BUSINESS NEWS 10/8

Five products to see stronger export to EU: ministry

BUSINESS NEWS 10/8

Five key exports of Vietnam – seafood, fruit, woodwork, footwear and apparel goods – will have a good chance to boost their growth into the EU market thanks to tariff reduction brought about by the EU – Vietnam Free Trade Agreement (EVFTA), according to the Ministry of Industry and Trade.

The deal, signed in Hanoi on June 30, is the first the EU had inked with a developing country in Asia, paving the way for the gradual reduction of up to 99 percent of tariffs between the two sides, as well as for the opening of the service and public procurement markets.

The ministry recommended exporters who want to expand their market share in the EU comply with regulations set by the bloc, particularly those on product origin and food safety.

Attention should also be paid to compulsory regulations on social responsibility as well as information transparency related to labour and production environment, it said.

Meanwhile, exporters of seafood products ought to be careful in ensuring the principle against illegal, unreported and unregulated (IUU) fishing.

Echoing the view, Chairman of the Vietnam Textile & Apparel Association (VITAS) Vu Duc Giang said in preparation for meeting the FTA’s requirements, since the beginning of 2018, the association has supported firms in accessing financial funds to make their production become more environmentally friendly.

However, he also pointed his finger at the short supplies, as over 60 percent of production materials for the garment-textile, leather-footwear, plastic, and food sectors, among others, have to be imported.

In the long-term, the shortage could turn into a hurdle for Vietnam to take advantage of tariff policy of the FTAs it has signed.

Vietnam is currently the second biggest ASEAN trade partner of the EU, which is also one of the key trade partners of the Southeast Asian nation. Bilateral trade reached 55.8 billion USD in 2018.

Oil group pays nearly 2.6 billion USD to state in 7 months

The Vietnam Oil and Gas Group (PVN) contributed nearly 60 trillion VND (2.59 billion USD) to the state budget in the first seven months of 2019, 7 percent above its target.

In the period, the group’s total revenue is estimated at 433 trillion VND, equivalent to 70.7 percent of its yearly plan.

The State-owned firm generated around 13.24 billion kWh of electricity, and produced 851,000 tonnes of nitrogenous fertiliser, 2.3 percent and 10 percent above its targets, respectively.

To fulfill this year's business goals, the group will keep a close eye on global oil prices, according to the PVN.

The firm also plans to rationally balance production output, export and processing of oil-gas and electricity so as to ensure targets set by the Government on raising gross domestic product, state budget collection and national energy security.

It will also promote the use of scientific and technological solutions to improve efficiency and take concerted financial measures to deal with negative developments in the world’s crude oil prices this year.

State financial funds should be restructured for efficiency

The operation of some off-budget State financial funds have overlapped with the State Budget or with each other in terms of purpose and tasks, experts have warned.

The statement was made at a meeting held between the National Assembly (NA)’s supervising team and the Government on the implementation of a legal framework relating to the management and use of off-budget financial funds in 2013-2018 period held in Hanoi on August 5.

According to the supervising team’s report, there were 28 funds managed by the central government and more than 40 funds controlled by localities during 2013-2018. The centrally-run funds are projected to raise 502.2 trillion VND in total in 2019, with 100.8 trillion VND to come from the State budget. The total outstanding balance of those funds by the end of 2019 is estimated at over 907.2 trillion VND.

Meanwhile, reports from 41 localities showed that total outstanding balance of locally-run funds rose through the years from 2013 to 2018, reaching almost 17.2 trillion VND in 2018. The five largest funds of this type were the land development fund, the development investment fund, the environmental protection fund, the housing development fund, and the forest protection and development fund.

At the meeting, participants agreed that the financial funds have made important contributions to fulfilling a number of social-economic and development objectives in the context of the State budget unable to meet the need annually.

However, the funds have also revealed problems and shortcomings in their operation such as the mobilisation of some funds was still limited and most of the resources of the funds originated from the State. The management of revenue and expenditure was inadequate.

Vice chairman of the NA’s Finance and Budget Committee Nguyen Huu Quang said the Government should restructure the funds and stop the operation of those with ineffective operation or no longer suitable with the current socio-economic situation.

Vice chairman of the NA’s Ethnic Council Nguyen Lam Thanh urged the supervising team to clarify the legal gap regarding the formation and management of off-budget State financial funds and point out shortcomings in ministries, agencies and localities’ management of the funds.

