BUSINESS NEWS HEADLINES MARCH 4

Pilot scheme for ride-hailing services to officially stop on April 1

BUSINESS NEWS HEADLINES MARCH 4

The Ministry of Transport has issued a decision to end the pilot programme for the application of technology in managing and connecting electronic contract-based passenger transportation from April 1.

The pilot programme on ride-hailing services will officially end after more than two years of implementation. The services will comply with the new regulations stipulated in Decree No.10/2020/ND-CP, replacing Decree No.86/2014/ND-CP.

The new Decree 10, which comes into effect on April 1, stipulates that all firms operating in passenger transportation with cars of fewer than nine seats using ride-hailing applications are to be treated as taxi firms.

According to the MoT, the pilot programme will be suspended to make sure it does not clash with Decree 10. Moreover, the ministry claimed this is a necessary move to control the boom of ride-hailing firms, which are making traffic management increasingly difficult.

The MoT requested municipal Departments of Transport in these cities to inform all ride hailing firms, transport co-operatives, and drivers participating in the pilot programme of its termination.

Furthermore, according to Decree No.10/2020/ND-CP issued by the Prime Minister on January 17, which will also come into effect on April 1, all ride-hailing vehicles have to affix “taxi” signs to the top of their vehicles or taxi badges made of reflective materials on their front and rear windshields.

In case passenger cars with less than nine seats have been given a badge for transportation service before April 1, 2020, they will have to reapply for a new badge and have it installed at the required position before July 1, 2021.

Since the implementation of the pilot programme, Vietnam has become a battleground for local ride-hailing firms like Fastgo, Aber, Vato, Be, and Southeast Asian unicorns Grab and Go-Jek (locally Go-Viet). In particular, Grab has become a heavyweight player in the market, putting pressure on traditional firms.

In June 2017, Vinasun had filed a lawsuit against Grab, claiming that the latter’s illegal activities have caused a slump in its earnings. The prolonged court case between Vinasun and Grab reflects the new competition between traditional taxi operators and ride-hailing firms in Vietnam.

Reacting to the transformed competitive environment, eight traditional taxi companies also launched their own software such as V.Car, Thanh Cong Car, Vic.Car, HomeCar, Mai Linh Car, LB.Car, and Emddi-Phuc Xuyen.

Yeah1 sells six million stocks to undisclosed strategic partner

Yeah1 stocks (HSX: YEG) produced a minuscule rise after the company chairman and general director sold six million shares to an unnamed strategic partner for VND300 billion ($13 million).

Yeah1 (HSX: YEG) closed the afternoon session on February 12 at VND50,200 ($2.18), up VND200 (0.9 US cent) against the previous session. The rise took place after Yeah1 chairman Nguyen Anh Nhuong Tong and general director Dao Phuc Tri sold more than six million stocks for VND50,000 ($2.17) per share. The amount included Tong’s 5.05 million and Tri’s one million shares.

As a result, their ownership rates in Yeah1 Group have narrowed to 30.3 per cent, followed by Ancla Assets Ltd. (10.93 per cent) and venture investment fund DFJ VinaCapital Venture (9.74 per cent).

According to Yeah1, the shares were picked up by its new strategic partners, however, the firm refused to disclose names.

Yeah1 held up by plunging stockYeah1 acquires MediaOne despite consecutive quarterly lossesYeah1 suffers sizeable losses from break up with YouTube
Yeah1 reported VND435 billion ($18.9 million) of revenue in the fourth quarter of 2019, down 32 per cent on-year. Notably, the spike in management costs and the $3.6 million provision resulted in losses of nearly VND158 billion ($6.87 million) in the quarter.

For the whole year, Yeah1 made VND1.449 trillion ($63 million) in revenue and VND372 billion ($16.17 million) in losses.

YEG recently approved the plan of developing frameworks for celebrities, which includes establishing Your Entertainment Platform JSC (YEP) and Super Star Yeah1 JSC (YSS) both worth VND14 billion ($608,700) each. Yeah1’s ownership rates in the two subsidiaries are 99.98 and 50.98 per cent, respectively.

US companies running short on materials during COVID-19 outbreak

The biggest challenges for US companies are securing alternative materials/goods supplies, along with inventory management, according to a recent survey by AmCham Hanoi.

The survey pointed out that over 50 per cent of responding members from the manufacturing sector are experiencing difficulties in sourcing supplies/materials due to disruptions from the COVID-19 outbreak and 35 per cent of respondents say that current supply chain disruptions are already seriously impacting their company’s global operations.

