BUSINESS NEWS 31/7

Eye on Indian market, Danang promotes wedding tourism

BUSINESS NEWS 31/7
Da Nang beach

Travel operators are planning to promote the central city of Danang as a destination for weddings and vacations to attract Indian tourists, particularly the well-heeled.

The travel agencies shared their promotion plans after day one of the Danang Tourism Introductory Workshop, which has been organized as part of a program to promote tourism in Danang. The workshop is being held from July 25 to 27 in the Indian city of Mumbai, and is being attended by Danang’s tourism leaders and over 100 travel companies from the two countries.

Nguyen Ngoc Anh, director of Omega Tours, said that at the event, Indian travel agencies expressed interest in the central destinations of Danang, Hoi An, and Hue, which are home to many five-star resorts suitable for vacations and luxury wedding ceremonies.

Indian wedding planning firms have also shown interest in surveying the wedding tourism market in Danang, he said. Next month, Omega Tours will invite customers to Danang to experience wedding services, he added.

However, a lot needs to be done to attract Indian tourists with deep pockets to the city, such as the launch of more air routes, relaxation of visa policies, and improvement in quality of service offered at tourist destinations, to meet the requirements of Indians, according to Anh and representatives of other travel firms attending the workshop, such as Indochina Unique Tourist and Vietnam TravelMart.

Currently, only indirect flights between India and local destinations, including Danang, are available, Anh said. The flights are operated by Bangkok Airlines and serve a huge number of Indians traveling to Thailand and Malaysia, Anh added.

Therefore, it is essential to launch direct air routes linking India with Danang and other localities across the country soon, said Nguyen Son Thuy, director of Indochina Unique Tourist. Revisions to visa policies must be taken into account as well, he added.

Thuy said the local tourism market will diversify if travel operators manage to woo wealthy Indian wedding tourists. His firm is set to organize a Famtrip in early September and invite Indian travel firms to visit Danang.

Aside from opening more air routes and improving tourism services, travel agencies and other businesses in the hospitality industry must jointly create custom-made tourism services to cater to the tourist segment, suggested Phung Pham Thanh Thuy from Sunworld.

Speaking at the workshop, Tran Xuan Thuy, Vietnamese Consul General in India, said central localities are ideal for Indian tourists. They can visit many destinations in Hue and Hoi An after vacationing in Danang, he said.

Vung Ang EZ attracts three new projects

The Ha Tinh People’s Committee has granted investment licences to three new projects worth a combination of more than VND1.65 trillion (US$71 million).

The projects will be developed at Vung Ang Economic Zone in Ky Anh Town, online newspaper baohatinh.vn reported.

They include a timber processing project funded by HCM City-based An Viet Phat Energy Co at a cost of more than VND1.28 trillion ($55 million). It will comprise two factories – the first producing lumber and plywood in Ky Thinh District with an annual capacity of 240,000 tonnes and the second producing compressed wood pellets with an annual capacity of 150,000 tonnes.

The second project, worth VND201 billion ($8.65 million), will be backed by Central Industrial Chemicals JCS, which is based in the province. It will include the development of chemical and petrochemical warehouses in Vung Ang Depot which will be able to store 30,700 cubic metres of products.

PCG Phu Vinh has been approved to develop a system providing liquefied petroleum gas and liquefied natural gas for Phu Vinh Industrial Zone with total investments of VND164 billion ($7 million).

The committee’s vice chairman Duong Tat Thang said he hoped that once operational, these projects would make big contributions to the State budget and create more local jobs.

The central province has set a target of luring 150 projects with total registered capital of about $2.5 billion by the end of this year, according to the committee.

The locality is now home to 1,183 projects, 1,108 of which were financed by domestic businesses with a total capital of more than VND107 trillion ($4.6 billion) while the remainder, worth more than $12 billion, were funded by foreign companies.

To date, 17 countries and territories have pumped investments into the province including Japan, South Korea, mainland China, Taiwan, Singapore, Hong Kong, Germany, the UK and the US.

FTA tariff incentives yet to be fully optimized

Vietnamese exports, which benefited from the tax incentive mechanism of the free trade agreements (FTA) the country has signed, posted US$46.2 billion in value during 2018, or 39 per cent of the total exports to the FTA signatories.

Agricultural exports reportedly make the best use of FTA tariffs due to their compliance with origin rules imposed on raw products and others for processed categories. (Illustrative photo: VOV)
This trade gap was noted in a recent statistical report by the Ministry of Industry and Trade (MoIT), according to Vietnam Economic Times.

