Deposits at banks modest due to low interest rates
|A person arranges stacks of Vietnamese banknotes. Capital has been poured into other sectors rather than banks due to their low deposit rates|
Low deposit rates at commercial banks have resulted in a low growth of capital flows into banks, while the capital that has been poured into other sectors, such as insurance, real estate, bonds and securities, has surged.
According to the Department of Credit for Economic Sectors under the State Bank of Vietnam, in the first quarter of this year, the deposit growth reached only 0.54%, well below the credit growth of 2.93% and the average deposit growth of 2.28% in the first quarter of the past seven years, Lao Dong newspaper reported.
At present, the rate for savings of less than six months is 3%-4%. Meanwhile, tenors of six to less than 12 months and over 12 months enjoy a rate of 3.5%-5.5% and 4.6%-6%, respectively.
Although some banks have revised up their deposit rates by 0.1-0.4 percentage points, the banks’ average deposit rate in the first quarter remained some 2 percentage points lower than that in the same period last year.
If the trend continues, the banking system’s liquidity will no longer be ample this year, according to Bao Viet Securities Company.
Meanwhile, the General Statistics Office stated that capital had been injected into other sectors, with life insurance premium soaring 11%. Meanwhile, the securities market mobilized nearly VND55.6 trillion, surging 42% over the same period last year.
Pham Lam, vice chairman of the Vietnam Association of Realtors, attributed land fevers over the past few months partly to residents’ idle money and their expectations of higher prices of real estate products.
According to Dao Minh Tu, deputy governor of the central bank, as of mid-March, banks’ outstanding loans for the property sector grew 2.13%, higher than the current credit growth of 2.04%, despite the central bank’s close control over credit for the sector.
Market rebounds, VN-Index returns to 1,250 point-level
Shares settled higher on Wednesday, reversing their morning course on recoveries of materials and banking stocks.
The benchmark VN-Index on the Ho Chi Minh Stock Exchange (HoSE) closed Wednesday's trade at 1,255.87 points, up 7.54 points, or 0.6 per cent. The index fell 0.37 per cent in the morning trade after losing 0.33 per cent on Tuesday.
The market's liquidity remained high as nearly 862 million shares were traded on the southern bourse, worth over VND19.3 trillion.
The index might continue to be weighed by correction pressure in the next few sessions before returning to its short-term rally, Bao Viet Securities Company's stock analyst Tran Xuan Bach said.
"In general, the index is still expected to gain points, heading to resistance territory of 1,275 - 1,300 points in the near term," Bach said, adding that local cash flows remain the key momentum to support the market.
The rally returned on gains of large-cap stocks in banking and materials sectors.
The VN30-Index, tracking 30 large-cap stocks on HoSE, climbed 1.05 per cent to 1,290.77 points. Twenty of the 30 biggest stocks in VN30 basket rose while nine stocks declined and one ended flat.
Hoa Phat Group (HPG) contributed the most to the market, up 5.79 per cent. Followed by Masan Group Corporation (MSN) with shares hitting the maximum daily gain of 7 per cent to VND100,700.
Other stocks listed in top five influencing the market's rally were Vietcombank (VCB), real estate developer No Va Land Investment Group Corporation (NVL) and Vietinbank (CTG).
PetroVietnam Gas JSC (GAS), Mobile World Investment Corporation (MWG), FPT Corporation (FPT) and Vietjet Aviation JSC (VJC) also posted positive performance.
Meanwhile, losses in Vinhomes JSC (VHM), Vingroup JSC (VIC), Viet Nam Dairy Products JSC (Vinamilk, VNM) and Viet Nam Rubber Group JSC (GVR) capped the market's gain.
VHM shares posted the biggest losses in market capitalisation, down 1.95 per cent.
Bach recommended investors keep stock proportion in their portfolio at 65 - 80 per cent. Investors with high cash ratio might consider opening long positions to increase stock proportion in correcting sessions.
On the Ha Noi Stock Exchange (HNX), the HNX-Index also edged higher on Wednesday, up nearly 0.9 per cent to 294.83 points. The HNX30-Index increased 1.13 per cent to 446.69 points.
During the session, domestic investors poured nearly VND2.7 trillion into the northern market, equivalent to a trading value of over 167 million shares.
However, foreign investors returned to net sell on both exchanges with a value of over VND1 trillion on HoSE and a net value of VND15.26 billion on HNX.
Transportation companies increase services for upcoming holiday
Transportation companies plan to increase their services to meet the greater demand during the April 30 and May Day holiday.
More trains will run on the Hanoi - Thanh Hoa, Hanoi - Vinh, and Hanoi - Dong Hoi routes on April 29 and 30.
Meanwhile, local airlines have increased flights to popular destinations to meet travel demand during the upcoming national holiday season.
Vietnam Airlines Group, including Vietnam Airlines, Pacific Airlines and Vasco, is offering 500,000 seats, equivalent to about 2,600 flights to and from Hanoi, Ho Chi Minh City, Da Nang, Quy Nhon, Da Lat and Phu Quoc, among other localities, between April 4 and May 3.
The number represents an increase of 100,000 seats compared to off-peak periods.
Bamboo Airways has plans to add about 110 to 150 flights per week, which is equivalent to 22,000 to 30,000 seats, with many routes operating at a frequency of up to four to five flights per day.