In addition, some companies are not operating at full capacity right now but most members in the manufacturing sector are hopeful that they will be operating near full capacity within two weeks.

Most members say it is too early to gauge the impacts of the coronavirus on their estimated 2020 revenues. However, of companies that are able to estimate the impact, 70 per cent say the coronavirus is expected to reduce their revenue by 10 per cent or less this year.

It is worth noting that one-quarter of respondents think Vietnam’s GDP will drop by more than 1.5 per cent due to the coronavirus. One quarter expect little or no change in GDP. The remaining half are somewhere in the middle.

In addition to concerns related to revenue and materials, US companies are also experiencing difficulties in getting people to come to Vietnam from abroad. Since the COVID-19 outbreak, 60 per cent of companies responding now allow staff to work from home and almost all members offer hand sanitiser in the workplace. Almost 80 per cent of member firms have cancelled or postponed meetings or events due to concerns over the COVID-19 outbreak.

Japanese confectionary giant Morinaga unlocks Vietnamese market

Japanese snack, confectionary, and ice-cream giant Morinaga & Co., the owner of iconic brands Hi-Chew and Dars Chocolate, has decided to expand its presence to Vietnam, one of its key markets in Southeast Asia.

Morinaga has linked up with DKSH’s Consumer Goods Business Unit to help its expansion to Vietnam and reinforce their existing partnership in Asia to the country.

According to the agreement, DKSH will be the enabler to further unlock Morinaga's potential in Vietnam and ensure regional coverage through the strategic expertise of the local teams.

The key objective of the collaboration is to drive Morinaga’s growth in the confectionery category, leveraging DKSH’s strong position in the rising convenience stores (CVS) channel, achieve comprehensive coverage in modern trade and deep capillary distribution in traditional trade. Besides a strong focus on coverage expansion for Morinaga, DKSH will pay special attention to increasing Hi-Chew and Dars Chocolate’s visibility across all channels and the whole region.

Terry Seremetis, head of the Consumer Goods Business Unit, commented, “We are thrilled to expand our regional collaboration with Morinaga to Vietnam. This extension is another true testament to our strength in this key market. Furthermore, adding Hi-Chew and Dars Chocolate to our brand portfolio will help us keep driving the distribution of confectionery amongst Vietnamese households.

Established in 1899 and listed in the First Section of the Tokyo Stock Exchange, Morinaga is one of the big Western confectionery manufactures in Japan. It consists of business activities of the manufacturing, purchase, and sales of confectioneries, food, frozen desserts, and health products. Morinaga generates consolidated net sales of ¥205 billion ($1.86 billion) and operating income of ¥20 billion ($182.2 million) in 2018.

Vietnam has massive potential in this sector, with major players in the market including Orion Food Vina, Vinamilk, PepsiCo Vietnam, Mondelez Kinh Do, and Bien Hoa Confectionery Corp.

According to figures from Statista.com, revenue in the ice-cream segment is expected to reach $74 million in 2019, with the compound annual growth rate (CAGR) of 7.4 per cent in 2019-2023.

Regarding the snack segment, according to a recent study by Kantar Worldpanel, which deals in consumer knowledge and insights based on continuous consumer panels, the Vietnamese snack market – which was valued at $518 million in 2015 – is expected to grow to $1 billion by 2020. The FMCG market in Vietnam is predicted to grow at a compound annual growth rate (CAGR) of 5-6 per cent by 2020.

To win over Vietnamese consumers, local and foreign brands need to understand local consumer behaviour and preferences to stay abreast of the latest trends, which include health and nutrition and indulgence, by offering new products and new tastes and flavours.

Global LNG market sees demand build for cleaner-burning energy

Global demand for liquefied natural gas (LNG) grew by 12.5 per cent to 359 million tonnes in 2019, according to Shell’s latest annual LNG Outlook, a significant increase that bolsters LNG’s growing role in the transition to a lower-carbon energy system.

Natural gas emits 45-55 per cent less greenhouse gases and less than one-tenth of the air pollutants than coal when used to generate electricity.

“The global LNG market continued to evolve in 2019 with demand increasing for LNG and natural gas in the power and non-power sectors,” said Maarten Wetselaar, integrated gas and new energies director at Shell. “Record supply investments will meet people’s growing need for the most flexible and cleanest-burning fossil fuel.”

“While we see weak market conditions due to record new supply coming in, two successive mild winters and the coronavirus situation, we expect equilibrium to return, driven by a combination of continued demand growth and reduction in new supply coming on-stream until the mid-2020s,” Wetselaar said.

