VIETNAM BUSINESS NEWS APRIL 22

Vietnamese firms have chance to reach out to Halal market

VIETNAM BUSINESS NEWS APRIL 22

Global demand for Halal product is increasing. (Photo: halalvietnam.vn)

Vietnamese food processors have opportunities to tap into the billion-USD Halal market when attending a hybrid exhibition on Halal products and processed food scheduled in late May in Singapore.

The Food and Agriculture Organisation of the United Nations (FAO) in Vietnam estimated that the Halal market is growing rapidly, with Muslim consumers worldwide spending 1.4 trillion USD on Halal food, and the figure expected to be ten times higher in 2050.

As a leading agricultural exporter in the world, Vietnam has huge advantages to penetrate into the Halal market, experts said, adding it is necessary to study consumers’ demand and Halal market’s standards.

Vietnamese authorities have joined hands with their partners in Singapore hold the hybrid event at Changi International Airport, aiming to help Vietnamese firms to engage in the promising Halal market.

Participants need to obtain Halal certificates, satisfy the Hazard Analysis Critical Control Point (HACCP), and provide products’ instruction in English, according to the Ministry of Industry and Trade’s Trade Promotion Agency.

Joining the event, businesses will enjoy free-of-charge exhibition areas, transportation, and business-matching events. Along with communication work, they will receive support to sell their Halal products at Singaporean supermarkets.

This is Vietnam’s first Hybrid exhibition in a foreign country, aiming to pilot trade fair in combination with business matching through digital platforms.

The exhibition will last for one week with strict trade measures put in place to ensure safety for the participants.

It is estimated that demand among the Muslim community for products found in Vietnam is about 34 billion USD per year. But, in fact, Vietnam’s export of such products to this market has reached only 10.5 billion USD, meaning that more than two-thirds of consumer demand, worth 23.6 billion USD, has been missed.

Every year, about 50 Vietnamese companies are granted halal certifications mainly for seafood, beverages, canned foods, confectionery, vegetarian food and pharmaceuticals products./.

SBV orders circulation of denominations of currency at reasonable ratio

According to the State Bank of Vietnam (SBV), recently, the Governor of SBV has issued a document directing its Transaction Center and branches to balance the structure ratio of all types of denominations of currency in circulation, ensuring the issuance rate of the VND500,000 notes in circulation following the regulations of SBV and increasing the issuance of small notes from VND10,000 downwards.

However, according to SBV, the ratio of VND500,000 notes put in circulation in some units remained high. The putting of small denominations into circulation in some units has not been done actively and thoroughly.

To continue to ensure a reasonable structure of the types of denominations of currency in circulation, SBV requires its branches in provinces and cities to monitor the progress of cash revenues and expenditures in the area, ensure to fully meet the cash demand for credit institutions and branches of foreign banks.

Steel producers post outstanding results in Q1

The surge in prices of steel since the beginning of 2021 helped many steel producers record good performance in the first quarter.

Rebar futures contracts, trading on the Shanghai Futures Exchange, increased sharply due to supply chain disruptions caused by the COVID-19 pandemic.

The most traded May rebar contract climbed 17.4 percent this year and traded at 5,101 yuan per tonne. The rebar price rose 51 percent compared to April 2020.

In its first quarter finance result, Hoa Sen Group (HSG) posted an increase of nearly 382 percent year-on-year in net revenue to 9.1 trillion VND, leading to a rise of 215.8 percent in profit after tax to 572 billion VND.

HSG said that the gain was mainly driven by increases in net revenue and falls in financial expenses, dropping nearly 30 per cent in the first quarter.

Ho Chí Minh City Metal Corporation (HMC) also witnessed strong growth in business results during this period with its revenue rising 40.4 percent over the same period of 2020 to over 1.1 trillion VND.

The company's profit after tax gained over 10 times compared to last year to 64.7 billion VND, marking the highest quarterly profit since it was founded.

In the financial report, HMC said that the main reasons for the company's outstanding performance were gains in sales and higher steel price.

The company will hold its annual general meeting on April 26. In a report prepared for the meeting, HMC set this year's target of 3.45 trillion VND in revenue, down 5 percent year-on-year, with profit after tax increasing 16 percent to 44 billion VND.

Another steel producer posting good results in the first quarter was Thu Duc Steel JSC (TDS).

The quarterly financial report showed that the company's net revenue rose 22.7 percent year-on-year to 601.6 billion VND. Its profit after tax also posted a gain of 45.5 percent to over 12.8 billion VND.

According to TDS, its steel consumption increased to over 1,760 tonnes in the last quarter while the steel price continued to rally.

The sharply decline in financial expenses also supported TDS' business results. The fees slid nearly 76 percent year-on-year in the first quarter.

In 2021, TDS is expected to reach 20 billion VND in profit before tax.

On the Ho Chí Minh Stock Exchange (HoSE), HSG and HMC closed higher on April 19, up 5.86 percent and 6.91 percent, respectively.