Popular routes are Hanoi/HCM City to Phu Quoc, Nha Trang, Quy Nhon or Vinh, Thanh Hoa and Hai Phong.
Low-cost tickets are mostly sold out.
Director of the Hanoi Transport Station JSC Nguyen Anh Toan said that as passenger numbers are expected to increase from the evening of April 24 to April 30, the company plans to run 500 more buses and conduct 1,050 trips a day from Giap Bat and My Dinh stations in Hanoi, an increase of around 130 percent compared to normal days, and 700 others at Gia Lam station./.
Over 8,700 retailers, auto and bike repairers leave market in Q1
Due to the Covid-19 pandemic and the strong development of e-commerce, more than 8,700 enterprises in the wholesale-retail, automobile and bike repairing sectors withdrew from the market in the first quarter of this year, up 24.5% year-on-year, according to the Business Registration Department under the Ministry of Planning and Investment.
The number was much higher than the number of suspended enterprises in other sectors.
Going online has become a trend among many retailers in HCMC and other localities over the past two to three years. The trend has grown further since Covid-19 broke out in early 2020.
Last year, more than 101,700 enterprises withdrew from the market, up 13.9% over 2019, including nearly 46,600 companies signing up to temporarily suspend operations, nearly 37,700 halting operations to complete dissolution procedures and some 17,500 being dissolved.
Among the firms that signed up to temporarily suspend operations, 17,360 were wholesale-retail, automobile and bike repairing businesses, surging 56.2% versus 2019.
The representative of a company selling paintings and souvenirs to international tourists in HCMC said his company has suspended its operations for a year to reduce losses and operation costs.
He has plans to resume the company’s operations in May or June when foreign tourists are expected to return to Vietnam. However, the pandemic remains complicated across the world, so he was unsure about his resumption plans.
In addition to Covid-19, the online business trend has caused multiple difficulties for owners of retail spaces in HCMC and other large cities to look for lessees.
Surveys of real estate companies showed that retailers in the food-beverage and fashion sectors tend to lease small retail spaces or return retail spaces.
The pandemic has forced consumers to cut their spending. As a result, multiple retail spaces in busy streets in HCMC and Hanoi have yet to find lessees.
However, wholesale and retail enterprises are those that can easily enter and withdraw from the market. They have faced many difficulties due to the pandemic which has changed consumers’ shopping habits and affected supply chains.
In the first three months of the year, more than 5,200 wholesale-retail, automobile and bike repairing businesses resumed their operations, accounting for 35.4% of the total firms returning to the market and falling 3.4% over the figure in the same period last year.
Kumho to invest over US$300 million in its Vietnam plant
South Korean tiremaker Kumho Tires has announced that it will invest an additional US$305 million to expand its manufacturing plant in Vietnam, enabling the tiremaker to double the facility’s production capacity.
The expansion project will be implemented in two years, starting from the third quarter of this year to the first quarter of 2023.
The plant, which is located in My Phuoc 3 Industrial Park in Binh Duong Province and has been operational for a decade, will be expanded by building more facilities on the vacant lot inside the plant’s compound.
Once complete, the expanded plant is expected to churn out at least 9.3 million tires per year.
Over the past years, Kumko Tire products manufactured in Binh Duong have been shipped to many parts of the world.
Kumho Tires is currently operating a number of tire manufacturing plants globally, but Vietnam is the only Southeast Asian country where the tiremaker has its facility. Aside from its plants in South Korea, Kumho Tires has also set up plants in China and the United States.
With an abundant amount of natural rubber, the surging demand for vehicles, low-cost labor, stable investment environment and other factors, Vietnam has been attracting major tiremakers to set up and expand their businesses.
Early this year, according to the Ministry of Planning and Investment’s Foreign Investment Agency, a Chinese-invested tire factory project in Tay Ninh Province had its investment adjusted upward by over US$312 million. Other large tire manufacturers such as Bridgestone, Yokohama Tyre, Maxxis and Sailun had entered the Vietnamese market, investing in large-scale projects.
Cai Mep – Thi Vai port receives vessel destined for West Coast of US
Deep-sea port SP-SSA International Terminal (SSIT) in the Cai Mep-Thi Vai port cluster in the southern province of Ba Ria-Vung Tau berthed MP The Belichick - a container vessel operated by Swiss logistics firm Mediterranean Shipping Company (MSC) on April 13.
The ship is destined for the US’s West Coast under a newly launched container service called Sentosa.
It embarked from Singapore and travels through Thailand’s Laem Chabang City and Ba Ria-Vung Tau to Long Beach City in the US’s Pacific Southwest, and will return to Singapore through China’s Shanghai, Ningbo and Xiamen cities.
The route aims to connect Southeast Asia with markets in southwestern Pacific, thus further promoting trade activities between the two regions.
Despite severe impacts posed by the COVID-19 pandemic on the global economy, Vietnam’s exports still recorded positive results, even breakthroughs.
As the demand for export to the US has risen sharply, MSC has put the above-mentioned service into operation to satisfy the demand.
According to the General Statistics Office, the US remained the largest importer of Vietnamese goods in the first quarter of 2021, with turnover of 21.2 billion USD, up 32.8 percent year-on-year./.
