BUSINESS NEWS 9/6

Cargo volumes at seaports remain imbalanced

BUSINESS NEWS 9/6

The volumes of cargo passing through seaports in the northern and central regions are small, while seaports in the south are overloaded.

According to the Vietnam Maritime Administration, the volume of cargo passing through seaports in Vietnam grew 10%-12% over the last decade.

However, seaports in the north serve 25%-30% of the total volume of cargo and those in central provinces, only 13%, while customs clearance procedures for 57% of cargo are done at seaports in the south.

Bui Thien Thu, deputy director of the Vietnam Maritime Administration, said that the distribution of cargo to seaports has several shortcomings. Cat Lai Port in HCMC should have been allowed to receive small vessels, with a capacity of some 5,000 tons of cargo. Large vessels should use the Cai Mep-Thi Vai port complex in Ba Ria-Vung Tau Province.

However, passages to Cat Lai Port are being dredged, allowing 50,000-ton vessels to enter the port.

Therefore, the Government should seek solutions to balance the volumes of cargo at seaports nationwide, Thu said.

Many key traffic projects behind schedule

Seven out of 10 key traffic projects in the country have fallen behind schedule to date, according to a report from the Ministry of Transport.

In the southern region, the Ben Luc-Long Thanh expressway project is 72% complete, 12% slower than scheduled.

Given the current slow progress, the ministry is concerned that the project could fail to be ready prior to the expiry of a loan agreement on December 14 next year.

Even though the ministry collaborated with the Commission for the Management of State Capital at Enterprises to handle bottlenecks, the inefficient execution dragged down the progress of the project.

Facing the same fate, the Trung Luong-My Thuan expressway project in southern Vietnam has been moving at a snail’s pace.

The ministry had earlier assigned the Tien Giang Province to remove obstacles and advance capital for site clearance, but the progress of the project has yet to be improved to date.

Among the seven projects, five involve urban railways, with the Ben Thanh-Suoi Tien and Ben Thanh-Tham Luong metro lines in HCMC falling far behind schedule.

Hanoi City has three urban railway projects behind schedule, with the Cat Linh-Ha Dong line not yet put into commercial operation due to obstacles related to appraisals and safety certification.

Nhon-Hanoi Station metro line is just 55% complete after seven years of construction, while Yen Vien-Ngoc Hoi railway is still in the administrative stage.

The Ministry of Transport ascribed the slow progress of these projects to the shortage of reciprocal capital and difficulties with site clearance.

However, the weak capacity of investors and contractors is one of the main factors hindering the construction of these projects, the ministry said.

HCMC to speed up waste-to-energy projects

CMC is inviting tenders to select consultants for waste-to-energy projects, but instead of undergoing lengthy procedures, the city leadership wants to shorten the process to build waste-to-energy plants as soon as possible.

The bidding execution of waste-to-energy projects was discussed by HCMC Chairman Nguyen Thanh Phong at a meeting with relevant agencies on the city’s socioeconomic performance in the first five months of this year on June 4.

Reporting on the execution of the bidding process, Nguyen Toan Thang, director of the municipal Department of Natural Resources and Environment, stated that, as regulated, the total time to complete procedures and organize a tender is 786 days. If some steps of the process are cut, the time will be reduced to 541 days, Thang added.

The department on May 19 held a tender to choose consultants for these projects. Another tender will be opened in July to select investors for the waste-to-energy projects. It is expected that the department will announce the winners of the tender in the second quarter of 2020.

On seeing the tenders’ timeline, Phong asked the relevant units to reduce the time taken. However, Thang remarked that it is forbidden to skip certain steps and procedures.

Phong voiced concern over the rising amount of waste being discharged into the environment each day. The city alone faces 8,900 tons of waste, exclusive of medical and industrial garbage, every day, whereas the waste is mainly treated by burying it.

Besides this, Phong questioned some departments and agencies regarding the slow relocation of facilities utilizing September 23 Park to conduct their business, asking Le Hoa Binh, director of the HCMC Department of Construction, to report on their progress.

Binh noted that as the Department of Transport had handed over the management rights to the department quite late, the relocation of the facilities at the park is still under preparation. After drawing up a plan, the department will report it to the city’s authority.