As per export revenue, goods sent to China, worth a total of US$12 billion, topped the list of Vietnamese exports utilizing FTA tariff incentives last year. They were followed by those shipped to the Republic of Korea (RoK) with the export value of US$11 billion and ASEAN member countries with US$8.5 billion.

Shipments to India reportedly made good use of the tax incentives prescribed in the ASEAN - India Free Trade Area (AIFTA) with the export value reaching US$4.7 billion last year.

This figure accounted for 72 per cent of the total exports to the Indian market, a 2.6-time rise in comparison with the previous year.

Following were exports to Chile with a proportion of 67 per cent and those to the RoK with 60 per cent. Elsewhere, exports to neighbouring countries such as Laos and Cambodia recorded moderate ratios of 0.02 per cent and 10 per cent, respectively.

Agricultural exports made the best use of FTA tariffs due to their compliance with origin rules imposed on raw products and others for processed categories.

Industrial items recorded a fairly low proportion of the total exports benefiting from FTA tariff incentives as satisfying the technical specifications as required by importers remained a challenging matter.

During a recent workshop aimed to discuss the opportunities and pitfalls arising from the EU-Vietnam Free Trade Agreement (EVFTA), Nguyen Thi Thu Trang, director of the WTO and Integration Center under the Vietnam Chamber of Commerce and Industry, cited outcomes from a recent business survey as showing that up to 84 per cent of the queried firms admitted their failure to optimize FTA tariff incentives due to a lack of information on relevant commitments and how best to utilize them.

This could be blamed for shortcomings from both State management agencies and enterprises themselves. The Ministry of Industry and Trade has yet to establish entities in charge of providing information related to FTAs, excluding the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), while local firms have not been active enough in updating themselves on relevant information.

As many as 82 per cent of the surveyed firms criticized State management agencies for their inadequacies and non-transparency in implementing FTAs, notably those in relation to delayed procedures.

There exists a large number of differences among regulations as committed in the FTAs, explained Ngo Chung Khanh, deputy head of the Multilateral Trade Policy Department under the MoIT.

He added that the rules which Vietnam has pledged to follow in the CPTPP vary from the EU-Vietnam Free Trade Agreement (EVFTA) on occasion, unintentionally making State management agencies face challenges when implementing these trade pacts.

Foreign-invested firms in Vietnam have made better use of FTA incentives, especially those on preferential certificate origin, than domestic companies did, the trade official stressed.

Masan Group sets sights on branded meat

Vietnamese food and agricultural giant Masan has renamed a subsidiary to focus on selling branded pork products.

The subsidiary, Masan Nutri-Science (MNS), Masan Group’s animal nutrition division, established in 2015, will now be known as Masan MEATLife (MML).

This is the first step in the group’s new strategy of switching from agricultural products to fast-moving consumer goods (FMCG), like providing branded packaged meat, a Masan representative told VnExpress.

The company wants to be the top producer in this market within the year, the representative added.

MML chairman Danny Le said pork was the largest segment in the F&B industry with a market value of more than $10 billion, 2.5 times the size of the dairy market.

However, MML will have to face a major competitor in the packaged pork industry – CP Vietnam, which belongs to Thai conglomerate Charoen Pokphand Group, one of the largest agriculture conglomerates in the world.

With over 25 years in the country, CP Vietnam has a complete value chain, from animal husbandry to food processing and retail. It has transitioned from livestock farming five years ago, unlike MML which is only doing so this year.

CP Vietnam’s revenue last year was VND60 trillion ($2.58 billion), four times that of MML, which was just over VND14 trillion ($602 million).

Revenue from CP Vietnam’s processed foods, including pork, came to VND40 trillion ($1.72 billion) last year.

MML currently generates most of its revenue from animal feed products, but began providing packaged meat from December 2018. It expects the segment to bring revenues of VND500 billion – VND1 trillion ($21.49 million - $42.98 million) in 2019.

By 2022, MML expects branded meat products to contribute 50-70 percent of its revenue, as consumers move to meat products guaranteed by brands, it said in a statement.

Masan Group also plans to make the company go public later in 2019 on UPCoM, an exchange for unlisted public companies that allows them to sell shares without having to list on Vietnam’s main exchanges.