Europe absorbed the majority of 2019 supply growth as competitively-priced LNG furthered coal-to-gas switching in the power sector and replaced declining domestic gas production and pipeline gas imports.

New spot-trading mechanisms and a wider variety of indices used for long-term contracts point towards LNG becoming an increasingly flexible commodity.

There was a modest rise in imports to Asia in 2019, compared to the previous two years, a result of mild weather and rising electricity generation from nuclear power in Japan and South Korea, two of the three largest global importers.

In China, LNG imports increased by 14 per cent in 2019 as efforts continued to improve urban air quality.

Also notable was LNG demand growth in South Asia. In total, Bangladesh, India, and Pakistan imported 36 million tonnes, an increase of 19 per cent over last year, pointing to emerging growth countries in Asia.

Over the longer-term, global LNG demand is expected to double to 700 million tonnes by 2040 as gas plays a significant role in shaping a lower-carbon energy system.

Asia is expected to remain the dominant region in the decades to come, with South and Southeast Asia generating more than half of the increased demand.

FE Credit takes crucial step to IPO

FE Credit has changed from the company limited to the joint-stock company operating model in preparation for its initial public offering (IPO) this year.

The State Bank of Vietnam (SBV) has just approved FE Credit's application to the joint-stock company format. This change is a legal requirement for an IPO.

The SBV also approved raising FE Credit's charter capital by VND5 billion ($217,400) to VND7.3 trillion ($317.4 million). In 2019, FE Credit recorded a pre-tax profit of VND4.5 trillion ($195.65 million), contributing more than 43 per cent to VPBank's profit.

The company has been reporting falling profit figures in the last three years. However, sharing with shareholders in the 2019 shareholders' meeting, Nguyen Duc Vinh, VPBank general director, affirmed that FE Credit is still an "important and effective business" of the bank. Although facing many difficulties as credit growth in this segment decelerated, FE Credit still increased its market share from 53 to 55 per cent.

As of the end of 2019, FE Credit reported a loan balance of VND60.6 trillion ($2.63 billion), an increase of 14 per cent. The non-performing loans (NPLs) ratio was 6 per cent, the same as at the end of 2018. The capital structure of the company includes equity (18 per cent), foreign debts (23 per cent), domestic debts (8 per cent), term deposits (4 per cent), promissory notes, treasury bills, deposit certificates, and bonds issued by credit institutions (43 per cent), and other debts (5 per cent).

In 2014, VPBank fully acquired Vinacomin Finance Company from Vinacomin and renamed it to FE Credit.

Shopping malls flounder in wake of coronavirus outbreak

An unexpected complication throwing off the forecasts of real estate consultants, shopping malls have been dragged down by the coronavirus epidemic.

The coronavirus outbreak has had a marked negative effect on high-performing shopping malls like Vincom Center, Lotte Mart (Hanoi capital), Giga Mall, Saigon Center, or Pearl Plaza (Ho Chi Minh City).

According to VIR’s observations, Vincom Center Ba Trieu that usually bustles during the weekends is now blanketed in silence. Specifically, food and coffee chains like King BBQ or Highland Coffee only manage to draw in a few customers. GV cinemas have also been floundering since the epidemic exploded.

In addition to the recent quiet, Vincom Center Ba Trieu has not managed to rent out all store areas despite its favourable location in an area of high- and middle-income residents. The situation is not fully the fault of COVID-19 – it has lasted since the beginning of the second quarter last year – though has been exacerbated by it.

In Ho Chi Minh City, Giga Mall has reported a similar drop in performance in the past days. A representative of the Korean BBQ chain there said, “Our revenue is only a half of the same period last year. Customers come only at a trickle even during the weekends.”

In addition to the poor sales caused by the health crisis, lease at the shopping malls remain unchanged while overheads and utilities, as well as coronavirus-accrued expenses have been a burden. “The fall in revenue has affected the earnings of our staff,” said a representative.

Acccording to real estate consultant Collier's latest report, the leasing price at Giga Mall is $25 per square metre per month. The minimum space for a food court is 250sq.m. Thus, the store chain may have to pay about $6,250 for lease.

Such a high leasing priceseems untenable amidst the epidemic. "If the crisis lasts, we may leave the shopping mall to cut operation costs,” said the representative of King BBQ.

Echoing this view, Nguyen Kim Ly, manager of a fashion store in a big shopping mall in District 1, said that the revenue these days is well below the VND30-40 million ($1,300-1,740) a day it made in the previous year as shoppers are few and far between. However, the situation is not so dire thanks to improving online sales.