Technology ushers in more online borrowers
Targeting middle-income customers who prefer convenience and have high demand for consumer loans, fintech firms have been improving their strength and solidifying their positions through the technology content applied on products.
Statistics indicated that the number of consumer loans at commercial banks, financial firms and fintech companies still increased steadfastly during the Covid-19 pandemic.
Middle-income customers’ demand for consumer loans has increased stably. A representative of ATM Online, a fintech company active in online lending, said that the firm received an average of 4,000 requests for borrowing each day.
Data from the fintech company showed that as of end-March, among 400,000 customers using financial services at ATM Online, over 50% of them had got two loans or more. The data also indicated that 30% and 10% of the total had got three and five loans or more, respectively.
“The number of return customers is high, proving that customers knew how to take advantages of convenient services provided by fintech firms,” said Do Minh Hai, director of ATM Online.
However, to help customers manage their money, fintech firms and their partners only offer one loan at a time. Customers only get another when their existing loans have been settled, according to the leader of ATM Online.
One main reason behind the increasing number of consumption loans is loan disbursement technology. On ATM Online’s platform, return customers’ requests for loans are handled within two minutes each, while a request from new customer is handled within 7-15 minutes.
These loans will be disbursed automatically and quickly if customers provide correct information and cooperate with the platform during the appraisal process, said the ATM Online representative.
Apart from automatic disbursement, customers can repay loans easily. ATM Online has also cooperated with some partners that offer e-payment gateways to make it easier for customers to make payments. Accordingly, ATM Online deploys a payment method based on personal accounts, so each customer will be provided with one bank account by its partner bank. With these accounts, customers can make monthly payments via their smartphones or laptops/computers. Transactions will be conducted immediately on the system.
Last year, management agencies repeatedly warned residents of scams through financial products. Besides, hackers also targeted online loans. Many scammers used fake identification cards to get loans.
To prevent frauds and scams, ATM Online and its partners have invested in electronic identity verification, face recognition, optical character recognition and voice recognition solutions.
With data from browser queries, ATM Online records customers’ interactions when using computers or smartphones to send a request for loans. These data, which are encrypted and analyzed, coupled with personal information, help determine whether customers are the authentic subjects or not.
“ATM Online’s scoring system, with 15 variables from the beginning, has seen credit score synthesized from over 300 variables with high accuracy after three years of operation, driven by thick customer data,” Hai said.
Aside from convenience and “anti-risk hedge” made possible by technology, improving service quality and helping customers know online lending products contribute to retaining customers. In 2020, ATM Online focused on upgrading experience and updating knowledge for customers on its services via the 14-day cooling-off period program applied to new customers.
Specifically, borrowers had 14 days to consider the loan that they registered and applied for. They could return the sum of money that was disbursed if they did not want to borrow any more. They would be exempt from interest rate, consulting and service fees during the 14-day period.
Last year, in addition to offering loans valued at VND3-12 million, ATM Online provided customers with a super-small loan worth as low as VND900,000. “The fintech lending firm expected the specially-designed loans to help customers get to know online lending products and experience services at ATM Online more proactively,” Hai said.
Major projects drive recovery of FDI inflow
In the first quarter of 2021, foreign direct investment (FDI) pledges to Vietnam recorded positive growth for the first time since the flare-up of the Covid-19 pandemic.
This is the result of Vietnam’s success in containing the pandemic and reflects foreign investors’ confidence and high expectations about Vietnam’s economic prospects.
On the final day of the first quarter, the Quang Ninh government granted investment licence to a US$500 million photovoltaic cell project by Jinko Solar from Hong Kong (China), one of the largest manufacturers of solar panels in the world with 12% of the global market. The company made two inspection tours in Vietnam and finally decided to choose Song Khoai Industrial Park for its manufacturing facility.
The first three months of 2021 also saw other enormous projects, including the Long An LNG I and II power plants by Singaporean investors with a total investment of US$3.1 billion, and the O Mon II thermal power plant by a Japanese investor with a total capital of US$1.31 billion.
In the manufacturing sector, an additional US$750 million was invested in the LG Display project in Hai Phong while Bac Giang Province saw US$293 million poured into a project by Fukang Technology to produce tablets and laptops.
According to the Ministry of Planning and Investment (MPI), FDI disbursement during the January-March period increased by 6.5%. For foreign investors in Vietnam, the recovery is clearly seen in their contributions to Vietnam’s total exports. Specifically, the foreign sector posted a trade surplus of US$8.8 billion, offsetting the trade deficit of US$6.7 billion by domestic enterprises to help Vietnam register a trade surplus of over US$2 billion.
Data by the General Statistics Office show that manufacturing accounts for the largest share of FDI into Vietnam, at 58.5%, and is the main driver of economic growth. In the first quarter of 2021, total FDI pledges to Vietnam rose by 18.5% after two consecutive months of decline.
According to the MPI’s Department of Foreign Investment, the transition from the 2014 Law on Investment to the 2020 Law on Investment, which took effect on January 1, 2021, has affected foreign investment in Vietnam.
In addition, the return of Covid-19 in many countries and in Vietnam also affected investors’ travel along with their decisions on new investments. Therefore, the number of new projects, capital adjustments and share purchases continues to fall compared with the same period but the decrease has improved.