He said the Government should quickly review and amend legal documents and regulations related to those funds, and recommended the early promulgation of a law on the management and use of off-budget funds.

To promote efficiency of the funds’ activities, participants said the Government should enhance the management, inspection and supervision of the operation of State financial funds along with improving the capacity of fund officials towards open and transparent management and use of this source of funding.

State Treasury looks to go more digital

The State Treasury of Vietnam (STV) is drafting a development strategy for the next decade in which it looks to become a digital treasury in 2030.

The STV and the International Monetary Fund (IMF) held a conference in Hanoi on August 5 to discuss the former’s development directions for 2021-2030.

STV General Director Ta Anh Tuan said Vietnam’s public finance is being reformed towards transparency, efficiency and sustainability, helping to promote economic development and the country’s stature in the international arena.

With the functions of managing the State budget and financial funds and mobilising capital from the State budget for development investment, the STV system has played an important role in public financial management.

Tuan noted the treasury has worked hard to reform its apparatus and modernise its operations, including by increasing IT application. As a result, it has greatly contributed to the improvement of efficiency, effectiveness and transparency in public finance.

The STV’s development strategy forms a crucial part of the financial sector’s, he said, adding that in its draft strategy for 2021-2030, the STV sets the overall target of building a lean, efficient and effective system towards a digital treasury.

According to senior economist Sandeep Saxena at the IMF’s Fiscal Affairs Department, the STV has obtained encouraging achievements in developing the core capacities and creating a solid foundation for the next reforms.

Mark Silins, a consultant at the IMF, also shared the view on the improvements in the management of the State budget fund between 2011 and 2020.

The information system for budget and treasury management has been put into use with strong structure and good capacity. About 30,000 units using the State budget have been connected with this system via the public services portal. Many of their networks have also been linked with banks. Thanks to that, up to 94 percent of the budget spending transactions have been directly transferred to bank accounts, while 98 percent of the budget collection transactions have been conducted online.

Two groups invest nearly 7.7 trillion VND in Yen Bai’s tourism

The northern mountainous province of Yen Bai has attracted tourism investment from two major groups worth nearly 7.7 trillion VND (333.24 million USD) since the start of 2019, said the provincial Department of Planning and Investment.

One project will be carried out by an affiliate of the AlphaNam Group at a cost of 4.98 trillion VND (215.52 million USD). A resort, trade complex and hotel will be built across more than 2,590 ha in Thac Ba Lake area in Yen Binh district.

The project is expected to complete in the next 12 years.

Prime Minister Nguyen Xuan Phuc has approved a master plan on the development of Thac Ba Lake national tourism site until 2025.

The site, located in Yen Binh district and Thac Ba town, will cover a total area of around 28,800 ha. About 1,200 ha (excluding the area of the water) will be used to develop the tourism zone.

The plan aims to turn the Thac Ba Lake site into a national tourism hub by 2025.

Meanwhile, an affiliate of the TH Group will pour 2.7 trillion VND into the Van Hoi eco-tourism site and resort.

Spanning in more than 764 ha in the province’s Tran Yen district, the project will be put into operation in 2025.

As of July 24, Yen Bai has allowed 28 firms to launch new investment projects in the province, with registered capital exceeding 12.3 trillion VND, according to the provincial Department of Planning and Investment.

Local authorities had also created optimal conditions for real estate developer Sun Group to conduct surveys for a multi-function complex along the Yen Bai section of the Noi Bai – Lao Cai highway.

Insurance stocks fail to attract individual investors

Most insurance stocks have underperformed despite a positive outlook for the Vietnamese insurance sector.

Ten insurance companies are trading on the Vietnamese stock market but only Bao Viet (HoSE: BVH) has seen its share price approach 80,000 VND, as its shares ended August 5 at 78,600 VND per share.

Meanwhile, another nine stocks closed August 5 at maximum 36,500 VND per share – almost half of Bao Viet’s share price.

It is obvious insurance stocks are undervalued on the market despite their gains in earnings, local media reported.

In the first six months of 2019, Bao Viet recorded its combined revenue was up slightly from the previous year to 20.9 trillion VND.

With a six-month post-tax profit of 670 billion VND, the company also fulfilled 54.6 percent of its post-tax profit for the year.

