Minister of Industry and Trade Nguyen Hong Dien requested the establishment of a steering committee to ensure sufficient essential goods supply for Ho Chi Minh City and other localities in the south as the total caseload in the city topped 8,000 on July 7.

The steering committee is headed by Deputy Minister of Industry and Trade Do Thang Hai, and eight members are leaders of relevant departments.

It is assigned to regularly contact the People's Committees, the Departments of Industry and Trade and related agencies of HCM City and southern provinces hit by the pandemic for coordinating the distribution of essential goods and services as well as adopting solutions to avoid disruption of essential goods and services supply.

The committee will connect with manufacturers, distributors and retailers to ensure sufficient of goods for local people in any circumstance. Online trading would also be supported.

The committee will coordinate with relevant forces, including the police, to assure an uninterrupted flow of goods between HCM City and other localities.

Dien said that localities could consider reopening traditional markets but the use of coupons should be applied.

The market management force is requested to work with related agencies to facilitate the circulation of goods and prevent overcharging and the sale of low-quality goods.

The Electricity Regulatory Authority and the Vietnam Electricity Group would take charge of regulating electricity to ensure supply for medical facilities, quarantine centres in HCM City and other southern localities./.

Vietnam Airlines signs 173.7-mln-USD credit deal with three banks

National flag carrier Vietnam Airlines on July 7 signed a credit deal – worth total of 4 trillion VND (173.7 million USD) – with three commercial banks, which are expected to weather the financial impact of the COVID-19 pandemic.

Under the agreement, the Southeast Asia Commercial Joint Stock Bank (SeABank), the Vietnam Maritime Commercial Joint Stock Bank (MSB) and the Saigon - Hanoi Commercial Joint Stock Bank (SHB) are committed to providing the carrier with zero-interest loans refinanced by the State Bank of Vietnam.

Despite the recovery of the domestic aviation market, Vietnam Airlines said, it has lost more than 60 percent of revenue due to travel restrictions and border closures induced by COVID-19.

Last year, the airline posted a revenue of over 40.61 trillion VND, down 59 percent from 2019.

The carrier operated around 96,500 flights during the year, a drop of more than 48 percent as compared to the previous year. It served 14.23 million passengers and handled nearly 195,000 tonnes of cargo, decreases of 51 percent and 47 percent, respectively.

Vietnam Airlines, which is 86.19 owned by the government, is taking necessary steps to issue 8 trillion VND worth of ordinary shares to existing shareholders by the end of third quarter of this year./.

Vietnam now world’s second largest fuel pellet exporter 

Vietnam exported around 3.2 million tonnes of fuel pellets of various types last year, making it the world’s second largest exporter of the products, according to the General Department of Customs.

The Vietnam Timber and Forest Product Association (VIFOREST) reported that Vietnamese pellets were mostly exported to Japan and the Republic of Korea to provide input for thermal power production.

Pellets are biomass fuel generally made from wood wastes, such as wood shavings, sawdust, and logging residues; and agricultural wastes, for example, rice husks, corn stover, sugarcane bagasse, and coffee pulps.

The country’s shipment of pellets rocketed to 3.2 million tonnes last year from just 175.5 tonnes in 2013. The export revenue increased 15.3 fold from nearly 23 million USD in 2013 to 351 million USD in 2020.

Vietnam has about 80 pellet factories and production facilities, mostly in the southeastern and northeastern regions, with combined capacity of close to 4.5 million tonnes per year.

The VIFOREST forecast the global demand for pellets is likely to spur about 250 percent over the next decade, to 36 million tonnes in 2030./.

Banks report high profit in H1 despite COVID-19

Many banks have reported high profit in the first half of 2021 despite impacts of COVID-19 pandemic.

Tien Phong Commercial Bank (TPBank) announced that its revenue surged 27.74 percent over the same period last year to over 6.23 trillion VND (270.42 million USD), with pre-tax profit reaching over 3 trillion VND (130.22 million VND), up 47.8 percent year on year.

The bank also enjoyed good signs in many other business indicators, with total assets hitting more than 242 trillion VND, close to its target of 250 trillion VND for the whole year.

Meanwhile, the Vietnam Joint Stock Commercial Bank for Industry and Trade (Vietinbank) posted a 74 percent rise in pre-tax profit to about 13 trillion VND.

With the result, the bank has completed three fourths of its yearly target of 16.8 trillion VND in profit.

The SSI Securities on July 5 reported that the majority of banks under its watchlist enjoyed high profit, including MSB, ACB and VPB. Techcombank, BIDV, and HDB were also predicted to post positive growth in the second quarter and the first six months of 2021.

In its recent report, Yuanta Securities Vietnam forecast that the credit growth of the whole sector will reach 12-13 percent this year.

Earlier, experts from Viet Dragon Securities (VDSC) predicted that the banking sector will experience a period of high profit this year with growth of 27 percent despite the COVID-19 pandemic./.

Ho Chi Minh City – Phu Quoc flights temporarily suspended

The Ministry of Transport has approved the temporary suspension of flights between Ho Chi Minh City and Phu Quoc island city in Kien Giang province.

Deputy Minister of Transport Le Anh Tuan signed a decision on the suspension of flights beginning at 0:00 on July 8 until further notice. The move came as HCM City is recording a large number of COVID-19 cases in recent weeks.

"The Civil Aviation Administration of Vietnam shall notify airlines, relevant agencies and units for information and implementation; and at the same time consider and settle at the request of the airlines and the relevant State agencies on arranging special flights to transport health workers, medical supplies and equipment", the Ministry of Transport said.

The Ministry of Transport tasked the Civil Aviation Administration of Vietnam to coordinate with relevant agencies and units under the People's Committee of Kien Giang province to monitor the COVID-19 situation to make adjustments to flights to/Phu Quoc Airport in a timely manner.

The Ministry of Transport had previously agreed to suspend flights from HCM City's Tan Son Nhat International Airport to Ba Ria – Vung Tau, Thanh Hoa, Quang Ninh, Hai Phong, Gia Lai, Quang Binh, Nghe An, Quang Nam, and Thua Thien – Hue./.  

Reference exchange rate up 15 VND

The State Bank of Vietnam set the daily reference exchange rate at 23,190 VND per USD on July 8, up 15 VND from the previous day.

With the current trading band of +/- 3 percent, the ceiling rate applied to commercial bank during the day is 23,886 VND/USD and the floor rate 22,494 VND/USD.

On the contrary, the rates listed at major commercial banks all increased.

At 8:30 am, Vietcombank listed the buying rate at 22,890 VND/USD and the selling rate at 23,120 VND/USD, both up 20 VND from the rates on July 7.

BIDV added 5 VND to both rates, listing the buying rate at 22,915 VND/USD and the selling rate at 23,115 VND/USD./.

Bac Giang moves to improve Yen The hill chicken trademark

Yen The district in northern Bac Giang province provides the market with around 12-14 million hill chickens worth 1.5 trillion VND every year, turning free-range chicken farming into sustainable livelihoods for local people.

Local authorities have focused on strengthening trade promotion activities and building the “Ga doi Yen The” (Yen The hill chicken) brand name, which has been protected and recognised in Laos, China, and Singapore.

In the domestic market, the hill chickens have become popular among customers in many cities and provinces nationwide.

To boost consumption, Bac Giang targets both domestic and export markets but top priority is given to domestic markets, especially in Hanoi and major cities. It is also looking to export Yen The hill chickens to ASEAN and China in the near future.

The district will also continue restructuring chicken varieties in farming to improve quality, towards making inroads into more difficult markets such as Japan and Europe.

According to the Secretary of the district Party Committee Bui The Chung, the local authority will pay due regard to promoting its potential and strengths and taking measures to improve quality, contributing to boosting the incomes of local people.

