Although Vietnam has been successful in containing the Covid-19 pandemic, the disease has raised concerns about the nation’s business environment and prospects for many businesses and industries.

CBRE Vietnam has conducted a flash survey of 180 occupier clients in order to gauge the industry’s response to the Covid-19 outbreak.

The results showed that the economic impact of the Covid-19 outbreak has weighed heavily on business sentiment in Vietnam, with 79% of respondents anticipating the business environment would deteriorate in the second half of 2020.

Some 43% of respondents anticipated a revenue contraction between 10-30% in 2020, and some 61% of respondents have not been offered relief measures from landlords.

The survey shows that 27% of respondents expected landlords to be more accommodating, as their businesses have been severely disrupted by Covid-19.

A broader survey, which reviewed occupiers’ opinions in the Asia-Pacific region, found that the retail industry was significantly impacted by the disease, with many stores suspending their expansion plans. Such delays in rental decisions will have a lasting impact on the following months.

However, 24% of participants in the region still expected revenue growth in 2020, of which the information technology industry is the most optimistic.

“There will be many new trends in business continuity planning that occupiers will focus on in the coming time. Companies are now more aware of the importance of evaluating and developing effective office use/allocation strategies,” said Thanh Pham, associate director of CBRE Vietnam.

She went on to say that the application of technology will be a leading factor in various industries, including the technology industry. More than half of occupiers in the finance and banking sector are considering splitting up their teams across multiple buildings.

Apparel sector expected to lose VND11 trillion in revenue due to coronavirus

The suspension and cancellation of export orders in the first quarter of 2020 is expected to cost the apparel sector VND11 trillion in lost revenues if Covid-19 is contained by late May and the economy recovers in June, according to Vietnam Textile and Garment Group (Vinatex).

In the first quarter of the year, many firms witnessed a drop in revenues by 20% year-on-year.

Apart from this, the time for opening a letter of credit doubled to 120 days, while multiple orders in March were delayed until April and May.

Also, a number of local apparel exporters remained stagnant in April, as they have yet to secure new orders for May.

The country’s apparel export revenues reached US$8.4 billion between January and March, down 2.02% year-on-year, Thanh Nien newspaper reported.

As the United States and the European Union started to close their borders due to the coronavirus pandemic from mid-March, Vietnam’s exports of textile and garment products to these markets were not heavily affected during the first-quarter period.

The second quarter is forecast to be the hardest-hit quarter for the apparel sector, trade activities are expected to return to normal in the fourth quarter.

For the most optimistic scenario, the country’s apparel sector will earn US$35 billion in export revenues this year, down 10% against 2019, while apparel export revenues will stand at a mere US$30 billion in the worst-case scenario, according to Vinatex.

MoIT to select top priority industries for support

Key industries like textiles, footwear, electronics, food and seafood processing must be prioritised for support in the “new normal” situation, said Truong Thanh Hoai, Director of the Industry Department under the Ministry of Industry and Trade (MoIT).

Hoai pointed out that the local textile and footwear industry with more than 4 million direct workers and another more than four million indirect workers has been affected badly, while orders for the electronics sector decreased significantly this month and were expected to keep dropping in the following month.

The director added the local automobile manufacturing and assembly industry also dropped with showrooms closing and factories operating in moderation.

“The state needs to give direct support because the commercial banks themselves cannot implement policies to support the businesses. The State should give them direct credit instead to help them overcome difficulties,” said Hoai.

“Support for land rental is applied in a very short time,” he said, suggesting that “The State can increase public investment in which they can buy iron and steel and furniture to support the local industries.”

Agreeing, Tran Duy Dong, Director of the Domestic Market Department, said: “Those industries must be on top to get the support.”

Dong said the pandemic had a strong impact on the services and tourism industries, reducing the income of workers as well as domestic consumption, thereby reducing spending and personal consumption.

In order to promote the domestic market in a "new normal" situation, Dong proposed to implement three measures including ensuring full supply of goods in the local market, taking full advantage of e-commerce and promoting links between industries.

“The connection between supply and demand such as the retail and distribution sectors and the agricultural and aquatic products producing sector should be boosted to the maximum so that local consumers can help buy local products,” he said.

Earlier, Minister of Industry and Trade Tran Tuan Anh said “It is necessary to point out the conditions for the industry to operate in a "new normal" and to recover as it was before the pandemic.”

Anh asked all MoIT’s departments and agencies to work with industry associations to get specific data to see what they can support.

"The goal is to develop an action plan to implement the Prime Minister's Directive to bring the economy back to normal as well as striving for development goals of 2020,” said the minister.