Other insurance businesses such as Post and Telecommunications Insurance JSC (HNX: PTI), BIDV Insurance Corp (HoSE: BIC), Agribank Insurance (UPCoM: ABI) and Military Insurance Corp (UCPoM: MIG) also performed well in the first six months but their shares are not too expensive at the moment.

Another leading insurer – Bao Minh Insurance Corp (HoSE: BMI) – on June 21 paid a 12 percent dividend in cash to investors for 2018’s results. The company has not revealed its results in the first six months, but early forecasts point out the company will release good figures.

According to the Insurance Association of Vietnam (IAV), the domestic insurance market was strong in the first six months of the year.

Total revenue of insurance fees in six months increased 16 percent year on year to 69.4 trillion VND. Of the figure, revenue of life insurance was up 17 percent year on year to 44.2 trillion VND and non-life insurance rose 14 percent to 25.2 trillion VND.

IAV figures mean insurance companies saw good earnings in the first six months. Therefore, there is plenty of room for insurance firms to improve earnings in the future, especially as Vietnamese people are paying more attention to insurance deals in order to prepare for risks.

However, insurance stocks may not be attractive to individual investors because of their modest dividend payout rates.

In recent years, insurance firms have been paying dividend payout rates of 10-15 percent each year.

Bao Viet plans to pay a 10 percent dividend to investors between July and September for last year’s results. The amount of the dividend payout is estimated at 700 billion VND.

Its dividend payout rate has remained the same over the last few years.

However, the firm’s share trading liquidity is only 220,000 shares in each session, which is modest compared to other large-cap stocks.

A similar trading situation also happened to other insurance stocks as their liquidity is quite low.

But to institutional investors, insurance stocks do have value.

The buying in insurance stocks of institutional investors, especially foreign companies, will help local firms access international practices and standards to make impressive growth rates in the local market.

Recent deals are between the Canada-based FairFax and BIDV Insurance Corp, between Post and Telecommunications Insurance Corp and DB Insurance.

Tuna exports to Italy shoot up 60 percent in H1

Vietnam gained 13.3 million USD from exporting tuna to Italy in the first half of 2019, a year-on-year surge of 60 percent, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).

Particularly, the export value in June enjoyed strong growth, up 728.9 percent from the same time last year.

As exports revenue expanded unceasingly during March-June, Italy became the first largest importer of Vietnamese tuna in the European Union in the first half. Last year, the country was the 4th biggest buyer of the Vietnamese tuna products.

Earlier, the VASEP expected tuna exports to top 1 billion USD this year, up 350 million USD from 2018.

Vietnam exported tuna products to 105 markets last year, with the US, the EU, Israel, ASEAN, Japan, Canada, China, and Mexico being the major ones. The US topped the list with nearly 230 million USD worth of purchases.

Frozen tuna fillet was a key export item to the US last year as shipments of processed tuna increased significantly while those of canned tuna products fell, VASEP said.

Vietnam was the fourth largest supplier of canned and processed tuna products to the US behind Thailand, Ecuador and China, and the second largest supplier of frozen fillet after Indonesia.

Vietnam’s retail sales reach 120.36 billion USD in seven months

Total retail sales of goods and services in Vietnam in the first seven months of the year rose 11.6 percent from the same period in 2018 to reach 2.8 quadrillion VND (120.36 billion USD).

The growth rate was lower than the rate recorded in 2018 but higher than those of the previous three years, according to the General Statistics Office (GSO). From 2015 to 2017, retail sales growth was between 10 percent and 10.8 percent per year.

If the price factor was excluded, purchasing power in the first seven months increased by 8.74 percent – higher than the 8.72 percent recorded in the same period of last year.

In July alone, retail sales of goods and services was 415.1 trillion VND (17.93 billion USD), up 1.7 percent from the previous month and up 12.4 percent year on year.

Of the figure, retail sales of goods accounted for 75 percent and increased by 13.4 percent year on year.

Retail sales of goods for the full seven-month period were up 12.5 percent year on year to 2.13 quadrillion VND, accounting for 76 percent of the total.

Among all sectors, purchases of educational and cultural products grew by 14.2 percent year on year, followed by food and beverage (12.8 percent), transportation (12.2 percent), home appliances (11.4 percent) and textiles and apparel (10.7 percent).

