Central province debuts first Ngoc Linh ginseng plant
An engineer introduces a sapling of Ngoc Linh ginseng at the Sam Sam company in Quang Nam Province. It's the first ever Ngoc Linh ginseng processing plant in Viet Nam. VNS Photo Cong Thanh
The central province has inaugurated the first-ever Ngoc Linh ginseng production plant – a major hi-tech processing factory combined with a seed and research centre – at Tam Thang Industrial Park in Tam Ky City.
It’s the first and the biggest plant nationwide specialising in producing finished products, pharmaceuticals and food from ginseng roots.
The factory, which was built by Sam Sam Company with an investment of VND125 billion (US$5.4 million) in the first phase, would produce 200,000 capsules and provide 5 million Ngoc Linh ginseng saplings per year.
Chairman of the company, Nguyen Duc Luc, said the plant will help build global production chains for the national brand and boost sustainable development of the Ngoc Linh ginseng zone in the district of Nam Tra My in Quang Nam Province.
“We planned a 100ha ginseng farm in Nam Tra My district – a major ginseng farm in Viet Nam – to boost the production and conservation of primary forests,” Luc said.
He said a fresh kilo of Ngoc Linh ginseng is sold for VND100 million (US$4,300), but processed products including capsules, foods, essential oils, cosmetics, drinks and tea would create higher value for the Quang Nam-based brand.
He added the company has been co-operating with WWF.
The central province plans an area of 20,000ha across seven zones of Ngoc Linh ginseng.
Ngoc Linh ginseng, grown both in Nam Tra My District in Quang Nam Province and Kon Tum, was recognised as a National Brand and given a Geographical Indication in 2018.
Ngoc Linh ginseng often grows 1,400m above sea level, in forests in Nam Tra My district in Quang Nam and Tu Mo Rong District in Kon Tum Province.
Up to 26 businesses agreed to invest $221 million in farming ginseng and processing essential oils, cosmetics, drinks and capsules from ginseng in the district.
Nam Tra My district and Hamyang County in South Korea agreed to boost tourism, agriculture, conservation and the development of Ngoc Linh ginseng.
HCM City ranks second for lowest cost of living in Southeast Asia
As the nation’s largest metropolis, Ho Chi Minh City has been ranked second in the list of the cheapest places to live throughout Southeast Asia, according to a report released by data aggregator iPrice Group.
The average monthly cost of living, including rent, food, transportation, and other utilities, for a single person in the southern city is VND18.8 million, equivalent to US$819, according to data compiled by iPrice across Southeast Asia’s six largest markets on the Numeo database.
Elsewhere in the region, Kuala Lumpur (Malaysia) comes in as the cheapest city with the monthly cost of living at VND18.2 million, equal to US$789.
Singapore is notable for having the most expensive cost of living at VND57 million, equivalent to US$2,467, followed by Bangkok (Thailand) at US$1,061, Manila (the Philippines) at US$1,046, and Jakarta at US$845.
This comes after Ho Chi Minh City also topped a list of the 10 most affordable destinations for American expatriates, with typical monthly costs of US$462.62 per person, according to an InterNations survey released last year.
Australia-Vietnam Business Council celebrates 25th anniversary
The Australia - Vietnam Business Council (AVBC) hosted a 25th Anniversary Dinner at the Boulevard Hotel in Sydney on April 28, where members and partners took part in matching activities and shared ideas, experience, and business opportunities.
In his welcoming remarks, AVBC President and Co-founder Laurence Strano said the celebrations not only look back on the council’s 25-year history but also reflect on the stronger-than-ever relations between Vietnam and Australia, contributed to by the business communities of both sides.
Discussing the AVBC’s history, Strano said that since its inception in 1996 it has contributed to connecting, exchanging, and promoting business and investment opportunities between Vietnamese and Australian companies. In addition to a headquarters in Sydney, it has two representative offices in the states of Queensland and Western Australia, he noted.
Vietnamese-Australians and AVBC members have helped bridge cultural differences and enhance mutual understanding between the two countries’ business communities, thereby facilitating and boosting bilateral trade, he added.
He also stated that the council will focus its efforts on beefing up cooperation between the two sides’ enterprises in the fields of digital technology, emerging technology, digital transformation, education, business development, public relations and media, sports, healthcare, housing, and commercial building development.