Under its agricultural production development strategy to 2030 and on the basis of restructuring agricultural production towards improving the quality and value of products, including Yen The hill chickens, the district has made efforts to promote production links and renovate breeding methods. It also adopted mechanisms to encourage the development of enterprises, cooperatives, and cooperative groups in husbandry, thus building agricultural production value chains.

The district authority has created the necessary conditions for households, businesses, cooperatives, and cooperative groups to access credit for livestock production and processing and to form closed chains in producing, processing, and marketing Yen The hill chicken products.

In the future, Yen The district will promote the transfer of scientific and technical advances in raising and processing Yen The hill chickens in order to improve quality, ensure food safety and hygiene, and increase competitiveness. 

Priority will be given to applying and transferring new, advanced high technologies in raising and processing hill chickens, expanding hill chicken production areas in accordance with VietGAP standards, and forming safe hill chicken production areas.

The district will also encourage businesses, organisations, and individuals to invest in developing breeding and processing facilities in order to diversify processed products. 

The locality has paid heed to introducing and promoting the product in parallel with expanding the market through effectively implementing policies and mechanisms on supporting the protection of intellectual property rights, trademark protection, geographical indications, and product brands for products made from Yen The hill chicken.

It has also built a mechanism to support the development of the Yen The hill chicken brand to meet the standards of the national “One Commune, One Product” (OCOP) programme. 

Yen The is a mountainous district in Bac Giang province with an area of more than 300 sq km, mainly hills and semi-mountainous land suitable for agricultural and forestry development in combination with livestock. 

The locality quickly identified hill chickens as its main livestock group, and planned a high-quality, large-scale production area.

Yen The hill chicken was granted a certificate of trademark registration by the National Office of Intellectual Property at the Ministry of Science and Technology in 2011. It was the first livestock product in Vietnam to be provided with trademark and monopoly protection.

The district's chicken products have continuously won prestigious prizes since 2011, and were among four Vietnamese products to receive “The best products and food of Southeast Asia-ASEAN” Cup in 2013.

To sustainably maintain and develop products, the district has issued and implemented projects to support their sustainable development in line with VietGAP standards in the 2013-2015 and 2016-2020 periods. 

The district’s chicken numbers are maintained at 4-4.5 million heads, primarily in Tien Thang, Canh Nau, Tam Tien, and Dong Vuong communes.

The locality has also planned hi-tech concentrated breeding areas in Dong Tam, Dong Ky, Canh Nau, Tien Thang, Tam Hiep, and Tam Tien communes, and developed large-scale hill chicken farming models./.

Ho Chi Minh City – Phu Quoc flights temporarily suspended

The Ministry of Transport has approved the temporary suspension of flights between Ho Chi Minh City and Phu Quoc island city in Kien Giang province.

Deputy Minister of Transport Le Anh Tuan signed a decision on the suspension of flights beginning at 0:00 on July 8 until further notice. The move came as HCM City is recording a large number of COVID-19 cases in recent weeks.

"The Civil Aviation Administration of Vietnam shall notify airlines, relevant agencies and units for information and implementation; and at the same time consider and settle at the request of the airlines and the relevant State agencies on arranging special flights to transport health workers, medical supplies and equipment", the Ministry of Transport said.

The Ministry of Transport tasked the Civil Aviation Administration of Vietnam to coordinate with relevant agencies and units under the People's Committee of Kien Giang province to monitor the COVID-19 situation to make adjustments to flights to/Phu Quoc Airport in a timely manner.

The Ministry of Transport had previously agreed to suspend flights from HCM City's Tan Son Nhat International Airport to Ba Ria – Vung Tau, Thanh Hoa, Quang Ninh, Hai Phong, Gia Lai, Quang Binh, Nghe An, Quang Nam, and Thua Thien – Hue./.  

Firms offered recommendations to boost exports to EU

Europe is a large market for Vietnamese goods, but businesses need to grasp its quality standards and consumption trends so as to fully capitalse on this market, heard an online workshop held on July 7.

Nguyen Tuan, Deputy Director of the Investment and Trade Promotion Centre of Ho Chi Minh City, said trade between Vietnam and Europe has recorded encouraging results in the recent past, and it is forecast to grow even more strongly thanks to the EU - Vietnam Free Trade Agreement (EVFTA).

Bilateral trade turnover saw a 12-fold increase from 4.1 billion USD in 2000 to nearly 50 billion USD in 2020. Vietnam’s exports to the EU surged by 13-fold from 2.8 billion USD to 35.1 billion USD during the period.

Last year, Vietnam posted about 29 million USD in trade surplus with the EU despite the COVID-19 pandemic. The main importers of Vietnamese goods include Germany, France, and Poland.

Tuan said as the pandemic is still wreaking havoc on the global economy and trade, Vietnam, including HCM City, has been working hard to connect local enterprises with foreign markets via online platforms and new sale channels. As a result, trading has been maintained, thus keeping supply chains uninterrupted.

Adam Koulaksezian, Director of the French Chamber of Commerce and Industry in Vietnam (CCIFV), noted Vietnam currently ranks 15th in the world and first in ASEAN among trade partners of the EU.

Thanks to the EVFTA that took effect in August 2020, tariff barriers have been lifted for a number of exports from both Vietnam and the EU, creating momentum for bilateral trade. Export and import between the two sides have been on the rise and predicted to grow further in the time ahead, which will be a great opportunity for Vietnamese exporters in many industries, he said.

However, Koulaksezian added, EU consumers are paying more attention to sustainability, including origin traceability of products, corporate social responsibility, and environmental protection. Therefore, Vietnamese businesses should ensure the sustainability of their products and build an export strategy matching the demands and trends in foreign markets.

Pointing out certain challenges to bilateral trade, Business Support Service Director at CCIFV Nguyen Dac Boi Quynh said the complex COVID-19 situation, especially in southern Vietnam where many wood and aquatic product processing firms are located, is forcing businesses to simultaneously implement social distancing and sustain production.

Other challenges include the requirements for product origin traceability and different types of certificates, and the fast-changing consumption trends in the EU.

Sharing her business’s experience, Pham Thi Hong Quang, Director of the Viet Source Handicraft Co. Ltd, said the company has built its infrastructure meeting importers’ requirements, shifted to online marketing in the face of the pandemic, and stay updated with new consumption trends in the EU, which has helped its shipments to this market increase 20 percent from the pre-pandemic period.

She recommended enterprises that want to access this market to make proper investment right from the beginning to meet quality requirements, update themselves with consumption trends, and make use of modern marketing channels./.

Rubber group looks to boost industrial zone development

The Vietnam Rubber Group (GVR) targets to earn revenue and profit of 26.9 trillion VND (1.17 billion USD) and 4.56 trillion VND this year, respectively.

It plans to spend 2.4 trillion VND to pay 2020's dividend at a rate of 6 percent.

This year, the company plans to spend about 2.63 trillion VND on investment, of which about 578 billion VND is invested in basic construction projects and the remaining 2.05 trillion VND is for long-term financial investment.

The information was released at the annual general meeting of shareholders held late June.

Responding to shareholders about the roadmap for land conversion in the near future, the management board said that GVR’s main area in the 2021-2025 period will be industrial zone development, which is expected to bring more benefits and profits for the group.

GVR will also continue the traditional business of exploiting and selling rubber latex and processing and manufacturing industrial wood products.

In the long term, the conversion of rubber plantation land into industrial parks can help GVR become one of the largest industrial developers in the southern region besides Becamex, Tin Nghia, Sonadezi and VSIP.