HCMC chairman urges removal of obstacles for projects

HCMC Chairman Nguyen Thanh Phong has asked the municipal Department of Planning and Investment to remove bottlenecks for projects prioritized by the city for investment to accelerate their progress.

At a meeting of the HCMC government on the city’s socioeconomic performance in May and the first five months of the year, Phong also asked the department to organize a conference to evaluate the effectiveness of the city’s investment promotion programs and report the plan for executing the city’s socioeconomic development in the 2021-2030 period with a vision to 2050 to the Standing Board of the municipal Party Committee.

Director of the HCMC Department of Planning and Investment Le Thi Huynh Mai noted that in the first five months of the year, trade and direct investment promotion activities were efficient.

The city attracted nearly VND348.5 trillion (US$14.9 billion) in domestic investment and US$2.77 billion in foreign investment in the period, up 4.6% and 49% year-on-year, respectively. In addition, the city reported high growth in export, retail revenue and agricultural and industrial production, according to Thanh Nien.

The city currently has 11 projects under construction. Some VND99 billion in official development assistance loans and VND25.3 billion in reciprocal capital were disbursed for such projects, accounting for nearly half and 2.11%, respectively, of the plan, reported the newspaper.

Concluding the meeting, HCMC Chairman Phong asked the heads of the competent agencies to take charge of reforming administrative procedures as 2019 was chosen as the year of breakthroughs for administrative reform.

Italian companies eye Vietnamese high-tech sector

A delegation from Italy is visiting Vietnam to enhance cooperation in areas of importance to Vietnam and in which Italy has strengths.

The Italian Trade Agency (ITA), in cooperation with the Embassy of Italy in Hanoi, organized a workshop today, June 5, to promote and develop new opportunities of trade, investment and technological collaboration between Italy and Vietnam as part of a partnership for innovation and sustainability.

Giuseppe Conte, the prime minister of Italy, attended the event as part of his ongoing visit to Vietnam.

The workshop was also attended by a number of representatives of leading Italian companies and manufacturing associations in a number of fields: machine tools, robots and industrial automation.

In light of the Vietnamese Government’s current focus on advanced technology and environmentally friendly investment projects such a renewable energy, smart infrastructure and machinery, the workshop offered both countries and their firms a chance to enhance cooperation.

Conte emphasized the potential for collaboration between Italy and Vietnam.

“We admire Vietnam’s gross domestic product growth. Vietnam has a double advantage: it can be both a consumption market for and a manufacturing partner of Italian companies in the age of Industry 4.0.” he said.

“At the moment, Vietnam is also aiming to lower manufacturing costs by using more advanced technology and digitalization in the context of Industry 4.0. To this end, Italy has 800 technology research institutes, capable of helping Vietnam to reach this goal,” stated Carlo Ferro, president of ITA.

The workshop also showcased the success of Italian efforts to assist Vietnamese companies in improving product quality through the example of the Italy-Vietnam Footwear Technological Training Center for technology transfer, consultancy and the training of trainers in the footwear industry.

Italy is now well-positioned to enhance business ties with Vietnam, particularly in technology innovation, as the latter is gearing toward a smart industry and circular economy, which is presented as a system of resource utilization where the reduction, reuse and recycling of elements prevails.

Vu Tien Loc, president of Vietnam Chamber of Commerce and Industry, said the Vietnamese business community is very keen on and leading the way toward achieving sustainable development goals. Currently, Vietnam is being selective in attracting foreign direct investment (FDI), choosing to direct FDI projects to fields that use advanced technology, especially ecofriendly technology.

“Each year, Vietnam will need US$25 billion for infrastructure development alone but cannot use ODA investment as it did before, so public-private partnerships are now a highly viable option,” Loc said.

Two CapitaLand Vietnam projects receive green certification

CapitaLand Vietnam announced on June 4 it has received green certification from Singapore’s Building & Construction Authority for its two residential projects Seasons Avenue and Vista Verde.

At the same time, the CapitaLand Group also set a target of achieving 100 per cent green certification of the enlarged global portfolio with Ascendas-Singbridge by 2030. It aims to have at least 20 per cent of energy consumption coming from renewable energy for the enlarged group by 2025.