Deputy Consul General of Vietnam in Sydney Nguyen Phu Hoa, for his part, highlighted Vietnam - Australia economic ties over recent years. Despite the impact of COVID-19, two-way trade rose nearly 4 percent to 10 billion AUD (about 8 billion USD) last year, said Hoa, who is also head of the Vietnamese Trade Office in Australia. In the first quarter of this year, Vietnam’s imports from Australia stood at 3.4 billion AUD, up 33.7 percent year-on-year.
Australian investors in Vietnam can not only access a market of nearly 100 million people but also other foreign markets, as the latter is now a member of 17 free trade agreements and has joined a number of economic and trade partnership frameworks with many foreign countries, he added.
Bui Viet Khoi from the Embassy of Vietnam in Australia said Vietnam has set a goal of becoming a high-income country by 2045 and to this end will need expertise, funding, and close cooperation from Australian businesses over the next 25 years.
He emphasised that the embassy will continue acting as a bridge to foster business partnerships and technology transfer between the two countries.
Vietnam and Australia will celebrate the 50th anniversary of diplomatic ties in 2023./.
Phu Yen looks to beef up cooperation with foreign partners
The south-central coastal province of Phu Yen is willing to expand cooperation with foreign partners and promote the application of new technologies towards sustainable development, Chairman of the provincial People’s Committee Tran Huu The has said.
The made the statement at a conference on development partnerships held in the provincial capital, Tuy Hoa city, on April 28, expressing a wish that foreign partners will consider Phu Yen a “laboratory” for new ideas.
The locality is calling for investment in the fields of tourism, agriculture, hospital development, and human resources training, he said.
According to Deputy Director of the provincial Department of Planning and Investment Cao Anh Son, Phu Yen attracted 230 investment projects worth 31 trillion VND (1.35 billion USD), including 10 foreign-invested projects worth 71.5 million USD in total.
In the first quarter of 2021, amid the complex developments of the COVID-19 pandemic, the provincial authorities granted investment licences to five projects with total capital of over 1.9 trillion VND.
At the conference, Italian Consul General in HCM City Dante Brand said Italian enterprises are looking to enhance cooperation and share their experience with local farmers, thus helping bring local farm produce to the European market.
According to Australian Consul General in HCM City Julianne Cowley, apart from supporting innovative ideas in agriculture and animal husbandry, Australia is also supporting Phu Yen in water treatment and sustainable aquaculture development projects.
Australian businesses are interested in green and clean projects, she said, noting that there is great potential for Australian firms to become reliable partners of Phu Yen in the future.
Meanwhile, Honorary Consul of Mexico in HCM City, Vu Minh Anh, said Phu Yen can tap its advantages from the wild and natural beauty of its heritage sites and landscapes to further promote tourism development, becoming a unique destination to attract more investors.
Jointly hosted by the provincial People’s Committee and the HCM City Department of Foreign Affairs, the conference aimed to introduce Phu Yen’s potential and strengths as well as opportunities for promoting investment and development cooperation between the province and foreign partners, especially in infrastructure development, tourism, and agro-forestry-aquaculture exports./.
Thai Binh to create optimal conditions for US investors
The northern province of Thai Binh will create favourable conditions for US enterprises to study its investment climate and carry out production and business projects in the locality, Chairman of the provincial People’s Committee Nguyen Khac Than has said.
During a trade and investment promotion seminar co-hosted by the provincial authorities and the American Chamber of Commerce in Vietnam (AmCham Vietnam) on April 28, Than pledged support for US investors and hoped that AmCham Vietnam would continue studying the locality’s business environment and work to attract investment in local economic and industrial zones.
Highlighting the province’s strengths, Vice Chairman of the provincial People’s Committee Lai Van Hoan said it boasts a favourable geographic location, high-quality human resources, convenient transport infrastructure, and abundant natural gas supplies.
Thai Binh wants to cooperate with US firms in the fields of processing, supporting industries, gas-fired and wind power, clean energy, high-technology, pharmaceutical production, education, and tourism infrastructure, among others, he added.