HCMC revives delayed downtown underground parking project

Ho Chi Minh City has revived a District 1 underground parking project nine years after its construction was originally scheduled to begin.

Authorities have given construction firm Dong Duong Group a second permission to build an underground parking lot at the Tao Dan Park.

Dong Duong received its first permission in 2010 to build a 5,300-square meter parking lot with seven underground levels and three upper levels that would accommodate 878 cars and 400 motorbikes.

However, as the project failed to start for a long time, the city’s Department of Natural Resources and Environment last year proposed that the city retrieves the land allocated for the project.

In this context, the reason for authorities granting a second permission is not clear.

In the latest permission, HCM City demands that Dong Duong starts construction by next June at the latest and finish it by the end of 2022, failing which it would retrieve the land.

The city had planned four underground parking spaces in the downtown Districts 1 and 3 that would accommodate 6,300 cars and 4,000 motorbikes in total. None of these have been implemented.

Earlier this month, the city cancelled an underground parking project in Le Van Tam Park, District 1 because many important requirements were not finalized, including applying for construction permits and evaluating technical designs.

Parking space in the downtown area of the 13-million strong city only meets around 7 percent of demand, urban planning experts said.

Order shortages put apparel exports at risk

The widespread shortages of orders could hinder the local apparel sector from enjoying an export growth rate of at least 11 per cent during the second half of 2019, therefore putting the full-year export target at risk.

The majority of garment and textile firms have secured export orders until the year’s third quarter.

Tu Thi Bich Loc, director of the My Anh garment stitching company, said that her firm has faced a range of difficulties during 2019 in comparison with the previous years. This can be seen in the number of My Anh shipments ordered by importers dropping dramatically by 30 per cent on year.

The price of garment and textile exports has remained consistent while input costs have increased as a result of the rising prices of imported materials, thus hitting apparel firms.

Truong Van Cam, general secretary of the Vietnam Textile and Apparel Association, said order shortages have been occurring throughout the sector, adding that the total orders which many domestic firms have gained represent only 70 per cent of the figure seen during the same period last year.

Furthermore, the domestic sale of fibre and other materials have run into difficulties during the first half of the year while the export value of ancillary materials fell by 0.29 per cent on year.

The above-mentioned factors could make the sector fail to meet the full-year export target of US$40 billion.

Cam attributed the downward fortunes of the sector to the negative impacts of ongoing US-China trade tensions. The domestic fibre production has suffered the most from the trade war which has made fibre exports to China plunge.

Vietnam used to produce approximately 2.2 million tons of fibre annually. As many as 1.5 million tons are shipped abroad; of which 60 per cent are sent to China. During the first half of this year, fibre exports to China inched up only 1.1 per cent on year.

In response to the tariffs imposed by the US administration, China has undergone deep yuan depreciation in order to facilitate its exports while the Vietnamese dong has remained steady. This has made Vietnamese exports to China, including apparel products and ancillary materials, more expensive, subsequently putting the domestic sector at a disadvantage.

Impacts of the free trade agreements (FTAs) Vietnam has signed could pose another threat.

Foreign partners believe that opportunities arising from the FTAs have yet to present themselves; hence, there are no high hopes on the soaring export growth of the apparel sector. This might force foreign partners to shift their import from Vietnam to other countries, resulting in the order shortages facing domestic garment firms.

Cam stressed that local firms must maximize their efforts into boosting their growth in a joint bid to meet the sector’s 2019 export target.

In particular, the sector must strive to obtain an export growth rate of at least 11 per cent during the second half of 2019 if it wants to meet the projected export figure of US$40 billion. However, this is not a simple task, he said.

Local firms should be more active in seeking additional orders to keep their production ahead for the remainder of the year. They are advised to make alliances with partners to build up production chains in order to meet origin rules as committed to in the FTAs.

Cam urged domestic firms to strictly follow label requirements and seek ways of having labels recognized in order to attract long-term orders from overseas partners.

High hopes put for shrimp exports in H2

Shrimp exports are expected to gain a boost during the remainder of 2019 thanks to positive impacts from the free trade agreements Vietnam has signed, particularly the freshly signed EU-Vietnam Free Trade Agreement.

In addition, the overseas demand for shrimp products is expected to soar over the rest of the year. This is partly attributed to easing competition from Indian exports as the South Asian country has concluded its main annual harvest season.

Furthermore, the EU-Vietnam Free Trade Agreement (EVFTA), signed on June 30, are expected to yield positive effects on Vietnamese shrimp exports.