Anh also agreed to put key industries of textiles, footwear, electronics, food processing industry, agricultural and seafood at the top priority of the plan./.

Covid-19 fueling online services

Despite the impact of the Covid-19 pandemic, the local retail market still recorded positive signs from e-commerce, online shopping, and delivery services in the first quarter of this year.

The slow-down in offline retail revenues has accelerated e-commerce and online shopping, which has played an important role in stabilizing trade for many stores during the outbreak, CBRE Vietnam stated in its quarterly report released on April 29.

Among the big names in the field of e-commerce, Tiki has grown at the fastest pace and reached a record 4,000 orders per minute. Also, SpeedL and Saigon Co.op have grown exponentially in online sales.

Additionally, Grab has activated a new platform, named 'GrabMart', to serve customers' shopping needs while staying at home.

In the Asia Pacific market, omni-channel and online retail performed well during the outbreak, from consumer products, cosmetics to luxury goods. Services such as sightseeing, museums, and real estate tours are available on the online platform.

In the long term, the growth of e-commerce will be a solid foundation for any future development in the retail market, CBRE projected.

Meanwhile, the traditional retail sector saw a big challenge in the first quarter of this year.

According to the General Statistics Office of Vietnam, sales in Q1-2020 of F&B, hotel services and tourism services decreased by 9.6% and 27.8% y-o-y, respectively.

The footfall in shopping centers decreased by approximately 80% in both HCMC and Hanoi during the outbreak.

Shophouse recorded many business terminations, mainly from those who had limited budgets for long-term business, since the Government enforced social distancing.

Also, a revenue drop raised financial pressures leading to the early terminations, forcing many businesses to turn to “survival” modes. For chain brands, the closure of several shophouses, combined with restructuring policies or salary cuts for employees, is also a short-term solution to stabilize funding.

Although the social distancing period had been eased at the end of April, most industries are still not allowed to open as usual.

Revenue in April was expected to decrease by 60-70% compared to March.

The current situation forces developers to continue incentive policies to reduce cost burdens, as well as create recovery time for tenants to overcome this difficult time.

“Covid-19 has negatively impacted offline traffic but, at the same time, created many opportunities to increase positive growth for small and medium-sized models, such as convenience stores, pharmacies and especially the e-commerce field,” said Vo Thi Phuong Mai, associate director - head of retail services of CBRE Vietnam.

E-commerce is a sparkling spot and transforming to support physical stores during the outbreak. The omnichannel capability will be more resilient and may even outperform, Mai said.

In reviewing the outlook for retail markets, CBRE projected that in the event the pandemic is contained in Q2-2020, vacancy rates in the CBD will remain unchanged, while non-CBD will likely see a slight increase of 1-2 percentage points.

In another scenario in which the pandemic is contained in September 2020, vacancies in both Hanoi and HCMC will surge by 5-7 percentage points. Future supplies in HCMC will drop 76% and there may be no new projects launched in Hanoi this year.

The elusive bull market

It seems that a strong price rally in the global coffee market usually occurs after an economic crisis or an epidemic which impacts the global economy. Each crisis has its own conditions but still they share some common features. Would Covid-19 trigger a bull run in the coffee market?

Many coffee farmers and traders are in hot waters when the Covid-19 pandemic has spread worldwide and become a pandemic.

Coffee has been facing a price crisis since the beginning of the crop. The coronavirus outbreak is only the “last straw that breaks the camel’s back.” The price chart on the London coffee market shows that the coffee prices have plunged, or have been bearish, over the past three years, from US$2,150 per ton in 2017 to US$1,189 per ton now.

Therefore, many coffee traders are feeling anxious, not only about the coronavirus outbreak but also the good 2020 coffee harvest of Brazil, the world’s top coffee exporter. Many forecasters have put out impressive figures for Brazil’s coffee production. Recently, the Dutch agriculture bank Rabobank has estimated a coffee output of some 67.5 million bags (a bag weighs 60 kilos), with about 18.5 million bags of robusta coffee, a historical record.

It’s true that the 2020 coffee production will be really impressive, if it’s for Brazil alone. But the Covid-19 outbreak could be a game changer.

A decline in storage is the result of little exports. As long as coffee exporting countries and coffee consuming countries apply social distancing, the world’s coffee exports will decline and coffee storage in consuming countries will diminish.