AmCham Vietnam Vice President John Rockhold said the seminar provided its members with important information on local human resources quality, infrastructure, and transparency, helping them make decisions on investing in the province.
He suggested Thai Binh pay due regard to improving its provincial competitiveness index so as to bolster its attractiveness.
Possessing huge potential in natural gas, solar and wind energy, the province could attract investors from the US, Japan, and the Republic of Korea, he noted./.
FDI in Dong Nai hits 670 mln USD since beginning of year
The southern province of Dong Nai granted permits on April 28 to allow six existing FDI projects to add nearly 250 million USD in registered capital.
Among these are Nestle Vietnam’s coffee production project at the Amata Industrial Park, with total investment increasing from 270 million USD to more than 400 million USD; VacPro Vietnam’s factory in the Nhon Trach I Industrial Park, rising from 7 million USD to 40 million USD; and a new branch of Suheung Vietnam, adding 30 million USD in capital to reach 80 million USD.
Foreign investors adding capital and expanding production is a positive sign and shows that they have confidence in the local business climate and are posting good earnings, deputy head of the provincial industrial park (IP) authority Le Van Danh said.
Most projects are in supporting industries and use advanced technology, he added.
Dong Nai is likely to welcome more foreign investors in the time to come, said Vice Chairman of the provincial People’s Committee Nguyen Thi Hoang.
She added that the province gives priority to projects applying high technology and employing skilled workers in supporting industries and is now more selective when it comes small-scale, labour-intensive, and environmentally-unfriendly projects.
According to data from the provincial IP authority, local IPs had attracted close to 670 million USD in 58 FDI projects since the beginning of this year. They include 39 projects receiving additional investment, worth more than 420 million USD.
Dong Nai is currently home to 32 IPs. Nearly 1,400 FDI projects worth a total of 27 billion USD have so far set up camp in the province./.
April’s CPI inches down 0.04 percent
Vietnam’s consumer price index (CPI) in April was down 0.04 percent against the previous month while up 2.7 percent year on year, according to the General Statistics Office (GSO).
The index in the first four months grew 0.89 percent year-on-year, the lowest growth rate since 2016.
Compared to the previous month, a downturn was seen in the prices of four out of 11 main groups of goods and services, with housing and construction materials taking the lead (0.43 percent). It was followed by post and telecommunication services (0.2 percent); food and catering services (0.13 percent); and culture, entertainment and tourism (0.11 percent).
The prices of garment-textile, headwear and footwear remained stable compared to the previous month.
The prices of transport services posted the strongest increase of 0.87 percent, while those of drinking and tobacco 0.14 percent, and equipment and household appliances 0.11 percent.
The GSO’s Price Statistics Department attributed the CPI price rise in the first four months to a hike in domestic and export prices of rice as well as the higher demand for the grain for the Lunar New Year (Tet) festival.
Prices of foodstuff in the period rose 0.2 percent year on year, while those of gas and petrol climbed by 14.69 percent and 2.49 percent, respectively, from the previous year.
Prices of educational services in January-April saw a year-on-year rise of 4.48 percent, driven by a tuition fee hike starting from the 2020-21 academic year.
On contrary, electricity prices in the period fell by 5.88 percent over the same period last year.
In the months, airlines and tourism operators introduced a host of promotions to boost tourism. On average, the air ticket prices dropped by 17.4 percent, train fares down 7.39 percent; and tour prices down 3.32 percent.
Domestic gold price in April contracted 1.9 percent over the previous month but went up 13.84 percent year-on-year, making the four-month figure up by 20.84 percent.
Meanwhile, that of US dollar was around 23,170 VND per USD, up 0.29 percent month-on-month but down 1.35 percent year-on-year, bringing the figure down 0.77 percent in Jan-Apr.
Core inflation in April increased 0.07 percent month on month and 0.95 percent against the same period last year.
The index expanded 0.74 percent in the first four months.
The core inflation rates in April and the first four months of 2021 compared to the same periods last year were the lowest in the past five years./.
Best design ideas for VinFast’s global showrooms announced
Nine most excellent design ideas at the VinFast Global Showroom Design Competition 2021 were recently honoured at Times Square, New York City.