The localities with the highest purchasing power growth rates included Quang Ninh (18.9 percent), Binh Duong (17.2 percent), Thanh Hoa (14.9 percent), Hai Phong (14.7 percent), Bac Ninh (14.1 percent), HCM City (13.9 percent), Binh Dinh (13.6 percent) and Hanoi (13.5 percent).

Also in the first seven months of 2019, sales of accommodation and catering services rose 10 percent year on year to 337.5 trillion VND, accounting for 12 percent of the total.

Travel sales in the period achieved an estimate of 25.8 trillion VND, representing 0.9 percent of the total and climbing by 12.5 percent from the a year ago.

Sales of other services in the period were estimated at 307.3 trillion VND, 11 percent of the total and representing an expansion of 6.7 percent compared to the same period in 2018.

Export of five key products expected to increase thanks to EU’s tariff cut

According to the Ministry of Industry and Trade, the top five key export products, consisting of aquatic products, vegetables and fruits, wood products, footwear and textiles, will have opportunities to post strong growth thanks to the EU-Vietnam Free Trade Agreement as the EU has pledged to reduce import tariffs for these five export products of Vietnam.

However, the ministry also warned that if Vietnamese enterprises want to grow and expand export market in the EU, they need to strictly comply with regulations by the EU. Particularly, they need to ensure rules of origin when exporting into this market.

Rules on origin traceability are also said to be tighter and stricter. If other products disguise as Vietnamese-made ones in order to export to the EU, there will be lots of consequences which might cause Vietnamese products to be imposed high anti-dumping tariffs.

Therefore, Vietnamese enterprises should pay attention to rules of origin when exporting to the EU.

Moreover, the EU market also attaches great importance to food hygiene and safety. Export enterprises need to consult and adjust their operations to meet standards and management procedures set by the EU.

In addition, regulations on social responsibility and transparency on information about labor and production environment are also considered as mandatory factors for enterprises to be able to export their products into the EU.

As for aquatic products, besides these aforesaid notices, firms should completely obey regulations on illegal, unreported, unregulated fishing.

 

Sharing the same point of view, Mr. Vu Duc Giang, chairman of the Vietnam Textile and Apparel Association, said that in order to deal with the aforesaid technical barriers, since the beginning of last year, the association has helped enterprises to access financial fund to improve their production system to become environmentally friendly, reduce emissions of pollutants and use clean energy instead of fossil energy.

However, Vietnamese enterprises have been facing difficulties in gaining initiative in input materials. In fact, more than 60 percent of raw materials for textile, leather, footwear, plastic and food industry are imported.

In long term, if this problem is not solved, it will be difficult for enterprises to take advantage of preferential import tariffs when exporting to markets that Vietnam has already signed free trade agreements with.

Textile firms go green to boost export

The Vietnam Textile and Apparel Association said that textile exports is expected to exceed US$40 billion this year, especially amid the context that the EU-Vietnam Free Trade Agreement has been signed.

However, in order to export to this market, besides meeting rules of origin and standards on quality, firms must comply with commitment to social responsibility, of which they must mainly pay attention to responsibility for environmental safety.

This has urged firms to go green in their production. Unfortunately, there are not many firms having enough capital to be able to convert their technology and production lines.

Amid the situation, the Ministry of Natural Resources and Environment said that, it has been rushing to work with professional associations and leaders of provinces to support enterprises in approaching financial aid from the Vietnam Environment Protection Fund.

Accordingly, if projects are approved, firms will get loans not higher than VND36.6 billion for a project and not higher than VND73.2 billion for an investor. Loan duration is ten years at the maximum and grace period is not longer than two years.

Firms will receive preferential interest rates from 2.6 percent to 3.6 percent per annum and interest rates will be fixed during the loan term.

Banking HR management benefits from digitalization

Global HSBC conducted “Project True North” in 65 countries and territories, including Vietnam, in August last year, impacting on 26,000 employees. The project was not only its largest human resources (HR) transformation to date, but also the largest HR transformation of its kind globally. Mr. Nonoy Nuyles, HR Director at HSBC Vietnam, explained that the era of Industry 4.0 means digital transformation is unavoidable. Change is taking place more quickly than ever in all fields, including banking and finance. As a global bank, one of its advantages is having the opportunity to learn from colleagues overseas and studying what has been applied in other markets and then adjusting and applying them locally.