The latest periodical report released by the International Coffee Organization (ICO) in March shows that the world’s coffee exports in the first five months of the 2019-2020 crop starting October 1, 2019 were 50.97 million bags, down 3.4% against the same period in the previous crop. Amid the Covid-19 outbreak, many transport and warehousing firms have had to shutter. A number of coffee exporting countries like Brazil, Columbia and Honduras have reported a decline in exports. There is no ground for forecasting that export will increase in the remaining time of the first half of 2020, as both exporters and importers have reduced signing new contracts. In importing countries, coffee roasters, both big and small, make use of coffee in stock and buy small amounts of coffee enough for processing to home deliver to customers due to the lockdown situation.

The two figures of coffee storage which have the strongest impact on the world’s coffee prices are from the Green Coffee Association (GCA) in America and the European Coffee Federation (ECF). The latest reports by these two organizations show that the available coffee storage in North America by end-March 2020 was 6.2 million bags, equivalent to a processing volume for consumption in 12-14 weeks, and the storage volume in the European Union by December 2019 was 5.4 million, enough for consumption in 5-6 weeks without any coffee imports.

With these figures, it can be assumed that the coffee storage in North America may fall drastically from April to July 2020. In the EU, the storage has diminished significantly, but imports for replenishment are not allowed due to efforts to fight Covid-19.

The prices on the London robusta coffee derivatives market, where Vietnamese coffee traders use as references, have experienced a nosedive four times since 2008. All the price plunges have been associated with crises followed by many ensuing financial bailout packages, such as quantitative easing programs.

The current nosedive is deeper than the one in 2008. Historical records show that the collapse of a range of American banks which pulled down other banks worldwide originated from mortgage trading contracts, sparking a global economic crisis. The U.S. Federal Reserves (Fed) and other central banks have had to pump out trillions of U.S. dollars to improve the situation, such as US$1.5 trillion in America, US$170 billion in the EU and US$586 billion in China.

Later, quantitative easing packages worth trillions of U.S. dollars launched by rich countries during 2010-2015 helped the robusta coffee prices survive the birdflu outbreak with the first animal-to-human transmission case recorded in China in 2013.

Huge money flooded financial exchanges, helping coffee prices on the London robusta coffee derivatives market and the New York arabica coffee market to break out from the bottom and pick up. Realities show that many world’s veteran coffee traders which used to believe in supply and demand factors and analyses have been hit hard. Some coffee roasters have even faced bankruptcy, as they are slow to change their outlooks for the market where prices are decided by the huge money on financial exchanges.

It can be said that the bullish phase is elusive somewhere in the coffee market thanks to Covid-19. The pandemic is widely believed to cause a disastrous economic recession. Therefore, central banks in the United States, the European Union, China, Japan, South Korea and other countries are using the “financial cannons” to shell the coronavirus, determined to not let their economies and the global economy fall into a disaster like what is happening in the health sector.

The question is when this bullish phase will occur? It’s not easy to answer. However, in the current situation when consumption is falling, logistics is difficult and many countries are struggling with the Covid-19 outbreak, it must wait at least until coffee shops, restaurants and eateries are re-opened. When enterprises and workers have stable business and income, every body is expected to be willing to pay higher for the coffee they enjoy.

VNAT removes contested coronavirus-related regulation

The Vietnam National Administration of Tourism (VNAT) has removed a regulation forbidding tourists from reporting the coronavirus situation at their hotel or resort on social media as it had attracted strong opposition, the local media reported.

VNAT Chairman Nguyen Trung Khanh on May 1 signed a decision amending the regulation on coronavirus infection prevention and control, which the administration had issued on April 29.

Observers stated that the regulation had violated people’s right to freedom of expression and information.

In addition to removing this contested regulation, VNAT also amended the language of another regulation, changing the ban on tour guides and employees of travel firms, hotels, resorts and tourist sites from sharing any information on the coronavirus situation on social media to simply banning them from sharing false information on social media.

Khanh explained that the regulations had been poorly worded because VNAT needed to issue the regulations urgently.

HCMC’s Jan-Apr budget revenue plunges by 12.4%

HCMC’s budget revenue in the first four months of 2020 reached nearly VND117.3 trillion, meeting 28.9% of the full-year target and falling by 12.4% year-on-year.

According to the HCMC Statistics Office, the city’s drop in budget revenue resulted from the coronavirus pandemic.

Of the figure, domestic revenue was nearly VND79 trillion, falling by 11% year-on-year. Revenue from crude oil reached over VND5.5 trillion, down 26.2% compared with the same period last year. The city earned nearly VND32.8 trillion from imports and exports between January and April, down 13% year-on-year.

Budget revenue from State-run enterprises accounted for 9.7% of total domestic revenue and slid by 13.6% year-on-year.