These are among the sustainability targets CapitaLand has committed to achieve as it works towards completing a transaction to acquire the businesses of Ascendas-Singbridge by the end of June. CapitaLand is set to become one of Asia’s largest diversified real estate groups, with over S$123 billion ($90 billion) in assets under management upon the completion of the transaction.

These targets were unveiled by Mr. Lee Chee Koon, President and CEO of the CapitaLand Group, in his message within CapitaLand’s 10th Global Sustainability Report. “At CapitaLand, we recognize that the long-term success of our business is closely intertwined with the health and prosperity of the communities we operate in,” he wrote. “We firmly believe in doing good and doing right, as we do well, and will continue to place sustainability as an integral part of our global business,” he said.

In line with CapitaLand Group’s new target of achieving 100 per cent green certification of its enlarged global portfolio, CapitaLand Vietnam’s has recently been recognized for its greening efforts. Its two residential projects - Seasons Avenue and Vista Verde - won Singapore’s Building and Construction Authority’s (BCA) Green Mark Gold award for overseas projects.

Seasons Avenue in Hanoi and Vista Verde in Ho Chi Minh City are residential projects comprised of four residential blocks each. Both feature lush green landscaping, providing a welcoming and tranquil environment for its residents. Residents can relax, exercise and organize activities while being close to nature. Units in both developments are also designed to maximize daylight and are well-ventilated to promote increased natural airflow and cooling.

Apart from Seasons Avenue and Vista Verde, in 2018, Somerset Ho Chi Minh City received the BCA Green Mark GoldPLUS award. The serviced residence is fitted with water efficient fixtures as well as efficient air-conditioning systems and LED lightings to reduce the building’s carbon footprint.

The serviced residence also encourages its residents to live sustainably. Friendly reminders to switch off lights, save water, and reduce the use of single-use plastic can be found within the block. Somerset Ho Chi Minh City has also set up a green corner to promote recycling and also organizes events such as tree-planting and environmental-themed movie screenings to further inculcate green habits among the residents.

Tiki & Unidepot sign strategic partnership

Tiki and Unidepot signed a strategic partnership contract on June 4 in Ho Chi Minh City to expand Tiki’s new operations center system, known as the fulfillment center system, this year, with a starting area of 10,000 sq m, located in Nha Be district.

Mr. Tran Ngoc Thai Son, Founder and CEO of Tiki, said this is just a first step in expanding Tiki’s supply chain this year, which contributes to raising the company’s operational competency and helps it maintain its position as the fastest-growing e-commerce unit in Vietnam.

Tiki’s losses in recent years have been primarily due to investment in its infrastructure and fulfillment center system. Expanding the system is now its key focus, as it benefits not only vendors but also Tiki’s customers in terms of faster delivery, lower cost, and guaranteed product quality, etc., from Vietnam’s logistics industry being improved and developed.

Starting with a 100 sq m warehouse, Tiki now has over 30,000 sq m in its fulfillment center system, which is expected to reach 100,000 sq m in the next six to eight months.

“We will become the leading supply chain service provider not only in the e-commerce industry but also in Vietnam’s logistics industry,” said Mr. Son. “In order for us to achieve this, we need to expand relations with our strategic partners providing warehousing infrastructure, and Unidepot is one of our key partners.”

Supply chain is a billion-dollar industry in Vietnam, and while it is recording surprisingly rapid growth it still lacks effectiveness.

Thanks to its technology, the development of Tiki’s fulfillment center system will see intermediate steps removed and the goods processing time cut down by half. A typical instance is that the total time for order processing with TikiNOW takes just 15 minutes, including all steps, from receiving orders and picking up to packaging and packing promotional goods, if any.

According to a survey by Tiki at the end of 2018, one of the leading factors encouraging customers to shop online is convenience. In particular, the short order processing time and fast delivery are the major drivers. Therefore, expanding the fulfillment center system allows Tiki to significantly raise its delivery speed, from which the shopping experience will be more complete.

According to Mr. Rahul Awasthi, Vice President of Warehouse Management at Tiki, one of its unique selling propositions is the TikiNOW 2h delivery service - the first in Southeast Asia. Its nationwide average delivery time is 1.2 days, much faster than the two-day average in the market as a whole. To accomplish this, expanding the fulfillment center system has become Tiki’s top priority this year.