At HSBC, the HR function, just like its business, has begun a transformation through the reformatting of its backbone systems infrastructure. The bank has embarked on a massive change towards process simplification with elements of global consistency. HSBC’s HR systems using cloud-based platforms have allowed its people to access the same types of applications and data through the internet instead. “The move to SAP Cloud-Based technology combined with an integrated front-end portal was a major investment to replace the legacy platform,” said Mr. Nuyles. “In HR management, the digitalization journey has reached HSBC’s shores.”

Other banks have also witnessed the changes taking place in the banking sector and recognized that competition is not just coming from other banks but also from outside players. “There will be a workforce shift overall and for our bank also, so the top priority is to attract and build up ‘3D Talent’ (digital mindset, data, and disruption),” Ms. Tran Thi Huong Anh, Director / Head of Human Resources at CIMB Bank (Vietnam), told VET. “Roles like UI / UX (user interface / user experience), scrum master, data & analytics, and partnership / business development are in increasing demand instead of conventional banking roles.”

As such, CIMB defined its original strategy from its first day as being “branch lite and digital led” and this is one of its advantages over well-established banks along the digital transformation journey. “Our organization is change-capable and we can readily adjust our business model as needed,” she added. “Having nimble, agile infrastructure is also critical and helps our organization execute our strategy more quickly, innovate faster, and swiftly respond to changing customer needs. Our HR staff have been equipping themselves with knowledge and understanding about Industry 4.0, digital transformation, and agile methodology, and their impact on the banking and financial services industry.”

Local analysts have noted that many banks in Vietnam are transforming their strategies towards digital banking, including internet banking, mobile banking, and digital banking services. The current operational model and workforce size also requires banks adopt new strategies to cope. A number of international banks have invested in moving from the HR software solution “People Force” to the new solution “Workday”.

“The trend towards digitalization in the HR management process has taken hold in Vietnam’s banking industry, especially in retail banking, which demands the digitalizing of the HR system,” said Ms. Nguyen Thi Bich Hong, General Director of HR2B, a Vietnamese HR consulting company. “Ninety per cent of all banks have a huge number of employees and HR is a top priority. Thus,

digitalization in the HR system is in keeping with the digital transformation of the bank in order to boost productivity and efficiency.”

Many major banks still face transformation-related obstacles when digitalizing their HR system. Due to high recruitment demand, a third party - HR consulting companies - is normally engaged to conduct the process. But integrating the third party’s recruitment management software with the highly-secure operations system of the bank is not good for either, according to Ms. Hong. “This is a limitation on banks moving to a comprehensive digital system.”

With experience in many industries, Ms. Tran Ngoc Tran, Head of Human Resources at fintech startup Finizi Vietnam, said local banks share a concern over information security and so don’t outsource recruitment, despite the rather high cost of completing the task internally. Multinational banks, meanwhile, are in a position to engage a trusted third party.

The trend towards digitalization in the HR management process has taken hold in Vietnam’s banking industry, especially in retail banking, which demands the digitalizing of the HR system.”

Fully connecting any new HR system to its predecessor to transfer data is also problematic. Conversely, Ms. Tran said, this is actually an advantage for newly-established organizations. “Large companies will face difficulties as a huge volume of staff data is put on the cloud,” she said. “They need to ensure that data is not lost and must manage it daily, while uploading old data to a new system. When building a HR system’s digitalization strategy, planning must be thorough and done slowly and carefully. It’s just not possible to change a system overnight.” Ms. Hong said that while all banks should have a HR management strategy, the larger banks are able to invest more into it. For all, however, transformation takes time and will impact all manner of things.

CIMB is currently seeking digital delivery professionals (system architect, scrum master, devops engineers, software developers, etc...) but finding it quite a task as the field is new and talent is thin on the ground. Ms. Huong Anh forecasts increasing demand in “3D” positions in the banking industry, such as UI / UX, cloud, agile, data & analytics, and sales & revenue generating roles, and falling demand in traditional positions such as tellers, operations-based staff, call center agents, and clerical / admin roles and even conventional credit roles.

Routine tasks are being weeded out as everything is automated and replaced by digital systems. This requires employees develop themselves and promote their capacity. Automation inevitably results in fewer personnel and, hence, for the bank, lower costs.

