BUSINESS NEWS HEADLINES MARCH 10

Shrimp farmers anxious due to sluggishness in exports

BUSINESS NEWS HEADLINES MARCH 10

The export of shrimps is the advantage of provinces in the Mekong Delta. However, since the outbreak of the Covid-19, the export of shrimps has faced several challenges.

According to shrimp exporters in Ca Mau Province, after the lunar New Year, the price of material black tiger prawn was fairly stable. Black tiger prawn sized 20 pcs per kilogram fetched VND240,000-VND250,000 per kilogram. However, the price of white-leg shrimps tended to decline. Particularly, white-leg shrimps sized 100 pcs per kilogram were sold at VND90,000-VND92,000 per kilogram, a decrease of VND10,000-VND15,000 per kilogram. A decline in the price of shrimps worries farmers in the Mekong Delta. Last year, the price of material shrimps was at low levels for a long time, causing farmers to raise shrimps perfunctorily or halt shrimp farming.

Mr. Nguyen Van Phuc, a farmer in Vinh Trach Dong Commune in Bac Lieu City in Bac Lieu Province, said that just two weeks ago, the price of white-leg shrimps sized 100 pcs per kilogram was bought at above VND100,000 per kilogram by traders but now the price has dropped sharply. Although the current price level is not too low, if the price continues to decline further, farmers will suffer losses.

Ca Mau and Bac Lieu are the two leading provinces in shrimp exports in the Mekong Delta. According to the Department of Industry and Trade of Bac Lieu Province, in January this year, shrimp export turnover reached US$62 million, an increase of 9 percent over the same period last year. In Ca Mau Province, shrimp exports were estimated at $58 million in January this year, up 8 percent year-on-year. Mr. Tran Hoang Em, General Secretary of the Ca Mau Association of Seafood Exporters and Producers, said that the provincial total shrimp exports exceeded $1.15 billion last year, of which the Chinese market accounted for 6-7 percent, or $102 million. In January this year alone, seafood exports to this market reached $6.99 million. However, due to the Covid-19 outbreak, many Chinese importers have informed Vietnamese seafood exporters to suspend the delivery, making exports difficult.

Recently, the Department of Industry and Trade of Ca Mau Province visited six seafood export enterprises in the province to directly study their business situation. Enterprises said that the exporting of goods to China by road remains difficult. Enterprises that export by sea still operate normally and are not affected much. However, the purchasing power of Chinese partners weakened due to restrictions on circulating, receiving imported goods, transporting, and distributing goods for consumption.

According to the departments of industry and trade of provinces in the Mekong Delta, if the Covid-19 pandemic continues to prolong, it will affect strongly the Chinese market and spread to neighboring markets, badly influencing export enterprises, including the risk of being canceled orders as countries carry out measures to restrict travel and trade. Moreover, if enterprises reduce the purchase of material shrimps, shrimp-farming households will be affected, especially in terms of cost price.

The Department of Industry and Trade of Bac Lieu Province said that the department and relevant departments will collaborate in giving instructions for the development of production and supporting enterprises. The agricultural industry must ensure the production of material shrimps for processing for export, meet requirements on farming area, geographical indication, traceability, and hygiene in aquaculture. The production of material shrimps increases then the production of frozen processed shrimps will increase, the value of industrial production and export turnover will also climb. Besides, if the export of head-on frozen shrimps to the Australian market and other markets is carried out, export turnover will be improved.

In Ca Mau Province, Mr. Nguyen Viet Trung, Director of the Department of Trade Management under the provincial Department of Industry and Trade, said that the department will closely watch the developments of the Covid-19 outbreak to timely inform enterprises for them to make suitable plans and continue to cooperate with relevant industries to support export enterprises, especially in terms of capital. He said that the department encouraged enterprises to promote exporting to other markets, exploit new markets, and make use of the EU-Vietnam Free Trade Agreement that will become effective in the upcoming months. According to the free trade agreement, import tariffs of most material shrimps to the EU market will be reduced from 12-20 percent to zero percent right after the agreement takes effect. This will create advantages for the export of shrimps of Ca Mau and other provinces in the Mekong Delta.

Shinhan Bank offers free online money transfer

Shinhan Bank’s individual customers are being offered free domestic money transfer transactions via its internet banking and Mobile Banking SOL app from now until the end of April.

The bank’s digital banking service allows customers to make banking transactions easily and conveniently on their mobile phone anytime and anywhere.

Customers will be also offered free monthly management and maintenance fees, and an added incentive of one per cent in their online savings deposits.

Credit card payments are made through the bank's internet banking and Mobile Banking SOL app.

Online payments using QR codes through the bank’s Mobile Banking SOL app allows customers to make quick payments.