Mr. Doan Quang Minh, CEO of Unidepot, said it took less than a month for Tiki and Unidepot to wrap up negotiations and sign the contract, despite it being a major project. Sharing a mutual vision of enhancing Vietnam’s logistics sector, the two sides establishing this partnership is a significant milestone for both.

Tiki earlier announced it would set up the “Tiki Foundation” to support and nurture Vietnamese talent in all fields, including arts, sports, technology, and science, etc. This is part of its corporate social responsibility efforts, in addition to its firm commitment to offer Vietnamese customers best-in-class services and products.

Push for digital payment of social security

Vietnam’s social security system in recent years has improved but is still inferior to typical middle-income countries, Ms. Keiko Inoue, Coordinator of the Human Development Program, Gender and Employment, at the World Bank (WB), told the “Strengthening Social Security Governance and Payment System: Current Assessment, International Experience, and Implications for Vietnam” seminar organized on June 3 in Hanoi by the Ministry of Labor and Social Affairs (MoLISA) in cooperation with the WB. “Vietnam needs to work hard to expand digital payments for social security distribution, providing reliable, cost-effective and accessible services for those who enjoy this regime,” she said.

Data presented by a representative from MoLISA showed that Vietnam Social Insurance (VSI) is currently paying social insurance to more than 3.1 million people, and millions of others enjoy one-time social insurance and coverage of burial, sickness, maternity, and convalescence expenses. Payment methods are conducted in many flexible forms, such as direct payment, via a bank, and via a post office. VSI has also built up a payment process for paying social insurance, health insurance, and unemployment insurance in a synchronous manner through electronic transactions. However, the number of people receiving pensions and monthly social insurance benefits through bank accounts is extremely low, as nearly 80 per cent of pensions and 100 per cent of social benefits are paid in cash.

According to Mr. Pham Thanh Du, Deputy Director of the Department of Accounting and Finance at VSI, Vietnamese people are still in the habit of using cash and payments via banks are not common. Only some 21 per cent of all payments are made via a bank account. Distribution rates between cities and provinces are uneven and mainly in major cities. The use of bank accounts and cards is difficult for the elderly and sick, especially those living in remote areas where there are very few ATMs.

“Under a resolution from the government, receiving social insurance payments through bank accounts is preferred but not mandatory,” Mr. Du said. “The implementation of the digitalization plan in social insurance payments is a positive step but faces many difficulties, especially for pensioners. Retirees wish to receive cash, as they are not comfortable using ATM machines.”

Ms. Inoue said that to overcome inadequacies in infrastructure in rural areas and remote areas, agents should be allowed to operate under the banking model and to develop electronic payment methods. The experience of similar countries show that such services have proven effective in providing low-cost digital payment services to beneficiaries, but a favorable legal environment is needed to succeed.

VSI will study and develop a roadmap to standardize data on pensioners and social insurance allowances to connect and share information with payment service providers in order to pay pensions and social insurance benefits through banks according to the assigned plan. It will also encourage recipients of pensions and social insurance benefits to use non-cash payments.

According to VSI’s goal, by 2020, Vietnam will have 20 per cent of social security payments made through banks. By 2021, the electronic transaction rate will reach 100 per cent, reducing the time needed for transactions between social insurance agencies and businesses and with a satisfaction rate of 80 per cent among participants in social insurance. In the 2025-2030 period, the satisfaction rate is to reach 85-90 per cent.

Economic, trade promotion seminars held in Italian cities

The European Union – Vietnam Free Trade Agreement (EVFTA) will open up opportunities for Italian firms, especially- small and medium-sized ones, heard recent bilateral economic and trade promotion seminars held in Parma and Piacenza cities, the Italian northern region of Emilia – Romagna.

The events, held late last month, attracted representatives of industry federations of the two cities and from firms operating in food, cosmetics and logistics.

Speaking at the events, Vietnamese Ambassador to Italy Nguyen Thi Bich Hue introduced Vietnam’s potential for businesses. She pledged that the Vietnamese Government will help Italian companies do business in Vietnam.