Aquatic exports to the EU will be immune from tariffs within a seven-year tax elimination phase as committed in the EVFTA. Notably, shrimp exports to the trading bloc will enjoy sharp tariff cuts set by the EU during the first year after the pact takes effect. Tariffs will gradually fall to zero per cent in subsequent years.

Firms expect these factors to create “breakthroughs” for shrimp exports during the second half of this year.

The Vietnam Association of Seafood Exporters and Producers reported that shrimp exports reached US$1.4 billion during the first half of 2019, an annual drop of 12 per cent.

Domestic shrimp exports to China fell sharply in the six-month period as the neighboring country increased its imports from India and Ecuador. This was resulted by China’s tight border trade policy coupled with fierce competition from the two countries.

Following sharp drops in the previous months, shrimp exports saw positive signs in June as exports to China racked up nearly US$47 million, up 10 per cent on year.

HCM City to host Vietnam Medi-Pharm Expo 2019

More than 400 domestic and foreign exhibitors will participate in the 19th Vietnam International Medical, Hospital and Pharmaceutical Exhibition (Vietnam Medi Pharm Expo 2019), slated to be held at the Sai Gon Exhibition and Conference Centre in HCM City from August 1 to 3.

The event will include international firms from Germany, the EU, South Korea, Japan, Australia, India, Malaysia, Singapore and Hong Kong. They will showcase pharmaceutical products and medical equipment at 400 booths, the event’s organiser – the Viet Nam National Trade Fair and Advertising Co (Vinexad) – said in a statement.

“The exhibition is a platform for international companies to access private and pubic hospitals and local pharmacy companies in Viet Nam and then share their advanced medical technologies and equipment,” the statement said.

A conference discussing the local medical market and related polices will be held on the sidelines of the event. A fact-finding tour to Cho Ray Hospital will provide foreign businesses with a realistic look into local medical treatment.

Qua That Chuan, general director of Nguyen Quoc Medical Corp, which has attended to the fair for many years, said the annual event offered his company an opportunity to broaden its brand, meet customers and establish new partnerships.

The event is expected to attract 15,000 visitors.

Toyota recalls nearly 1,600 cars for airbag fault

Toyota Motor Viet Nam (TMV) is recalling 1,592 vehicles over a programming problem in the airbag electronic control unit (ECU).

According to the Japanese car maker, the recalled model is the Toyota Rush. The recalled cars were manufactured in Indonesia between July 16, 2018 and January 10, 2019.

Due to the programming issue, when the rear wheel of the vehicle passes over a pothole or uneven road surface, the central airbag ECU may determine that it is a side collision. This could unexpectedly trigger the side and curtain shield airbags, putting passengers at risk.

The recall programme will take place from July 29, 2019 to July 29, 2022, with a fix time of about 0.4 hours per vehicle.

For Toyota Rush cars that were not imported through official channels, Toyota Motor Viet Nam will help owners contact Toyota Motor Corporation (TMC) to get information.

After receiving confirmation and approval from TMC, Toyota Motor Viet Nam dealers will proceed to replace the central airbag ECU for free.

Almost $500m invested in farm product processing industry in H1

The agriculture sector in the first half of this year attracted about VND11.4 trillion (US$491.3 million) to 11 new and existing projects processing farming products, according the Ministry of Agriculture and Rural Development.

The ministry said since 2018, total capital of over VND20 trillion was invested in 30 projects processing agricultural products nationwide. They are hoped to create a breakthrough in processing and exporting farm produce.

Head of the MARD’s Department of Planning Nguyen Van Viet said the ministry is directing the implementation of a project to reduce post-harvest losses and improve the value of farming, forestry and fishery products in processing,

Viet said attention has been paid to enhancing deep processing of products with great market advantages and promoting restructuring of farming products to increase added value.

The MARD will continue to support and facilitate the construction and operation of large-scale and modern processing plants of vegetables, fruits and livestock products in 2019, including a hi-tech dairy cow and milk processing plant worth VND3.8 trillion (over $163.7 million) in the central province of Thanh Hoa.

In the first half of this year, as many as 1,634 agro-forestry-aquaculture enterprises were established, lifting the total enterprises operating in the agricultural field to nearly 11,000.

Of which, large-scale firms such as Vinamilk, Nafoods, TH, Dabaco Vietnam, Masan, Lavifood, Ba Huan and Bien Dong have promoted investment into high-tech application in production and business.