Budget revenue from private companies was VND20.7 trillion and from foreign invested companies was VND21.58 trillion, down 21.2% and 5.6% year-on-year, respectively.

The city’s spending in the first four months picked up by 11.3% year-on-year to VND18 trillion, including some VND5 trillion for investment and development (up 14.2% year-on-year) and over VND11.2 trillion for regular expenditures (up 10.9%).

To address the negative impact of the coronavirus pandemic on the city’s economic activity and budget revenue, the city government has taken steps to prevent the spread of the virus and help the city meet its socioeconomic targets for 2020.

The solutions focus on four main goals: helping businesses maintain and restore production during the pandemic, helping the poor weather the Covid-19 crisis, promoting technological innovations that serve production and trade and supporting enterprises to resume operations after the pandemic.

Vietnam Airlines posts heavy losses due to Covid-19

Vietnam Airlines has announced in its Q1 financial report that its first quarter losses were greater than its 2019 profits.

The national flag carrier and its subsidiaries made VND18.8 trillion in net revenue in the first three months, dropping by 26% year-on-year, the lowest in three years, according to its financial report.

Even though the airline slashed its sale expenses and management costs by 40%, it still sustained over VND2.7 trillion in lost revenue.

However, thanks to proceeds from the sale of fixed assets and inventories, its after-tax loss was reduced to VND2.6 trillion, while it booked net profit of VND2.5 trillion in 2019.

The carrier frequently earned high profits in the first quarters of the past few years due to strong air travel demand during the Lunar New Year holiday (Tet).

Due to the impact of Covid-19, the disease caused by the new coronavirus, its average revenue from domestic passenger transport has fallen by 29%, while the international passenger transport revenue has dipped by 34%, stated Vietnam Airlines.

Apart from this, its members, including the Vietnam Airport Ground Services Company, Skypec and Vietnam Airlines Caterers, have been hit hard by the coronavirus pandemic.

Working capital for the carrier’s operations is expected to edge down by VND15 trillion this year.

Reports from the State capital management committee showed that under increasing financial pressure, banks will not be able to continue offering loans to Vietnam Airlines and its members.

As such, the carrier has asked the Government to provide VND12 trillion in financial aid.

Tourists to Da Nang fall sharply during national holidays

The number of tourists to the central coastal city of Da Nang during the Liberation of the South and National Reunification Day (April 30) and International Labour Day (May 1) declined significantly by 98.5 percent to 5,800, according to the municipal Department of Tourism.

International arrivals were down 99.5 percent year-on-year to 650, while domestic visitors fell 98 percent to 5,150.

Only 150 out of the 968 tourist accommodation facilities were open in the city, including about 50 establishments that reopened after the Government and the municipal People’s Committee eased social distancing measures on April 23.

To ensure safety for holidaymakers, the local tourism department has asked relevant agencies to continue implementing the Prime Minister’s directions on preventive measures such as equipping staff with protective gear, checking temperature, wearing face masks and maintaining physical distance.

In 2019, Da Nang welcomed 8.69 million vacationers, including nearly 3.5 million foreigners, up 30.7 percent from the previous year./.

Number of new firms in Hanoi in January-April down 13.1 percent

The capital city of Hanoi granted licences to 235 foreign-invested projects with total registered capital of 324 million USD in the first four months of this year.

A further 35 projects registered additional capital of 365 million USD, while foreign investors contributed capital and purchased shares worth 293 million USD.

During the period, the city earned over 4.3 billion USD from exports, down nearly 4.7 percent year-on-year. Export earnings of domestic firms fell 4.6 percent while that of foreign enterprises was down 4.7 percent.

The city’s industrial production index in April dropped 14.7 percent month-on-month and 4.3 percent year-on-year.

However, the index for the first four months of this year rose by 2.3 percent annually./.

Iron, steel exports to Germany soar in Q1

Iron and steel exports to Germany saw significant increases in volume and value in the first quarter of this year, according to preliminary statistics from the General Department of Vietnam Customs.

Iron and steel export volume hit 858 tonnes, up 17-fold, while value surged 18 times annually to 1.27 million USD.

Vietnam’s total exports to Germany, one of the country’s major markets in the European Union, reached 648.61 million USD in March, up 24.93 percent month-on-month, and raising the first quarter figure to 1.68 billion USD, up 1.87 percent against the same period last year.

Toys and sports equipment raked in 15.8 million USD in March, soaring 221.79 percent, bringing the first-quarter figure to 25.9 million USD, up 136.9 percent./.