The bank also allows payment transactions via popular electronic wallets like Momo and GrabPay by Moca.

Hoa Phat’s February steel exports almost triple year-on-year

Hoa Phat Group, the largest steel maker in the country, exported over 40,000 tonnes of construction steel in February, almost tripling that of the same period last year.

Dramatic surge was seen in exports to Canada, which accounted for 54.4 percent of the total exports. It was followed by Thailand and Malaysia.

The company’s sales of construction steel last month hit 205,000 tonnes, bringing the total sales in the first two months of 2020 to 381,000 tonnes, including 69,000 tonnes exported.

The February steel sales in the southern region hit 54,810 tonnes while sales in the northern and central regions amounted over 86.5 tonnes and 23.9 tonnes, respectively.

Aside from finished products, the firm supplied 170,000 tonnes of high-quality billets to factories in Asia, including Thailand and Indonesia.

In April, the steel maker plans to test the hot-rolled coil (HRC) production line as part of the second phase of the Hoa Phat – Dung Quang steel integrated complex.

Hoa Phat Group exported more than 265,000 tonnes of construction steel in 2019, up 11.3 percent year on year, the multi-sectoral conglomerate reported.

Some of its foreign markets include the US, Australia, Canada, Japan, Cambodia, Malaysia, Laos, Thailand, Indonesia, Singapore, the Philippines and Brunei.

Among them, Cambodia was the largest, to which Hoa Phat shipped 151,000 tonnes of steel, accounting for over 50 percent of the total export volume.

It was followed by Japan (55,000 tonnes), Canada (20,000 tonnes), the US and Malaysia, which are all demanding markets, proving the competitiveness and quality of Hoa Phat steel in the global market, the group said.

For 2020, the multi-sector conglomerate aims to ship 400,000 tonnes of construction steel abroad, equivalent to nearly 10 percent of its sale target.

EVFTA offers market gap for national agricultural sector

Joining the Vietnam-EU Free Trade Agreement (EVFTA) is set to create favourable conditions for many of Vietnam’s advantageous items, such as agricultural products, to make inroads into the EU market.

Following the EVFTA’s recent ratification by the European Parliament, Vietnam has become the first developing country in the Asia-Pacific region to enjoy free trade relations with the EU.

Many experts believe that the trade pact will ultimately serve to eliminate over 99 per cent of tariff lines, thus creating optimal conditions for the country's advantageous exports, particularly agricultural products, to penetrate the highly lucrative market.

The EVFTA is therefore expected to facilitate the country’s access to the world's leading market in terms of size, technology, and financial potential.

Due to the EU being a market that maintains high standards, both local businesses and the national economy will be forced to strive to reach some of the highest standards in the world in terms of trade and investment in order to gain access to the market.

Moreover, the EVFTA is also expected to allow the country to restructure its import and export activities whilst simultaneously avoiding becoming reliant on traditional markets.

Nguyen Do Anh Tuan, director of the Department of International Cooperation in the Ministry of Agriculture and Rural Development, said the EU represents a huge market that has the world's fourth largest GDP and annually imports agricultural products that reach approximately US$150 billion.

At present, the nation’s agricultural exports rake in over US$40 billion each year globally with exports to the EU making up only US$5 billion of the overall figure.

With the country poised to enjoy immediate tariff cuts right after the EVFTA comes into effect, especially with regard to tariff reduction on agricultural processed products, there will be plenty of opportunities for local goods to enjoy competitive prices whilst exporting to the EU market.

Tuan went on to emphasis that the average income of European citizens remains high, whilst they are also willing to pay a higher price for high-quality products.

This will help to speed up restructuring within the agricultural sector in order to put a greater focus on items with a higher value and quality while ensuring sustainable development for the industry, he noted.

The EU is also one of the most stringent markets when it comes to agricultural products, with a number of strict requirements in place such as on antibiotic residues and pesticides relating to these products. If local businesses are able to meet these conditions, their agricultural products will not only enter the EU but also other markets globally.

Experts stated that there is a need to review overall technical standards and improve the industry’s capacity to meet the requirements set by high-end markets such as the EU.

Vu Tien Loc, Chairman of Vietnam Chamber of Commerce and Industry, assessed that to take advantage of the EVFTA's opportunities, the most important issues are to improve the competitiveness of local goods and accelerate institutional reform.

Loc proposed that government agencies focus on building institutions that aim to facilitate the operation of firms, while businesses should focus on enhancing their own competitiveness, renovating business models, and devising long-term business strategies towards sustainable development.

CapitaLand achieves growth of 21 per cent in PATMI

CapitaLand Limited has achieved a total profit after tax and minority interests (PATMI) of over S$2.1 billion (US$1.5 billion) in fiscal year 2019, 21.2 per cent higher than that of last year.