TDS, which trades on UPCOM, also opened the new week on a positive note. The TDS shares increased 14.62 percent to 24,300 VND./.

Vietnamese firms learning importance of branding: conference

The Vietnam Value Programme has brought home to businesses the importance of brands, which hold the key to increasing the value of products and enterprises, said Deputy Minister of Industry and Trade Do Thang Hai.

“The number of Vietnamese enterprises with products recognised as national brand has risen from 30 in 2008 to 124 now and to 283 products," he told the opening ceremony of the Vietnam National Brand Week which is organised from May 19 to 25 in HCM City.

The Vietnam Value Programme, implemented since 2003, aims to build the image of Viet Nam as a country with high-quality goods and services and enhancing the prestige of its enterprises both at home and abroad.

According to Brand Finance, a leading global brand valuation and strategy consultancy, in 2020 Viet Nam’s national brand was valued at US$319 billion, up 29 per cent from 2019 and nine places to 33rd in the National Brands list of the world’s 100 most valuable brands, he said.

Samir Dixit, managing director of Brand Finance Asia-Pacific, said in his company’s 2021 Global Soft Power Index Report, Viet Nam is the only country in Southeast Asia to improve its soft power ranking from 2020.

Its ranking moved up from 50th place out of 60 countries in 2020 to 47th place out of 105 in 2021.

According to Brand Finance, soft power is “a nation’s ability to influence the preferences and behaviours of various actors in the international arena through attraction or persuasion rather than coercion.”

Speaking at the National Brand Forum, held as part of the Vietnam National Brand Week, Nguyen Son Tra from the ministry’s Multilateral Trade Policy Department said, “Commitments under CPTPP and EVFTA have helped promote the Vietnamese brand in export markets.”

To build their brands, besides focusing on product quality and prices, businesses also need to focus on factors like social responsibility, environmental protection and sustainable development, she added.

Pham S, vice chairman of the Lam Dong Province People’s Committee, said, “Branding is the golden key that helps firms open doors to new markets.”

Vu Ba Phu, director general of the Viet Nam Trade Promotion Agency, said his agancy and the ministry would continue to provide support to enterprises with products and services recognised as national brand to promote their exports.

They would also organise activities to increase awareness among consumers about the programme and ‘Viet Nam Value’ products through various domestic and international media channels, he said.

The 2021 Viet Nam National Brand Week includes the Vietnam National Brand Forum, a seminar on how to leverage Vietnamese brands and activities to popularise the National Brand Programme.

The event is expected to help promote Viet Nam as a producer of high-quality goods and services, boost foreign trade and enhance national competitiveness while calling for concerted efforts from ministries and business community in developing national brands in Viet Nam.

Vietnam welcomes FDI in production of medical equipment: trade officer

Vietnam has rolled out the red carpet for foreign investors, including those from ASEAN member states, to land investment in the field of advanced medical equipment, said Counselor Nguyen Manh Hung at the Vietnamese Embassy in Germany.

At a virtual conference held by Ernst & Young (EY) Global Limited on April 20, Hung said that ASEAN has produced a wide range of medical equipment, and 5-7 percent of the global equipment exports are sourced from ASEAN countries.

Vietnam has huge demand for medical equipment due to its rapid aging population, he stressed, believing that a network between ASEAN member states should be established to enhance information exchange as well as cooperation in the field so as to ensure timely supply of medical equipment and pharmaceutical products.

At the event, which also aimed to promote trade and investment in consumer goods within the bloc, Hung highlighted the important role of Vietnam’s garment and footwear in both domestic and export markets.

Despite adverse impacts of COVID-19, Vietnam’s exports of consumer products topped 100.3 billion USD in 2020, a year-on-year rise of 2.4 percent. Particularly, shipments of garment and footwear products accounted for 20 percent of the nation’s total export revenue in 2019.

Currently, Vietnam is the fourth largest garment and textile exporter, and the second biggest source market of footwear. However, 80 percent of the leather shoes come from the FDI sector, Hung said.

As the COVID-19 pandemic has affected the supply of materials for the two production sectors, while global demand has declined sharply, Vietnam is working to diversify its material supplies to reduce risks.

In a bid to enjoy tax preferences from free trade deals such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Europe-Vietnam Free Trade Agreement (EVFTA), brands and suppliers in Vietnam are using domestic materials.

According to Hai, with robust economic growth, ASEAN is both a large supplier of consumer products and a big market.

With increasing income, ASEAN consumers have preferred high-quality products, including garments and leather shoes; therefore, Vietnam is striving to branch out the two sectors through developing transport and logistics infrastructure, he added./.

Ministry targets 650 million USD from mango exports by 2030

The Ministry of Agriculture and Rural Development (MARD) expects that, by 2030, Vietnam will be home to about 140,000 ha of mango trees with output standing at 1.5 million tonnes, earning the country 650 million USD from exports of the fruit.