Newly registered enterprises in Tra Vinh increase

Despite the COVID-19 pandemic, the number of newly registered enterprises in the Mekong Delta province of Tra Vinh has risen this year compared to the same period last year.

About 126 enterprises have registered since the beginning of the year with total registered capital of 1,591 billion VND (67.7 million USD). Compared to the same period last year, the number of new enterprises rose by 12, while registered capital increased by nearly four times, according to the provincial People Committee.

Chairman of the provincial People Committee Dong Van Lam has promoted tax policies and credit support for companies affected by the pandemic.

Specifically, banks and credit institutions in the province have reduced lending interest rates in maximum in some priority areas, he said.

According to the State Bank of Vietnam branch based in Tra Vinh, the province has more than 500 customers with debts totally worth over 650 billion VND having repayment terms restructured. A 0.5 percent reduction in the interest rates is applied to bank debts, while the interest rate of credit institution debts are cut by 1 percent.

About 1,700 businesses and 2,000 business households have received a five-month extension for tax payments.

In addition to the tax payment extension, 130 enterprises have received a five-month extension on land rental payments.

The management board of the Small and Medium-sized Enterprise Development Project of Tra Vinh Province (SMEs Tra Vinh) has given non-refundable support of more than 1.86 billion VND to small and medium-sized enterprises.

The financial support will focus on investment for technological innovation and the use of solar power to increase production capacity and product quality, and to reduce costs to improve competitive capacity, according to SMEs Tra Vinh./.

RCEP on track to be inked by year-end

The Regional Comprehensive Economic Partnership (RCEP) remains on track to be signed by the end of 2020, said Singapore’s Trade and Industry Minister Chan Chun Sing on May 3.

All RCEP negotiators have agreed that it is important to sign the trade deal this year to bolster the confidence of the global economy and the regional economy, especially in such a difficult moment, Chan told reporters during a virtual interview.

Intensive virtual meetings have been ongoing, he said, adding that no significant delays were foreseen in the signing of the agreement.

He also said COVID-19 developments would have to be taken into account to see if the signing could proceed in a meeting or in a different way.

The minister further noted that an offer has been made to India to rejoin discussions in the coming month.

If India is unable to rejoin the discussions in the coming month, then the plans will continue to proceed with the legal scrubbing for the preparation for the signing at the end of the year, he said.

The RCEP is set to be the world's largest trade pact, and involves 15 countries, including all ten ASEAN nations, Australia, China, Japan, New Zealand, and the Republic of Korea. India withdrew from the deal last year./.

Industrial production index grows at slowest pace in many years

The Index of Industrial Production (IIP) in the first four months of 2020 grew by about 1.8 percent year on year, the slowest pace in many years, due to COVID-19, according to the General Statistics Office (GSO).

The processing-manufacturing sector rose 3 percent; electricity production and distribution 2.9 percent; and water supply, waste and wastewater management and treatment 3.6 percent. Meanwhile, the mining industry contracted 6.8 percent.

The GSO said the complex developments of the COVID-19 pandemic around the world have led to a shortage of input materials, which has subsequently hit industrial production.

Motorized vehicle production was down 14.2 percent; beverage production 13.9 percent; and crude oil and natural gas extraction 10.8 percent.

Other key products that followed the downward trend are beer (24.1 percent), automobiles (23.8 percent), sugarcane (23.5 percent), motorcycles (16.6 percent), crude oil (12 percent), and liquefied petroleum gas (11.8 percent).

However, some industries still recorded fair growth such as medicine, pharmaceutical chemical product, and herbal material manufacturing (25.9 percent), coke and refined petroleum product production (16.9 percent), and metal ore mining (16.5 percent).

In April alone, the IIP dropped by 13.3 percent month on month and 10.5 percent year on year.

The GSO said the COVID-19 pandemic’s impacts have forced a large number of businesses to lay off employees, adding that the number of employees at industrial firms on April 1 declined 1.1 percent month on month and 1.6 percent year on year./.

Indonesia offers free electricity to small firms

Indonesia’s state utility power company PLN said on May 1 that it will offer free electricity over six months for small-scale businesses and producers.

PLN Chairman and CEO Zulkifli Zaini said the company has begun collecting data of about 500,000 customers eligible for support.

Last month, the Indonesian Government offered electricity bill waivers for nearly 24 million households with monthly consumption of 450 VA, and 50 percent discount for another 7 million households that use 900 VA per month.

At a government meeting on April 29, President Joko Widodo announced several plans to ensure that small and medium-sized enterprises could enjoy relief packages, including free electricity.