Operating PATMI was S$1.1 billion ($793 million), a record high for the group, it said.

The group attributed the good results to Ascendas-Singbridge (ASB) businesses, assets acquired in fiscal year 2018, and assets that turned operational in fiscal year 2019.

For the last quarter of 2019, PATMI was S$926.6 million ($688 million), a year-on-year increase of 94.8 per cent. The increase was mainly due to better operating performance, higher gains from asset recycling and revaluation of investment properties.

Revenue for the last quarter of 2019 grew by 46.3 per cent to S$2.4 billion ($1.7 million), mainly due to the consolidation of ASB and Raffles City Chongqing as well as higher contributions from Singapore and China malls and lodging properties in the USA.

The residential developments contributing to revenue in the quarter were Raffles City Residences in Chongqing, Vermont Hills in Beijing and Parc Botanica in Chengdu, China, as well as Marine Blue in Singapore.

The group said the sudden outbreak of COVID-19 has affected their businesses and those of their partners and tenants, especially in China and Singapore.

“The extent of the impact will depend on how long the outbreak lasts. Nevertheless, we remain positive on the long-term fundamentals for Singapore and China. Our priority is to ensure the well-being of our staff, tenants and patrons.

At the same time, we will proactively manage our business, including giving targeted relief measures to tenants and contributing to efforts to help the community and medical staff dealing with COVID-19. CapitaLand will fight and ride though this difficult period together with our stakeholders,” said Lee Chee Koon, Group CEO of CapitaLand Group.

As a show of solidarity with its stakeholders, board members and senior management will take a reduction in their board fee and base salary, from 5 per cent to 15 per cent effective from April 1, 2020.

The group has also imposed a wage freeze for all staff at managerial level and above. These measures will be reviewed after six months or when the position arising from the COVID-19 outbreak has stabilised.

CapitaLand Limited (CapitaLand) is one of Asia’s largest diversified real estate groups.

Senegal a potential market for Vietnamese rice

Việt Nam this year would have opportunities to continue increasing rice exports to Senegal, as well as Africa as a whole, due to high demand from those markets, the Việt Nam Trade Office in Algeria said.

This year, Senegal's demand for imported rice is forecasted to be high because people are storing more food, including rice, during the serious outbreak of locusts in East Africa – which has destroyed crops – and the novel coronavirus epidemic, it said.

According to the US Department of Agriculture, Africa's rice demand in 2020 is estimated at 15.7 million tonnes. Of which, Senegal may have to import 1.3 million tonnes, it said.

In 2019, Việt Nam had strong growth in rice exports to Senegal compared to 2018, the trade office said. The exports reached 96,665 tonnes of rice, earning US$32.6 million, up 13 times in volume and 10.2 times in value year on year.

In this market, Vietnamese rice has to compete with rice from India, Pakistan, Thailand, China, Brazil, Argentina, Uruguay, the US, Malaysia and Cambodia.

It has also noted that according to the United Nations Food and Agriculture Organisation (FAO), Senegal in 2019 imported about 1.5 million tonnes of rice, an increase of 15 per cent compared to 2018 due to low rice supply in the domestic market.

About 90 per cent of rice imports to Senegal are broken rice. Senegalese people prefer broken rice due to its low cost, according to the trade office.

Deutsche Bank invests to support cross-border trade in Vietnam

Deutsche Bank has just announced making further investments into Vietnam to support higher trade flows from Europe, which are expected to increase following the recently ratified EU-Vietnam Free Trade Agreement (EVFTA).

Vietnam is already a significant trade partner for Germany, with annual trade of around €14 billion ($15.6 billion)as the second-largest trade partner in the ASEAN. Deutsche Bank research shows that foreign direct investment (FDI) into Vietnam has doubled in the past five years.

Deutsche Bank Vietnam chief country officer Hans-Dieter Holtzmann said, “The rise in FDI can be attributed to more foreign companies investing in supply chains in Vietnam to support intra-Asian trade. With supply chains facilitating more trade, we are clearly seeing more demand for both inbound and outbound Vietnamese Dong currency payments.”

As a result, the bank is investing in enhancing the digital capabilities of its award-winning FX platforms to cater for the higher demand for local currency settlement. Late last year, Deutsche Bank added the restricted Vietnamese Dong to its FX4Cash platform, which offers more than 130 currency pairs globally.

“More corporate clients are choosing to settle payments in local VND rather than USD to better manage the costs of currency conversion, but this also requires local currency risk management,” he added.

As more clients trade and settle in local currency, there is also a greater demand for hedging currency exposure. The development of Vietnam’s Non-Deliverables Forward (NDF) market is providing clients with an avenue to hedge their VND exposure.