 

According to the MARD in the period 2013-18, the industry of processing farming, forestry and fishery developed strongly with a growth rate of about 5-7 per cent per year. Therefore, the total export value of this sector gained strong growth at about 8-10 per cent a year, especially in 2018 with a record high of $40.02 billion.

However, the farming processing industry still has bottlenecks in the production value chain such as low capacity, low technology and poor quality of raw materials and processed products.

At present, Viet Nam’s industry of processing agricultural, forestry and fishery products has a designed capacity of about 120 million tonnes a year and over 7,500 large-scale enterprises.

Viet Nam's processed agricultural products have been exported to over 180 countries and territories, including many high-demanding markets such as the EU, US and Japan.

Sharp rises in Q2 corporate earnings come from asset sales

A number of listed companies have reported sharp increases in their quarterly profits as they have performed well in selling stakes in sub-units and projects.

The first half of the year was a tough time for local firms as the Vietnamese economy growth slowed to 6.71 per cent.

The figure was 0.02 percentage point lower than that recorded in the first half of 2018 amid the rising trade tension between the US and China as well as the slowdown of the global economy.

Therefore, the second-quarter earnings season was predicted to be not as good as it was in previous years for listed companies, according to securities firms.

However, some companies managed to swim against the current. Their quarterly earnings recorded extraordinary improvements thanks to the sale of their assets and stakes in member companies and projects.

The sale of its 60 per cent stake in Vinh Hao 6 Solar Power project is expected to bring construction and realty firm Fecon’s revenue in the second quarter up 30 per cent year on year to VND715.5 billion (US$30.7 million).

The value of the deal was estimated at VND45 billion. Fecon’s post-tax profit was forecast to rise 2.4 times yearly to VND150.3 billion in the past quarter.

Property developer Dat Xanh has recently released its second-quarter financial report, which shows the firm’s revenue rose 10 per cent to VND842.4 billion and post-tax profit shot up 100 per cent to VND249 billion.

The company’s quarterly financial report also stated that it sold stakes in its investment projects for nearly VND220 billion in the second quarter.

Steelmaker Nam Kim has estimated a VND120 billion profit for the second quarter of 2019, which is an improvement from the previous two quarters.

The company recorded a loss of VND173 billion in the fourth quarter of 2018 and of VND102 billion in the January-March period of 2019.

After the first two quarters of 2019, Nam Kim estimated its net profit was VND20-25 billion, down 80 per cent year on year.

As the average price of hot-rolled coil on global markets in the second quarter increased modestly to $557 per tonne from $548 per tonne in the first quarter, the company managed to sell its entire ownership in two sub companies and one land use licence.

Before the deals were pulled off, Nam Kim held 100 per cent stake in Nam Kim Corea, which had charter capital of VND91.45 billion.

Nam Kim also sold its Nam Kim 1 Plant for VND180 billion and transferred its land use licence in the southern province of Ba Ria-Vung Tau for VND250 billion.

In 2019, Nam Kim plans to earn VND850 billion from selling its shares in member companies, associate firms and projects.

Central bank cuts treasury bill interest rate for first time in four months

The State Bank of Viet Nam (SBV) has reduced interest rates on treasury bills for the first time since March.

According to a weekly report on monetary market of the Saigon Securities Incorporation (SSI), the interest rate of seven-day treasury bills was adjusted down to 2.75 per cent per year last week, down 25 basis points against March.

The SBV last week also net injected VND19 trillion (US$815.45 million) via treasury bills so inter-bank interest rates decreased during the week, currently at 3.08 per cent for overnight term and 3.18 per cent for one week terms, down 10 basis points and 12 basis points, respectively compared to the previous week.

Meanwhile, inter-bank interest rates for US dollar loans continued to be less volatile compared to the previous week. At the end of the week, the overnight interest rate stood at 2.51 per cent (down one basis point); one week 2.59 per cent (unchanged), two weeks 2.66 per cent (down one basis point) and one month 2.78 per cent (down two basis points).

The gap between interest rates in the Vietnamese dong and the US dollar dropped to 0.6-0.7 per cent per year.

According to SSI analysts, if the US Federal Reserve (Fed) cuts interest rates at the end of July as expected, it will not affect the SBV’s monetary policy too much, but make the implementation of favourable monetary policy directions smoother by reducing pressure from exchange rates.