Nearly 1,000 entries from 90 countries were sent to the contest, held by the Vietnam Design Association – Ho Chi Minh City (VDAS) and VinFast from January 25 to February 25. The event drew the enthusiastic participation of designers from the US, Canada, Europe, Australia and Vietnam.
VinFast CEO Thai Thi Thanh Hai said “We are very happy that the contest attracted designers from all over the world, who show a similarity with VinFast in creativity, and desire to break the limit to create the best outcomes. This encourages VinFast to gain more confidence to win the hearts of global customers”.
According to VDAS President Ho Tan Duong, the best entries had to feature a standout design concept, sharpest rendition of VinFast brand and feasibility.
The first prize worth 30,000 USD went to US designer Vicky Daroca. The remaining eight designers were presented the second prize, each valued 1,750 USD.
Giving evaluations on Daroca’s design, President of Asia-Pacific Design Award Patrick Fong said that there are almost no boundaries in Daroca’s work, which clearly shows a strong state of freedom, and consistency in creative interpretation.
“Such a spatial arrangement that brings contentment experience to customers every time they visit”, he added.
VinFast, a subsidiary of Vingroup, one of Asia's leading conglomerates, is Vietnam’s only indigenous car brand, and currently makes the Lux SA2.0, Lux A2.0 and Fadil.
It has researched and developed the first three-level 3-4 Autonomous Smart EV models with 30 smart features, underlining its vision to become a global smart electric mobility company./.
UK newspaper impressed by Vietnam transition to green energy
The expansion of Vietnam’s wind and solar farms is proving to be crucial in continuing to power economic growth, according to the Financial Times of the UK.
In an article published on April 26, the media outlet quotes data released by Irena, an intergovernmental renewable energy organisation, stating that the country’s production from solar and wind power increased by 237% and 60%, respectively, throughout 2020, helping raise the share of these sources to a quarter, almost a decade ahead of schedule.
The article also outlines experts’ opinions, noting that with average speeds of over 10 metres a second, reaching force six on the Beaufort scale, its territorial waters rank among the top 10% in terms of the windiest places on the planet.
“Many other countries in the region also have good wind speeds but they are limited by deep seas,” says Adrian Dempsey, chief financial officer for the Asia-Pacific region at Mainstream Renewable Power, an Irish energy company which operates in Vietnam.
Experts state that the seas off the coast of provinces such as Binh Thuan and Soc Trang, where developers such as Mainstream plan to build multibillion-dollar offshore wind farms, are also relatively shallow, with depths of between 20 metres to 50 metres.
“To illustrate how impressive Vietnam’s renewable energy adoption has been... (it) did not have any utility-scale solar power until 2018, and very little wind,” notes Thu Vu, an energy finance analyst at the Institute for Energy Economics and Financial Analysis, an Ohio think-tank.
Despite this growth in the use of green energy, the expert also highlights the higher cost of offshore units relative to onshore or nearshore wind.
According to Ian Hatton, chair of Enterprize Energy, a UK-renewable energy company, Vietnam must strive to improve its infrastructure as a means of reducing costs.
He believes this could be achieved by linking up the energy-charged south to northern cities, whilst also building substations, and laying cables along the seabed for the purpose of offshore production, or through finding alternative solutions. At present, Enterprize is experimenting with converting wind energy and seawater into hydrogen.
The article also mentions the typical dilemma that low- and middle-income nations such as Vietnam face. Indeed, if they produce enough energy to meet demand without improving transmission infrastructure, it is likely that additional capacity would be squandered.
However, William Gaillard, vice-president of wind turbine manufacturer Vestas, believes the country has “shown a path for others to follow.”
“The combination of an attractive feed-in-tariff with ambitious installation targets and a transparent permitting process has been a critical factor in unlocking this market,” Gaillard concludes.
Vietravel Airlines launches first travel guide on flights in Vietnam
Local budget carrier Vietravel Airlines is to release a new travel guide which will be given out to travelers onboard its flights, making it the first guide of its kind in Vietnam, thereby introducing passengers to various cultural stories and travel experiences.
Guides given out during flights can serve as tourism ambassadors and will be able to introduce facts about the various travel destinations to passengers, with a specific focus on their history and culture.