“This year we are seeing more liquidity in the NDF market, so we are expanding our VND Deliverable and Non-Deliverable Forward capabilities on our Autobahn platform. This will allow our onshore and offshore clients to hedge their local currency exposure,” Holtzmann added.

In addition to introducing its enhanced FX platform, the bank is also extending FX API technology to local clients who will be able to connect their own direct sales e-commerce infrastructure to the bank’s platform, while being supported with pre- and post-trade activities.

Globally, Deutsche Bank most often sees API used by clients to expand their own B2B and B2C sales offering by introducing a wider range of currencies for online transactions. This solution gives end customers more choice around payment currencies to hedge against currency movements.

Deutsche Bank has been operating in Vietnam since 1992, providing banking and financing solutions to multinationals, large local corporates, and financial institutions, ranging from cash management and FX to custody and trade finance.

F&N snaps up six million Vinamilk shares after numerous failed attempts

F&N Dairy Investment Pte., Ltd. has recently announced the successful purchase of six million shares of Vinamilk (VNM), raising its ownership to over 307.5 million shares, equivalent to 17.65 per cent.

Two foreign funds, Platinum Victory Pte., Ltd. and F&N Dairy Investments, have repeatedly registered to buy Vinamilk shares despite failing multiple times. At the latest successful transaction, F&N Dairy Investments has completed the purchase of 6.6 million shares of Vinamilk in March 2018. Meanwhile, Platinum Victory Pte., Ltd. successfully purchased only 130,000 shares in July 2018.

F&N Dairy Investments is a subsidiary of Fraser & Neave Limited (F&N), a food and beverage, publishing, and former brewing and property conglomerate in Singapore held by Thai billionaire Charoen Sirivadhanabhakdi. F&N Dairy Investments has been a major shareholder of Vinamilk since the dairy firm was equitised in 2005.

After several attempts to increase its ownership, F&N Dairy Investments currently holds 307.5 million shares (17.65 per cent) of Vinamilk. The foreign fund is the second-largest stakeholder of Vinamilk behind State Capital Investment Corporation, which owns a 36 per cent stake at Vinamilk.

Singapore-based Platinum Victory, the subsidiary of Hong Kong-based Jardine Matheson, likewise, has become a major shareholder of Vinamilk after SCIC's auction in November 2017. After years of continuously purchasing Vinamilk shares, the fund has increased its ownership to 10.62 per cent or 184.9 million shares.

Other than these two major shareholders, many special investment funds like Mathews, Genesis Group, Deutsche Bank, Vietnam Ventures, the Government of Singapore, Dragon Capital, and Morgan Stanley all hold stakes in Vinamilk.

Vinamilk posted VND56.32 trillion ($2.45 billion) in revenue and VND10.55 trillion ($458.7 million) in after-tax profit in 2019, up 7 and 3.4 per cent against 2018. After-tax profit for shareholders of the parent company increased by 3.5 per cent to VND10.58 trillion ($460 million), which equals to an earning per share of about VND5,470 (24 US Cents).

Tiki in trouble for selling shoddy goods

Tiki, the most prestigious e-commerce platform in Vietnam, has gotten into trouble for selling low-quality goods and came under wide criticism for its poor customer service, according to Vietnam Investment Review.

A customer named Kim Anh most recently uploaded an article on Vietnam Business Insider about her disappointing experience shopping on Tiki. On last November 18, she bought a Macbook Pro 2017 from the Tiki Trading channel. However, the laptop delivered showed signs of errors such as quickly running out of battery (instead of the 10-12 hours cited by Apple) or overheating in one or two hours. This brought into question Tiki’s pledge of only selling authenticated goods.

She also contacted the e-commerce firm’s customer service for help and was directed to reset the device, which did not fix the issues. On last December 9, a Tiki staff took the laptop for repair. 37 days later (January 14, 2020), Tiki returned her laptop but she could not log in because it was logged with the account of the maintenance staff and forgot to log out before returning it to the customer.

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Moreover, Tiki previously committed to taking back any good within 21 days. However, after 37 days, the company returned her a device that still did not work. What makes her even more disappointed is that Tiki has ignored fixing the laptop although she repeatedly called them to check on progress.

For now, Tiki has issued no comment on the problem. In contrast to Shopee and Lazada whose platforms are known to be inundated by low-quality and fake goods, Tiki has built up trust with customers during the past 10 years by ensuring that only authenticated items are traded on its platform.

Tiki is one of the Big 4 in the local e-commerce market with the value assessment of VND1 trillion ($43.48 million). The firm also raised capital in June and December last year. The two main shareholders are VNG with 24.6 per cent and JD.com with 21 per cent of the shares. Others include Ubiquitous Traders Pte., Ltd. (nearly 9 per cent), CyberAgent, STIC, and Sumitomo.