Looking back from the end of 2015, although the Fed raised interest rates, the SBV’s interest rate and open market operation (OMO) interest rates remained stable. At some times, the OMO interest rates plummeted to below 1 per cent annually. This shows Viet Nam’s monetary policy is quite flexible, with the aim of stabilising the currency and being cautious in regulating cash flow and controlling credit quality.

As the central bank recently raised the credit growth limit for certain banks, some believed it was loosening monetary policy. However, SSI analysts said it was not an expansion of the SBV’s 14 per cent credit growth target set for the entire banking system this year and this was still under the SBV’s orientation from the beginning of the year, based on actual credit growth in the first six months of 2019.

Firstly, the analysts explained, this year’s credit growth target for the entire banking system is 14 per cent but the credit growth limit allocated to each bank was lower at some 11-13 per cent at the beginning of the year, even the rate at some banks such as Vietinbank and Sacombank was only 7 per cent.

Secondly, the central bank expanded the credit growth quota for just eight commercial banks that met Basel II international banking standards earlier than scheduled. So if all eight commercial banks had their credit growth limit raised to the expected level, total increased loans would be some VND46 trillion, accounting for merely 0.6 per cent of total outstanding loans of the whole banking system.

Hai Phong port posts strong revenue growth in first half of 2019

Hai Phong Port Joint Stock Company recorded impressive growth in both revenue and cargo output via its seaports in Hai Phong during the first six months of this year, according to the company.

The company, a member of the Viet Nam National Shipping Lines (Vinalines), received total cargo volume of more than 13 million tonnes and gained total revenue of VND852 billion (US$36.3 million) in the first half of this year, Nguyen Tuong Anh, deputy general director of Hai Phong Port JSC, was quoted as saying by Giao thong (Transport) newspaper.

Those figures were up by 10.5 per cent in cargo volume and 15.1 per cent in revenue from the same period last year, he said.

According to a Hai Phong port representative, the company has been improving the capacity of loading and unloading equipment, including through the application of information technology.

At the same time, it has strengthened relations with prestigious shipping lines around the world to open service lines directly connecting to its seaports in Hai Phong.

Hai Phong Port JSC is one of the biggest seaport enterprises in Viet Nam. With the ownership of major ports such as Tan Vu, Hoang Dieu and Chua Ve, the company holds more than a 42 per cent market share of loaded and unloaded goods in Hai Phong.

In 2018, the Government gave approval for Hai Phong Port JSC to invest in the construction of container terminals No 3 and No 4 in the area of Lach Huyen international seaport with a total investment of VND7 trillion. The two terminals will have the capacity to handle vessels up to 100,000DWT (8,000 TEU).

Viet Nam’s coal imports increases sharply by mid-July

Viet Nam imported about 23 million tonnes of coal between the beginning of the year and July 15 worth US$2.17 billion, according to the General Department of Customs.

Imports rose by 108 per cent in volume and 69.5 per cent in value from the same period last year.

The growth rate of import volume was higher than that of value because the import price of coal reduced to $95.2 per tonne from $117 in the same period last year.

Notably, the total volume of imported coal from the first day of this year until July 15 exceeded the amount imported during all of 2018 by about 57,000 tonnes.

In the first half of this year, Indonesia, Australia, Russia and China were the four largest coal suppliers for Viet Nam, Hai quan (Customs) newspaper quoted the General Statistics Office as saying.

Viet Nam imported 7.3 million tonnes of coal worth of $461.7 million from ASEAN countries in the first six months of the year, including more than one million tonnes in June.

About 7.1 million tonnes were imported from Australia, worth $769.5 million, 3.7 million tonnes from Russia with a value of $325.2 million and 590,000 tonnes from China, worth $177.7 million.

Domestic demand is increasing, especially for thermal power plants, while the output of the country's coal mines is much lower. Therefore, coal imports are expected to continue increasing.

In the first half of July alone, the nation spent $191 million to import more than 2.2 million tonnes of coal.

According to the National Electricity Development Plan for the 2011-20 period, to meet domestic demand for electricity, Viet Nam’s power plants must reach a total capacity of 75,000MW in 2020. About 48 per cent of the capacity will come from thermal power plants that use coal.

By 2030, the total capacity of power plants must stand at 146,800MW with 51.6 per cent coming from thermal power plants.

To achieve the target, thermal power plants will need 64.1 million tonnes of coal in 2020 and 131.1 million tonnes in 2030, according to Viet Nam's development plan for the coal industry.

