at the end of March accompanied by oil companies namely Vietnam National Oil and Gas Group (PetroVietnam), Vietnam National Petroleum Group (Petrolimex), PetroVietnam Oil Corporation (PVOIL), and Binh Son Refinering and Petrochemical JSC (BSR).

In the meeting with the UAE Minister of Energy and Infrastructure Suhail Mohamed Al Mazrouei, Dien highlighted Vietnam’s willingness to cooperate with the Middle East nation in the oil extraction and oil products trading.

U.S. becomes largest importer of Viet Nam’s farm products in Q1

The U.S. was the largest importer of Viet Nam’s farm products over the first three months of 2022, with US$3.5 billion, accounting for 27.1 percent of Viet Nam’s export turnover, according to the Ministry of Agriculture and Rural Development.

The U.S. was followed by China with US$2.1 billion, Japan (US$872 million) and the Republic of Korea (US$562 million), making up 16.6 percent, 6.8 percent and 4.4 percent, respectively.

During the reviewed period, Viet Nam gained over US$12.8 billion from exporting agriculture-aquaculture-forestry products, a year-on-year increase of 15.3 percent.

Of the figure, the export of agriculture, forestry and aquatic products reached US$5.5 billion, US$4.3 billion and US$2.4 billion, witnessing respective growths of 12.8 percent, 4.4 percent and 38.7 percent.

Key farm export items included timber (US$3.9 billion), coffee (US$1.2 billion), shrimp (US$929 million), rubber (US$746 million), rice (US$715 million), tra fish (US$606 million) and cassava (US$420 million).

Meanwhile, the import value of farm products in the first quarter of the year saw year-on-year decrease of 3.5 percent, attaining nearly US$9.8 billion. 

Source: VOV/VNA/SGGP/SGT/VIR/VNS/VGP

VIETNAM BUSINESS NEWS MARCH 31

Environment tax reduction on fuels to come into life from April 1