The CGV cinema at Pearl Plaza has also seen a significant drop in revenue these days. “Blockbusters were not enough to lure in customers, with visitor count a solid one-third down against the time before the epidemic,” said a CGV’s staff.

Regarding the effects of the coronavirus on retailers and also shopping malls, Stephen Wyatt, country head of JLL Vietnam, told VIR that the effect of this outbreak is still limited. “We expect the impact to be short-term, and most investors and operators are adopting a wait-to-see attitude and delaying making major decisions."

Ho Chi Minh City real estate developers urge solutions for breakthough

Ho Chi Minh City People's Committee and developers discussed solutions to the legal and administrative quandaries holding back real estate projects in the city on the morning of February 22
The meeting was part of the committee’s efforts to create a fair and competitive investment environment for all developers in 2020 and the time ahead.

According to Nguyen Thanh Phong, Chairman of Ho Chi Minh City People’s Committee, urgent solutions will soon be proposed to help developers stabilise their business and continue to participate in a programme to improve the city’s’ landscape.

Phong said the city will focus on the development of leading enterprises and developers which can help improve the city's competitiveness.

“The local authorities must understand developers’ difficulties and join hands to decrease those difficulties. The city cannot develop without the success of investors. Thus local authorities must share all difficulties burdening developers and must try their best to alleviate them,” Phong said.

He requested local departments to present more drastic solutions to improve the business environment within the tenets of current laws and regulations to serve developers.

Recently, the Ho Chi Minh City Real Estate Association and real estate developers have been petitioning the Committee, asking for help to wipe out red tape keeping projects delayed.

According to Le Hoang Chau, chairman of the association, the real estate market of the city is now in a difficult situation. These difficulties, however, are temporary and are not part of the normal course of events. "The reasons of these difficulties were the overlapping legal framework and the implementation of legal documentation at the grassroots levels,” Chau said.

A representative of Novaland, one of the biggest real estate developers in the southern provinces, said that with the help and support from local authorities, many of its difficulties have been dispelled at several projects.

Among those are the Co Giang residential project located at 100 Co Giang Street in District 1. This project was handed over land by the local authorities along with the construction permit.

The other project was a complex of trading centre, office, offitel, and apartments at 151-155 Ben Van Don Street in District 4. The land use tax for this project was adjusted by the Ho Chi Minh City’s Department of Natural Resources and Environment after a long wait.

Another apartment tower located at Thao Dien commune of District 2 and an partment tower located at Dien Bien Phu Street of Binh Thanh district have also been granted land use right certificates.

Meanwhile, the high rise building located at 67 Mai Chi Tho Road, District 2 and seven other projects located in Phu Nhuan district were also being reviewed and proposed for granting land use right certificates by the authorities.

With the desire to break though current difficulties and promote the development of the real estate market, Novaland believes that the government and relevant authorities will accompany developers, soon releasing guidelines and instructions to solve current difficulties and problems.

Novaland also wishes local authorities would allow developers to quickly resume their projects to strengthen the supply of products to real estate market and meet the accommodation and investment needs of the people, thereby improving social security and contributing to the state budget.

Novaland is one of Vietnam's premier real estate developers operating in the southern provinces. The company holds and develop about 4,900 hectares, a factor that is key for real estate developers to continuously launch new products.

"Novaland pursues a long-term vision in Vietnam and we see the current red tape and legal difficulties besetting the market as nothing but a temporary hindrance," said a representative from Novaland. "When the real estate legislation is clear and completed, the market will quickly return to activity, Novaland will then be able to release pent-up supply to meet the rising demand at the soonest timeline."

Course on sustainable debt management held in Ha Noi

A training course on sustainable national debt management is taking place in Hanoi as part of Vietnam’s public debt management reform programme.

The event is being jointly organised by the Ministry of Finance (MoF), the World Bank (WB) and the International Monetary Fund (IMF) from February 24-28.

According to Vo Huu Hien, deputy general director of the MoF’s Department of Debt Management and External Finance, the ministry will coordinate with relevant departments, sectors and localities to draw up a five-year plan on borrowing and repaying public debt in the 2021-25 period to submit to the Prime Minister for consideration before June 30.

The plan will include a public debt ceiling and safety threshold for indicators of public and government debts compared to GDP, and a target for direct government debt repayments compared to the State budget, he said.

Currently, debt sustainability analysis (DSA) is one of the key debt management models that is closely connected to analyzing, forecasting and performing debt portfolio risk management operations to ensure public debt safety and national financial security.