Coal demand from the key metal, cement, fertiliser and chemical industries as well as other consumer sectors will be about 25.5 million tonnes in 2030.

That means Viet Nam will need a total of about 157 million tonnes of coal in 2030 while the domestic supply will reach a maximum of 57 million tonnes. The nation will find it necessary to import up to 100 million tonnes of coal.

Vung Ang EZ attracts three new projects

The Ha Tinh People’s Committee has granted investment licences to three new projects worth a combination of more than VND1.65 trillion (US$71 million).

The projects will be developed at Vung Ang Economic Zone in Ky Anh Town, online newspaper baohatinh.vn reported.

They include a timber processing project funded by HCM City-based An Viet Phat Energy Co at a cost of more than VND1.28 trillion ($55 million). It will comprise two factories – the first producing lumber and plywood in Ky Thinh District with an annual capacity of 240,000 tonnes and the second producing compressed wood pellets with an annual capacity of 150,000 tonnes.

The second project, worth VND201 billion ($8.65 million), will be backed by Central Industrial Chemicals JCS, which is based in the province. It will include the development of chemical and petrochemical warehouses in Vung Ang Depot which will be able to store 30,700 cubic metres of products.

PCG Phu Vinh has been approved to develop a system providing liquefied petroleum gas and liquefied natural gas for Phu Vinh Industrial Zone with total investments of VND164 billion ($7 million).

The committee’s vice chairman Duong Tat Thang said he hoped that once operational, these projects would make big contributions to the State budget and create more local jobs.

The central province has set a target of luring 150 projects with total registered capital of about $2.5 billion by the end of this year, according to the committee.

The locality is now home to 1,183 projects, 1,108 of which were financed by domestic businesses with a total capital of more than VND107 trillion ($4.6 billion) while the remainder, worth more than $12 billion, were funded by foreign companies.

To date, 17 countries and territories have pumped investments into the province including Japan, South Korea, mainland China, Taiwan, Singapore, Hong Kong, Germany, the UK and the US.

State Treasury disburses 4.6 million USD as investment in H1

The State Treasury disbursed a total of 107.7 billion VND (4.6 million USD) as investments in the first half of 2019, equivalent to only 29.7 percent of the set target.

In controlling the spending of the State budget, the State Treasury system has actively coordinated with ministries, sectors, localities and budget users in taking concerted measures to step up investment disbursement, with the work monitored closely within the framework of estimates.

During January-June, State budget collection via treasuries reached 743.4 trillion VND, equal to 52.6 percent of yearly estimates.

The State Treasury also mobilized 115.8 trillion VND from the sale of Government bonds in the period, thus helping meet the demand for budget debt payment.

Rooftop solar power development programme in Vietnam launched

The Electricity and Renewable Energy Authority of the Ministry of Industry and Trade launched a programme to boost the development of rooftop solar power in Vietnam at a workshop held in Ho Chi Minh City on July 25.

Director of the authority Phuong Hoang Kim said the Vietnamese Government has been more aware of the role of solar energy and energy saving in maintaining economic growth, ensuring energy security, and protecting public health and environment.

Renewable energy is expected to generate 6.5 percent of the country’s total electricity in 2020 and 10.7 percent in 2030, he said, adding that Vietnam aims to save 10 percent of energy in the total power consumption in 2020.

The Vietnam Low Emission Energy Program (V-LEEP), funded by the US Agency for International Development (USAID), is designed to attract investment from the private sector into clean energy.

According to Michael Greene, Director of the USAID, through this programme, the US agency will support the Vietnamese Government to harmonise national strategies, laws, policies and regulations to encourage the development of clean energy.

Earlier, the Ministry of Industry and Trade had approved a programme to develop rooftop solar power in Vietnam between 2019 and 2025.

The industrial sector uses about 50 percent of the country’s total energy resources; hence, increasing energy saving and efficient use in the sector is a top priority to ensure national energy security.

Vietnam is also seeking to generate electricity from wind and biomass energy.

ODA disbursement in H1 remains low: MPI

Disbursement of official development assistance (ODA) in the first half of the year was estimated at more than 4.17 trillion VND (179.7 million USD), accounting for only 6.9 percent of the National Assembly’s plan and 12.7 percent of that assigned by the Prime Minister, according to the Ministry of Planning and Investment (MPI).