Central coast ventures light up

In the midst of the COVID-19 outbreak, the vitality of Vietnam’s central region is intensifying with tourism hotspots attracting massive investment as the multitude of infrastructure and entertainment projects

As the whole world is focused on the fight against COVID-19, in Vietnam, the central region’s actions have been praised by the World Health Organization. With the country working hard to prevent the spread of the virus, it has proved to be a safe destination for domestic and international tourists, and a good environment for investors. Although many tours have been cancelled and resorts suffer from a lack of visitors, investors and experts in the sector claim the region’s effective prevention measures to date ensure that it remains an excellent tourist destination.

 

Le Tri Thanh, Chairman of Quang Nam People’s Committee, spoke about how the province has circulated information on the best methods for disease prevention in the locality, in order to ensure the highest level of protection for tourists and residents. Furthermore, the People’s Committee is also supporting investors and businesses to overcome difficulties and to create the best conditions for ongoing projects.

According to Thanh, the local economy, including tourism, the automobile industry, agriculture, consumer goods, and real estate could take a hit in the current situation. Nevertheless, overall the local economy is becoming more stable, with Truong Hai automobile factory operating as normal, and high-tech agriculture and real estate projects being implemented on schedule.

For example, Hoiana Casino Resort Complex is urgently completing its first phase, with plans to launch in the second quarter of 2020. The first phase includes a casino with 140 tables and over 300 slot machines, a hotel complex of more than 1,000 rooms, and an 18-hole golf course. Work on the Hoiana project began in 2010, with the total investment of $4 billion, deployed on an area of nearly 1,000 hectares in seven stages over a 13-year period.

Danang is also host to a number of ongoing projects, such as the Sunshine aerospace components factory, led by Universal Alloy Corporation. The factory, located in Danang Hi-tech Park, started construction in March 2019, with the total investment capital of $170 million. It is expected to provide aircraft fuselage parts and engine parts for Rolls Royce, and is set to commence production and business activities next month.

The 5-star/$100 million Mikazuki Spa & Hotel Resort project in Danang’s Xuan Thieu tourist area led by Japan’s Mikazuki JSC is also on track to open its doors in April. The entertainment area fits the criteria of the city’s tourism development strategy, as well as spearheading the development of Danang’s northwestern coastal area. This area is also home to Aria Danang, conceived by Hanoi Non Nuoc Tourism Investment JSC in conjunction with Danh Khoi Real Estate JSC whose 95 per cent stake is owned by property firm NetLand. The hotel and resort covers an area of 7.5ha, with 28 villas on Non Nuoc Beach and four 5-star condotel apartment towers. Work on the foundations is expected to be completed on schedule in the second quarter of 2020.

In terms of infrastructure, the Hai Van II road tunnel project, invested by Deo Ca Investment Group JSC with the total investment capital of VND5 trillion ($217.4 million), is expected to be inaugurated in September.

In Quy Nhon city of Binh Dinh province, TMS Luxury Hotel Quy Nhon Beach has a scale of 2,600 square metres, designed with 42 floors (40 floors and two basements). Currently, the main investor TMS Group is rushing to complete and hand over to customers in the shortest time possible. TMS Luxury Hotel Quy Nhon Beach is a 5-star utility system with 700 hotel rooms and luxury apartments, and four floors including a commercial centre, swimming pool, sky bar, gym, restaurant, supermarket, Scots English School, Kid-zone entertainment area, and a high-quality general clinic.

Meanwhile, in Tuy Hoa city of Phu Yen province, a great deal of work is being carried out. This includes Apec Mandala Wyndham Phu Yen, a complex of hotel apartments and high-class commercial centres, invested by APEC Group. The project is built on 5,500sq.m of land, with a total floor area of over 73,000sq.m.

The work includes a basement and 27 storeys, and is expected to be completed within 390 days and put into use in 2021. Apec Mandala Wyndham Phu Yen will provide 1,055 hotel apartments, solving the problem of high-class accommodation and entertainment in Phu Yen, changing the face of the resort real estate market, and promoting the tourism potential of Phu Yen.

In addition, Tuy Hoa also has many other schemes in progress, such as the Tien Dung Hotel complex, the Dat Xanh Mien Trung Group’s premium shophouses on the Hung Vuong-Tuy Hoa route, and the VietBeach luxury resort.

Sotrans approves full takeover by ITL Corporation

South Logistics JSC (Sotrans – HOSE: STG) has submitted a proposal to allow Indo Trans Logistics Corporation (ITL Corporation) to increase its ownership at the company to 100 per cent without making a

If the transaction is carried out according to plan, ITL will make a complete takeover of Sotrans. As of present, ITL is holding over 41 million shares or 41.78 per cent of Sotrans’ charter capital.