A positive point is the wave of high-tech companies with a series of projects by Samsung, Foxconn, Luxshare and Intel having been put into operation, in addition to moves by many major technology companies to learn about the investment opportunities in Vietnam.
Besides establishing a working group to welcome large companies, the Prime Minister recently issued a decision on the criteria of a high-tech company, replacing those already in place since 2015. The most significant change is that a company is to be classified as high-tech if its revenue from high-tech products accounts for at least 70% of its annual revenue. The decision also stipulates the portion of spending on research and investment depending on the company size, which provides much more favourable conditions for enterprises.
In order to realise the Politburo’s resolution on fine-tuning institutions and policies to enhance the quality of foreign investment until 2030, the MPI is soliciting opinions from the relevant ministries and agencies on special incentive policies, which are expected to cover innovation centres, research and development projects, projects larger than VND30 trillion (US$1.3 billion) and those with disbursement of VND10 trillion (over US$400 million) in three years.
High logistic costs hinder Delta agriculture exports
Agriculture exports from the Mekong Delta are facing logistical challenges, affecting their competitiveness overseas.
Dong Van Thanh, Chairman of the Hau Giang provincial People’s Committee, said the Mekong Delta exports millions of tonnes of agriculture products every year but the region is facing many logistical choke-points.
The region is lacking key logistics hubs and storage areas for empty containers and products at ports. Goods have to be transported through many areas before reaching HCM City for export, which increases the cost.
Ngo Tuong Vy, Deputy Director of the Chanh Thu Fruit Export and Import Co. Ltd in Ben Tre province, said that the cost of air transport of fresh fruits to the US and European markets have increased greatly over the years.
For example, the cost for air shipping fresh fruits to the US used to be around 3.5 USD per kilo a few years ago, but now has risen to 6 USD per kilo.
This is affecting their competitiveness overseas and reducing the amount of fruit shipped there.
However, since preservation technology for many fruit products is not good enough, they have to rely on air transport.
The cost of ocean transport of fruit is 15 times cheaper than air, so better preservation technology to maintain quality on longer container trips is important, she said.
Pham Tien Hoai, General Director of the Hanh Nguyen Logistics, said that the logistics costs of Vietnam’s agricultural products are high, usually accounting for around 30 per cent of their final prices, so they struggle to compete with goods from other suppliers such as China, Thailand and Indonesia.
Vo Thanh Phong, general director of Hau Giang Maritime Service Co. Ltd, said the Government needs to continue its effort to improve and enlarge waterways in the Mekong Delta so that large vessels can easily travel through different regions, reducing transport time and costs.
Le Tien Chau, provincial party secretary of Hau Giang, said that for 2021 – 2026 the province will invest around 18 trillion VND (777.99 million USD) to improve traffic infrastructure and region connectivity.
Every year the Mekong Delta accounts for 90 percent of the country’s rice exports, and 70 percent of fruit exports./.
Transport Ministry proposes extending support policy for transport firms
The Ministry of Transport has proposed the Government extend support policies for transport firms until the end of the year and offer more support solutions to those facing difficulties caused by Covid-19.
As for road transport, the ministry proposed the Government extend its support for road maintenance fees that have been reduced by 30% on passenger coaches and 10% on trucks until the end of 2021.
It is necessary to offer more support solutions for road transport firms to help them recover after the coronavirus pandemic, including reducing value-added tax to zero and corporate income tax by half and extending debt payment deadlines, according to the ministry’s proposal.
Other support solutions proposed by the ministry included a 50% reduction on services at coach stations, a 50% cut in registration fees for vehicles used for transport operations and exemption from parking fees at train stations, seaports and airports. These cuts should be valid until the end of the year.
Regarding aviation transport, the Ministry of Transport proposed the Government allow extending the policies of slashing the fees of take-off and landing services by 50% and applying the lowest price at VND0 for some aviation services until the end of 2021.
In addition, the State Bank of Vietnam should consider offering support solutions related to credit, interest rates and payment deadlines, the local media reported.
Apart from this, the ministry proposed prioritizing Covid-19 vaccination for Vietnamese sailors, navigators and those who work directly with ships and putting Vietnamese sailors whose work contracts expired and who were stuck in foreign countries on the priority list for repatriation flights.
Japan’s Enshu Railway to build software development unit in Vietnam
Japan-based Enshu Railway Co., Ltd. will invest in the establishment of a subsidiary focusing on software development in Vietnam in July.
As reported by Kyodo News, the Hanoi-based unit, Entetsu Vietnam Co., will be capitalised at 30 million yen (US$274,000) and become operational in August.
The subsidiary will be engaged in developing web-based information technology systems and smartphone apps and creating websites in order for its parent to upgrade its services.
Enshu Railway, which has a track record of hiring foreign students as full- and part-time employees in IT-related departments at its head office in Hamamatsu, plans to employ local engineers for the subsidiary.
With its launch, the company will close its representative office in Hanoi, which was opened in March last year.
The Japanese firm also runs bus and other transportation services mainly in the Hamamatsu area in Shizuoka prefecture.
Under its three-year business plan through last March, Enshu Railway pursued diverse lifestyle and daily living services that also involved the real estate, insurance, nursing care, retailing and leisure sectors while promoting in-house digital transformation. But its business, particularly in the mainstay transportation sector, has been hit by the COVID-19 pandemic.