Most notably, the contents will be changed weekly and frequently updated to showcase new travel trends, destinations, and tips for passengers to have a good-quality travel experience.
Vietravel Airlines first launched commercial flights at the start of this year.
The carrier is currently deploying three modern A321 CEO airplanes to local destinations such as Hanoi, Ho Chi Minh City, Da Nang, Phu Quoc, and Da Lat.
HCM City needs a push to become a global financial centre: conference
With a favourable business environment and rapid and steady economic growth, HCM City meets all essential conditions to become a global financial centre, a conference heard in the city on Tuesday.
The city contributes around 22.3 per cent to the country’s GDP and 27 per cent to the national budget, and attracts 34 per cent of the country's FDI.
It has excellent financial infrastructure with numerous banks, financial intermediaries, investment funds, and financial firms that play a vital role in attracting and distributing capital.
Dr Tran Du Lich, member of the Government Advisory Group, said the city is a gateway to major financial centres and capitals in Southeast Asia, and the idea of turning it into a regional and international financial centre is not new.
However, the growth of the financial sector, especially HCM City’s, has not been consistent and the dependence on the banking system for capital has been significantly distorting the financial markets, he explained.
Key characteristics of international financial centres include a deep, liquid and sophisticated capital market, and competitive tax and regulatory regimes designed to attract foreign investment in financial services.
HCM City must become a development locomotive for the country and the key economic regions in the south, and drive the development of the Mekong Delta and the Central Highlands.
It needs to strengthen its competitiveness in terms of institutions, human resources and infrastructure.
It should continue to aim for sustainable growth by improving its competitiveness and growth quality through healthy economic restructuring, and ensure a favourable business environment for enterprises and encourage start-ups, innovation and smart-city measures.
Lich said the plan to make HCM City a regional and international financial hub should be stated clearly in the national strategic economy to ensure the National Assembly and Government could develop policies and specific mechanisms.
To turn HCM City into a financial centre requires three phases, with the first phase from now until 2025 used to complete all the necessary infrastructure for the financial centre, he said.
In the second phase until 2035 the key mission would be to complete its institutional, human resources and urban infrastructure requirements, he said.
The third phase from 2035 should develop an international financial market, he added.
Experts said with strong support from the Government and local authorities, HCM City would graduate from being a national financial centre to a regional and then international centre in future years.
VN-Index inches higher, foreign investors flee from market before long holiday
Shares ended mixed Thursday with the VN-Index continuing its upward trend on bank stocks while foreign investors fled from the market.
The market benchmark VN-Index edged 0.8 per cent higher, or 9.84 points, to finish the trading day at 1,239.39 points. The market breadth was still positive as 220 stocks rose while 167 fell and 53 stocks ended flat.
The market’s liquidity was higher than yesterday with nearly 647.2 million shares traded on the southern market, worth VND19.3 trillion.
The index was boosted by large-cap stocks, mainly in the banking sector. The 30 large-cap stocks tracker VN30-index increased 1.41 per cent to 1,312.28 points. Twenty of the 30 biggest stocks in the VN30 basket inched higher yesterday while ten stocks decreased.
In a daily report to investors, MB Securities JSC said that the recovery of the banking sector was the driving force supporting the market rebound.
The cash flows remaining high not only helped the index gain points but also eased investors sentiment amid selling pressure earlier this week, the firm added.
“On the technical front, the market has created a buffer zone for the bottom in the short-term, the upper bound at the resistance territory of 1,300 points will fluctuate,” MB Securities said.
However, the securities firm forecasted that the fluctuation is not a big concern as the upward trend will still dominate due to current optimistic signs, both internal and external.
Many big bank stocks posted great performance yesterday with VPBank (VPB) leading the gains, up 6.36 per cent. Vietcombank (VCB), Vietinbank (CTG), Techcombank (TCB), HDBank (HDB) and Asia Commercial Bank (ACB) all jumped more than 1 per cent.
Other stocks from materials, real estate and construction, and utilities also witnessed big gains. Of which, Hoa Phat Group (HPG) edged 3.75 per cent higher, Vietnam Rubber Group JSC (GVR) up 3 per cent, No Va Land Investment Group Corporation (Novaland, NVL) up 2.66 per cent and PetroVietnam Gas JSC (GAS) up 1.95 per cent.