However, DSA has so far only been evaluated by IMF experts in the framework of their working visits to Vietnam without the direct participation of representatives from the MoF as well as relevant Vietnamese agencies to research the operation of the model.

Hien highlighted the significance of the training course, saying that it contributed to enhancing capacity building activities as well as to developing strategic reports for not only the MoF but also other agencies.

He expressed his hope that the course would provide practical lessons as well as policy implications for Vietnamese agencies in building, appraising, approving, implementing and monitoring the implementation of medium-term loan and repayment plans to ensure sustainable debt calculation.

EVN produces one third of total power output

Electricity of Viet Nam (EVN) has produced 7,185MW of power, accounting for 33.2 per cent of Viet Nam’s total power output in the 2016-20 period, according to the revised Power Development Master Plan (PDP) VII.

The National Steering Committee for Electricity Development said under PDP VII for the 2016-20 period, total national power output would reach 21,650MW, including 14,465MW, or 66.8 per cent, by other producers.

In the 2016-30 period, EVN has been assigned to invest in 24 projects with a total capacity of 15,215MW, including 14 projects in the 2016-20 period with a total capacity of 7,185MW.

Nine out of the 24 projects are operating, while the remaining 15 projects are under construction or in the preparation stage.

The Steering Committee said EVN had approved an adjusted design for the Quang Trach I Thermal Power Project with a capacity of 2,400MW. This would be a key project, making an important contribution to ensuring national energy security.

The Government has requested the State Bank of Viet Nam to support EVN in loans for this project. They need to report difficulties to the Government.

EVN expects to start construction of the project at the end of 2020 and put the project into operation in 2024.

 

For the Quang Trach II Thermal Power Project (2,400 MW), the Management Board of Quang Binh Economic Zone has been collecting opinions evaluating this project to report to the Ministry of Planning and Investment. According to the revised PDP VII, the project will be put into operation in 2028-29.

Meanwhile, EVN has submitted to the Prime Minister for approval the pre-feasibility study report (PreFS) of O Mon III Thermal Power Plant project to receive a decision of the investment policy. Therefore, according to the National Steering Committee, the project is forecast to finish five years later than planned.

According to the revised PDP VII, the O Mon IV thermal project (1,050MW) will operate in 2021, the Dung Quat I Thermal Power Project in 2023 and the Dung Quat III Thermal Power Plant in 2026.

According to Minister of Industry and Trade Tran Tuan Anh, standing deputy chairman of the National Steering Committee, power projects have been implemented in three investment models, including those invested by Viet Nam Electricity (EVN), the Viet Nam National Oil and Gas Group (PetroVietnam) and Viet Nam National Coal and Minerals Group (Vinacomin); build-operate-transfer (BOT) projects and independent power producer (IPP) projects.

The revised PDP VII includes 62 projects with a large capacity of over 200MW in the period from 2016 to 2030. Of which, 15 projects have completed as scheduled while the remaining 47 projects are delayed.

PVN is the investor of eight key power projects with a total capacity of 11,400MW, including three projects in the 2016-20 period and five projects in the 2021-30 period. At present, all eight projects have faced difficulties, so have not been completed according to the schedule in the revised PDP VII.

Meanwhile, TKV has been developing four projects with a total capacity of 2,950MW, including two projects in the 2016-20 period and two other projects in the 2021-30 period. All four projects are set to finish two years later than planned or longer.

Nineteen thermal power plant projects are invested in the form of BOT, with a total capacity of nearly 27,000MW. There are seven IPP projects with a total capacity of about 2,000MW.

According to the National Steering Committee, the IPP projects are also delayed. It is hard to know when those projects will be completed, including My Ly and Nam Mo hydroelectric projects; Cong Thanh Thermal Power Project; and Hoi Xuan Hydropower Project.

EVN to increase cashless payments for power bills

Electricity of Viet Nam (EVN) will promote cashless payments to reach the goal of 75 per cent of customers paying their bills digitally by 2025.

EVN said that online payments for power bills were very simple and convenient for both customers and EVN, helping save time and costs. Cashless payments also contributed significantly to improving the transparency of payment activities and increasing efficiency in management.

EVN targeted that by the end of this year, about 50 per cent of its customers would pay their bills through cashless payment channels, from 46.54 per cent in 2019.

About 87 per cent of the total value of electricity bills were collected via cashless channels in 2019.

Since 2013, EVN promoted cashless payment nationwide through enhancing cooperation with banks and payment intermediaries to establish a diversification of cashless payment channels for its customers.

Now, all electricity services of EVN were conducted online and connected to the national public service portal.