Earlier, Indonesia announced an additional budget of over 24.8 billion USD to cope with the impacts of COVID-19./.

Building material sector eyes boon

The building material sector would be among the first to benefit from the Government’s efforts to speed up disbursement of public investment, which was identified as a growth driver as the COVID-19 pandemic cast a shadow on the economy.

According to analysts of VNDirect Securities, major growth drivers were slowing down. Specifically, exports were under pressure as global demand dropped and FDI also saw significant decline in registered capital (down by 20.9 percent to 8.6 billion USD in the first quarter).

“COVID-19 entirely changed the macro-economic landscape. We believe that public investment will play a very important role in accelerating economic growth this year as other drivers slow down,” VNDirect Securities wrote.

VNDirect forecast Vietnam’s gross domestic product (GDP) to expand at five percent this year.

VNDirect said that the Government was sending strong signals about accelerating public investment disbursement this year.

Disbursement of public investment rose by 16.4 percent to reach 59.5 trillion VND in the first quarter, or 13.2 percent of the plan for the full year.

In the 2021-22 period, the Government would increase public investment by 8.2 percent, higher than the Government’s GDP growth target set at 6.1 percent for 2020.

Budget deficit would be allowed to increase to 3.5 percent of GDP in 2021-22, from the planned rate of 3.4 percent of GDP in 2020.

According to a report by the Ministry of Finance, public investment was planned at 700 trillion VND this year, 2.2 times higher than the realised capital in 2019.

It was estimated that if all budgeted public investment was disbursed this year, GDP this year would increase by 0.42 percentage points. Public investment would focus on improving infrastructure.

According to VNDirect, component projects of the North-South Expressway would be the focus of public investment. Earlier this month, Prime Minister Nguyen Xuan Phuc agreed to change the investment model of eight projects of the North-South Expressway from public-private partnership to State-invested.

Thus, all 11 component projects of the North-South Expressway would be State-invested.

The Prime Minister also urged localities to focus on speeding up land clearance for these projects so that construction of some could be started in the third quarter of this year, instead of the first quarter of 2021.

Enterprises which produced and supplied building materials would benefit from the speeding up of public investment disbursement, VNDirect said.

VNDirect estimated that around 40 percent of public investment would be spent in 11 component project of the North-South Expressway and My Thuan – Can Tho Highway.

Accordingly, the construction would need asphalt worth around 8.9 trillion VND, construction steel worth 7.6 trillion VND and cement worth 3.8 trillion VND. Demand for construction stone would also increase to around 30-35 percent of the capacity of producers./.

Industry and trade sector will promote support industry development

The Industry and Trade Ministry will promote the restructuring of industrial production sectors, especially the support industry, due to difficulties in production during the novel coronavirus (COVID-19) pandemic.

The pandemic has caused local enterprises difficulties in production because they depend on imported input materials.

Deputy Minister of Industry and Trade Do Thang Hai said the ministry would focus on restructuring chains for industrial production, especially in large manufacturing and processing industries such as textiles, footwear, electronics and wooden processing sectors.

The restructuring would be carried out to promote sustainable cooperation with some partners such as South Korea, Japan and India to avoid dependence on a few partners or markets as at present.

The ministry would review the situation and demand for input materials to propose production organisation plans and solutions to diversify sources of raw materials for production and business.

It has also proposed the Government consider approval of a resolution on solutions promoting development of the support industry. Based on the resolution, the solutions on developing the support industry would be carried out in all provinces and cities nationwide, reported the Ha Noi Moi (new Ha Noi) newspaper.

Truong Thanh Hoai, director of the Ministry of Industry and Trade’s Industry Department, said Viet Nam had a low localisation rate in industries and mostly imported raw materials and spare parts for domestic production.

Besides that, according to the ministry, Viet Nam’s index of industrial production in the first quarter surged 5.8 per cent year on year, lower than the growth rate of 9.2 per cent in the first quarter of 2019.

Of which, the industrial production of the manufacturing and processing industry in the first quarter of this year rose by only 7.2 per cent year on year, much lower than the growth rate of 10.9 per cent in the first quarter of last year and 15.7 per cent in the first quarter of 2018.

The low growth rate was mainly due to the COVID-19 outbreak that has affected the supply of imported raw materials for domestic industrial production, especially in the processing and manufacturing industries.

At present, domestic garment enterprises have a shortage of raw materials for processing export products. Therefore, many of them have focused on producing masks to meet high demand on the domestic market. The production has helped them to overcome the current difficulties due to available raw materials on the local market. 