On the contrary, Vinhomes JSC (VHM) reported the biggest losses, down 1.59 per cent. Other stocks weighing the market were Saigon Beer - Alcohol - Beverage Corporation (SAB), Vingroup JSC (VIC) and Masan Group (MSN).
Meanwhile, on the Ha Noi Stock Exchange (HNX), the HNX-Index fell 0.11 per cent to 281.75 points despite gains in large-cap stocks. The HNX30-Index rose 0.17 per cent to 419.19 points.
During the session, over 121.4 million shares were traded on HNX, worth nearly VND2.4 trillion.
Foreign investors fled from the market again as they net sold a value of VND378.49 billion. Of which, they net sold a value of VND410.82 billion on HoSE, while net bought a value of VND16.13 billion on HNX and a value of VND15.9 billion on UPCOM.
Viet Nam's market will close on Friday due to the long holiday.
Vinaconex to issue $173.3 million of bonds
Viet Nam Construction and Import-Export Joint Stock Corporation (Vinaconex) plans to raise a large amount of capital in 2021 by issuing VND4 trillion (US$173.3 million) worth of bonds this year.
The information was released during its annual general meeting of shareholders held on Tuesday in Ha Noi.
The mobilised capital will be used to realise Vinaconex’s ambition to accumulate a land fund of up to 5,000 hectares by 2025, as well as increasing the capital ownership ratio at a number of key member companies with potential development.
The meeting approved the plan to issue convertible bonds worth up to VND2 trillion. These bonds have a par value of VND1 trillion and a four-year term with a maximum interest rate of 12 per cent per year. Expected execution time is in 2021.
Bond owners have the right to convert bonds into Vinaconex shares after at least one year from the date of completion of the offering or at the request of bondholders. The amount of convertible bonds will be decided by the Board of Directors via negotiations with bondholders to ensure shareholders' benefits.
The conversion price will be determined by the Board of Directors, however it must be at least two times higher than the book value in the consolidated financial statements in the latest year and not lower than the par value. The conversion rate has not been decided yet.
Another plan to issue VND2 trillion of bonds to the public was also approved by shareholders. All raised capital will be used to serve business activities and increase capital scale. These bond will be in the non-convertible form, not attached with warrants but attached with collateral.
The meeting also approved a plan to offer more than 58.2 million shares to existing shareholders, equivalent to 14.5 per cent of outstanding shares, for the purpose of increasing capital for business activities.
The management board stated that the expected offering price will not be lower than the book value in accordance with the company's financial statements, however the final price and exercise rate have not been decided.
If the issuance is successful, Vinaconex's charter capital will increase from VND4.42 trillion to VND5 trillion.
This year, Vinaconex hopes to achieve revenue and post-tax profit of VND12.23 trillion and VND1 trillion respectively, up 141 per cent and down 40 per cent, respectively, over the same period last year.
Dividends in 2021 will also be equivalent to 2020 with a rate of 12 per cent in cash.
By the end of the first three months of 2021, the value of the signed construction contracts of Vinaconex was estimated at nearly VND15 trillion, in which there are three outstanding packages of the North - South expressway project in the East, particularly Phan Thiet-Dau Giay, Vinh Hao-Phan Thiet, Mai Son-Highway 45.
This year, Vinaconex continues to focus on completing investment procedures for a number of important projects, speeding up construction of a number of projects including the Cat Ba-Amatina project in the northern province of Hai Phong, luxury apartments on Lang Ha street in Ha Noi and the Hoa Binh Boulevard urban area in the northern province of Mong Cai.
Viet Nam sees untapped potential for blockchain and AI development
There remains untapped potential for blockchain and artificial intelligence (AI) development in Viet Nam, experts told a recent talkshow in Ha Noi.
Adam Christopher Chaplin - CEO of Defi For You, said that this was a golden time to promote research, development and application of blockchain technology in Viet Nam.
As a cryptocurrency expert and investor in blockchain application projects over the past seven years, he said that in the next two decades, blockchain would be the most important keyword in the technology world.
Tran Quoc Long from the VNU University of Engineering and Technology said the potential of blockchain and AI development in Viet Nam remained untouched with many opportunities waiting to be explored in the future.