From the perspective of a global bank, Mr. Nuyles from HSBC said an efficient process is the cornerstone of customer experience management and improvement. The success of any technological innovation is therefore underpinned by a strong understanding of customer potential, the engagement journey, pain point solutions, and overall proposition.

The transformation demanded of each individual encompasses both mindset and skill,

he went on. Workforces must be agile. Behavior expectations include learning quickly and applying new knowledge immediately. Change demands quick solutions and the ability to fine-tune and improve during the process, with a capacity to navigate and create through ambiguous and limited givens.

Ten years ago, only around half of CEOs of financial services (FS) companies saw skills shortages as a threat to their growth prospects. According to the new “Industry Trends 2019, Financial Services Talent” report, 76 per cent now see it that way. This lack of key skills is affecting everything an FS organization does, including staff costs, innovation, and customer experience.

So how can FS organizations create a more cost-competitive talent model without stifling innovation, impeding growth, or undermining customer service? To provide answers to this pressing question, PwC recently released a new report based on the results of its 22nd Annual Global CEO Survey.

“As traditional talent strategies are struggling to keep pace with disruptions, there are a variety of approaches that companies can take,” said Mr. Nguyen Hoang Nam, Assurance Partner and Financial Services Leader at PwC Vietnam. “Some of them are self-contained. Others will involve participating in broader industry-wide efforts, often with government input. On the whole, they point to an end result where people and technology work together more effectively.”

PwC researchers have identified the four Rules of Talent Attraction:

1. Forge a renewed sense of purpose
Although FS organizations have found themselves weighed down by process and regulation over the past ten years, digital transformation has set off a fresh wave of innovation. Pushing a business to the forefront of that wave and creating an environment where it can prosper can help make it a magnet for talent.

2. Get workforce planning up to speed
Effective data analytics can give businesses a critical edge in anticipating future talent needs and creating a compelling people experience. Priorities include ensuring you have people within your HR team with the necessary data modelling skills, as well as the ability to interpret data and understand its business implications.

3. Managing the real impact of technology
The impact of technology on a workforce is often misunderstood. Far from whole divisions being automated out of existence, we’re seeing parts of jobs being replaced and augmented. The resulting priorities include learning how to best use digital tools and making the most of the time they free up.

4. Operate as part of a wide ecosystem
Contract, contingent, joint venture, and other forms of partnership or independent talent should be at the center rather than the fringes of workforce strategies. The move to a platform model in which the most appropriate products and services are brought in would accelerate the move to partnering and provide more flexible talent sourcing. Key priorities include the identification and engagement needed to create a reliable network of independent contractors.

Hanoi has nearly 3,500 accommodation establishments

By the end of July 2019, Hanoi had 3,499 accommodation establishments with 60, 812 rooms, according to the municipal Department of Tourism.

Of the figure, only 564 establishments have been rated, offering 22,749 rooms, with 67 three- to five-star hotels, and seven four- to five-star condotels.

The capital city has been emerging as a top destination for both domestic and foreign travellers in recent years, and it is still working to establish itself as a true tourist hub.

Hanoi welcomed more than 2.4 million tourists and pocketed over 8 trillion VND (345.2 million USD) from tourism services in July, up 9.5 percent and 31.5 percent against the same month of 2018, respectively.

Statistics released by the municipal Tourism Department show that of the total holiday-makers, over 460,000 were foreigners, a year-on-year rise of 9.6 percent.

In the first seven months of 2019, over 16.7 million people, including 3.7 million foreigners, chose Hanoi as a destination for their holidays, up 9.2 percent and 8.9 percent year-on-year, respectively. Total revenue from tourism was estimated at 57.7 trillion VND (2.4 billion USD), up 28.8 percent.

In July, 64.2 percent of hotel rooms were used, up 2.87 percent against the same month last year, but down 3.2 percent compared with that in June. Notably, the occupancy rate for four- and five-star hotels was about 80 percent.

The city is striving for 29 million tourists and earning 103 trillion VND (4.42 billion USD) in revenue this year.

It aims to welcome 30 million tourist arrivals, including 5.7 million foreigners, in 2020, and attain annual growth of 8 – 10 percent in the sector. Its revenue from tourists is expected to reach 120 trillion VND (5.16 billion USD) in 2020 and grow by 15 – 17 percent year on year.