Delegates hailed the Vietnamese market with a population of nearly 100 million people, rising consumption, average annual economic growth of 6 percent, and quality and low-cost workforce.

Once the EVFTA takes effect, it will remove 99 percent of tariff lines, thus benefiting Italian enterprises and positively impacting bilateral trade and investment ties, they said.

They suggested Vietnam serve as a bridge for European and Italian goods to enter other ASEAN markets.

Representatives from the Vietnam Trade Office answered questions raised by participants.

 

While in the two cities, the Vietnamese delegation had working sessions with local authorities and visited several firms operating in Vietnam such as Davines, Cosmoproject and Piacentina.

Currently, the relationship between Binh Duong and Emilia – Romagna region is considered a model of Vietnam – Italy inter-regional cooperation.

With contributions by Parma and Piacenza, Emilia – Romagna region accounts for more than half of Italy’s exports to Vietnam.

Four new projects in Danang starting construction

Four out of eight projects that received investment certificates or investment proposal approvals at the major investment promotion event Spring Conference 2019 in Danang early this year have kicked off construction.

The Danang Department of Planning and Investment has just sent a report to the Danang People's Committee reviewing the implementation of signed projects at the Spring Conference 2019.

Accordingly, at the Spring Conference 2019 on March 1, the city granted investment certificates, investment proposal approvals, and notices allowing investment study for 19 projects with a total investment capital of nearly $4 billion.

Of the eight projects that have received investment certificates or investment proposal approval on the occasion, four have begun construction, meeting the set schedule in the certificates.

These four projects cover Sunshine aerospace component manufacturing plant, Xuan Thieu resort expansion, Key Tronic Vietnam signal lamp production facility, and Nissan Automobile expansion.

The four remaining projects, now in the legal setup stage, are slated to start construction in the forthcoming time.

Besides, the investors of the 11 projects that received notices allowing for investment study at the Spring Conference 2019 are busy fulfilling procedures related to the planning, drawing environmental impact assessment, or organising auctions on land use right, as per existing regulations.

For each project, the Danang Department of Planning and Investment said that there have been specific proposals urging related authorised agencies to speed up the process of settling procedures in order to accelerate the progress of the projects which were signed at the Spring Conference 2019.

Kosy to invest $434.7 trillion in Bac Lieu wind farm

Kosy Group wants to implement a series of projects in Bac Lieu province, including a real estate project – which is its core business – and a wind farm with the total investment capital of VND10 trillion ($434.7 million).

On June 1, Kosy signed a co-operation agreement with the Bac Lieu People’s Committee to develop Kosy Bac Lieu wind farm in Hoa Binh district.

The representative of Kosy said that the group is accelerating the completion of legal procedures for the group and affirms to kick off the construction right after finishing the dossier.

Along with the wind farm project, the group is studying investment opportunities in Bac Lieu, especially in the real estate sector.

Kosy’s decision to jump into the energy sector is to catch up with world trends. At present, the group has developed hydropower plants in the northern province of Lai Chau and solar power plants in Binh Thuan province. It sets the target to generate 210MW from thermal power plants to add to the national grid, contributing to ensuring national energy security.

Bac Lieu is a popular destination for both foreign and local investors in the renewable energy sector.

On April 15, Bac Phuong JSC organised the ground-breaking ceremony of the operations centre of the Dong Hai 1 wind farm – phase 1 in Long Dien commune, Dong Hai district, the Mekong Delta province of Bac Lieu.

Having the total investment capital of VND130 billion ($5.65 million), the operation centre covers an area of 7 hectares and will include an office building, a functional building, warehouse, and other infrastructure. The construction will be finished within 12 months.

The first phase of Dong Hai 1 wind farm has a designed capacity of 50MW and the total investment capital of VND2.5 trillion ($108.7 million). The wind farm will have 12 wind turbines, a lifting station 22/110kV with the capacity of 1x63MVA, a 110kV line, an operations centre, and other supporting works.

Cong Ly Ltd. is a wind power developer in Bac Lieu with a VND5.2 trillion ($226.08 million) project. It has put 62 wind turbine poles with the total capacity of 99.2MW into operation, producing 320 million kWh of electricity a year. In January 2018 Cong Ly organised the ground-breaking ceremony of the Bac Lieu wind farm phase III, which will cost approximately VND8.3 trillion ($360.9 million).