Other experts at the event agreed that blockchain and AI development would be soon be facilitated in Viet Nam thanks to the trend of digital transformation, advanced computing power and the emergence of large data sets.
Hosted by Edsolabs Joint Stock Company and Blockchain Developer Asia, the talkshow discussed AI and blockchain technologies in Viet Nam.
In addition to updating the latest trends such as NFT (nonfungible tokens) technology, AIoT (artificial intelligence of things), experts have brought the correct scientific view of AI and blockchain technology through several lectures on AI applications, cloud computing, blockchain 101 while answering questions about the development roadmap of AI and blockchain industry.
Edso Labs is a technology company founded in 2018, aiming to provide comprehensive digital transformation solutions for businesses of diverse industries. It is headquartered in Ha Noi.
UNDP urges better business practices
Amid increasing global integration, the implementation of responsible business practices becomes a must. However, the level of awareness among the Vietnamese business community remains low, urging bolder actions to ensure improvement.
At last week’s launch of a study on corporate awareness and implementation of responsible business practices (RBP) in Vietnam by the United Nations Development Programme (UNDP) and the Embassy of Sweden in Vietnam, research team leader Vu Van Tuan said that the concept of corporate social responsibility is trending towards RBP.
RBP means actively assessing business impact on environment and society, and taking measures to prevent and address adverse impacts, and providing effective remedies when negative impacts occur, Tuan said. This includes going beyond compliance with national laws where necessary to align with international standards such as those of the International Labour Organization and others.
UNDP deputy resident representative Sitara Syed highlighted the timeliness of the study. “The study is critical at this moment. Though Vietnam’s rapid, yet relatively inclusive economic growth and an influx of investment have brought opportunities, they have also contributed significantly to environmental degradation and corporate-related human rights breaches,” she said.
Under the study, in which over 2,000 samples were sent out from August to December 2020, understanding of RBP varies among business enterprises. Specifically, 81 per cent of state-owned enterprises (SOEs) had the highest rate of full understanding about RBP, and 47 per cent of local private enterprises have the lowest rate of full understanding. The rate among foreign-invested enterprises (FIEs) sits at 69 per cent.
The study – the first in Vietnam – focuses on labour, environmental, and governance issues, with the data being collected through focus group discussions, key informant interviews, and a survey with 279 respondents. Enterprises involved were from the agro-forestry-fishery, manufacturing and construction, and trade and services economic sectors.
In regard to RBP in labour issues, local private enterprises have the lowest level of implementation, while small enterprises have the lowest. In an environmental aspect, the compliance rate (55-64 per cent) of activities with direct impacts on the environment, such as waste treatment and hazard prevention, is the highest among studied practices.
Meanwhile, the highest level of RBP implementation overall is in wastewater treatment, with the lowest level in climate change response. SOEs have the highest level of RBP implementation, and local private enterprises and FIEs have a relatively similar level of implementation.
In terms of governance issues, large enterprises have a much higher rate of application of international practice than small- and medium-sized enterprises (19 per cent compared to 3 and 5 per cent, respectively). The rate for applying international standards among FIEs almost doubles that of SOEs and local private enterprises (14 per cent compared to 8 per cent each).
Responsible business is a global trend with increasing implications for Vietnam. As a result, the two recent progressive free trade agreements of the EU-Vietnam deal and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership have provisions on trade and sustainable development, as well as labour and the environment.
While the Vietnamese regulatory framework on RBP is deemed quite strong, there are still gaps where alignment with international standards is needed. But good signal of RBP implementation for the future have merged. Some 60 per cent of enterprises have a plan for RBP adoption, and over two-thirds of large enterprises, SOEs, and groups in agro-forestry-fishery said that they would adopt it in the future.
Syed told VIR, “Globally from what we know, the movement for responsible business is gaining strength in Asia and the Pacific and this is a very good signal.” She added, “Other countries like Malaysia, Singapore and Thailand are ahead in RBP compared to Vietnam, but Vietnam can catch up. I think there is a lot of willingness among consumers and many businesses to apply RBP, as indicated by 60 per cent of the responded businesses, and there is strong commitment from the government.”