Director of the municipal Tourism Department Tran Duc Hai said better tourism products and services that meet international standards have made the capital’s tourism sector more professional and impressed tourists.

Hanoi is now home to many international luxury hotel brands, international-standard golf courses and large-scale trade centres.

This year, the city was again listed in various tourism rankings. Japan’s All Nippon Airways ranked it 25th among the 26 best Asian cities for a combination of business and leisure. The capital city was ranked fourth among 25 destinations in Asia and 15th among 25 destinations in the world in 2019 by TripAdvisor. Most recently, it was named in the Cable News Network (CNN)'s list of the 17 best places in Asia.

To promote its image, the municipal People’s Committee and CNN recently signed a memorandum of understanding on advertising the capital city on the channel for 2019-2024.

Besides, municipal tourism officials have worked with Vietnam Airlines in welcoming survey teams from Japan, Australia and Europe and organising the “Summer in Europe” programme at Ly Thai To Park besides Hoan Kiem lake. The department has also stepped up the development of tourism products in the suburbs.

To attract more domestic and foreign tourists, Hai said the tourism sector will increase the quality of cultural tourism products, building quality destinations to make them outstanding attractions.

Instead of developing downtown tourism as before, the sector is gradually tapping the potential in the suburbs to diversify products, contributing to socio-economic structure shifting in the localities.

Phung Quang Thang, Director of Hanoitourist, advised localities to focus on developing key products as it is not enough to rely on their potential.

It is important to pay attention to destination management to avoid affecting product exploitation between local enterprises and those from other places, and intensify connectivity between them to build products suitable to tourists’ tastes.

Thua Thien-Hue works to attract more investment

The central province of Thua Thien-Hue will continue accelerating administrative reform to facilitate investment, while strengthening support to investors, especially in human resources training.

According to Hoang Viet Trung, Vice Director of the provincial Department of Planning and Investment, the province will create optimal investment and business environment with attractive incentives and smooth management mechanisms, thus helping investors have long-term and stable operation.

Trung said that the province will focus on creating easier capital access to businesses, especially small- and medium-sized enterprises and startups.

In the first seven months of 2019, Thua Thien-Hue saw the establishment of 405 new firms with a combined registered capital of over 4.6 trillion VND (197.8 million USD), up 45 percent year on year.

Trung said that in the period, the province’s budget collection reached nearly 4.2 trillion VND, up 8.7 percent year on year, while export revenue also rose 10 percent. Small businesses made great contributions to the results, he added.

He also noted that the province’s activities to support and build startup ecosystem or innovative startups have focused on serving enterprises and help startups develop on the right direction.

This year, Thua Thien-Hue plans to attract 15 domestic and foreign projects worth 400 million USD.

Lack of infrastructure blamed for stagnant tourism projects

The authorities in Quang Ngai Province are dealing with a number of stagnant tourism projects.

There are 24 tourism projects in Quang Ngai Province that have been granted investment licenses. However, a majority of them have been stagnant.

The project on My Khe Beach invested by My Khe Vietnam Company covers 23.5 hectares with a total investment of VND824bn (USD35.5m). Due to financial difficulties, the project has been postponed since 2012. In 2018, My Khe Vietnam Company suggested transferring the project to My Khe Resort Company and the Department of Planning and Investment gave its approval.

The Anh Van eco-resort project invested by Truc Lam Company covers 14.8 hectares in Tinh Ky and Tinh Khe communes. It is divided into three phases from 2017 to 2018, 2018 to 2019 and 2019 to 2020. As of now, VND50bn (USD2.2m) has been disbursed but the investor is facing some difficulties in ground clearance.

The Land Development Centre and the Department of Natural Resources and Environment are reviewing the project and finding solutions before submitting the report to the Quang Ngai People's Committee.

Tran Thi My Ai, director of the Department of Planning and Investment, said since 2007 the provincial authorities have used the state budget and local budget to invest in infrastructure and call for more tourism investment. However, stagnant projects were caused by many factors.

"Investing into the infrastructure before or after calling for new tourism projects is still a problem," she said. "Potential projects are often located in places that lack proper infrastructure. Without good infrastructure, attracting new projects will be very difficult."