Speaking with shareholders about this new segment, the management board said that the advantage of GVR was owning an abundant rubber land fund, mainly in the provinces of Dong Nai and Binh Duong, while the land fund for industrial parks in these areas is inadequate.

It is estimated that the area for lease of industrial land is expected to achieve a 5-year annual compound growth rate (CAGR) of 17 percent, while the current main business of GVR - rubber latex production - only achieves a 5-year CAGR of 3.6 percent.

GVR will also sell about 2,686 hectares of industrial land in the next five years, an increase of 76 percent compared to the total sales of industrial land in the 2016-2020 period.

By the end of 2020, GVR had managed a domestic rubber area of roughly 87,000 hectares.

Last year, the industrial zone segment contributes 1.52 trillion VND in revenue and 821 billion VND in profit./.

Forestry product exports expected to reach 15.5 bilion USD in 2021

It is forecast that the total export turnover of wood and forestry products for the whole year will reach 15.5 billion USD, a year-on-year increase of 17 percent.

The figure was revealed by Bui Chinh Nghia, Vice General Director of the Vietnam Administration of Forestry ( VNFOREST) under the Ministry of Agriculture and Rural Development, at a conference held on July 7 to review its performance in the first half of the year and set tasks for the second half of 2021.

The export value of wood and forestry products in the first six months of this year was estimated at 8.71 billion USD, up 61.6 percent compared to the same period last year, the conference heard.

Wood processing enterprises continued to push up the export of products with high added value such as kitchen cupboards and furniture, Nghia said, adding that these are also products that have achieved a great growth rate of 40 percent.

While appreciating the good results gained by the VNFOREST over the past six months, Deputy Minister of Agriculture and Rural Development Le Quoc Doanh said it should not rest on its laurels as the industry has been facing challenges from the impacts of the COVID-19 pandemic and natural disasters. Trade barriers would directly affect export activities, he added.

Thus, the deputy minister demanded the administration to build scenarios for the forest industry to cope with emerging challenges.

Regarding the US's investigation into some wooden products imported from Vietnam, Doanh said that the wood manufacturing and processing industry needed to be more cautious to show other countries that Vietnam is moving towards transparent trade and is a reliable partner.

To gradually meet the demand for transparent domestic raw materials, the VNFOREST plans to issue a certificate of sustainable forest management, Nghia said.

The administration will work closely with the Programme for the Endorsement of Forest Certification (PEFC) to accelerate the recognition of the national forest certification system and link with the PEFC forest certification.

It is reported that the area of the newly-planted forest has so far reached 108,258 ha, accounting for 41.6 percent of the plan and that of the whole year is expected to hit 260,000 ha, meeting the year’s target.

As many as 109 forest fires and 1,329 forest-related violations were recorded in the first six months of the year. The damaged forest area was 1,210 ha, a decrease of 53 percent compared with the same period last year. Of which, 283 ha were damaged by forest fires and 672 ha due to illegal deforestation.

The administration will strengthen the forest protection and management to meet the target of reducing the number of violations by 10 percent and the damaged forest area by 20 percent compared with last year’s figures./.

Australia – a potential market for Vietnamese organic agricultural products

The potential for organic agricultural development in Vietnam is still great and the opportunity for organic agricultural products from Vietnam to enter Australia is very promising in the near future, said Nguyen Van Kien, Director of Canberra-based Mekong Organics Company.

Mekong Organics has been selected by the Australia government to implement a project to promote the development of organic agricultural technology, certification and trade between Vietnam and Australia within the framework of the Australia-Vietnam Enhanced Economic Engagement Grant (AVEG) pilot programme.

Kien, who is also a senior lecturer at the Australian National University and has worked for 20 years at Vietnam's An Giang University, said that by accessing reports of many new scientific studies on the organic agricultural industry he realised that the potential for organic agriculture in Vietnam is still very large, with the current growth trend of the organic industry in the world, especially in the US, Europe, Canada and Australia markets.

Vietnam's Mekong Delta has many advantages to shift to ecological and organic agriculture to be on par with leading agriculture in the region and the world, he told the Vietnam News Agency (VNA).

The shift from low-quality to high-quality agricultural production was very urgent to improve farmers' incomes as well as the environment for communities, and adapt to climate change, he said.

According to Tim Marshal, General Director of TM Organics Company, and Chairman of the Organic Certification Authority of the National Association of Sustainable Agriculture Australia, the market for organic agricultural products in Australia reached 2.5 billion AUD (equivalent to nearly 2 billion USD) in 2019. 

This market has been constantly growing, with a wide variety of products such as processed and beauty products, and garments appearing more and more in farmers' markets, supermarkets, restaurants and cafes.

However, domestic production in Australia has not yet met the needs of consumers. 

Due to lower supply than demand in the organic agricultural product market in Australia, Kien said that the potential for organic agricultural products from Vietnam to enter this market is quite high in the coming years, especially processed products such as sauces, jams, canned fruits, dried or frozen vegetables.

While processed products can be easily imported into Australia, it is difficult for raw products because they had to meet very high biosecurity requirements for imported agricultural products, he added.

Kien said the project will focus on a training course for 200 learners who are businessmen, students, farmers and lectures on production and processing and trade in organic agricultural products based on experience from Australia.

During the course which will be organised in November this year, the learners will be able to access Australia's organic standards, biosafety standards when exporting to this country, and information on the organic agricultural market. 

The orginisation of a forum between Australia and Vietnam will also be included, he said, adding that it will provide a opportunity for farmers and businesses of the two countries to introduce organic products./.

Indonesia halts anti-dumping measures on cold steel sheets from Vietnam

The Indonesian Government has moved to stop applying anti-dumping measures on a number of cold–rolled steel sheets originating or imported from Vietnam, according to the Ministry of Industry and Trade’s Trade Remedies Authority of Vietnam (TRAV).

Following this decision, cold-rolled steel sheets imported from the Vietnamese market will not be subject to anti-dumping duties of up to 49.2%.

This comes following an anti-dumping investigation initiated by the Indonesian Anti-Dumping Committee (KADI) in August 2019, before being completed in February this year.

According to data compiled by the Indonesian investigating agency, Indonesia imported approximately 365,000 tonnes of cold rolled steel sheets from Vietnam worth roughly US$290 million annually throughout the investigation period.

The TRAV indicated that this represents a positive result for Vietnamese exporters that have fully co-operated with KADI for nearly two years as they have consistently provided sufficient information at the request of the Indonesian investigating agency.

During the investigation period, the Ministry of Industry and Trade (MoIT) has been closely monitoring developments of the case and acted promptly to assist Vietnamese firms protect their legitimate interests.  

Both the MoIT and the TRAV have sent letters to relevant Indonesian agencies to calculate and determine the dumping margin in line with the World Trade Organization (WTO) and international practices.

The MoIT has also directed the Vietnamese Trade Office in Indonesia to attend public hearings and use them as platforms to voice their support for Vietnamese businesses.

Moving forward, the TRAV will continue co-ordinating alongside the Vietnam Steel Association and related firms as they monitor the latest developments in export markets and the Indonesian market in order to take timely measures.

Vietnam, New Zealand urged to take full advantage of FTAs

As members of several free trade agreements (FTAs), both Vietnam and New Zealand can seize upon opportunities to promote economic development and connect supply chains within FTAs to export goods to markets of partner countries, according industry insiders.

Since both countries first established the Comprehensive Partnership in 2009 and signed the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA) in 2010, there have been a range of significant changes in terms of economic relations, with bilateral trade witnessing robust growth over the past decade.

Last year, despite the adverse impact caused by the COVID-19 pandemic, bilateral trade surged by 6.9% to reach NZD1.93 billion compared to 2019. Vietnam also represented the 16th largest partner in importing goods from New Zealand.