Besides, numerous foreign investors from Thailand, the US, and South Korea expressed interest in developing wind farms in this province. However, to date, no more projects have been implemented.

Reed Tradex signs for Japanese expos

The ASEAN’s leading exhibition organiser Reed Tradex has signed an agreement with the Japan External Trade Organization in order to present the Vietnam-Japan Supporting Industries Exhibition and Vietnam Manufacturing Expo, with the aim of strengthening partnerships between businesses in the supporting industries, and pushing towards being able to compete with the rest of the world.

Currently, Vietnam has diplomatic relations with 187 countries, and economic and trade co-operation with 224 countries and territories. The country has 16 free trade agreements signed or under negotiation with 58 partners from Asia, Europe, the Americas, and the Middle East. Besides, Vietnam also has nearly 60 bilateral investment promotion and protection agreements to support domestic businesses in going global.

“Taking the role as one of the leading organisations in the region for connecting ­businesses through international conferences and exhibitions, Reed Tradex is honoured to co-operate with the Japan External Trade Organization (JETRO) in Hanoi and the ­Department of Trade Promotion under the Ministry of Industry and Trade to bring this event as a networking opportunity for enterprises, as well as support the links between manufacturers and companies related to the country’s supporting industries,” said Phan Ngan, project manager of Reed Tradex Vietnam.

Currently, the process of strengthening business operations and optimising resources has accelerated dramatically. Apart from challenges caused by global economic instability, such as flexible exchange rate policies, and strict regulation and monitoring in financial systems, the trend of production relocation from China to Vietnam is also bringing a host of opportunities to businesses that keep abreast of the latest changes, according to Reed Tradex.

Chief representative of the JETRO in Hanoi, Hironobu Kitagawa, said that the localisation for materials, components, and spare parts of Japanese businesses in Vietnam is 36.3 per cent, while the rates for China and Thailand are 68 and 57 per cent, respectively. Thus, businesses have to import materials, components, and spare parts from neighbouring countries like Thailand or China. “This leads to increasing costs and high risks for Japanese investors with operations in the Vietnamese manufacturing industry, and difficulties in maintaining medium- and long-term production activities in Vietnam,” Kitagawa said.

In addition, the supporting industries are largely undertaken by small- and medium-sized enterprises (SMEs), he continued. “Restrictions on mechanisms and policies to support SMEs are an issue that we are encountering in Vietnam. If the problem is solved, there will be more Japanese investors eyeing the manufacturing and supporting industries here.”

According to Le Hoang Tai, deputy director general of the Department of Trade Promotion, the supporting industries play a vital role in developing a competitive and sustainable industry. With this, the government has assigned the Ministry of Industry and Trade to actively implement the Supporting Industry Development Programme until 2025. “Vietnamese supporting enterprises are fully facilitated to apply modern quality management standards, improve product quality, participate deeply in the global supply chain, and increase the localisation rate in significant industries such as automobiles, textiles, footwear, and electronics,” Tai said.

Only 21 per cent of Vietnamese SMEs have successfully participated in global value chains, manifestly low compared to the 46 per cent of other ASEAN members.

Despite the fact that a wide range of key worldwide manufacturers have set their production in Vietnam and provided the manufacturing and supporting industries with opportunities, without co-operation, Vietnamese businesses still struggle to join these global supply chains. To bolster relationships between large foreign corporations and local SMEs, the United States Agency for International Development has decided to implement the LinkSME project for the 2018-2023 period with the total budget of $22.1 million.

The project catalyses systemic changes in these business relations, significantly increasing the quantity and quality of links between Vietnamese enterprises and global value chains. Improved and increased business links will help Vietnamese private companies leverage business competitiveness, increase job creation and economic growth, and encourage entrepreneurial innovation.

Thai airlines increase flights for passengers travelling to Vietnam

Booming tourism in Vietnam has seen a record number of Thai visitors in the first four months of this year, resulting in higher frequency of flights by Thai airlines, especially to top destinations like central Da Nang and Da Lat cities.