She also took responsibility for the lack of warnings to investors about quickly completing administrative procedures. Ai said she would urge the investors to make commitments to complete the projects as quick as possible.

Long haul flights to shift from Tan Son Nhat to Long Thanh airport

When operational, the Long Thanh International Airport will receive planes flying 1,000 kilometers and more.

The move is planned to reduce the burden on the heavily overloaded Tan Son Nhat International Airport, currently the biggest in the country.

In the future, the Tan Son Nhat Airport in Ho Chi Minh City will receive narrow-bodied jets like Airbus A321 and Boeing 737 used for routes under 1,000 kilometers, the Ministry of Transport said in the feasibility report it submitted to the government in late July for the new Long Thanh International Airport.

Long Thanh airport, to be built in the southern province of Dong Nai, will have four stories, with the ground floor for welcoming passengers, first floor for arrivals, transit and baggage claim, second floor for shopping and restaurants and third floor for departures and customs, the report said.

Do Tat Binh, deputy director of the Airports Corporation of Vietnam (ACV), which partnered with a French-Japanese-Vietnamese consortium to produce the feasibility report, said that the airport will have large spaces for trees and a waterfall. Natural light will be utilized to the maximum, he added.

The report, which is scheduled to be presented to the National Assembly in October, proposes three funding options for the airport: from official development assistance (ODA), appointing ACV as the main investor, or inviting bids from interested investors.

It highly recommends the option, to have state-owned ACV, which runs 22 airports in the country, be the main investor. The corporation has experience building runways, parking bays and terminals for the biggest airports in Vietnam, the report noted.

The Long Thanh International Airport, to be built in three phases over three decades, is set to become Vietnam’s largest airport.

The first phase is scheduled for completion in 2025, when the new airport will be able to handle 25 million passengers a year. The next two phases will run from 2030 to 2035 and from 2040 to 2050.

The three phases are estimated to cost $5.4 billion now, but experts have warned this could double if the project is delayed by five years.

Lying 40 kilometers east of HCMC, the airport is expected to take up the overflow from the largest existing airport in the country, the Tan Son Nhat International Airport.

Once completed, Long Thanh International Airport will have an annual capacity of 100 million passengers and five million tons of cargo.

Tan Son Nhat served 38 million passengers last year, up 6.4 percent from 2017, way above its designed capacity of 25 million passengers.

Vietnamese airports served 103.5 million passengers last year, up 11 percent from 2017, according to ACV.

Long An seeks FDI boost to industrialisation plans

The southern province of Long An is giving top priority to foreign investment in urban residential area construction, transport, industrial infrastructure, hi-tech agriculture, and supporting industry, according to provincial authorities.

The statement was made by Vo Ngoc Dinh, deputy director of the province’s Department of Planning and Investment.

Dinh said that the province is seeking to become modern and industrialised by 2020. A favourable geographic location, abundant resources and a dynamic and investor-friendly administration make Long An an optimal destination for foreign direct investment.

“The province, situated 40km from HCM City, has been striving hard to attract FDI. It has worked hard to draw up measures and plans to improve the business climate for foreign investors and assess business conditions to help foreign companies handle problems that arise,” Dinh said.

The province is home to 978 foreign-invested projects worth almost US$6.15 billion in Long An. Almost 60 per cent are operational and have so far brought in $3.6 billion.

The projects are concentrated in industrial parks and clusters in key districts such as Duc Hoa, Ben Luc, Can Duoc, Can Giuoc, and Tan An City. The UK, Taiwan, Japan, Singapore, South Korea, and the US are the biggest of the 37 countries and territories investing in the province.

Vietnam attends major int’l hospitality expo in India

Vietnamese firms are among the 650 businesses taking part in the 2019 India International Hospitality Expo (IHE 2019), which will be held in Uttah Pradesh state of India from August 7 to 10.

The annual expo, second of its kind, is specialised in the supporting industry for the hospitality and tourism sector in India. It is expected to attract 20,000 visitors this year.

Products and services on display include those in furniture and furnishing, bathroom fitting, food processing and packaging equipment, event décor and management, and IT solution/smart hotel tech, among others.

In addition, various activities such as workshops to bolster trade and business connection will be arranged at the expo, along with a cooking class and a competition between chefs.

Last year, the first IHE was a success which drew more than 400 businesses and over 10,000 visitors.

 
 
 
 
 
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