Majority of family businesses in Vietnam lack digital capabilities
The lack of the digital tools and capabilities that are needed for a rapidly changing world will present significant challenges to family businesses in protecting their legacy.
Only 30% of Vietnamese family businesses said they have strong digital capabilities, as compared to 38% globally, while a mere 9% say that their digital journey is complete.
The information was revealed in the 10th PwC Global Family Business Survey conducted from October 5 to December 11, 2020, of which the key decision-makers of 33 family businesses in Vietnam participated in an online interview.
This slow progress could be tied to the reportedly high levels of resistance to embracing change within the company, as revealed by 67% of respondents, added the report, saying this is significantly higher than the perceived sentiment of regional peers, at 29%, and global peers, at 33%.
“The lack of the digital tools and capabilities that are needed for a rapidly changing world will present significant challenges to family businesses in protecting their legacy,” said Johnathan Ooi, private business services leader at PwC Vietnam.
“Moving faster along the digital journey will require more than just bridging the technology gap. Transformation must be a part of a cultural shift that is supported by highly engaged leaders, as well as a commitment to upskilling the workforce,” he added.
Meanwhile, the report also revealed 65% of the surveyed Vietnamese family business predict growth in 2021.
The view for 2022 is more positive, with three out of four respondents saying that they are optimistic about growth, and 33% anticipating that the growth will be “quick” and “aggressive” – higher than the regional and global responses, which stand at 28% and 21%, respectively.
In keeping with such growth aspirations, the findings also reveal that business expansion and technology adoption are the key priorities. 55% of the respondents confirmed a focus on bringing new products and services to the market, with 52% on the increasing use of new technology. Given that the global pandemic is marking permanent changes, the rethinking or adaptation of new business models is also top of mind for 52% of respondents.
There are also apparent shifts towards business diversification and more externally managed structures for family businesses. Within five years, 45% of Vietnamese family businesses are aiming to become more diversified, highlighting the need for sustainable revenue streams for future disruptions.
The current operating model – which centres on businesses that are owner-managed and family-managed – is expected to shift towards a “family-owned / externally-managed” or “externally-run” model, increasing from 12% to 60% over the next five years.
Over half (52%) of Vietnamese family businesses expect that the next generation will become majority shareholders within five years’ time. However, only 36% of respondents claim to have a formal succession plan in place.
“Family businesses are having to navigate a faster pace of change than ever before. An equal focus should be placed on strategic planning and succession planning. Making a head start in this area will therefore be helpful for the next generation. They will be equipped with the necessary tools to drive the business forward and in the right direction,” noted Ooi.
The report also shed light on the growing need for Vietnamese family businesses to factor ESG (Environmental, Social, and Corporate Governance) credentials into their plans for securing their legacy.
In a year in which businesses have had to transform the ways they meet the needs of society and the environment, falling behind in terms of addressing sustainability and wider EGS issues could create a potential business risk, noted the report.
While the majority of Vietnamese family businesses (85%) are reportedly engaged in some form of social responsibility activities, issues relating to sustainability are currently far down the list of priorities. Only 21% of the surveyed family businesses feel that there is a responsibility to fight climate change, versus 50% in both Asia Pacific and globally.
“The world is changing, and so is the formula for lasting family business success. Tomorrow’s family businesses require a new approach to enhancing their legacy – one that is based on keeping ahead of digital transformation, with a greater focus on sustainability goals, and professional family governance,” Ooi commented.
Quang Ngai prioritises investment promotion for supporting industries
Supporting industries will be a focus of an investment promotion plan released by central Quang Ngai province for 2021.
It has earmarked close to 2.2 billion VND (95,500 USD) to implement activities to attract investment to local projects in supporting industries, petrochemicals, high-technology, seaports, logistics, clean technology, hi-tech agriculture, urban infrastructure, and tourism and services.
The province also wants to lure more investment this year into housing, services, and utility development projects for workers at the Dung Quat Economic Zone and local industrial parks.
According to the Dung Quat Economic Zone and Quang Ngai Industrial Parks Authority (DEZA), it will invite new investors to set up business in the province this year via existing investors and provide support in regard to site clearance and public administration services.
It will also help enterprises tackle the challenges and speed up the progress of licensed projects while offering all possible conditions for luring new capital, it said.
The province plans to hasten the progress of a number of projects, including an industrial, urban, and service complex at the Vietnam-Singapore Industrial Park (VSIP) Quang Ngai, the Dung Quat Refinery expansion, the Hoa Phat Dung Quat Iron and Steel Integrated Complex, and gas-fuelled power projects at the Binh Hoa - Binh Phuoc Industrial Park.
It will review delayed and inefficient projects to identify supportive measures or revoke licenses if required, while action will be taken to further better the business climate, accelerate public administration reform, and bring in medium- and large-scale investment projects, especially those in supporting industries that use high-technology and are environmentally friendly.
A number of investment promotion and business-matching events are also in the pipeline.
As of the end of February, Quang Ngai was home to 61 valid FDI projects with combined investment of nearly 1.97 billion USD, and 668 domestic projects, excluding those in real estate, worth close to 295 trillion VND./.