According to the research team, the leading role of the government in driving responsible business is recognised, with the National Action Plan ranked highest, and it was stressed that to ensure higher implementation, greater external and internal pressure is needed.
Foreign companies ramp up investment in tyre production
More tyre producers are ramping up investment in Vietnam to capitalise on the opportunities brought by free trade agreements.
Kumho Tire, one of the world’s leading tyre manufacturers, has today that they will be investing $305 million to expand upon their Vietnam tyre plant and expects to double its production capacity by 2023. Upon the completion of the expansion in Vietnam, the company forecasts to produce at least 9.3 million tyres per year.
The project for expansion will gradually be funded beginning from the third quarter of 2021 through the first quarter of 2023 in which a new section of the building will be added to the vacant lot currently within the overall facility compound.
Kumho Tire is currently operating eight manufacturing facilities located in South Korea, China, the US, and Vietnam.
“As a company, we are heading in a very positive direction and part of our strategy is to increase our production capacity ahead of the growing demand in order to ensure product availability for our customers and support the continued growth of partnerships,” said Il Taik Jung, president and CEO of Kumho Tire.
Another manufacturer, Jinyu Tire, has poured an additional $312 million into its tyre manufacturing facility in Tay Ninh. Jinyu has begun production of its first truck and bus radial (TBR) tyres at the new factory in Vietnam, which will have the capacity to produce up to two million tyres annually.
The Vietnam facility is Jinyu’s first overseas production base. With the new facility, Jinyu aims to strengthen its global supply chain and provide a solid base for further globalisation strategies, alongside being able to provide products and services to more customers internationally as well as in the Vietnamese market.
Meanwhile, Ohio-based Cooper Tire & Rubber Company has agreed to form a joint venture with Sailun Vietnam Co., Ltd. to build a manufacturing plant with the capacity to produce more than 2 million truck and bus radial (TBR) tyres annually. The facility will be located near Ho Chi Minh City at the site of Sailun Vietnam’s existing operations. Cooper will own 35 per cent of the new venture.
Last year, the project has increased its capital with an additional $130 million. The initial investment capital of the project was around $280 million.
Zhongxue Yuan, chairman and president of Sailun Group Co., Ltd., said that the company will expand its partnership with both US and Vietnamese partners to supply its tyre products across the world. To facilitate the goal, the company will continue to increase its product quality, develop a research and development centre in Ho Chi Minh City, as well as expand manufacturing activities.
In 2020, the volume of exported rubber reached an estimated 1.75 million tonnes, worth $2.38 billion, up 2.8 per cent in volume and up 3.5 per cent in value against last year. The average price of export rubber in November posted more than $1,328 per ton, a decrease of 1.53 per cent on-year, according to the Ministry of Agriculture and Rural Development’s Agro Processing and Market Development Authority.
Vietnam’s tyre industry has started to recover from the COVID-19 pandemic thanks to an expanding export market as well as favourable policies for the domestic automobile industry. Besides, China has difficulties in exporting tyres to the US because of the trade conflict, which has created opportunities for other countries to expand distribution channels, including Vietnam.
Moreover, the US Department of Commerce (DOC) has decided against imposing anti-dumping duty on Vietnam’s passenger vehicle and light truck tyres. Accordingly, major tyre exporters/producers of Vietnam such as Sailun, Kenda Rubber, Bridgestone Tire Manufacturing Vietnam LLC, Kumho Tire and Yokohama Tire Vietnam were determined not to have committed dumping.
A statement from Vietnam’s Ministry of Industry and Trade (MoIT) said this is encouraging news given the US' status as Vietnam’s most important market for car tyres, with the export turnover of the above-mentioned firms making up 95.5 per cent of the country’s total tyre exports to the US in 2019 at $469.6 million.
“A zero per cent anti-dumping duty would help Vietnam’s major tyre producers to continue exporting to the US,” stated the MoIT, adding this is important as the domestic production of tyres is facing fierce competition from imported products of Thailand and China.
“Vietnamese tyres would gain considerable advantages against those from South Korea, Taiwan, and Thailand that are subject to dumping rates from 13.25-98.44 per cent in the US market,” noted the ministry.
Source: VNA/VNS/VOV/VIR/SGT/Nhan Dan/Hanoitimes