New Zealand’s major imports include electronic products, garments, footwear, wooden products, tropical agricultural products, and aquatic products, while key Vietnamese imports from New Zealand include raw milk and dairy products, wine, along with garments and textiles.

Duong Phuong Thao, Vietnamese Trade Counselor in New Zealand, noted that both sides are members of new-generation free trade agreements, including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Regional Comprehensive Economic Partnership (RCEP).

In addition to the AANZFTA, these FTAs can serve to greatly elevate bilateral trade in the near future.

It can therefore be considered that the two nations can seize upon these opportunities to enhance capacity building in agricultural production, apply higher food safety standards as a way of improving product quality, and transfer processing technology in agricultural and aquatic products to boost exports to markets of partner countries.

Due to these factors, local businesses are advised to closely co-ordinate with their import partners to ensure that their goods meet the stringent regulations set in terms of the rule of origin, as well as undergoing quarantine set by the demanding markets in future, according to the Vietnamese Trade Office in New Zealand.

HCM City to trial mobile sales of essential goods as lockdowns restrict consumers’ access

The HCM City Department of Industry and Trade plans an itinerant sales programme that will sell goods around the city since many traditional markets, supermarkets and food stores are closed to combat the COVID-19 pandemic.

Nguyen Thi Ngoc Thuong, sourcing department manager at Bach Hoa Xanh retail chains, said people's food needs are at more than 200% compared to the time of no epidemic. To meet the demand, her chain has increased its inventories in the city by 180 per cent, with a focus on pork, vegetables, tubers, and fruits.

"We can further increase stocks if needed and offer online shopping and home delivery. We will meet demand.”

Phan Van Dung, deputy general director of Vissan, said his company would increase the supply of fresh pork to make up for the shortfall caused by the closure of Hoc Mon Wholesale Market.

Vissan now sells 120-150 tonnes per day, 30 tonnes more than in June and 70-80 tonnes higher than in the pre-COVID period.

Nineteen cases were detected at the Hoc Mon Wholesale Market and more were contact traced in other places, forcing the district People’s Committee to close it.

Hoc Mon used to be one of the city’s three largest wholesale markets, distributing 3,500-4,000 tonnes of pork, 2,000 tonnes of vegetables and 1,000 tonnes of fruits every day.

But Thuong pointed out that the fact many Bach Hoa Xanh stores have to be temporarily closed means customers have less access to food.

Bach Hoa Xanh, Saigon Food Company and Ba Huan Company are therefore urging the government to consider mobile sales in areas that have been closed down and at the sites of temporary traditional markets that have been closed.

Dung said Vissan has the equipment and vehicles to go to five to 10 locations a day, but pointed out that local authorities need to identify the locations to mitigate the threat of Covid prevention.

Saigon Food Company and Ba Huan Company also said they are willing to sell at industrial parks and residential areas that are locked down if local authorities provide support.

Of the 234 traditional markets in the city, 93 have been closed on safety grounds. 

Farmers need training to develop digital agriculture

Farmers need more training on digital technology to bring the industry to another level, experts have said.

Nguyen Duc Tung, general secretary of the Viet Nam Digital Agriculture Asociation (VIDA), made the statement said at a launch ceremony for a report on digital transformation in agriculture in Ha Noi yesterday.

“Viet Nam has adequate facilities and infrastructure to implement digital transformation in the agricultural sector,” he said, adding that farmers’ technology adaption was among the factors that needed most attention when building digital agriculture.

According to the report, although Viet Nam was an agricultural country, Vietnamese agriculture has still not had strong development due to many internal and global problems.

The multi-dimensional impact of the Fourth Industrial Revolution and the COVID-19 pandemic has forced the economy and agriculture to transform, according to the report.

The report said though digital transformation was inevitable and the first results of the change have shown potential, the digital transformation process of agricultural production was still long and full of challenges.

The report considered the e-government programme of the Ministry of Agriculture and Rural Development and other regulations in data sharing as positive points in the process, but the weakness of the system was that agricultural data was not connected from the local to national level while there was a lack of human resources to use technology in farming.

Most agriculture students don’t know much about technology, Tung said.

At the same time, links between enterprises in the value chain and ties those in the chain need to ensure better harmony in terms of benefits and responsibilities, according to the report.

The report said the lack of funding for digital transformation was a problem faced by most businesses, especially small and medium-sized firms, the most common business type in Viet Nam.

According to VIDA, the report provides an overview of local agriculture by approaching the core stakeholders of the industry like farmers, businesses and policymakers through online surveys and in-depth face-to-face interviews on the digital transformation process in Viet Nam.

VIDA's goal in the coming years is to develop the annual report to become a total solution for the digitisation of the agricultural sector.

Tung said the report is hoped to the premise for the development of business evaluation indicators in the industry.

VIDA’s report also recommended building a common and uniform database, developing infrastructure with the participation of many parties, developing policies to support capital investment for businesses, developing an innovation system focusing on new technology, and promoting awareness through communication.

Despite the COVID-19 pandemic, Viet Nam saw a year on year increase of 30.3 per cent in agro, forestry and seafood product exports to US$22.83 billion in the first five months of 2021, reported the Ministry of Agriculture and Rural Development (MARD). 

HCM City assures supply of essential goods to remain normal despite wholesale markets closure

The HCM City Department of Industry and Trade said it has plans to ensure uninterrupted supply of essential goods to meet consumer demand though all three of the city's largest wholesale markets have been closed.

Binh Dien Wholesale Market in District 8 was closed on Tuesday morning after recording at least 39 cases of COVID-19 through mass testing, and will reopen when it can comply fully with the pandemic prevention and control protocols.

Traders there have been told to switch to online sales and have their products delivered to customers’ homes until then.

The city will also strengthen mobile sales to ensure there is an adequate supply of essential items like food.

The department has worked with businesses and district administrations to ensure no small trader hikes prices.

Whatever the situation, authorities and key businesses would ensure supply is always adequate provided people do not hoard, Nguyen Nguyen Phuong, deputy director of the department, said.

With the three largest wholesale markets in the city having to temporarily shut down, Thu Duc and Hoc Mon being the others, goods coming from provinces to the city will go directly to traditional markets.

The department said the 1,962 food supply points (106 supermarkets, 220 traditional markets and 1,636 convenience stores) in the city have plans for stockpiling to ensure supply of food and other essential items is adequate.

The city also plans to strengthen the capacity of traditional markets as well as modern distribution systems to maintain their key role in distributing essential goods.

Bui Ta Hoang Vu, director of the department, said the city held a meeting with Tay Ninh Province to set up a buffer zone for transhipment of goods between the two places.

Goods coming from Tay Ninh to the city will be gathered in a place between Cu Chi and Trang Bang it will disinfect districts where both they and the vehicles transporting them before they are brought to traditional markets.

The 30-hectare Binh Dien Wholesale Market has thousands of stalls selling mainly seafood, pork and vegetables.

It has around 20,000 people working every night during normal times, but during social distancing only 9,000-12,000 people were allowed to work there, yet the risk of spread of infection remained very high. It has thousands of stalls, and some 5,000 cars and trucks and 2,000 three-wheelers enter it every day.

Eight thousand tonnes of fruits and vegetables come to the city’s three wholesale markets every day, meeting 70 per cent of demand.

Supermarkets, shopping malls and other retailers supply the remaining 30 per cent.

Shares edge higher, foreign investors net buy over $90.3 million

The market ended higher on Wednesday with the VN-Index recovering from the previous session's losses. Meanwhile, foreign investors flocked back to the market with a net buy value of more than VND2 trillion.