Foreign merchants register to purchase lychees in Vietnam
Hai Duong and Bac Giang, Vietnam's lychee growing hubs, have processed numerous entry applications from foreign traders wishing to buy the products two months prior to harvest.
Bac Giang is expected to welcome a total 500 Chinese merchants, who have been buying lychees from local farmers for many years, in the next few months.
Luc Ngan District estimates that the total lychees harvested this year would reach 120,000 tons, a year-on-year increase of 41 percent.
Meanwhile, many foreign traders have registered to enter Vietnam to buy lychees from Hai Duong province.
Hai Duong is expected to harvest around 45,000-52,000 tons of lychees this season.
Hai Duong Province’s total area for lychee cultivation is 10,000 hectares, of which 3,300 hectares are in Thanh Ha District, 3,600 in Chi Linh Province, and the rest in other localities.
Vietnam Furniture Matching Week kicks off in HCM City
The Vietnam Furniture Matching Week, held by the Handicraft and Wood Industry Association of Ho Chi Minh City (HAWA), kicked off in the southern city on April 14.
Various online and offline events will be arranged until April 19 to foster trade opportunities between Vietnamese manufacturers and foreign buyers.
More than 10,000 products are being showcased at a virtual exhibition at hopefairs.com. The platform also hosts numerous webinars and broadcasts by HAWA and foreign partners.
HAWA President Nguyen Quoc Khanh said the Vietnam Furniture Matching Week is hoped to address bottlenecks in trade activities in the world’s furniture market, which has been hindered by COVID-19.
A highlight of the trade show is the “Furniture Sourcing Day” on April 14, with the participation of over 400 representatives of foreign buyers, producers, and businesses in the handicraft and wood industry.
Furthermore, two major symposiums focusing on the building of firm management systems to meet sustainable purchasing demand, and export opportunities for wooden products and handicrafts via Amazon will be held to pass on information to local firms./.
SBV Governor calls for credit growth, quality
Governor of the State Bank of Vietnam (SBV) Nguyen Thi Hong has requested that credit growth be achieved in tandem with improving credit quality, with a focus on manufacturing and priority areas.
During a teleconference in Hanoi on April 14, Director of the SBV’s Credit Department for Economic Sectors Nguyen Tuan Anh said that as of March 31, the economy’s outstanding debts had surpassed 9.46 quadrillion VND, up 2.93 percent from late 2020.
Credit growth in agro-forestry-fisheries reached 2.42 percent, industry 3.04 percent, and real estate 3 percent. Meanwhile, credit in securities hit 45.3 trillion VND (1.96 billion USD), down 1 percent from late 2020.
Hong said the SBV has set credit growth at nearly 12 percent this year, with credit in areas of risk to be brought under control.
Violations of banking activities have been mostly found in credit activities. At present, total outstanding debts are equivalent to 140 percent of the country’s GDP.
As of late March, banks had restructured debt repayments for nearly 263,000 customers with outstanding debts of more than 353 trillion VND, and exempt or cut interest rates for over 660,000 customers with more than 1.27 quadrillion VND. Credit organisations have lent over 3 quadrillion VND to more than 452,000 clients since January 23.
In the near future, Anh said the SBV will realign monetary policy with macro-economic and monetary developments as well as the pandemic situation at home and abroad.
At the same time, it will closely control credit in areas of risk, such as securities, real estate, and build-operate-transfer (BOT) and build-transfer (BT) transport projects, while managing risks in lending.
The SBV will prioritise the provision of higher credit quotas for credit organisations that actively reduce lending rates and also encourage financial companies to cut lending rates.
The sector will tackle the difficulties faced by customers who were hit by COVID-19 and natural disasters.
Credit institutions were asked to continue creating favourable conditions for individuals and businesses to access credit, and to work with localities to step up a programme connecting banks with companies./.
Vietnam Airlines to open six new routes in peak season
Vietnam Airlines is set to expand its domestic flight network between April 24 and August 31 to meet the higher demand during the summer’s peak travel season.
The national flag carrier will open six new routes: Da Nang - Vinh, Phu Quoc - Can Tho, Phu Quoc - Nha Trang, Phu Quoc - Buon Me Thuot, Phu Quoc - Hue, and Phu Quoc - Thanh Hoa.
Da Nang - Thanh Hoa and Can Tho - Buon Me Thuot flights will be resumed.
The Da Nang - Thanh Hoa, Phu Quoc - Can Tho, Phu Quoc - Nha Trang, and Phu Quoc - Hue routes will have four round-trip flights a week, on Monday, Wednesday, Friday, and Sunday.
Three round-trip flights a week will be conducted on Tuesday, Thursday, and Saturday on the Da Nang - Vinh, Can Tho - Buon Me Thuot, Phu Quoc - Buon Me Thuot, and Phu Quoc - Thanh Hoa routes.
Since May, the carrier has opened 28 new routes, most of which fly to famous tourist destinations, raising its domestic flight network to 67 routes. The move aims to stimulate domestic travel after the recent resurgence of COVID-19 was brought under control./.
Can Tho city hosts third VietShrimp fair
The third VietShrimp Aquaculture International Fair, focusing on technology in Vietnam’s shrimp industry, opened in the Mekong Delta city of Can Tho on April 14.