Under the proposal, Sotrans has approved ITL to increase its ownership to 100 per cent of the total voting shares of STG without making a mandatory public offering in line with Vietnamese regulations.

Accordingly, ITL will purchase STG stakes from existing shareholders or increase its ownership in companies holding a stake in STG.

According to its 2019 financial statement, Sotrans has generated over VND1.8 trillion ($78.26 million) in revenue and VND122.6 billion ($5.33 million) in after-tax profit, down 22.2 per cent against 2018.

Sotrans’ returns on asset and returns on equity are lower than other transport and logistics firms like Gemadept, Viettel Post, and Transimex.

Beside ITL, Vietnam Electrical Equipment JSC (GELEX) is another major stakeholder holding a 54.78 per cent stake in Sotrans. By owning a controlling stake in the company, GELEX has extended its reach to the logistics industry beyond its core electricity business.

In 2016-2017, Gelex and ITL have been vying for the acquisition of Sotrans, following State Capital Investment Corporation's (SCIC) move to offload its entire 47.8 per cent at Sotrans in 2015. With Sotrans’ latest proposal, ITL is expected to become the winner of the race.

Chief operating officer of ITL, Amanda Rasmussen, told VIR that the firm will invest an additional $70 million in 2020. "The investment will further strengthen our position as a leading player in Vietnam and Indochina through further mergers and acquisitions and asset development."

ITL is also aiming to become the national champion – the leading logistics company of Vietnam and the region – as well as a $500 million company in the next two years.

Central city to train students in aviation engineering

The central city’s Technology Science College under the Đà Nẵng University has started the first training course for aviation engineering in the central and Central Highlands region, supplying human resources for the manufacturing of components in the near future.

The college said the first course plans to train at least 50 students following orders from Universal Alloy Corporation (UAC), a US company that invested US$170 million in building the first aircraft components factory in Việt Nam.

It said UAC will send experts to participate in the training course.

According to the college, the four-year training course would supply enough qualified workers, meeting businesses' standards in the coming years.

A source from UAC said it would employ 650 engineers in 2021 for the first stage of investment, and 1,000 workers and engineers in 2023.

UAC has been building the factory on 1.67ha at the city’s Hi-Tech Park in two phases of investment in 2019-26.

The factory will produce 4,000 aircraft components out of five million pieces of equipment for aerospace companies such as Boeing, Airbus, Embraer, and Bombardier.

Another college in the city – Đông Á College – will also train high-quality human resources for markets in Japan, Germany, Singapore and Taiwan.

A Nissan factory in Osaka, Japan plans to recruit trained workers from central Việt Nam for factories in Japan.

Đà Nẵng university, which has developed 12 college-level education centres in the last 20 years, trains 90,000 students in technology, engineering, science, economics, trade, finance, foreign languages, medicine, culture, tourism and media studies per year.

Latest G-bond auction raises over 216 million USD

The State Treasury has raised 5 trillion VND (216.4 million USD) worth of Government bonds at a recent auction held by the Hanoi Stock Exchange.

Accordingly, the State Treasury offered G-bonds of four maturities – seven years (500 billion VND), and 15 years, 20 years and 30 years with 1.5 trillion VND each.

Interest rates of all terms reported decreases, ranging from 0.11-0.37 percent a year.

Specifically, 500 billion VND worth of seven-year bonds was mobilised with an annual interest rate of 2 percent, down 0.24 percent from the auction on February 19.

A total of 1.5 trillion VND was raised from 15-year bonds with an annual interest rate of 2.51 percent, down 0.37 percent from the February 26 auction. Meanwhile, another 1.5 trillion VND was collected via 20-year bonds, with a yield rate of 2.98 percent, 0.11 percent lower than that in the February 19 session.

The State Treasury also raised 1.5 trillion VND worth of 30-year bonds with an annual interest rate of 3.25 percent, down 0.3 percent from the February 26 auction.

So far this year, the State Treasury has mobilised 28.26 trillion VND (1.22 billion USD) from G-bond auctions on the HNX./.

Tourism staff in Danang left unemployed due to coronavirus

Up to around 23,000 people in the central city of Danang's tourism sector have been temporarily laid off due to SARS-CoV-2.

According to the Danang Tourism Association, these are among the 35,000 people from 800 local travel firms.

Since the SARS-CoV-2 outbreak, the number of foreign visitors, particularly those from China, South Korea and ASEAN markets to Danang have drastically dropped.