The Bangkok Post newspaper reported that new attractions in these two cities and heavy tourism promotions have drawn 174,777 Thai tourists to Vietnam in the reviewed period, a year-on-year rise of 46 percent.

Thailand had the highest growth in arrivals to Vietnam over the first four months, followed by Indonesia (29 percent), Taiwan (25 percent), the Philippines (24.4 percent), the Republic of Korea (23.2 percent) and Malaysia (15.7 percent).

The newspaper quoted Ranon Viputsiri, head of commercial operations at budget airline Thai Vietjet Air, as saying that the number of Thai tourists has surged since mid-April, during the long holidays in Thailand.

Passengers flying with Thai Vietjet Air increased by 30 percent in the period, Ranon said. Most of Thai Vietjet Air's passengers are Thais who hold round-trip tickets to go see landmarks such as Ba Na Hills and Golden Bridge in Da Nang, or to visit Da Lat, a mid-sized city scattered with French colonial villas.

He added that several infrastructure projects in Vietnam are underway and will be a plus for the country's tourism.

Thai Vietjet Air has noticed tourism growth in Vietnam, and the airline has added more flights to Da Nang and Da Lat to meet passengers’ demand.

Since April this year, the Bangkok-Da Nang route has increased from two to three flights daily, while the Bangkok-Da Lat route has been upgraded to daily service, up from five flights a week.

Bangkok Airways has also ramped up services to Vietnam by increasing the frequency of the Bangkok-Da Nang route to 14 flights a week and opening a direct route from Bangkok to Cam Ranh with four flights a week in the first quarter this year.

According to statistics from the Vietnam National Administration of Tourism (VNAT), since 2010 the number of international tourists to Vietnam has tripled from 5 million to more than 15.6 million in 2018.

Foreign arrivals in Vietnam in the January-April period are estimated at 5.9 million, up 7.6 percent year-on-year, putting Vietnam on track to meet the projected 18 million in 2019.

Cassava exports plummet during five-month period

Vietnam’s exports of cassava and cassava-based products suffered a remarkable drop during the first five months of the year, according to the Ministry of Agriculture and Rural Development.

During the reviewed period, the nation exported 1.08 million tons of cassava, raking in US$414 million, down 17.6 per cent in volume and 11 per cent in value against the same period last year.
Due to falling demand from China, the forecast for the export of cassava and cassava-based products is pessimistic.

China remained the largest export market for Vietnamese cassava in the first four months of the year, accounting for 89.2 per cent, a drop of 16.4 per cent in volume and 3.5 per cent in value compared to last year’s corresponding period.

Representatives from the Agro Processing and Market Development Authority (Agrotrade), under the Ministry of Agriculture and Rural Development, attributed the decline to a sharp drop in the export of cassava starch via border gates and official channels.

China has also tightened regulatory controls on labelling, packaging, and information on Vietnamese cassava starch exported via border gates. In addition, China has reduced its standard VAT rate from 16 per cent to 13 per cent as of April 1. This has resulted in making the price of goods exported via border gates less competitive.

Moreover, the significantly increasing demand for cassavas chips has made Vietnamese businesses not rush to sign exports contracts to the Chinese market due to low export prices.

The export price of cassava and cassava-based products in May stood at US$408 per ton, an increase of 0.8 per cent in comparison to the previous month and down 10.2 per cent in comparison with the same period last year.

Meanwhile, the export price of cassava starch fell slightly to US$425 per ton, down 1.7 per cent from the previous month and a drop of 15.2 per cent in comparison with last year’s corresponding period.

The export price of cassava chips in May was US$222 per ton, a large fall of 8.0 per cent from last month and down 11.3 per cent against the same period last year.

Agrotrade forecasts that transactions concerning the export of cassavas and cassava-based products will continue to fall in the near future due to a decreased demand from China.

The export of cassava starch is also predicted to remain low until the year’s second quarter. However, the demand for cassava chips from China is predicted to recover after China levied 25 per cent import tariffs on US$60 billion worth of goods from the US.

Credit institutions must swing into action to boost e-payment

Banks and financial institutions should apply industry 4.0 technologies and find new solutions to handling risks from e-payments if they want to further develop their products and services in the local market, Nguyen Kim Anh, Deputy Governor of the State Bank of Vietnam, has said.