With the theme “Sustainable Destination”, the three-day fair features close to 200 pavilions from some 150 domestic and foreign firms involved in aquaculture.
A number of symposiums will also be held to introduce effective production models and orientations and solutions to sustainable shrimp farming.
President of the Vietnam Fisheries Society (Vinafish) and head of the organising board Nguyen Viet Thang said the fair aims to promote the achievements of the sector over the years, as well as help companies cooperate, expand markets, and introduce new farming technologies, in the hope of ensuring the efficient and sustainable development of Vietnam’s shrimp sector.
According to the Ministry of Agriculture and Rural Development, Vietnam has more than 200,000 ha of hi-tech shrimp farming areas, primarily in the two Mekong Delta provinces of Bac Lieu and Soc Trang.
The sector targets producing 930,000 tonnes of brackish water shrimp this year, raking in 4 billion USD from exports.
With average growth of 7 percent in the global shrimp sector, the world's total shrimp output is expected to hit 15 million tonnes by 2045. Vietnam may take the lead in shrimp production and processing by that time, accounting for a quarter of the global share with an output of nearly 4 million worth 20 billion USD./.
Hoa Phat becomes Vietnam’s biggest steelmaker
The Hoa Phat Group has surpassed Hung Nghiep Formosa Ha Tinh to become Vietnam’s largest steel producer after it produced 2 million tonnes of crude steel in the first quarter of this year, a 60 percent increase year-on-year.
Hung Nghiep Formosa Ha Tinh took the second spot with output of 1.62 million tonnes, 20 percent lower than Hoa Phat.
In March alone, Hoa Phat produced 700,000 tonnes of crude steel, up 56 percent year-on-year and its highest-ever output for a month. It continued to take the leading position in terms of construction steel and steel pipe, with market shares of 33.8 percent and 30.19 percent, respectively.
The group’s crude steel production has reached over 8 million tonnes a year, including over 5 million tonnes of construction steel and 3 million tonnes of hot rolled coil (HRC). Of the total, the Hoa Phat Dung Quat Steel Integrated Complex is the largest producer, with annual production of 5.2 million tonnes, followed by the Hoa Phat Hai Duong Steel Integrated Complex with 2.5 million tonnes a year.
Its steel mill complex in Hung Yen province has a capacity of 400,000 tonnes a year. When the Hoa Phat Dung Quat 2 project comes into operation, the group’s crude steel output is expected to reach 14 million tonnes a year.
Hoa Phat is currently among the 50 largest steel companies in the world and the largest in Southeast Asia./.
Dong Nai aims to attract 700 million USD in FDI to IPs this year
The southern province of Dong Nai plans to attract some 700 million USD in FDI to its industrial parks (IPs) this year.
Despite the negative impact of the COVID-19 pandemic, IPs in the province attracted 10 FDI projects in the first quarter of this year, while 19 others added a combined 320 million USD, hitting 46 percent of the annual plan.
Major projects include the second phase of the Hansol Electronics Vietnam project at the Ho Nai IP, with registered capital of 100 million USD; the 60 million USD factory of the Ojitex Vietnam Co. at the Loc An - Binh Son IP; and Platel Vina’s plant at the Amata IP, with 30 million USD.
Average capital stood at 19 million USD per project in Q1; higher than the 11 million USD posted in the same period last year.
Thirty-two IPs in Dong Nai are home some 1,900 projects invested by domestic businesses and companies from 41 countries and territories, of which 1,362 are FDI projects totalling 26.96 billion USD.
FDI projects in the province are mainly in machinery-devices, electronic components, garment-textiles, footwear, and plastics./.
2021 Vietnam Expo opens in Hanoi
The 2021 Vietnam International Trade Fair (Vietnam Expo), the 30th edition of its kind, opened at the Hanoi International Exhibition Centre at 91 Tran Hung Dao Street in downtown Hanoi on April 14.
Addressing the opening ceremony, Deputy Minister of Industry and Trade Do Thang Hai said since 1991, the annual event has become one of the largest trade promotion events in Vietnam’s industry and trade sector, offering chances for firms to bolster exports as well as develop the domestic market.
This year, the event attracts 320 businesses of Vietnam and five other countries and territories, who showcase their products at 300 booths.
To enhance efficiency for firms amid the adverse impact of COVID-19, activities will be held both on-site and online via e-commerce platforms. An online version of the event will run until May 14 at www.online.vietnamexpo.com.vn.
The organisers said they chose the fair’s theme spotlighting digital transformation to advocate the Government’s national programme in this direction, in the hope of creating a platform to connect the business circle to relevant solutions and applications, thus enhancing their competitive edge in production and business.
The expo also features a national space of the Republic of Korea (RoK) run by the Korea Trade Investment Promotion Agency (KOTRA) in Hanoi for the 22nd consecutive year./.
Japan's Ube Construction Materials forms sales unit in Vietnam
Japan's Ube Construction Materials Co. has set up a subsidiary in Ho Chi Minh City to sell waterproof agents and other construction materials in Vietnam and other Southeast Asian countries.
Ube Construction Materials, a Tokyo-based wholly owned unit of chemical giant Ube Industries Ltd., said it owns a 51 percent stake in the new local arm, Ube CT Construction Materials Vietnam Co., which has an initial capital of 753,100 USD.