BuyMed gets US$2.5 million in pre-Series A funding

Local start-up BuyMed, a pharmaceutical distribution network, raised US$2.5 million in its pre-Series A funding.

According to the firm, investors include Sequoia Capital, India’s Surge early-stage accelerator programme, and Genesia Ventures. Former investor Cocoon Capital also participated in the funding, it added.

Founded in 2018, BuyMed operates Thuocsi.vn, a pharmaceutical distribution platform in the local market.

The firm announced that it has tripled annual revenue in the past 12 months and is planning to add new product lines, including cosmetics, medical devices, supplements and medical services, with the goal of becoming a “one-stop marketplace” for health supplies for healthcare providers in Southeast Asia.

BuyMed verifies suppliers on its platform, improving safety and reducing the risk of medications making their way into the unofficial market. Currently, the platform has 700 verified suppliers, distributors and manufacturers serving over 7,000 healthcare providers.

Genesia Ventures general partner Takahiro Suzuki, said: “There is still a tremendous opportunity for growth and improvement in Viet Nam’s pharmaceutical supply chain and we believe that BuyMed’s founders have the experience, execution and operational management necessary to tackle this problem.”

BuyMed Co-founder Hoang Nguyen told Viet Nam News: “There are no major multi-brand distributors in Viet Nam, so most pharmaceutical manufacturers and brands need to set up their own networks. This means the process of getting medications and other pharmaceutical supplies to healthcare providers is highly fragmented.”

Peter Nguyen, CEO and co-founder of BuyMed, told local media that the firm is committed to “supporting both pharmacies and pharmaceutical partners in times of a healthcare crisis.”

As online marketplaces like thuocsi.vn are becoming the new normal, BuyMed’s mission to improve the efficiency of the entire healthcare industry puts the company at the forefront of Viet Nam’s pharma efforts to modernise the healthcare system.

The platform now serves thousands of pharmacies, clinics and hospitals across the country — a 250 per cent growth in six months. BuyMed has also expanded its network of suppliers, distributors and manufacturers, working closely with hundreds of partners to ensure the products received by end users are delivered in a timely manner.

BuyMed aims to add other healthcare verticals including cosmetics, medical devices, supplements, and medical services to become a one-stop marketplace for healthcare practices in emerging markets, the CEO said.

Meanwhile the firm co-founder Hoang added: “Responding to the COVID-19 pandemic, BuyMed has expanded its platform so more of its partners can sell online, and added safety measures like frequent warehouse and office sanitisation and a no-contact drop-off and cash collection system."  

Tourists to Da Nang fall sharply during national holidays

The number of tourists to the central coastal city of Da Nang during the Liberation of the South and National Reunification Day (April 30) and International Labour Day (May 1) declined significantly by 98.5 percent to 5,800, according to the municipal Department of Tourism.

International arrivals were down 99.5 percent year-on-year to 650, while domestic visitors fell 98 percent to 5,150.

Only 150 out of the 968 tourist accommodation facilities were open in the city, including about 50 establishments that reopened after the Government and the municipal People’s Committee eased social distancing measures on April 23.

To ensure safety for holidaymakers, the local tourism department has asked relevant agencies to continue implementing the Prime Minister’s directions on preventive measures such as equipping staff with protective gear, checking temperature, wearing face masks and maintaining physical distance.

In 2019, Da Nang welcomed 8.69 million vacationers, including nearly 3.5 million foreigners, up 30.7 percent from the previous year./.

Number of new firms in Hanoi in January-April down 13.1 percent

The number of new firms set up in Hanoi in the period from January-April dropped 13.1 percent from the same period in 2019 to 7,468, but the combined registered capital of new enterprises shot up 46.5 percent to over 118 trillion VND (nearly 5.1 billion USD).

According to Bui Anh Tuan, director of the Business Registration Management Agency under the Ministry of Planning and Investment, the decline in new firms reflected the impact of the COVID-19 epidemic on production and business. On the other hand, it also implied that businesses are waiting for clearer opportunities after society shifts to a “new normal” situation after the epidemic is put under control.

Sharing his view, Chairman of the Vietnam Chamber of Commerce and Industry Vu Tien Loc noted that despite the decrease in number similarly to the general trend in the country, the registered capital of new firms in Hanoi surged by 46.5 percent while the national figure dropped by 17.9 percent.

He said the positive statistics showed the improved environment for investment and business in Hanoi.

The capital city has taken concerted measures to support businesses in the context of the COVID-19 epidemic. The municipal People’s Committee has issued a plan to implement the Government’s Resolution 02/NQ-CP on continuing to implement key tasks and solutions to improve business environment and enhance national competitiveness in 2020.