The market benchmark VN-Index on the Ho Chi Minh Stock Exchange (HoSe) surged 33.76 points, or 2.49 per cent, to 1,388.55 points. The index lost more than 56 points, falling below the key level of 1,400 points, as selling forces weighed on the market in the last trading hour of Tuesday.

The market's breadth stayed negative as 226 stocks decreased, while 147 stocks rose and 40 ended flat.

The liquidity remained high with nearly 740 million shares traded, worth nearly VND24.87 trillion (US$1.1 billion).

The rally was thanks to recoveries in large-cap stocks. The VN30-Index posted gains of 50.35 points, or 3.38 per cent, to 1,538.77 points. Of the 30 biggest stocks in the VN30 basket, 26 stocks rose while only four slid.

Stocks across all sectors jumped sharply yesterday.

In the top five stocks influencing the market's rally, Vinhomes JSC (VHM) was the biggest gainer in market capitalisation, up 6.07 per cent.

It was followed by PetroVietnam Gas JSC (PVGas, GAS), Techcombank and Hoa Phat Group (HPG), up 6.64 per cent, 4.81 per cent and 3.96 per cent, respectively.

Other stocks like Vietjet Aviation JSC (VJC), FPT Corporation (FPT) and Mobile World Investment Corporation (MWG) also witnessed good performance, with MWG shares hitting the maximum daily gain of 7 per cent.

After the VN-Index broke through the short-term support level of around 1,380 points, the index's technical signals were weaker and the next support zone is 1,325 points, said analysts from Saigon - Hanoi Securities JSC (SHS).

Based on Elliott theory, the market might enter the corrective wave A with a target of around 1,210 points. However, after strong correction sessions, the market often has technical recoveries to claim back some losses, SHS added.

On the Ha Noi Stock Exchange (HNX), the HNX-Index also inched 0.41 per cent higher to 319.83 points, boosted by gains in large-cap stocks. The HNX30-Index, tracking the 30 biggest stocks on the northern bourse, increased 1.01 per cent to 498.17 points.

During the session, over 168.93 million shares were traded on HNX, worth nearly VND3.9 trillion.

While foreign investors were net buyers on HoSE, with a net value of VND2.08 trillion, they net sold a value of VND47.27 billion on HNX. 

Prescription drug sales down amid COVID contagion fears

Growth in prescription drugs from the first quarter to the third quarter of 2020 have decreased by 10-15 per cent compared to 2019 and fear of COVID-19 is to blame, according to SSI Securities.

Hospital admission procedures have also become stricter during the pandemic restricting the number of patients who are visiting the facilities for periodic health check-ups. This, in turn, has greatly affected the number of people buying medicine.

The pharmaceutical industry has long been considered a stable growth industry, but since the beginning of the pandemic, these factors have seen significant declines in the prescription drug sector.

In 2020, the growth rate of this channel was just five per cent, significantly lower than the figure of more than 10 per cent the previous year.

In contrast to the decline in prescription drug sales, over the counter (OTC) drug sales recorded remarkable growth. This was particularly notable in sales of pain relievers, antipyretics, antiseptics, and hand sanitiser.

OTC drug prices are not affected by the Law on Bidding, which creates favourable conditions for pharmaceutical enterprises to promote and exploit this product line, according to Phu Hung Securities Corporation.

According to a survey by the Vietnam Report, about 71.4 per cent of enterprises participating in the survey chose to develop and expand OTC channels to compensate for the shortage of sales in prescription drugs.

Businesses with well developed OTC sales channels all recorded positive results in the first quarter of this year. Traphaco Pharmaceutical Joint Stock Company (TRA), for example, recorded a VND55.2 billion (US$2.4 million) in profit after tax in the first quarter of 2021, an increase of about 40 per cent over the same period in 2020.

Many businesses, however, that did not have strong OTC sales at the beginning of the pandemic have suffered losses. Ben Tre Pharmaceutical Joint Stock Company (DBT), for example, recorded a loss of VND328 million in the first quarter of this year opposed to a VND6 billion pre-tax profit in the same period last year.

COVID-19 VACCINES

In early June 2021, the Ministry of Health announced a list of 36 medical facilities eligible to import and preserve COVID-19 vaccines, including many companies listed on the stock exchange. These included Vimedimex Binh Duong Pharmaceutical JSC (VMD), Ben Tre Pharmaceutical JSC (DBT), Central Pharmaceutical Company No.1 JSC (DP1), Danang Pharmaceutical Medical Equipment JSC (DDN) and Codupha Central Pharmaceutical JSC (CDP).

Almost immediately after the announcement, pharmaceutical stocks received a much needed boost. VMD, for example, saw an increase from VND23,700 per share on June 1 to VND34,130 per share on June 9. A 44 per cent increase, before sliding back to its current value of VND26,500 per share.

Similarly, DDN recorded five consecutive sessions of gains from June 2 to June 8. This saw an increase of 35 per cent, from VND13,200 per share to VND22,000 per share, before closing Wednesday at VND13,500 per share. This was still 17 per cent above its share price in early June.

DBT shares also increased dramatically over the same period. Shares rose for six consecutive sessions by 42 per cent, rising from VND13,150 to VND18,350 per share only to drop back to around VND13,350. A 9 per cent increase compared to early June.

Notably, DBT has also completed the capital divestment from Nha Trang Vaccine and Biological Products JSC successfully (BIO), selling 4.4 million shares or the equivalent to 51 per cent of BIO's charter capital.

BIO was considered a "dead" stock due to failing to witness any transactions after joining the Unlisted Public Company Market (UPCoM) in August 2018.

However, this changed quickly amid the pandemic with the stock receiving much more attention from investors. On May 27 of this year, BIO hit VND152,450 per share, an increase of 1,594 per cent compared to VND9,500 per share recorded on April 20, 2021.

Currently, BIO has cooled down significantly, trading around VND41,000 per share.

Mergers and acquisitions are also believed to be impacting stock prices in recent months.

On June 7 this year, Pymepharco JSC (PME) announced that Stada Service Holding BV of Germany had made a public offer to buy nearly 356,000 PME shares. This is the equivalent to 0.47 per cent of the company's charter capital. As of March 26 this year, Stada Service Holding BV held 99.53 per cent of capital in PME. This acquisition would give the German financiers full ownership of PME’s capital.

Viet Nam's pharmaceutical market is currently valued at $7.4 billion covering 22,000 different types of drugs. According to Fitch Solutions, growth in Viet Nam's pharmaceutical industry will reach 8.7 per cent in 2021. SSI Securities also forecast a growth rate of 15 per cent higher than the pharmaceutical industry's average growth rate of 11.8 per cent, over the 2018-2019 period.

These strong growth figures are partly attributed to Viet Nam's rapidly ageing population and big increases in per capita income.  

Foxconn forced to re-employ at outside locations

Major manufacturers of some of the world’s most sought-after products are scrambling to spread production efforts elsewhere due to prolonged pandemic impacts in India and Vietnam in particular.

Bac Giang Industrial Zones Management Authority is making efforts to cooperate with Apple supplier Foxconn, which runs three manufacturing facilities in the province, in an attempt to help resume operations at full capacity as soon as possible.

Fuyu Precision Component Co., Ltd. – a facility of Foxconn Singapore – has struggled with pandemic-related restrictions at Quang Chau Industrial Zone (IZ) since the latest outbreak hit the north of the country and major manufacturing sites in May.

A Foxconn Vietnam representative confirmed to VIR that the company has yet to resume at full capacity because a large volume of the labour force was isolated.

In mid-May, Bac Giang People’s Committee asked entire tenants in four IZs to suspend operations in order to prevent the spread of the pandemic. They include Fuhong Precision Component (in Dinh Tram IZ) and New Wing Interconnect Technology (in Van Trung IZ) started to resume operations in part by the end of the month.