Eight of 59 localities had a disbursement rate of more than 30 percent, including Hai Phong, Ninh Binh, Phu Yen, Ho Chi Minh City, Binh Duong, Tra Vinh, Kien Giang and Bac Lieu. The rate was below 30 percent at 11 ministries and sectors and zero in 28 other localities.

The MPI said that a lack of corresponding funds has made it impossible to absorb foreign capital, resulting in the slow disbursement of ODA. Meanwhile, several projects have not completed investment procedures or been in the process to adjust total investment capital or extend loan agreements.

Besides, low readiness of projects has affected the disbursement progress. Although many are arranged with enough capital like urban transport project in Hai Phong city, project on upgrading Can Tho University and project on expanding Hoa Binh General Hospital, money could not be disbursed due to bottlenecks in land clearance and resettlement.

The ministry has set up working groups to supervise ODA disbursement in key sectors, and devise measures to accelerate the progress.

75,000 derivatives trading accounts opened in first six months

More than 75,000 trading accounts were opened on the derivatives market as of the end of June, officials announced on July 25.

The figure was up 30 percent from the end of 2018. The average number of futures contracts traded in each session in June reached nearly 100,000.

After its launch in August 2017, the derivatives market has been warmly welcomed by investors seeking opportunities to trade VN30-Index futures contracts whenever the common stock market gets into uncertain territory, according to Le Trong Minh, Editor- in-chief of Dau Tu (Investment) newspaper.

The derivatives market has helped investors hedge risks, kept money on the equities market, allowed investors to seek short-term profits and stabilised the common stock market.

However, there have been some problems with the market such as the small number of institutional investors joining the derivatives market, high volatility and a lower-than-expected number of transactions.

As the Government wants the Vietnamese equities market to reach 100 percent of Vietnam’s gross domestic product (GDP) by 2020 and the number of active investors accounts for 3 percent of the population, a mechanism needs to be developed to foster professional investors, said Pham Thi Thuy, director of virtual derivatives market project at VPBank Securities (VPBS).

To help individual investors sharpen their knowledge, skills and understanding of the derivatives market, Dau Tu newspaper and VPBS will launch a contest on virtual derivatives trading from August 1 to July 31, 2020.

Contestants will be able to compete on a virtual trading platform provided by VPBS. Awards will be given weekly, monthly, quarterly and yearly for investors with the best profit and the highest number of futures contracts traded, along with a lucky draw.

The total value of prizes is 1.1 billion VND (47,300 USD) for 654 awards. The highest-valued award is 200 million VND and will be given to the investor with the best trading profit of the year.

The contest will help investors share their ideas, knowledge and skills as well as provide training for all contestants, Minh said.

Each investor will receive an initial 100 million VND when registering in the virtual trading contest. The virtual trading platform can be downloaded from the Apple Store and Google Play.

Vietnam earns trade surplus of nearly US$1.8 billion in Jan-July

Vietnam exported US$145.13 billion worth of products and spent US$143.34 billion on imports in the January-July period, resulting in a trade surplus of US$1.79 billion during the period, according to data from the General Statistics Office.

Statistics showed that exports in the seven-month period rose 7.5%, while imports were up 8.3% over the same period last year, according to the Vietnam News Agency.

Domestic enterprises suffered a trade deficit of US$16.8 billion, while the foreign direct investment (FDI) sector recorded a trade surplus of US$18.6 billion, including crude oil revenue.

Specifically, local firms’ exports expanded 12.2% to more than US$44 billion, while FDI businesses generated US$101.13 billion from exports, including crude oil, up 5.6% year-on-year.

Thus, the export revenue growth of domestic firms was higher than that of FDI companies.

Among 24 kinds of merchandise with export revenue of over US$1 billion each, there were four items posting export revenue of more than US$10 billion each: phones and phone parts (US$27.3 billion), accounting for 18.8%, followed by computers, electronic products and accessories (US$18.6 billion); textiles and garments (US$18.3 billion); and footwear (US$10.4 billion).

During the period, the United States was Vietnam’s largest import market, with revenue of US$32.5 billion, up more than a quarter over the same period last year.

The European Union came in second with US$24.3 billion, followed by China with US$20 billion, the ASEAN with US$15.2 billion and South Korea with US$10.7 billion.

Meanwhile, China remained the country’s largest supplier of products in the period with import turnover reaching US$42 billion, marking a year-on-year increase of 16.9%.

 
 
 
 
 
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