The mango growing area currently stands at some 87,000 ha, 48 percent of which is in the Mekong Delta.

Vietnam shipped over 180 million USD worth of mangoes abroad last year, accounting for only 1.15 percent of the world’s total.

China was the largest market of Vietnam, with nearly 152 million USD, or 83.9 percent of the total, followed by Russia, the US, the Republic of Korea, the EU, Australia, and Japan, according to MARD’s Agro Processing and Market Development Authority.

To achieve the export target, Deputy Director of MARD’s Plant Protection Department Nguyen Thi Thu Huong called on the ministry to upgrade her department’s technical centres so as to carry out studies helping to remove technical barriers, seek new markets, and conduct pre-export checks.

She also recommended MARD digitalise its databases on farming zones, processing establishments, and packaging facilities.

While localities should enhance connectivity between cultivation areas and increase training for local staff in charge of farming techniques, businesses need to seriously comply with regulations from both importing countries and Vietnam, boost production cooperation, maintain constant monitoring to ensure sufficient supply and quality materials, and remain updated on export information, Huong added.

Deputy Minister Tran Thanh Nam said having 48 percent of the mango growing area concentrated in the Mekong Delta is favourable in improving quality and meeting the requirements of importing markets.

However, as the area meeting VietGAP and GlobalGAP standards makes up just 3.8 percent of the Mekong Delta’s mango growing area, it is necessary to boost the adoption of these standards, he noted.

Nam also urged provinces and cities in the Mekong Delta to work to improve quality in every step, from farming and harvesting to preservation, while strengthening links in mango sales.

In particular, they should identify target markets and work with enterprises and cooperatives to help farmers align cultivation practices with international standards./.

Vietnamese, US firms join hands to develop aviation infrastructure

More than 80 state-owned and private enterprises from Vietnam and the US discussed cooperative opportunities at a recent virtual conference as both sides are making preparations for the launch of direct flights between the two countries.

Leading US firms such as Autodesk, Boeing, Collins, Aerospace, Haskell, Honeywell, Mitre, Rapiscan, JBT Aerotech, Turner Construction and Tyco Security, among others, shared experience and solutions in airport development, as well as highlighted opportunities to boost the Vietnam-US collaboration in this field.

At the event, the US Federal Aviation Administration, the US Transportation Security Administration, the US Department of Commerce and the US Trade Development Agency said they would work closely with the Vietnamese sides to develop a safe and effective air transportation system.
The US agencies are working to provide technical and financial support for the Vietnamese side.

Meanwhile, representatives from the Civil Aviation Authority of Vietnam (CAAV) and Airport Corporation of Vietnam (ACV) shared information on Vietnam’s aviation infrastructure development plans.

Earlier, Bamboo Airways was licensed by the US Department of Transportation to carry passengers and cargo between Vietnam and the US. It will use wide-body Boeing 787-9 Dreamliner to fly directly from Hanoi/Ho Chi Minh City to international airports in the US.

Experts evaluated the market potential between the two countries is at about 700,000 passengers per year, while only 30,000 – 60,000 passengers per year are needed to open the direct flight.

In term of legal aspects, in 2003, Vietnam and the US signed an aviation agreement that allows carriers of the two countries to operate direct flights with a frequency of one flight per day or fly over to a transition country before departing from the US.

In 2010, the CAAV reviewed and reassessed the agreement, concluding there are no restrictions or obstacles on passengers, flight frequency to apply for permission to open flights connecting Vietnam and the US.

And after 10 years of efforts, in early 2019, the CAAV obtained the US CAT-1 certificate. This is a prerequisite for Vietnamese airlines to apply for permits to fly to the US and to codeshare with US airlines. The FAA will continue to evaluate the capacity of each Vietnamese carrier./.

Hanoi: Q1 exports fall slightly year on year

Hanoi earned 3.118 billion USD from exports in the first quarter of 2021, dropping 1 percent from the same period last year, according to the municipal Department of Industry and Trade.

Of the total, more than 1.6 billion USD came from shipments by domestic businesses, down 9.3 percent, and over 1.15 billion USD from foreign invested firms, up 9.7 percent.

Some commodities posting export growth in Q1 included mobile phones and accessories (92.4 million USD, up 110 percent), footwear (77.6 million USD, up 24.6 percent), and glass and glassware products (83.7 million USD, up 17.8 percent).

Those with shrunken shipments were transport vehicles and spare parts (283.3 million USD, down 15.7 percent), agricultural products (141.3 million USD, down 30 percent), and petrol and oil (127.1 million USD, down 42.4 percent).

Meanwhile, the capital imported almost 6.99 billion USD worth of goods in the first three months, up 4 percent year on year, including 5.38 billion USD by domestic enterprises and 1.6 billion USD by foreign invested ones, up 4 percent and 4.1 percent, respectively.

Explaining the export contraction in Q1, Acting Director of the Department of Industry and Trade Tran Thi Phuong Lan said complex developments of the COVID-19 pandemic in the key export markets like the US, Europe, and Southeast Asia have continued to adversely impact exports, leading to a sharp decline the shipments of vehicles and spare parts, petrol, and oil./.