EVN was also hastening the digitalisation of its business and services with an aim to improve quality and customer care.

EVN targeted that all transactions with customers would be conducted electronically by 2025.

Capacity of coal-fired power plants to drop in 2025

The capacity of coal-fired power plants in Vietnam will be reduced to 8,760 MW in 2025 and 6,340 in 2030 due to the sluggish implementation of several projects and the disagreement of some localities in coal-fired power plant development.

In 2020, the production of coal-fueled electricity will make up about 33.2 percent of the total, gas-fueled thermal electricity 14.8 percent, hydropower 30.1 percent, and small hydropower and renewable energy 20.3 percent.

By 2025, these figures will be respectively 37.1 percent, 13.7 percent, 18.2 percent, and 25.5 percent.

The total output of solar and wind power in 2020 and 2025 will be 12 billion kWh and 36 billion kWh, respectively./.

Binh Dinh approves wind farms

The Ho Chi Minh City-based Fico JSC has been given initial approval from the Binh Dinh Economic Zone (EZ) Authority to develop two wind power plants in the Nhon Hoi EZ.

Spanning 175ha, the Nhon Hoi 1 wind power plant would have a capacity of 30MW annually, and would cost more than 1.32 trillion VND (56.7 million USD) to build, according to the provincial portal.

The 30MW Nhon Hoi 2 wind power plant, with an estimated cost of nearly 1.25 trillion VND (54 million USD), would cover 200ha.

The two plants are slated for completion in September 2021.

The investor would have its approval revoked if it failed to implement the projects within a year, according to the province.

Last year, the central province of Binh Dinh granted investment licences to 83 domestically-financed projects with total registered capital of more than 48 trillion VND. Of the total, 10 projects worth 30 trillion VND were in the Nhon Hoi EZ./.

145.9-million-USD wind power plant to be built in Tra Vinh

Construction of Hiep Thanh wind-power plant at a cost of nearly 3.37 trillion VND (145.9 million USD) began in the Mekong Delta province of Tra Vinh late last week.

Twenty percent of the total investment comes from its investor - Ecotech Tra Vinh Renewable JSC - while the remainder is loans provided by the investment fund Climate Investment One of the Netherlands and Korean Samtan International Co, the online newspaper congthuong.vn reported.

The plant covers a site of more than 2,700ha in the coastal commune of Hiep Thanh in Duyen Hai township and has a designed capacity of 78MW from 18 turbines.

Vice Chairman of the provincial People's Committee Tran Anh Dung said the plant will supply 300 million kWh of electricity annually while creating up to 100 jobs for local workers.

The plant is expected to be completed in mid-2021./.

State budget collection tops 9.3 billion USD in two months

Total State budget collection was estimated at 214.2 trillion VND (9.31 billion USD) in the first two months of this year, or 14.2 percent of the yearly estimate, reported the General Statistics Office on February 29.

Of the figure, 179.8 trillion VND was domestic revenue, 8.6 trillion VND came from crude oil, and 25.9 trillion VND from exports-imports.

In domestic budget collection, 21.3 trillion VND was from State-owned enterprises, 36.5 trillion VND from foreign-invested firms, exclusive of crude oil, 42 trillion VND from industry and trade taxes and non-State services, and 15.3 trillion VND from individual income tax.

In the same period, total State expenditures stood at 145 trillion VND, or 8.3 percent of the estimate. Of which, 116.1 trillion VND was regular spending, 7.4 trillion VND for development investment, and 21.4 trillion VND for debt interest payment./.

Nearly 16,200 firms suspend operations in two months

Nearly 16,200 businesses suspended operations in the first two months of this year, up 19.5 percent annually, reported the General Statistics Office.

During the period, the number of newly-established firms rose 9.1 percent to 17,400 and those resuming operations were up 17.1 percent year-on-year to 11,900.

The new enterprises had a total registered capital of 220 trillion VND (956 million USD) and 157,500 workers, down 11.1 percent and 3.9 percent year-on-year, respectively.

About 5,700 businesses registered to add 421 trillion VND to their capital.

In total, additional 641 trillion VND was poured into the economy, down 26.2 percent from the same period last year.

Up to 9,400 businesses waited for dissolution procedures, down 31.4 percent and 2,800 others completed the procedures, down 11.1 percent./.

US supports Vietnam in sustainable livestock practice

The Hanoitimes - The program built the capacity of livestock experts and extension officers to enhance sustainable intensification of the sector.

The United States has been supporting Vietnam in an initiative to develop animal husbandry in a sustainable way.