It was also reported in June that production in one Indian iPhone plant was halved after more than 100 Foxconn employees tested positive.

The difficulties in daily operations for Fuyu and others mean that the suppliers are having to ramp up operations in locations with fewer restrictions in order to reach their targets, especially in China.

A representative of the Ministry of Planning and Investment’s Foreign Investment Agency noted that factories on the Chinese mainland are possibly being tasked with assembling new iPhones in order to release them as scheduled in the fall. However, China may not necessarily be the long-term destination for Apple suppliers due to high labour costs – one of the reasons diversification from China was taking place before the pandemic.

Media reports have added to the assumption that Foxconn in China is ramping up operations to offset the decrease in capacity from the Indian and Vietnamese markets. Global Times reported that Foxconn has also been ramping up recruitment on the Chinese mainland amid COVID-19 resurgences in India and Vietnam, causing major disruptions in both production lines and supply chains. “This isn’t a temporary move but one that will last for six months or even a year,” a source from Foxconn told Global Times last month.

Analysts noted that Foxconn may also be hiring for the mass production of new Apple products like iPhones, as orders flow back to China. The Foxconn factory in Zhengzhou in central China raised its bonus for new workers to over $900 from the previous $550 per person at the end of May. New workers will get the bonus if they work for at least 55 days within a period longer than 90 days, according to a recruitment notice from the factory in mid-June.

Similarly, iPhone production hub Shanghai Pegatron recently raised its recruitment bonus, with a rebate increased from $850 up to $1,300 to meet the manpower demand in the upcoming peak season.

Last year, Apple moved about eight factories and production lines from China to both India and Vietnam. Its partners have poured billions of US dollars to build new factories and purchase machines – however, COVID-19 has posed as a huge challenge for iPhone production, not only in these markets but in Taiwan as well.

The ongoing events are somewhat of a backwards step for Foxconn’s plans. In January, Bac Giang People’s Committee granted an investment certificate for the Fukang Technology Factory project of Foxconn worth $270 million. The factory would be located in Quang Chau IZ with the goal of manufacturing and processing tablets and laptops with a capacity of about eight million products per year. However, construction has yet to be kicked off and there is no current timeline for operations.

Speaking at the ceremony to receive the certificate, a company representative said that the company was to add 10,000 positions in Vietnam this year. In early 2021, Foxconn indeed posted recruitment notices for the positions of electronic component assemblers and engineers for its factories in both Bac Ninh and Bac Giang.

In an interview last week with Hoang Sy Tuan, deputy director of the Investment Trade Tourism Promotion Agency of the north-central province of Thanh Hoa, he noted that Foxconn was still considering three locations offered by Thanh Hoa People’s Committee to develop a $1.3-billion project to produce electronic parts for Apple. The locations include Nghi Son Economic Zone in the west of the province and another one in Thieu Hoa district. Once complete, the plants could generate 100,000-150,000 jobs and $10 billion in export revenues per year.

“The agency often contacts Foxconn to support it to understand more about the investment environment of the province. The investor will arrive in the province for field surveys once the pandemic is controlled,” Tuan said.

New assistance under ADB to boost private sector development in Vietnam

A new $4.6 million technical assistance package from the Asian Development bank will help the government of Vietnam to strengthen public-private partnerships, private sector development, and state-owned enterprise reform.

The $4.6 million technical assistance package from the Asian Development Bank (ADB) will be used to provide policy advisory, assist in the preparation of infrastructure projects, and strengthen institutional capacity to enhance sustainable economic growth. The financing includes a $2.7 million grant from the government of Canada and a $1.9 million grant from the government of Australia, both to be administered by the ADB.

“Vietnam has achieved impressive socio-economic development over the past three decades by maintaining high economic growth gained from its structural reforms,” said ADB principal private sector development specialist Donald Lambert. “To meet the targets of its upcoming Socio-economic Development Strategy (SEDS) 2021-2030, maintain the growth rate of 6-7 per cent, and achieve the Sustainable Development Goals, Vietnam will need to further accelerate economic reforms, expanding the role of the private sector in driving the country’s development.”

Between 2011 and 2020, Vietnam invested an estimated $117 billion in infrastructure. However, its infrastructure remains underdeveloped compared to its regional peers. The country will need to mobilise an estimated $237 billion by 2030 to close the infrastructure deficit, which is $49 billion more than the historical spending trajectory.

Recognising the potential of the private sector to help close the infrastructure deficit, Vietnam’s SEDS 2021-2030 prioritises removing barriers to open competition and developing a supportive environment to increase the private sector’s contribution to the economy, including a larger role in infrastructure development.

The ADB’s new technical assistance will help by delivering policy advice on public-private partnerships (PPPs) and private sector development, piloting projects that embed the G20 Quality Infrastructure Investment principles, and strengthening PPP and private sector development institutional capacities.

Efficient growth strategy boosts valuation of Masan stocks

Valuations of Masan Group's MSN stock have been rated 20 per cent higher than the current trading price according to securities companies and investment banks.

On July 2, 2021, the Board of Management at Masan Group (code: MSN) held an online meeting with investors. The meeting revolved around Masan increasing its ownership rate in The CrownX (TCX) from 80.2 to 84.9 per cent as well as the business situation of VinCommerce which owns the Vinmart and Vinmart+ chains.

At the same time, the company also shared more about the strategy of developing the Point of Life consumer-retail platform, especially promoting the integration from offline to online after the cooperation agreement with Alibaba.

After this meeting on July 5, Viet Capital Securities (VCSC) raised MSN's target price. In its assessment summary VCSC said, “We currently rate MSN with a buy recommendation at a target price of VND142,500 ($6.19),” said VCSC. In May 2021, VCSC gave a buy recommendation of VND121,600 ($5.28). Currently, MSN is trading at VND110,000 ($4.78).

According to VCSC, Masan has conducted two deals to increase its ownership in TCX. Specifically, it spent $350 million to buy treasury shares with TCX valued at $7.3 billion. Also, Masan spent $50 million to acquire secondary shares of TCX with a valuation of $7.3 billion.

“It is worth noting that $7.3 billion is also the valuation at which Alibaba and other investors have invested in TCX. A consortium led by Alibaba has injected $400 million to scoop up a 5.5 per cent stake in TCX,” VCSC added.

In the long term, Masan aims to increase VinCommerce's total commercial margin above 30 per cent from the current 20 per cent by negotiating terms with suppliers, sharing revenue with Phuc Long kiosks located in VinMart and VinMart+ stores, as well as building VinCommerce's own brand portfolio.

While Masan has yet to release its semi-annual financial statement, its Board of Management (BoM) said that although VinCommerce has closed several underperforming stores in 2020, sales growth at existing stores kept its revenue unchanged compared to the previous year as the COVID-19 outbreak has accelerated the transition of consumers to modern retail channels.

Although VinCommerce posted positive earnings before interest, taxes, depreciation, and amortisation (EBITDA) since the end of 2020, it still incurred a net loss. VCSC called this loss "planned", with the BoM planning for a net loss of about VND1 trillion ($43.44 million) in 2021 for the subsidiary, an improvement compared to the loss of VND3.2 trillion ($138.97 million) in 2020.

VCSC noted that many securities companies and institutional investors have placed high expectations on Masan's strategy to develop an offline-to-online retail model. In particular, Masan is accelerating its Point of Life platform that will serve the essential needs of consumers from groceries to financial services (payment, credit card, investment) through cooperation with Techcombank. It will also expand its service offering to meet other needs in the future such as healthcare, education, and entertainment.