The rest of the stake is held by two other Japanese companies - 37.5 percent by T. Chatani & Co., a subsidiary of chemical goods trading house OG Corp., and 11.5 percent by Koatsu Gas Kogyo Co., a manufacturer of high-pressure gas.
The waterproof materials market in Vietnam is expected to expand in line with the country's economic growth, an Ube Industries spokesman told NNA, commenting on the establishment of the new local unit as the Ube group's first business base in Vietnam.
Ube Construction Materials was founded in 2015 and plays a central role in the group's construction materials business./.
Teleconference boosts Belgian investment in Binh Duong
A teleconference was held on April 14 to promote Belgian investment in the southern province of Binh Duong.
The event was co-hosted by the Becamex IDC Corp and the provincial People’s Committee.
In his opening speech, Vice Chairman of the provincial People’s Committee Nguyen Thanh Truc said as of the end of March, Binh Duong had drawn nearly 4,000 foreign-invested projects worth nearly 37.9 billion USD, ranking third nationwide in terms of foreign direct investment (FDI) attraction, only behind Ho Chi Minh City and Hanoi.
The province is now home to five Belgian projects worth over 39 million USD, ranking 37th out of 65 countries and territories investing in the locality, mostly pharmaceuticals, apparel, additives, beer and malt, and goods storage.
Vietnamese Ambassador to Belgium and Luxembourg Vu Anh Quang said amid uncertain developments caused by COVID-19 pandemic in the world, Belgium and Vietnam continue to be important trade-investment partners of each other because they serve as regional trade hubs and gateways to the European Union and ASEAN.
The two nations’ enterprises hold the potential of deeper collaboration within the framework of the EU-Vietnam Free Trade Agreement (EVFTA) and the Vietnam – Belgium strategic partnership in agriculture, he added.
The Vietnamese Government attaches special importance to the implementation of major FTAs such as the EVFTA, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), and the Regional Comprehensive Economic Partnership (RCEP), he said, adding that FDI continues to serve as an important resource for Vietnam’s economic growth and contribute to the implementation of the 2021-2030 socio-economic development strategy with a vision to 2045 which was adopted by the 13th National Party Congress.
Belgian delegates hailed Vietnam as a significant gateway linking ASEAN with the world via roads, waterway and airway. With a widespread system of deep-water seaports capable of receiving big vessels, political stability and the Government’s business incentives, Vietnam is well-positioned to attract foreign investors.
Belgium now invests in 78 projects valued at 1.1 billion USD in Vietnam, placing 23rd out of 131 countries and territories investing in the country, predominantly in seaports, infrastructure, logistics, real estate, water supply and drainage, waste treatment, manufacturing and processing, electricity production and distribution, agro-forestry-fisheries, which are strength of Binh Duong.
The European nation is also Vietnam’s fifth largest importer in the EU, behind Germany, the Netherlands, France and Italy while Vietnam is Belgium’s second largest trade partner in ASEAN, behind Singapore. Two-way trade reached 2.83 billion EUR last year, 633 million EUR of which was Belgium’s exports./.
Shrimp sector sets sights on US$4 bln export target in 2021
The Vietnamese shrimp sector is aiming to boast a brackish water shrimp farming area of approximately 740,000 hectares with a total output of 930,000 tonnes and an export turnover of US$4 billion during the course of this year.
Tran Dinh Luan, director general of the Directorate of Fisheries in Vietnam addresses the event
This information was released during the opening ceremony of the shrimp aquaculture international fair 2021 which got underway on April 14 in the Mekong Delta city of Can Tho.
The event offers an ideal venue for managers, scientists, traders, and farmers to share and introduce various new technology products and advanced models, strengthen connectivity between producers and consumers, while elevating the image of Vietnamese shrimp in the global market.
Nguyen Viet Thang, chairman of the Vietnam Fisheries Association, said despite the impact of the novel coronavirus (COVID-19) pandemic, local shrimp export turnover reached over US$3.7 billion last year.
Currently, Vietnam is home to roughly 200,000 hectares of hi-tech shrimp farming, the majority of which is in the two provinces of Bac Lieu and Soc Trang in southern Vietnam.
Statistics show with the global shrimp industry averaging an annual growth rate of some 7%, total global shrimp production is anticipated to reach 15 million tonnes by 2045.
Many industry experts said Vietnam could become the world's leading shrimp producer and account for about 25% of the global shrimp market share with an output of four million tonnes of raw shrimp worth US$20 billion by 2045.
This prediction can come true if they said proper strategies are implemented in order to develop the domestic shrimp industry in a sustainable manner, whilst also adapting to issues relating to climate change and making efforts to protect the environment.
Tran Dinh Luan, director general of the Directorate of Fisheries in Vietnam, noted recent years has seen several effective shrimp production models implemented, attracting a host of groups and companies to get involved in the value chains of the local shrimp industry.
Luan also pointed out that with proper strategies, the shrimp sector is expected to gross an export turnover of between US$3 billion and US$ 4 billion, or even as high as US$6 billion, in the near future.
The international fair will offer an opportunity for managers, businesses, and localities to gain greater access to the latest technologies in order to develop the shrimp industry in a sustainable manner, Luan said.
Source: VNA/VNS/VOV/VIR/SGT/Nhan Dan/Hanoitimes