The Danang Department of Tourism reported that Danang's tourism sector have faced losses of more than VND700 billion (USD30.43 million) so far this year because of SARS-CoV-2.

Ho Nguyen Phuong Chi, chairman of Danang Hotel Association, said travel firms need to take advantage of this time to provide training courses for their staff.
The association will co-operate with the municipal Department of Tourism and the Federation of Labour to organise two intensive training courses for hotels in the city in March.

Many other localities such as Nha Trang and Hanoi have also been severely hit by SARS-CoV-2.

The Vietnamese tourism sector could face USD7.7 billion in losses over the next three months due to SARS-CoV-2, said Ngo Hoai Chung, deputy head of Vietnam National Administration of Tourism.

EVFTA offers market gap for national agricultural sector

Joining the Vietnam-EU Free Trade Agreement (EVFTA) is set to create favourable conditions for many of Vietnam’s advantageous items, such as agricultural products, to make inroads into the EU market.

Following the EVFTA’s recent ratification by the European Parliament, Vietnam has become the first developing country in the Asia-Pacific region to enjoy free trade relations with the EU.

Many experts believe that the trade pact will ultimately serve to eliminate over 99 per cent of tariff lines, thus creating optimal conditions for the country's advantageous exports, particularly agricultural products, to penetrate the highly lucrative market.

The EVFTA is therefore expected to facilitate the country’s access to the world's leading market in terms of size, technology, and financial potential.

Due to the EU being a market that maintains high standards, both local businesses and the national economy will be forced to strive to reach some of the highest standards in the world in terms of trade and investment in order to gain access to the market.

Moreover, the EVFTA is also expected to allow the country to restructure its import and export activities whilst simultaneously avoiding becoming reliant on traditional markets.

Nguyen Do Anh Tuan, director of the Department of International Cooperation in the Ministry of Agriculture and Rural Development, said the EU represents a huge market that has the world's fourth largest GDP and annually imports agricultural products that reach approximately US$150 billion.

At present, the nation’s agricultural exports rake in over US$40 billion each year globally with exports to the EU making up only US$5 billion of the overall figure.

With the country poised to enjoy immediate tariff cuts right after the EVFTA comes into effect, especially with regard to tariff reduction on agricultural processed products, there will be plenty of opportunities for local goods to enjoy competitive prices whilst exporting to the EU market.

Tuan went on to emphasis that the average income of European citizens remains high, whilst they are also willing to pay a higher price for high-quality products.

This will help to speed up restructuring within the agricultural sector in order to put a greater focus on items with a higher value and quality while ensuring sustainable development for the industry, he noted.

The EU is also one of the most stringent markets when it comes to agricultural products, with a number of strict requirements in place such as on antibiotic residues and pesticides relating to these products. If local businesses are able to meet these conditions, their agricultural products will not only enter the EU but also other markets globally.

Experts stated that there is a need to review overall technical standards and improve the industry’s capacity to meet the requirements set by high-end markets such as the EU.

Vu Tien Loc, Chairman of Vietnam Chamber of Commerce and Industry, assessed that to take advantage of the EVFTA's opportunities, the most important issues are to improve the competitiveness of local goods and accelerate institutional reform.

Loc proposed that government agencies focus on building institutions that aim to facilitate the operation of firms, while businesses should focus on enhancing their own competitiveness, renovating business models, and devising long-term business strategies towards sustainable development.

Vietnam adopts plan for sustainable development of marine economy

The government has issued a resolution on an overall plan for the sustainable development of Vietnam’s marine economy until 2030, with a view to 2045.

Tourism features prominently in the plan, with investment to be made to improve infrastructure in key regions so as to boost tourism in coastal areas and islands.

Under the resolution, all economic sectors are encouraged to form large-scale tourism complexes, with shopping centres and high-quality entertainment services, as well as to promote eco-tourism and community-based tourism.

New travel routes to remote islands and waters will also be piloted.

Seaports will be developed to meet the country’s modernisation and industrialisation needs and to make Vietnam capable of competing with regional countries in port activities.

As part of the plan, Vietnam will continue to prospect for minerals, oil and gas and non-conventional hydrocarbon resources while enhancing extraction efficiency and protecting the environment and marine biodiversity.

Attention will be paid to coastal aquaculture using advanced technology and measures will be taken to reduce destructive fishing activities and promote offshore fishing aligned with protecting fish resources.

In addition, programmes will be implemented to cope with natural disasters, climate change and sea level rise while sea animal rescue centres will be established at several marine nature reserves.

The overall plan also includes measures to enhance the living standards of residents in coastal areas, and to protect coastal cultural festivals and places of interest.

Diversifying wood export market to reduce risk

Vietnam’s wood export revenue is forecast to rise 20% in 2020. However, the industry cannot avoid the impacts of the recent epidemic, necessitating efforts to diversify its export markets.