Specifically, in the first half, Masan cooperated with Alibaba and Lazada to promote online grocery sales. The company also formed a strategic cooperation with Phuc Long to develop Phuc Long Kiosks at VinMart+ stores. By the end of June, around 50 VinMart+ stores have set up Phuc Long kiosks. The kiosks will share 20 per cent of their estimated VND5 million ($220) daily revenue with VinComerce.

Under the cooperation, 1,100 Phuc Long Kiosks will be set up in VinMart+ locations by the end of the year to contribute an expected 4 per cent to the EBITDA margin of the VinMart+ system.

In addition, Masan launched a pilot model intergrating Techcombank's financial services and Phuc Long Kiosks at VinMart+ in Hanoi. It set the goal of increasing the number of VinCommerce points of sale (VinMart and VinMart+) to 3,000 by the end of 2021, reinforcing its leadership in terms of scale and profit.

To finance the above strategies, TCX is expected to continue to raise $300-400 million in the second half of the year. In a press release from July 1, Danny Le, general director of Masan Group said that, “2021 will mark a turning point for VinCommerce when this retail system starts to turn a profit. Our top priority is to re-expand our point-of-sale system to build a leading retail chain in terms of scale while maintaining the momentum of improving profitability. This is the foundation for us to increase investment to accelerate our offline-to-online integration strategy. Based on TCX’s projected business results in 2021 and the growth potential of the offline-to-online integration platform, TCX's current valuation does not accurately reflect its value."

Another company, Mirae Asset Securities, also issued a report on July 5 raising the target price of MSN to VND131,000 ($5.69). Previously, in January 2021, Mirae Asset Securities rated MSN with a valuation of VND120,000 ($5.21). Similarly, HSC also announced a new valuation for MSN shares at VND134,000 ($5.82) in its report published on July 2.

On July 7, Credit Suisse raised MSN's forecast for earnings per share (EPS) in 2021 and 2022 at 38 and 5 per cent, respectively, against the previous forecast. This investment bank also raised MSN's target price to VND137.000 ($5.95).

Business management change to adapt to new HR realities

The pandemic causes businesses to convert their operating model from a triangular to a circular model where management gives direction, facilitate, and empower subordinates to take responsibility for implementation.

In the webinar “Humanized HR for the New Now” hosted by Talentnet, Tieu Yen Trinh, CEO of Talentnet shared that, “The role of the manager is very important. Managers need to have a mindset of 'it's okay to be wrong', which means that employees can make mistakes quickly, correct them quickly, and redo tasks quickly instead of waiting for everything to be perfect.”

HR management models under the new norm will shift from a triangular to a flexible circular model. That is, instead of managing from the top down through many different management levels, making processes lengthy, the pandemic caused businesses to switch to a new model where the management only provides directions while facilitating and empowering subordinates to take responsibility for implementation.

HR is no longer managed by departments based on the original job description but are managed on a project-basis, based on the skills employees possess. This governance model helps businesses quickly and flexibly change according to market realities as there are still many uncertainties ahead.

Accordingly, global HR management trends are moving towards a multi-stakeholder approach, re-skilling, employee experience improvement, science-based decision-making, focusing on employee happiness, as well as applying automation and new technology.

Talentnet also emphasised four salient features of Vietnam's labour market amid the new normal. Firstly, a young and well-educated workforce is starting to emerge into dominance. Secondly, enterprises are looking at the role of HR during the crisis to review and re-evaluate the costs and benefits of HR investment.

Thirdly, talent shortage is happening at all levels in both Vietnamese and foreign companies, not only on the senior personnel level. Therefore, many businesses have invested heavily in programmes to attract and retain talent. Finally, due to the impact of the pandemic and the trend of digital transformation, recruitment demand in the digital and e-commerce segments is increasing.

According to the General Department of Statistics, in the first half, the number of employees in new enterprises also increased by 1.3 per cent over the same period, focusing on the industries such as retail, wholesale, repair, processing, and manufacturing.

Remarkably, since the first outbreak of COVID-19 pandemic, 32.1 million workers aged 15 and over in Vietnam have been negatively affected. 69 per cent have reduced working hours, reduced income or lost jobs, mainly in the service and manufacturing sectors (76 per cent).

It is predicted that the top five sectors with the highest labour shortage in Vietnam in 2021 will be real estate, finance and banking, manufacturing, and technology-related fields like IT, e-commerce, fintech, and proptech.

Recruitment demand in the first half of 2021 focuses on industries such as finance, banking, insurance, real estate, and construction. Notably, while healthcare and pharmaceuticals are the hot industries in the south while high-tech and IT are the hottest in the north. In particular, there are a lot more openings for project managers in the north than in the south.

However, according to the Talentent-Mercer remuneration survey in Vietnam in 2021, 20 per cent of surveyed enterprises plan to hire more employees. Meanwhile, 10 per cent of businesses plan to reduce the number of employees, focusing on service industries heavily affected by the pandemic such as restaurants, customers, and transportation. 70 per cent of businesses would not change the number of employees but focus on training to help employees keep up with market demands.

Construction cost hikes exacerbate real estate delays

The skyrocketing price of construction materials has been affecting real estate projects in Vietnam, delaying their progress and raising property prices even further.

Construction and real estate businesses have been shocked by the galloping increase in the price of construction materials, affecting the agreements of many contractors with developers.

Since the beginning of 2021, steel has seen runaway price growth to now stand at nearly VND18 million ($780) per tonne, 40-50 per cent higher than quotes from the end of 2020.

In particular, some steel producers have increased prices six times within as little as 10 days. Meanwhile, the cost of cement also increased by VND30,000-50,000 per tonne ($1.30-2.20), and the price of sand nearly doubled.

In the face of rising construction costs, many investors said they would have to delay some projects and adjust the prices of their products.

Nguyen Hoang, director for research and development of DKRA Vietnam, said that the increase in the cost of construction materials will certainly impact real estate projects being implemented, as well as both contractors and investors.

“Costs increase at the expense of initial profit expectations, which could slow down the construction process at some projects or force developers and contractors to re-negotiate terms,” Hoang said, adding that the effects would reduce market supply towards the end of the year.

Other projects, he added, may pause to wait for prices to climb down. However, this will jeopardise construction progress and could negatively affect buyers.

Several disputes have already arisen between developers and buyers regarding the slow process at projects like Sunshine City Saigon, funded by Sunshine Group, in which buyers are requesting that their deposits are returned.

Meanwhile, Lim Hua Tiong, CEO of Frasers Property Vietnam, told VIR that increasing material prices generally affect a project’s profitability, planning, and in the worst-case scenario can lead to delays in construction and handovers.

“The sudden and unexpected spike will affect contractors with insufficient cash reserves to purchase materials to proceed with the construction,” said Hua Tiong, adding that the hike will, however, eventually stabilise within inflation range. His expectations are supported by a recent study by S&P Global which expects steel prices to soften in the second half of 2021.

At the same time, Hoang from DKRA warned that some developers could resort to cost- and profit-saving solutions such as switching to cheaper building materials.

According to the Vietnam Association of Realtors, the price of apartments could increase 10-15 per cent due to material prices, instead of the 4-6 per cent originally forecast.

Hoang from DKRA suggested developers and contractors utilise their back-up budget on time to cope with the increased price of construction materials.

“They should also diversify their sourcing of irreplaceable construction materials and discover suitable alternatives while ensuring the quality of the construction,” Hoang explained.

Hua Tiong of Frasers Property added, “Investors and developers should continue to utilise their expertise and experience to plan, develop, and manage the project and work closely with their contractors to ensure timely project implementation.

It is also important for developers to have a strong balance sheet and cash reserves to tide over any economic shocks or adverse market conditions.”

At the same time, he said the current spike in construction material prices is only a short-term effect. “Rising land prices and delayed projects approval typically remain a bigger issue in Vietnam’s real estate market,” Tiong said.