Vinamilk leaps six spots in world’s top 50 dairy producers

The Vietnam Dairy Products Joint Stock Company (Vinamilk) has moved up six places from 42nd to 36th in the Top 50 by Total Sales in Dairy Product Processors (Global), according to the rankings announced by UK-based Plimsoll Publishing Ltd.

With total revenue of more than 59.7 trillion VND (nearly 2.6 billion USD) in 2020, Vinamilk was the only dairy producer in Southeast Asia to enter the Top 50.

Top 10 named businesses from the US, New Zealand, Europe and China.

The Vietnamese dairy firm entered the Top 50 for the first time in 2017. In 2020, thanks to its rational strategies to respond to the COVID-19 pandemic, Vinamilk posted robust business results, with earnings surging 5.9 percent from 2019, and 17 percent from 2017.

In the past time, an array of new products have been introduced to Vietnamese consumers, including high-grade Vinamilk Green Farm fresh milk – a product made of fresh milk sourced at Vinamilk’s Green Farm, Vinamilk UHT fresh milk with bird’s nest and Fruit Love.

Thanks to its high-quality products, Vinamilk has been among top three most chosen fast-moving consumer goods (FMCG) brand owners in both urban and rural areas for the 8th consecutive year, according to the Kantar Worldpanel’s Asia Brand Footprint 2020.

Along with affirming its prestige in the domestic market, Vinamilk has won the taste of consumers in 56 countries and territories. To date, it has shipped more than 2.4 billion USD worth of dairy products abroad.

Vinamilk has invested heavily in its international-standard dairy farms. The firm is now owning 13 dairy farms in Vietnam, and an organic milch cow farming resort complex in Laos.

Earlier this year, Vinamilk introduced the first eco-farm system in Thanh Hoa, Quang Ngai, and Tay Ninh provinces, with tens of thousands of cows. At the farm, the natural groundwater is considered "the source of nourishing life" as it is the water supply source for plants, grasslands and corn, helping to create eco-detention basins and keeping the air cool and fresh./.

Vinh Long looks to step up industrial development

A surge in investments in the Mekong Delta’s Vinh Long province is expected to be an opportunity for it to speed up its industrial development in the time to come.

Industrial parks in the province have attracted 69 investment projects to date, including 40 FDI projects, with total capital of nearly 4 trillion VND (173.8 million USD) and 766 million USD.

In 2020, despite the impact of COVID-19, investments in local industrial parks totalled 158 million USD, up 52 percent year-on-year.

Along with the main fields of farm produce processing, food, animal feed production, and footwear, the province also began attracting investment in supporting industries such as the production of automobile spare parts. This conforms with the province’s investment attraction orientation of improving capacity in industrial production.

Deputy Director of the provincial Department of Planning and Investment Nguyen Khac Nhu said that besides the efforts of businesses, State support through policies and mechanisms has made an important contribution to raising resources to invest in developing production and business.

Local departments and sectors have actively coordinated with businesses and localities over the years to help businesses deal with any difficulties, with a focus on simplifying administrative procedures.

Vinh Long is calling for investment in five key pillars: industry, agriculture, culture - tourism, urban development housing, and trade - services, with total investment of over 24 trillion VND.

Le Minh Tan, Director of the province’s investment promotion and enterprise support centre, said the province is inviting investment in 10 key projects in different fields, including the Binh Tan Industrial Park project worth some 2.9 trillion VND (125.8 million USD), an urban area development project worth 7.5 trillion VND, and an agricultural production and processing project worth 400 billion VND in Binh Minh town.

To improve the quality and effectiveness of foreign investment, it is working to attract strategic investors from potential markets such as Japan, the Republic of Korea, Taiwan (China), Singapore, and the EU.

The RoK now has 18 investment projects worth nearly 90 million USD in Vinh Long, Japan eight worth 102.5 million USD, and Taiwan (China) 11 worth some 239.2 million USD.

The province also targets major projects and those that have high added value and use advanced and environmentally-friendly technology, he said, especially agriculture-based industrial development, high-quality human resources training, and agricultural tourism.

Local authorities will constantly create optimal conditions for investors to access key projects and learn about incentives while helping them tackle obstacles in project implementation, he added.

Vinh Long last year granted in principle approval and investment certificates to 26 projects with total registered capital of nearly 4.35 trillion VND and over 104 million USD, including six FDI projects./.

Logistics firms encouraged to foster links to bolster performance

Fostering connectivity between logistics providers and between them and companies in other sectors will create more opportunities for mutual support, thus creating large enterprises to lead the market, according to Deputy Minister of Industry and Trade Tran Quoc Khanh.

Last year, when global trade was severely impacted by COVID-19, logistics activities in many countries came to a standstill, while logistics in service of e-commerce became quickly overloaded due to a surge in online orders, Khanh told a conference in Hanoi on April 20 discussing measures to develop the logistics market.