2018 sees booming e-payment services in Vietnam as internet and mobile payment transactions respectively leaped by 19.5 per cent and 169.5 per cent 2017.

Anh urged credit institutions to further optimize the use of smart data for making insightful analysis on customer needs so that they are able to provide clients with appropriate products and services.

2018 saw booming e-payment services in Vietnam as internet and mobile payment transactions respectively leaped by 19.5 per cent and 169.5 per cent 2017, the State Bank of Vietnam reported. Indeed, PricewaterhouseCoopers (PwC) ranked Vietnam as one of the fastest-growing mobile payment markets in 2018.

As many as 18,668 automated teller machines (ATMs) and 261,705 point of sale (POS) machines had been installed nationwide by the end of March. Transactions via domestic payment cards amounted to 65 million in amount and VND171 trillion (US$7.35 billion) in value during the first quarter of 2019.

Commercial banks have integrated additional features into bank cards with the aim of facilitating card holders’ payments and easing security threats.

These positive outcomes were attributed to concerted efforts by commercial banks into developing new payment methods based on the application of innovative apps and solutions such as QR codes, the digitization of card information, contactless payments, and the use of smart phones as a payment tool. These applications have allowed banks to improve security and convenience for their products and services.

Nguyen Quang Minh, Deputy General Director of the National Payment Corporation of Vietnam (NAPAS) claimed changing local payment behaviour as well as leveraging the development of e-payment remains a thorny issue for commercial banks.

Minh elaborated that financial services and payment methods have merely been developed in major localities while banks are yet to find much traction in rural and remote areas.

Nguyen Thi Hien, deputy director of the Banking Strategy Institute, said that the country’s average financial service access rate remains lower than that of regional peers. Most notably, the rate of adults making e-payments stood at 23 per cent, much lower than the 67.9 per cent ratio in China and 79.8 per cent in Thailand.

Hien criticized the slow pace of e-payment growth for the long-standing cash payment behavior of locals and their fear of security risks from e-payments.

In fact, poor linkages exist in local financial infrastructure while there have been many gaps in the legal framework and the distribution network of credit institutions.

In order to spur the nationwide development of non-cash payment methods, Hien emphasized the significance of utilizing fintech platforms to diversify distribution channels and expand them in localities which have limited access to financial services.

She also urged additional public-private cooperation in efficiently developing an inclusive infrastructure that covers the retail payment system and ICT infrastructure.

Given this, Deputy Governor Nguyen Kim Anh stressed the diversification of financial institutions and channels as an effective solution to overcoming the existing hindrances to e-payments.

Vietnam’s ever-growing young population along with its increasing internet and mobile adoption rates presents huge opportunities for Vietnamese credit institutions to expand digital banking and payment services.

A brighter prospect lays ahead for those providing such services at a high security level and reasonable costs.

Four new projects in Danang starting construction

Four out of eight projects that received investment certificates or investment proposal approvals at the major investment promotion event Spring Conference 2019 in Danang early this year have kicked off construction.

The Danang Department of Planning and Investment has just sent a report to the Danang People's Committee reviewing the implementation of signed projects at the Spring Conference 2019.

Accordingly, at the Spring Conference 2019 on March 1, the city granted investment certificates, investment proposal approvals, and notices allowing investment study for 19 projects with a total investment capital of nearly $4 billion.

Of the eight projects that have received investment certificates or investment proposal approval on the occasion, four have begun construction, meeting the set schedule in the certificates.

These four projects cover Sunshine aerospace component manufacturing plant, Xuan Thieu resort expansion, Key Tronic Vietnam signal lamp production facility, and Nissan Automobile expansion.

The four remaining projects, now in the legal setup stage, are slated to start construction in the forthcoming time.

Besides, the investors of the 11 projects that received notices allowing for investment study at the Spring Conference 2019 are busy fulfilling procedures related to the planning, drawing environmental impact assessment, or organising auctions on land use right, as per existing regulations.

For each project, the Danang Department of Planning and Investment said that there have been specific proposals urging related authorised agencies to speed up the process of settling procedures in order to accelerate the progress of the projects which were signed at the Spring Conference 2019.

 
 
 
 
 
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