He added that as a foreign developer, he hoped that there would be continued focus on establishing more transparent approval processes for policymakers.

Over 140,000 new stock trading accounts opened in June

The Vietnamese stock market continues to attract retail investors with over 140,000 new accounts opened in June.

Data compiled by the Vietnam Securities Depository Centre (VSD) shows that the number of new accounts opened in June reached a new historical high of 140,470. This is the fourth consecutive month that the figure is above the 100,000 threshold, Bao Viet Securities (BVSC) commented.

The large majority (140,054) of these new accounts were opened by domestic individual investors. The number of new accounts opened by domestic institutional investors also increased for the third consecutive month, reaching 139 new accounts.

"However, the number of openings by foreign investors has decreased. Foreign individual investors only opened 280 new accounts, against the 423 in May, while the number of accounts closed by foreign organisations outnumbered newly opened ones. Specifically, there were 25 new accounts and 28 recently closed accounts," BVSC said.

The number of new accounts remained high in June, showing the excitement of the domestic stock market.

Earlier this week, the new infrastructure developed by FPT was officially implemented at the Ho Chi Minh City Stock Exchange.

The adoption of the trading system of the Korean Exchange is also set to take place between June 14 and August 6, with the official launch expected in the third or fourth quarter of this year.

Promoting tourism development in new situation

Implementing the Government’s Resolution No. 50/NQ-CP dated May 20, 2021 on the Action Programme to implement the Resolution of the 13th National Party Congress, the Ministry of Culture, Sports and Tourism (MoCST) has developed an action programme for tourism development during the 2021-2025 period.

The programme sets out the specific goals and tasks to create a high level of consensus in terms of the awareness and action of the whole tourism sector and related industries on the roadmap to turn tourism into a spearhead economic sector of the country.

During the 2016-2019 period, Vietnam witnessed the rapid growth of domestic tourism with record numbers in both international and domestic arrivals and total revenue. However, the smokeless industry then faced a precarious situation due to the impact of the COVID-19 pandemic as well as the general downturn in global tourism. About 90% of tourism businesses were forced to close and total revenue from tourists decreased by over 60%.

The above situation posed a problem for tourism’s sustainable development. The sector needs to identify specific and methodical steps to overcome difficulties while creating strong motivation for the restoration and breakthrough of tourism.

Regarding this, at a conference held by the MoCST to finalise the action programme for tourism development during 2021-2025 period, Minister Nguyen Van Hung affirmed it is necessary to change the mindset and approach to tourism to restructure the tourism market and acknowledge the importance of the domestic tourist market. How to take advantage and exploit the market of nearly 100 million people in the country is what the action programme examined, so that tourism industry can develop in a sustainable and balanced manner. In addition, the problem of quantity and quality also needs to be re-examined. The tourism sector should focus on increasing visitors to Vietnam as well as their contributions to the country’s economy instead of boosting solely the number of tourists.

On this basis, the action programme for tourism development during the 2021-2025 period sets out seven key tasks including: the review, evaluation and completion of policies on tourism development; the application of science-technology and digital technology into the tourism industry; investment in infrastructure serving tourism; the development of products and the management of service quality; support for businesses to restore and develop amidst the pandemic; the development of high-quality human resources; the enhancement of promotion activities and international cooperation. These tasks are to be solidified by 17 key projects and tasks.

According to the experts, the action programme provides fundamental solutions to help the tourism sector overcome its difficulties while creating long-term development momentum in the future. Of which, many contents have been considered to closely grasp the actual situation, solving immediate backlogs, such as: policies to support businesses and tourism workers to overcome difficulties caused by COVID-19 and associated with financial support measures, tax exemptions and reduction, preferential loans, debt rescheduling, debt freezing, job supports, proposals to reduce fees for procedures, the reduction of business deposits, and the digitisation and application of modern technologies to create a smart tourism ecosystem.

A representative from the Vietnam Tourism Association has also made proposals to promote tourism following the pandemic, focusing on the attraction of key target markets and the enhancement of promotion activities in these markets. In the immediate future, to make preparations for the application of “vaccine passports” to welcome international guests, it is crucial to increase the vaccination rate for those operating in the tourism sector. In addition, the relevant agencies and enterprises should pay much attention to stimulating tourism demand in this “new normal” situation. In the context of the COVID-19 epidemic, tourism stimulation must be understood in a new sense with the goal being the sustainable growth of visitors and price reduction while improving service quality and adding new types of services.

The Departments of Tourism and of Culture, Sports and Tourism in provinces and cities also noted several suggestions: specific guidance is needed on the establishment of tourism development funds in localities; amendment and supplementation of new regulations and detailed guidance on legal provisions related to investment and business activities in tourism sector is key; a balance of budget packages to support provinces to invest in their transport infrastructure especially in key economic regions is required.

Firms offered recommendations to boost exports to EU

Europe is a large market for Vietnamese goods, but businesses need to grasp its quality standards and consumption trends so as to fully capitalise on this market, heard an online workshop held on July 7.

Nguyen Tuan, Deputy Director of the Investment and Trade Promotion Centre of Ho Chi Minh City, said trade between Vietnam and Europe has recorded encouraging results in the recent past, and it is forecast to grow even more strongly thanks to the EU - Vietnam Free Trade Agreement (EVFTA).

Bilateral trade turnover saw a 12-fold increase from US$4.1 billion in 2000 to nearly US$50 billion in 2020. Vietnam’s exports to the EU surged by 13-fold from US$2.8 billion to US$35.1 billion during the period.

Last year, Vietnam posted about US$29 million in trade surplus with the EU despite the COVID-19 pandemic. The main importers of Vietnamese goods include Germany, France, and Poland.

Tuan said as the pandemic is still wreaking havoc on the global economy and trade, Vietnam, including HCM City, has been working hard to connect local enterprises with foreign markets via online platforms and new sale channels. As a result, trading has been maintained, thus keeping supply chains uninterrupted.

Adam Koulaksezian, Director of the French Chamber of Commerce and Industry in Vietnam (CCIFV), noted Vietnam currently ranks 15th in the world and first in ASEAN among trade partners of the EU.

Thanks to the EVFTA that took effect in August 2020, tariff barriers have been lifted for a number of exports from both Vietnam and the EU, creating momentum for bilateral trade. Export and import between the two sides have been on the rise and predicted to grow further in the time ahead, which will be a great opportunity for Vietnamese exporters in many industries, he said.

However, Koulaksezian added, EU consumes are paying more attention to sustainability, including origin traceability of products, corporate social responsibility, and environmental protection. Therefore, Vietnamese businesses should ensure the sustainability of their products and build an export strategy matching the demands and trends in foreign markets.

Pointing out certain challenges to bilateral trade, Business Support Service Director at CCIFV Nguyen Dac Boi Quynh said the complex COVID-19 situation, especially in southern Vietnam where many wood and aquatic product processing firms are located, is forcing businesses to simultaneously implement social distancing and sustain production.

Other challenges include the requirements for product origin traceability and different types of certificates, and the fast-changing consumption trends in the EU.

Sharing her business’s experience, Pham Thi Hong Quang, Director of the Viet Source Handicraft Co. Ltd, said the company has built its infrastructure meeting importers’ requirements, shifted to online marketing in the face of the pandemic, and stay updated with new consumption trends in the EU, which has helped its shipments to this market increase 20 percent from the pre-pandemic period.

She recommended enterprises that want to access this market to make proper investment right from the beginning to meet quality requirements, update themselves with consumption trends, and make use of modern marketing channels.

Source: VNA/VNS/VOV/VIR/SGT/Nhan Dan/Hanoitimes