Without careful preparations, logistics providers as well as production and business enterprises will face major difficulties in adapting to the new circumstances, he believes.

He noted that the global logistics market was given a boost by the recovery in international trade flows in the second half of 2020. Moreover, post-pandemic trade facilitation and policies from governments to improve the economic climate were helpful in expanding the market.

 

According to a report from ResearchAndMarket.com, the size of the global logistics market was estimated at 3.31 trillion USD in 2021, up 17.6 percent compared to 2000 and showing that the sector still boasts substantial development potential.

According to the Vietnam Logistics Business Association (VLA), 95 percent of active logistics companies in Vietnam are Vietnamese, but mostly of small or medium scale and with poor links.

Many participants to the conference pointed out that their modest scale is one of the barriers facing domestic logistics firms in competing in the domestic market, not to mention the region and the world.

Meanwhile, Nguyen Quoc Phuong, Deputy General Director of the Airports Corporation of Vietnam (ACV), said that international transport accounts for 80 percent of total transport in Vietnam. The market share in international transport held by domestic airlines is currently just 12 percent, with the remainder belonging to 75 foreign airlines.

Insiders said the Ministry of Industry and Trade should complete policies and legal regulations on logistics services.

At the same time, it is necessary to complete logistics infrastructure by continuing to review planning and investing in supporting businesses to build large warehouses in different localities.

Authorised agencies should also upgrade and connect transport infrastructure, cut fees, and allow the optimisation of resources through the re-distribution, sharing, and re-using of redundant capacity for the promotion of the logistics sector, they added./.

Vietnam beefs up engagements with German hospitals, businesses

The Online Business Mission – Medizintechnik conference took place in Hanoi on April 20 to discuss operation models in the health sector of Germany and Vietnam, opportunities for cooperation between their hospitals and businesses, and the importance of building their medical technical exchange networks.

Stefan Blechschmidt, director at the economic cooperation office under the German state Thuringia's international cooperation department, said he wants to support collaborative projects in the fields of life sciences and healthcare in Vietnam.

He hoped that the Hanoi IEC – the representative office of the state in Vietnam – can promote cooperation between German and Vietnamese hospitals, he added.

At the conference, businesses from Thuringia introduced their capacity in meeting the needs of the Vietnamese market.

A representative from the general hospital of Vietnam’s northern province of Yen Bai said the establishment looks for collaboration with Germany so that it can improve its professional and customer services capacity in such areas as neurosurgery, infection control, and human resources building.

After discussing the market for medical technical equipment in Vietnam, participating Vietnamese and German firms exchanged their views on networking opportunities for mutual development.

More events similar to the Online Business Mission – Medizintechnik conference will be held in the time to come./.

VIETNAM BUSINESS NEWS APRIL 22

Vietnam AutoExpo 2021 to take place in August

The 17th International Exhibition on Automobile, Transportation and Supporting Industry (Vietnam AutoExpo 2021) will take place at the Vietnam National Convention Centre in Hanoi from August 19 to 22, gathering leading brands of commercial and specialised vehicles and motorcycles as well as supporting industries.

Vietnam AutoExpo 2021 will be co-organised by the Vietnam Institute of Industrial and Trade Policy and Strategy, the Vietnam Association for Supporting Industries (VASI), the Vietnam Society of Automotive Engineers (VSAE), and the CIS Vietnam Advertising & Exhibition JSC.

The exhibition was originally slated for May 6 to 9, but given COVID-19 was rescheduled to ensure community safety.

Over the past 16 years, Vietnam AutoExpo has offered good opportunities to enterprises in relevant fields to approach potential customers, introduce their products, and exchange experience.

Open from 9am to 5.30pm, the expo is expected to attract more than 40,000 visitors.

Vietnam AutoExpo 2019 featured some 20 leading brands of automobiles, motorcycles, and specialised vehicles, 180 manufacturers and distributors of spare parts, supporting industry products, and banking and insurance products. The four-day exhibition attracted more than 38,000 visitors.

The 2020 event was not organised as scheduled due to the pandemic./.

HCM City continues to fight smuggling, trade fraud

HCM City is to step up effort in inspections to prevent trade fraud and smuggling after some of its inspections were suspended due to COVID-19, said deputy chairwoman of HCM City People's Committee Phan Thị Thắng.

Government agencies worked closely last year to monitor the situation, verify information, conduct surprise inspections, and handle violations, it said.

A number of warehouses were fined for storing goods of unknown origin and counterfeits and those that infringed intellectual property rights, it added.

Some new scams have emerged in the city.

For instance, companies and individuals using State assets such as land, factories and warehouses illegally leased them out, and lessees used them to store prohibited goods and contraband, and those of unclear origin.

Many passengers and crew members were caught taking advantage of the relaxed entry and exit policies at the city’s ports and Tân Sơn Nhất International Airport to smuggle in addictive substances, wild animals, gold, silver, foreign currencies, watches, phones, and banned and fake goods.