The United States Department of Agriculture (USDA) and the Vietnamese Ministry of Agriculture and Rural Development (MARD) have collaborated since 2012 on the “Enhancing Capacity for Low Emission Development Strategies (EC-LEDS) in the Agriculture Sector” project, through funding from the US Department of State.

The program built the capacity of livestock experts and extension officers to enhance sustainable intensification of the sector in line with national agriculture development and environmental policy objectives.

A major challenge the project aimed to tackle was improving efficiency of livestock production through feed improvements and assess associated reductions in greenhouse gas emissions per unit of milk or meat.

The project partnered livestock experts from the University of California (UC) Davis with MARD’s Department of Livestock Production, National Institute for Animal Science, National Agriculture Extension Center, and the Vietnam National University of Agriculture.

Software developed by UC Davis for beef and cattle ration development was translated into Vietnamese and is now available for free through MARD. The software also includes a new greenhouse gas emission calculator, which allows users to track how innovation in livestock feed management can support implementation of greenhouse gas reduction goals.

Improving feed management first requires data on feeds available and a deep understanding of animal husbandry. The project developed the first national feed database for Vietnam, which contains over 1,100 feed forages making it one of the largest consolidated feed databases globally. Feed and forage available through international markets and specific feeds available seasonably and regionally across Vietnam are included.

Roughly 400 extension officers and livestock experts, as well as almost 4,000 students studying animal husbandry, have been trained on how to use the software to develop improved feed rations.

Throughout 2020, the partners will continue to share the project resources with technical experts as well as supporting uptake of the findings into policy planning and implementation.

Vietnam tourism industry takes strong hit from cororavirus

According to media reports, many hotels in Vietnam have been forced to shut temporarily to mitigate losses while a number of tour guides are seeking new jobs.

Vietnam’s tourism industry has felt bruises as the new cororavirus has spread fears across the globe and caused a plunge in foreign arrivals, especially guests from the largest markets.

Foreign tourist arrivals in the country totaled an estimated 3.23 million in the first two months this year, representing an increase of 4.8% year-on-year, the slowest pace since 2016, according to data of the General Statistic Office.

The country welcomed 2.43 million Asia visitors in the January-February period, up a meager 4.7% from the corresponding period last year. Of the total, arrivals from China dropped 5.8% to 838.6 thousand, those from South Korea inched up 2.4% to 790.4 thousand, and those from Japan increased 8% to 163 thousand.

The impact of Covid-19 was felt stronger in February when the arrivals reached some 1.24 million, falling 27.7% from January and 21.8% from a year earlier, statistics showed. The number of Asian guests, which usually account for more than 70% of the total, plummeted 27.2% year-on-year.

According to media reports, many hotels in Vietnam have been forced to shut temporarily to mitigate losses while a number of tour guides are seeking new jobs.

Vietnam’s tourism industry is estimated to suffer a loss of US$7 billion this year due to the Covid-19 epidemic.

The Vietnam National Administration of Tourism and national carrier Vietnam Airlines on February 25 launched a campaign to stimulate travel demand for both outbound and inbound markets.

Covid-19 inflicts damage on Hanoi tourism

Chinese arrivals to Hanoi in February declined 93.5% year-on-year while those from South Korea fell 51.4%.

Tourism is the hardest hit sector in Hanoi by the Covid-19 epidemic as arrivals from China, South Korea and Japan which account for nearly 40% of total tourists coming to the capital have fallen, according to Nguyen Manh Quyen, director of the municipal Department of Planning and Investment.

Notably, Chinese arrivals to Hanoi in February plunged 93.5% year-on-year while those from South Korea dropped 51.4%; those from Singapore fell 42.4%, and the number of domestic tourists plummeted by 27%, Quyen said at a meeting on February 28.

The industrial production also suffers direct impact, Quyen informed, adding these three markets make up 50% of Hanoi's exports and 30% imports.

Specifically, the textile and garment sector sources 60% of materials from China and South Korea; equipment, phones, machinery and transportation vehicles production import 30% from the two Northeast Asian countries, Quyen said.

In the January – February period, Hanoi’s industrial production index increased 5.8% year-on-year, lower than the growth rate of 6.1% recorded in the same period last year. Some industrial products saw a sharp decline in production volume. For example, alcohol production was down 23.2% year-on-year; footwear 5.5%; and plastic products 12.5%.

In contrast, products required for anti-virus measures such as pharmaceuticals, fertilizers, and chemicals have grown 55.6% and 46.3% year-on-year in volume, respectively.

In the two-month period, Hanoi’s exports declined 19% year-on-year and imports down 20.7%.