The Covid-19 epidemic has been directly affecting the exports of a number of industries in Vietnam during the opening months of 2020. The wood industry is one of the rare industries that has not significantly suffered due to the epidemic.

Founder and Chairman of Global Integration Business Consultants Company (GIBC), Pham Phu Ngoc Trai, said that Vietnam's ability regarding handicrafts production and wood processing has been recognised worldwide. The proof is that "Made in Vietnam" furniture is available all over the world, even in the most high-grade sectors. Vietnamese wood producers have also participated in providing products for international-standard constructions.

Vietnamese wood products have become increasingly popular and brand affirmed. Statistics from the Vietnam Timber and Forest Product Association (VIFORES) show that the wood industry has not been negatively affected by the Covid-19 epidemic as its export revenue reached US$15.3 billion in the first two months of this year, an increase of about 10.1% over the same period last year. Many wood enterprises believe that the growth of wood exports will reach 20% by the year’s end.

Despite the US-China trade war in 2019, the Vietnam’s wood industry still grew by 22% in 2019 and achieved an export turnover of about US$11.2 billion. Although the world economy has suffered from the negative effects of the Covid-19 epidemic in early 2020, the Vietnamese wood industry is a rare example of one that has not been heavily impacted, even enjoying some benefits from the former..

Chairman of Binh Duong Province Timber Association Dien Quang Hiep said that since the beginning of the year, many factories in China have stopped working to limit the spread of disease. Therefore, the orders for wooden products have poured into other countries, including Vietnam, helping to increase export turnover.

Meanwhile, Vietnam’s domestic wood production mainly uses domestically-produced materials and the shortage of wood is imported from other countries such as the US, Canada and Africa.

In terms of wood exports, Vietnam's main destination markets are the EU, the US and Japan, so the impact of the epidemic is insignificant. In addition, Vietnam has participated in a number of new-generation free trade agreements (FTAs). The EU-Vietnam FTA (EVFTA) has been ratified by the European Parliament and is expected to take effect this year, which will create further opportunity for the Vietnamese wood industry to grow as taxes imposed on Vietnamese wood products exported to the EU will be gradually reduced to 0%.

Although the wood industry has yet to be affected by the Covid-19 epidemic, 2020 is still considered a turbulent year for the industry. Chairman of the VIFORES Do Xuan Lap said that woodchips are the most important wood products exported from Vietnam to China, with a turnover of US$972.2 million in 2019, accounting for 79,2% of total export turnover of all Vietnamese wood products exported to China.

The Covid-19 epidemic has caused Chinese paper and pulp companies to cease operations or reduce their scale, making it difficult for Vietnamese woodchips exporters in this market. Therefore, market diversification is necessary to reduce risk.

Chairman of the Board of Directors of Woodsland JSC Vu Hai Bang, said that the biggest impact of the Covid-19 epidemic is related to the supply of some raw materials from Chinese suppliers like accessories or surface coating materials (paint). Paint accounts for 7% of the cost of a product but without it, the entire batch of wood products is affected. The disruption of supply will also greatly harm producers.

Wood export has remained one of the focuses of the Vietnamese wood industry. Experts say that the wood industry not only aims to grow by 20% in 2020, but also looks towards stable and sustainable development.

Therefore, businesses and management agencies need to grasp the needs and tastes of export markets, as well as studying potential incidents in the future in order to develop reasonable strategies. Identifying, controlling and eliminating risk is a vital condition for the industry, particularly in established markets with high requirements regarding product legality and sustainability.

Management agencies and enterprises in the industry have been developing many mechanisms, policies and solutions to minimize risk. To Xuan Phuc, an expert from Forest Trends, said that information about the industry should be accurate and transparent, reflecting the actual picture of the industry. This will support decision-making and balance priorities, in order to foster sustainable development in the future.

Attending trade promotion events is also a way to diversify the export market for Vietnamese wood products. Deputy Director of the Trade Promotion Department (Ministry of Industry and Trade), Bui Thi Thanh An, said that the organizer of the Las Vegas furniture fair in the US has sent an open letter to invite Vietnamese timber suppliers to participate in the fair in July 2020.

At the same time, they suggested that the Trade Promotion Department will work with Furniture Today Magazine to promote the Vietnamese furniture brand in the US. US wood buyers are seeking other sources to gradually replace the Chinese market share as Chinese wood products are being subjected to high taxes together with the various impacts of the Covid-19 epidemic. This is a good opportunity for Vietnamese businesses to participate in advertising to and approaching customers in the US, one of the largest markets of Vietnamese wood products, helping thereby to diversify the market and connect with more potential customers.

 
 

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