Smuggling and trade fraud have become increasingly sophisticated.

Trương Văn Ba, director of the HCM City Market Surveillance Department, said last year 25,538 violations were discovered involving loss of tax revenues of VNĐ5.8 trillion, and charges were filed in 113 cases.

Fighting smuggling, trade fraud and fake goods has been identified as a key task this year and needs to be done regularly to prevent them, he added.

According to the city police, city militia has been told to look out for dubious activities and crack down on the trade of prohibited, smuggled and counterfeit goods.

Drugs, weapons, illegal firecrackers, unsafe and violent toys, and cigarettes are in their sights.

The city border guard, the Southern Border Guard Soldiers' Department of Drug and Crime Prevention, naval squadron No 28, and border forces in Bà Rịa-Vũng Tàu and Tiền Giang provinces will look out for possible violations at estuaries, seaports and maritime borders.

The city is also calling on businesses and consumers to join hands in the fight against smuggling and trade fraud. 

Business environment improves despite challenges in disease

Measures to improve Vietnam’s business environment continued showing effectiveness despite the COVID-19 pandemic, but the speed of improvement slowed compared to previous years.

The statement was made by Dau Anh Tuan, head of the VCCI's Legal Department, at a seminar in Hanoi on April 20 held to reveal the findings of the report on “Vietnam’s business environment reform programme: Perspectives from enterprises".

According to the report, the criteria of business establishment and access to electricity were rated the highest, with 72.5 percent and 65.9 percent of businesses rated good or very good in improvement, respectively. Bankruptcy ranked last with 44.4 percent of businesses rated good or very good.

But the tendency of improvement seemed to be slowing down compared to previous years, Tuan said.

The improvement trend of fields was quite contradictory. The rate of improvement of fields with low scores such as bankruptcy, investor protection and import-export, went up, while rates of fields with high scores, such as business establishment, access to electricity, went down.

With regard to corporate finance, while credit access in 2020 was perceived to be more difficult than in 2019, tax procedures became much easier. Locally, the indicators were still more positive than in 2019, but the rate of improvement had slowed down, he said.

He said that the administrative procedures related to construction, although improved in recent years, had not really facilitated businesses. The most difficult procedures include land, site clearance, construction planning, urban planning, decisions on investment policy.

The report also showed that private and small-scale enterprises faced more difficulties in completing construction procedures than foreign-invested and large-scale enterprises.

Informal fees are now the biggest problem businesses are facing, particularly records handling officers and the legal regulations.

Tran Thi Hong Minh, Director of the Central Institute for Economic Management (CIEM), said there were still many obstacles for businesses such as complex regulation system and overlapping and unnecessary business conditions.

Specialised inspection activities moved slowly. The one-door customs mechanism had not yet been effective as businesses still had to submit paper copies. There was a lack of connection between ministries, and the information technology system was congested, she said.

Regarding judicial reform, the proportion of enterprises using courts to resolve disputes increased, but the judgment enforcement rates of enforcement agencies decreased, said Chairman of the Vietnam Chamber of Commerce and Industry (VCCI) Vu Tien Loc.

“We have reduced the inequality between private and State-owned enterprises, between private and FDI enterprises. But there are still complaints about corruption and interest groups,” he said.

“The stability of our laws and policies has reduced market access conditions in many sectors and industries, creating very good conditions for small and medium enterprises to enter the market. However, in many areas that require large investment and prolonged capital recovery, the risk of policy changes is still worrying, hindering many large enterprises to invest money,” he said./.

Vietnam welcomes FDI in production of medical equipment: trade officer

Vietnam has rolled out the red carpet for foreign investors, including those from ASEAN member states, to land investment in the field of advanced medical equipment, said Counselor Nguyen Manh Hung at the Vietnamese Embassy in Germany.

At a virtual conference held by Ernst & Young (EY) Global Limited on April 20, Hung said that ASEAN has produced a wide range of medical equipment, and 5%-7% of the global equipment exports are sourced from ASEAN countries.

Vietnam has huge demand for medical equipment due to its rapid aging population, he stressed, believing that a network between ASEAN member states should be established to enhance information exchange as well as cooperation in the field so as to ensure timely supply of medical equipment and pharmaceutical products.

At the event, which also aimed to promote trade and investment in consumer goods within the bloc, Hung highlighted the important role of Vietnam’s garment and footwear in both domestic and export markets.

Despite the adverse impact of COVID-19, Vietnam’s exports of consumer products topped US$100.3 billion in 2020, a year-on-year rise of 2.4%. Particularly, shipments of garment and footwear products accounted for 20% of the nation’s total export revenue in 2019.

Currently, Vietnam is the fourth largest garment and textile exporter, and the second biggest source market of footwear. However, 80% of the leather shoes come from the FDI sector, Hung said.