Meanwhile, South Korea, Japan and China also account for 41.5% of Hanoi’s total foreign direct investments (FDI), so the epidemic in these countries is causing negative impacts on the FDI inflow to Hanoi during the first months of 2020.

In the first two months of 2020, Hanoi attracted US$240.19 million in FDI, significantly lower than the US$4 billion from the same period in 2019.

Hanoi reported 3,660 newly established enterprises during the two-month period, with registered capital of a combined VND89 trillion (US$3.84 billion).

Total state budget revenue reached VND51.47 trillion (US$2.22 billion), up 4.9% year-on-year and equivalent to 18.5% of the year’s estimate, while the expenditure stood at VND8.89 trillion (US$383.8 million), or 8.6% of the estimate.

The consumer price index (CPI) in February declined 0.07% month-on-month but was up 5.16% year-on-year.

To mitigate impacts from the Covid-19 epidemic, the authority would continue with administrative reform, particularly removal and simplification of business conditions, Quyen said.

Hanoi gives strong priority to addressing businesses’ concerns while mobilizing resources to support production, consumption and tourism, Quyen stressed.

Retail sales, service revenues post 37.4 billion USD in two months

The total retail sales and service revenue rose 8.3 percent year-on-year to over 863.9 trillion VND (37.4 billion USD) in the first two months of 2020, according to the General Statistics Office (GSO).

Retail sales of goods in January-February were estimated at 674 trillion VND (nearly 29.2 billion USD), up 9.8 percent against the same period last year.

Increases were seen in the sales of automobiles (up 11.2 percent), gasoline and oil (up 11 percent), household appliances, tools, and equipment (up 9.5 percent), garment-textile (up 8.9 percent), food and foodstuff (up 8.6 percent), vehicles (up 7.1 percent), and cultural and education products (up 4.7 percent).

Localities recording significant growth in retail sales include Quang Ninh province (13.8 percent), Hai Phong city (13.6 percent), Thanh Hoa province (11.9 percent), Nghe An province (10.9 percent), and capital city of Hanoi (10.5 percent).

Revenues from accommodation and catering services in the two-month period was estimated at 95 trillion VND (4.08 billion USD), up only 1.7 percent year-on-year due to the impact of the acute respiratory disease caused by the novel coronavirus SARS-CoV-2 (COVID-19).

Declines in accommodation and catering service revenues was reported in most of localities, including Khanh Hoa province (24.2 percent), Lam Dong province (10.2 percent), Hanoi city (8.1 percent), Can Tho city (5.6 percent), and Ho Chi Minh City (5 percent).

Travel service revenues reached 7.4 trillion VND (320 million USD), up 1.1 percent year-on-year. Slight growth was seen in some cities and provinces such as Binh Thuan province (5.3 percent), Da Nang city (1.5 percent), and Ha Tinh province (0.8 percent).

Revenues from other services rose 5.2 percent year-on-year to 87.5 trillion VND (almost 3.8 billion USD)./.

HCM City expected to become int'l financial centre

Prime Minister Nguyen Xuan Phuc has asked the Government Advisory Group to submit a document by April 30 outlining necessary steps to turn Ho Chi Minh City into an international financial centre.

Tran Du Lịch, member of the Government Advisory Group, said that HCM City was a gateway to major financial centres and capitals of ASEAN countries.The idea to turn the city into a regional and international financial centre is not new, but would be an essential part of the National Economic Strategy to 2030, he added.

The growth of the financial market, particularly in HCM City, has not been consistent and the dependence on the banking system for capital has been significantly distorting the financial market, he said.

Key characteristics of international financial centres include deep, liquid and sophisticated capital market, as well as competitive tax and regulatory regimes designed to attract foreign investment in financial services.

Le Hong Giang, director of Investment Strategy Fund Tactical Global Management, said the legal framework for financial centres must be clear.

Financial services have become more reliant on technology, so the nature of a financial centre will shift to a hi-tech centre, he said. “This will prove to be a challenge for existing centres but an opportunity for new financial centres.”

Deputy PM Vu Duc Dam highlighted the city’s achievements in socio-economic development, which has made the city a destination for many firms across the world.

“HCM City will continue to aim for sustainable growth by improving its competitiveness and growth quality through healthy economic restructuring,” he said. “The city will also ensure a favourable business environment for enterprises, and encourage start-ups, innovation and smart-city measures.”

Though HCM City accounts for only 9.36 percent of the national population, it contributes 14 percent to the country’s export value and 27 percent to State revenue./.

 
 

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