Under the plan, Hanoi aims to maintain its place among the top 10 localities in the PCI (Provincial Competitive Index), and continue to meet or surpass indications on business environment. The city is pushing its departments and agencies to update and publish 100 percent of decisions, policies and administrative procedures on their websites.

Director of the city’s Department of Planning and Investment Nguyen Manh Quyen said besides maintaining support for business establishment, the city is making preparations to seize opportunities brought about by free trade deals that Vietnam has signed.

He said Hanoi will try to keep the rate of on-line business registration at 100 percent, and the rate of business filing and paying tax online at over 98 percent./.

Hanoi licenses 235 FDI projects in four months

The capital city of Hanoi granted licences to 235 foreign-invested projects with total registered capital of 324 million USD in the first four months of this year.

A further 35 projects registered additional capital of 365 million USD, while foreign investors contributed capital and purchased shares worth 293 million USD.

During the period, the city earned over 4.3 billion USD from exports, down nearly 4.7 percent year-on-year. Export earnings of domestic firms fell 4.6 percent while that of foreign enterprises was down 4.7 percent.

The city’s industrial production index in April dropped 14.7 percent month-on-month and 4.3 percent year-on-year.

However, the index for the first four months of this year rose by 2.3 percent annually./.

Iron, steel exports to Germany soar in Q1

Iron and steel exports to Germany saw significant increases in volume and value in the first quarter of this year, according to preliminary statistics from the General Department of Vietnam Customs.

Iron and steel export volume hit 858 tonnes, up 17-fold, while value surged 18 times annually to 1.27 million USD.

Vietnam’s total exports to Germany, one of the country’s major markets in the European Union, reached 648.61 million USD in March, up 24.93 percent month-on-month, and raising the first quarter figure to 1.68 billion USD, up 1.87 percent against the same period last year.

Toys and sports equipment raked in 15.8 million USD in March, soaring 221.79 percent, bringing the first-quarter figure to 25.9 million USD, up 136.9 percent./.

Newly registered enterprises in Tra Vinh increase

Despite the COVID-19 pandemic, the number of newly registered enterprises in the Mekong Delta province of Tra Vinh has risen this year compared to the same period last year.

About 126 enterprises have registered since the beginning of the year with total registered capital of 1,591 billion VND (67.7 million USD). Compared to the same period last year, the number of new enterprises rose by 12, while registered capital increased by nearly four times, according to the provincial People Committee.

Chairman of the provincial People Committee Dong Van Lam has promoted tax policies and credit support for companies affected by the pandemic.

Specifically, banks and credit institutions in the province have reduced lending interest rates in maximum in some priority areas, he said.

According to the State Bank of Vietnam branch based in Tra Vinh, the province has more than 500 customers with debts totally worth over 650 billion VND having repayment terms restructured. A 0.5 percent reduction in the interest rates is applied to bank debts, while the interest rate of credit institution debts are cut by 1 percent.

About 1,700 businesses and 2,000 business households have received a five-month extension for tax payments.

In addition to the tax payment extension, 130 enterprises have received a five-month extension on land rental payments.

The management board of the Small and Medium-sized Enterprise Development Project of Tra Vinh Province (SMEs Tra Vinh) has given non-refundable support of more than 1.86 billion VND to small and medium-sized enterprises.

The financial support will focus on investment for technological innovation and the use of solar power to increase production capacity and product quality, and to reduce costs to improve competitive capacity, according to SMEs Tra Vinh./.

RCEP on track to be inked by year-end

The Regional Comprehensive Economic Partnership (RCEP) remains on track to be signed by the end of 2020, said Singapore’s Trade and Industry Minister Chan Chun Sing on May 3.

All RCEP negotiators have agreed that it is important to sign the trade deal this year to bolster the confidence of the global economy and the regional economy, especially in such a difficult moment, Chan told reporters during a virtual interview.

Intensive virtual meetings have been ongoing, he said, adding that no significant delays were foreseen in the signing of the agreement.

He also said COVID-19 developments would have to be taken into account to see if the signing could proceed in a meeting or in a different way.

The minister further noted that an offer has been made to India to rejoin discussions in the coming month.

If India is unable to rejoin the discussions in the coming month, then the plans will continue to proceed with the legal scrubbing for the preparation for the signing at the end of the year, he said.

The RCEP is set to be the world's largest trade pact, and involves 15 countries, including all ten ASEAN nations, Australia, China, Japan, New Zealand, and the Republic of Korea. India withdrew from the deal last year./.