As the COVID-19 pandemic has affected the supply of materials for the two production sectors, while global demand has declined sharply, Vietnam is working to diversify its material supplies to reduce risks.

In a bid to enjoy tax preferences from free trade deals such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Europe-Vietnam Free Trade Agreement (EVFTA), brands and suppliers in Vietnam are using domestic materials.

According to Hai, with robust economic growth, ASEAN is both a large supplier of consumer products and a big market.

With increasing income, ASEAN consumers have preferred high-quality products, including garments and leather shoes; therefore, Vietnam is striving to branch out the two sectors through developing transport and logistics infrastructure, he added.

Vegetable exports to Taiwan enjoy surge

The first months of this year saw Vietnamese vegetable exports to Taiwan (China) rise sharply, turning Vietnam into the largest vegetable supplier to this market.

Taiwan has increased the import of Vietnamese vegetables during the first months of 2021.
Taiwan imported 45,180 tonnes of vegetables worth US$45.1 million during the initial two months of the year, a year-on-year increase of 37.1% in volume and 37.7% in value, according to the Taiwan Customs Administration.

Of the total, 7,290 tonnes were shipped from Vietnam worth US$5.5 million, up 296.4% in volume and 197.8% in value over the same period from 2020.

As a result, Vietnam emerged as the largest supplier of vegetables to Taiwan, making up 16.1% of its total vegetable imports in the reviewed period.

Besides Vietnam, Japan, the Republic of Korea, Australia and NewZealand were also other four large vegetable suppliers to the Taiwan market in the first two months of 2021.

RoK's fast-food chain expands investment in Vietnam

Lotteria, a subsidiary of the Republic of Korea’s Lotte Group, will expand its investment in Vietnam through opening more 28 fast-food stores and building a new food material factory in Long Hau Industrial Park in the southern province of Long An.

A representative from Lotteria Vietnam confirmed this information with Hanoitimes and denied a recent report that it will close its fast-food chain in the country. He also said the report of the Koreatimes resulted from a misunderstanding. 

According to the Republic of Korea's newspaper, the hamburger chains overseas are being shut down due to the COVID-19 pandemic. Lotteria Indonesia, which operates more than 20 stores, is in the process of closing down due to its losses, mainly from impacts of the COVID-19 pandemic. 

Lotteria franchises in Vietnam have all stopped operations, the Koreatimes wrote, and its headquarters in Seoul is reviewing the possibility of closing down the business within 2021. It didn’t make any profit last year.

The chain now has more than 260 stores including 100 under the franchise model across Vietnam since 1998. 

The Vietnamese market is considered as potential market for the development of the food & beverage industry. With the desire to develop sustainably and consolidate its leading position in this vibrant market, Lotteria started franchising to co-develop with partners nationwide from October 2014.

As of April 2020, Lotteria was the leading fast food chain in Vietnam with 151 stores, followed by Jollibee with 115, according to Statista, a German market research firm.

Foreign firms hold 95% of Vietnamese electronics export value

Vietnam’s electronics exports have enjoyed robust growth in recent times, with foreign firms holding 95% of Vietnamese electronics export value, according to figures released by the Ministry of Industry and Trade.

The Ministry revealed that the average growth rate of Vietnamese electronics exports throughout the 2010 to 2019 period hit over 50%, with exports in 2019 reaching more than US$87 billion.

By the end of the first quarter of the year, the electronics sector was ranked among the key industries with export turnover reaching over US$5 billion, of which the export of phones and components enjoyed an increase of 9% to US$14.1 billion on-year, while computer and component exports rose by 31% to US$12 billion.

Despite this, up to 95% of the export value of the electronics industry belonged to foreign-invested enterprises (FDI) during the reviewed period, with the export value of telephones and components accounting for over 99% of the total, while electronics, computers, and components made up 98%.

Experts indicate that these inadequacies can be attributed to the electronics industry’s low localisation rate of between 5% and 10%, adding that the majority of electronic products within the Vietnamese market are CBU (complete built unit) imports, or alternatively assembled domestically from imported accessories with low technological content.

Furthermore, several reputable domestic electronics firms have been slowing down, with their brands gradually fading away recently, while emerging local brands such as Vsmart, Vietel, and Bphone are facing fierce competition from foreign brands.

Representatives from the Vietnam Industry Agency indicate that the capacity of domestic enterprises remains limited due to their product quality and designs not sufficiently meeting the market’s high demand, while there remains weak connectivity between FDI enteprirses and multinational corporations.

Despite this, through a number of co-operative projects alongside FDI enterprises, domestic firms have shown great efforts in improving their product quality and competitiveness as they join the supply chains of FDI businesses.  

For example, the number of Vietnamese first-tier suppliers for Samsung Vietnam recorded an increase to 35 within four years, according to experts from the agency.

At present, there are four Vietnamese enterprises which are participating in Panasonic’s supply chain, with its value accounting for approximately 10% of the group’s production input value, while Canon Vietnam has continuously sought Vietnamese suppliers in order to increase its localisation rate.

The Vietnam Industry Agency proposed that the Government take measures to protect the electricity and consumer electronics market, fine-tune the legal framework on the rules of origin for Vietnamese goods, while simultaneously devising support policies for a number of promising domestic enterprises within the electronics sector.

Experts have therefore advised businesses to identify their core product segments whilst paying close attention to the general trends occurring globally in terms of consumption and technology development as they prepare to launch highly-competitive products in the future.

VPI, PVOIL partner in research on electric-vehicle battery, charging station

The Vietnam Petroleum Institute (VPI) and the PetroVietnam Oil Corporation (PVOIL) have agreed to collaborate in the research on electric vehicle (EV)’s battery and charging station.

Under the reached agreement, VPI is to assess the impact of energy transition tendency on Vietnam’s petroleum market, identify challenges and chances under the transition and the development of battery and charging station in the world, region and Vietnam.

It will afterward put forth recommendations for PVOIL’s stable and sustainable development against the backdrop of energy transition.

VPI will keep a close watch on the market and regularly update information for PVOIL’s leaders to make accurate decisions and prepare solutions, so as to cope with risks and make the best of chances amid energy transition.

PVOIL began its research on EV, the feasibility for EV to replace gasoline cars and possible scenarios three years ago.

The corporation will capitalise on its current infrastructure of over 600 petroleum stations nationwide and apply technologies in the Fourth Industrial Revolution to devise new solutions to EV development, said its President and CEO Cao Hoai Duong.

Logistics firms encouraged to foster links to bolster performance

Fostering connectivity between logistics providers and companies in other sectors will create more opportunities for mutual support, allowing large enterprises to lead the market, according to Deputy Minister of Industry and Trade Tran Quoc Khanh.

When global trade was severely impacted by COVID-19 last year, logistics activities in many countries came to a standstill, while logistics in service of e-commerce became quickly overloaded due to a surge in online orders, Khanh told a conference in Ha Noi on Tuesday discussing measures to develop the logistics market.

Without careful preparations, logistics providers as well as production and business enterprises will face major difficulties adapting to the new normal, he believes.

He noted that the global logistics market was given a boost by the recovery in international trade flows in the second half of 2020. Post-pandemic trade facilitation and policies from governments to improve the economic climate were helpful in expanding the market.

According to a report from ResearchAndMarket.com, the size of the global logistics market was estimated at US$3.31 trillion in 2021, up 17.6 per cent compared to 2000 and showing that the sector still boasts substantial development potential.

According to the Vietnam Logistics Business Association (VLA), 95 per cent of active logistics companies in Viet Nam are Vietnamese, but mostly of small or medium scale and with poor links.

Many participants to the conference pointed out that their modest scale is one of the barriers facing domestic logistics firms in competing in the domestic market, not to mention the region and the world.

Nguyen Quoc Phuong, Deputy General Director of the Airports Corporation of Vietnam (ACV), said that international transport accounts for 80 per cent of total transportation in Viet Nam. The market share in international transport held by domestic airlines is currently just 12 per cent, with the remainder belonging to 75 foreign airlines.

Insiders said the Ministry of Industry and Trade should complete policies and legal regulations on logistics services.

At the same time, it is necessary to complete logistics infrastructure by continuing to review planning and investing in supporting businesses to build large warehouses in different localities.

Authorised agencies should also upgrade and connect transport infrastructure, cut fees, and allow the optimisation of resources through the re-distribution, sharing, and re-using of redundant capacity for the promotion of the logistics sector, they added. 

Online exhibition to promote Vietnamese construction products in Australia

The second virtual Vietnam Sourcing Expo on “Build and Home Decor” will be held by the Vietnamese trade office in Australia following the success of last year's event.

Vietnamese enterprises can register for free space in the expo via email at vntrade@bigpond.net.au. The office has also provided data on importers, tax lines, and conditions for imports on its business-matching mobile app Viet-Aus Trade.

The app also provides a platform for Vietnamese businesses operating in construction materials and exterior and interior decorations to advertise their products.

The office said that last year it worked with business associations in Australia and export companies in Viet Nam to organise the first exhibition of its kind as part of efforts to help Vietnamese enterprises make deeper inroads into the Australian market.

Australia is witnessing a boom in demand for construction materials and housing.

Viet Nam’s export turnover of construction-related products to the country has posted strong growth.

Despite COVID-19’s impact on global trade, Viet Nam’s exports to Australia grew 62.08 per cent year-on-year in January to almost US$391 million.

Bilateral trade increased 39.92 per cent against January 2020 to approximately $873 million, according to the General Department of Viet Nam Customs.

The office said that there was a surge in the number of Australian businesses seeking Vietnamese partners via the trade office last year. Most highly value the quality of Vietnamese products and wish to expand their market and diversify supply sources. 

Source: VNA/VNS/VOV/VIR/SGT/Nhan Dan/Hanoitimes   

 
 

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