VIETNAM BUSINESS NEWS FEB. 19

Industrial real estate is bright spot in 2020 market

The industrial market is the only real estate sector that has enjoyed positive progress in both rental rates and occupancy rates during the COVID-19 pandemic.

In 2020, the average occupancy rate in industrial zones was up more than 70 percent year-on-year. The average factory rental price nationwide was 60-80,000 VND per sq.m and the purchase price of land in industrial zones with infrastructure ranged from 3 to 5 million VND per sq.m, according to the Vietnam Real Estate Brokerage Association.

A report from the association showed the number of proposals to research investment in new construction of industrial parks in 2020 also increased sharply compared to previous years.

The Association said there will be many new industrial zone infrastructure development projects approved in the near future.

Along with that, many logistics projects serving industrial zones will also be promoted and the rental price of warehouse and factory premises in 2021 is forecast to not increase compared to 2020.

At present, Vietnam has 260 industrial parks in operation and 75 under construction. 

Marine science, technology key for sustainable development

The marine economy has become key to Vietnam's economic structure and exploitation of the country's seas and islands has created a new driving force for development amid deep international integration, experts have said.

To realise the goal of Vietnam becoming a strong coastal country by 2045, experts, scientists, businesses and State agencies all think it is important to pay attention to the role of science, marine technology and marine human resources.

Vu Truong Son, Deputy Director of the Vietnam Administration of Sea and Islands under the Ministry of Natural Resources and Environment, said to ensure solid policy-making and planning, science, technology and marine research in Vietnam need to be one step ahead.

To make the most of advanced scientific and technological achievements and to be among the leading countries in ASEAN and form a contingent of highly qualified marine science and technology staff, the Vietnam Administration of Sea and Islands was assigned to take charge of building a master project on marine science and technology research to 2030, with a vision to 2045.

The project aims to promote innovation and apply scientific and public achievements, promote research, establish scientific grounds for planning and completing policies and laws on the sustainable development of the marine economy and research associated with an investigation of marine resources and the environment.

The project includes several goals, such as prioritising research on the application of science and technology for the marine economy, with a focus on improving the efficiency of co-ordination among sectors, linking the goal of marine economic development with the protection of the sovereignty of sea and islands and environmental protection.

Along with the master project, in recent years, the Ministry of Natural Resources and Environment has worked with the Ministry of Science and Technology to develop a programme of national-level science and technology research on sea and islands in 2021-2025. They are also researching a project of technological development of natural resources, sea and island environments amid emerging challenges in the marine environmental security.

Associate Professor Nguyen Duy Dung, Chairman of the Vietnam Association of Marine Aquaculture, said from a geopolitical perspective, the topographical structure and geographical space of Vietnam has unique features and many advantages with a coastline of 3,260km and a large sea space.

Vietnam is among the 10 countries with the highest index of coast length relative to its territorial area. On average, there is 1km of coastline for every 100sq.km of land, six times higher than the world average. Vietnam has more than 3,000 islands and more than 1 million square kilometres of exclusive economic waters, three times the size of the mainland.

In the mainland as well as in the sea, the country contains many important ecosystems and rich and diverse natural resources, said Dung.

Nguyen Thach Dang, Director of the Department of Management and Basic Investigation of Sea and Islands under the Vietnam Administration of Sea and Islands, said foreign activities and international relations have contributed to maintaining sovereignty, jurisdiction and national interests at sea, maintaining a peaceful and stable environment for development.

Dang said Vietnam has exploited the potential and advantages of the islands from ancient times up to now in many different aspects.

This has created a solid foundation for Vietnam to build the marine economy into an important part of the country's economic structure. That will create a position and force for Vietnam in its integration with ASEAN and the world, contributing to the protection of sea and island sovereignty.

Vietnam has also expanded maritime co-operation with countries inside and outside the region such as the Philippines, Malaysia, China, Australia, India and the US in many fields including fishing, joint patrols, scientific research and marine environmental protection.

Plans and programmes have been realised by the International Cooperation on Sustainable Marine Economic Development of Vietnam to 2030 approved by Prime Minister Nguyen Xuan Phuc in the Resolution No 647/QD-TTg on May 18 last year.

The exploitation of the potential advantages of sea and islands should be further strengthened in research and implementation of policies and plans for Vietnam's marine economic development at present and in the future, said Dang./.

Banks step up to lure demand deposits

Competition among banks to lure demand deposits is becoming fiercer as the cheap capital source helps banks increase their net interest income (NIM) ratio.

Demand deposits have very low interest rates of only 0.1 percent per year. Therefore, banks will have low input capital costs and ease to increase their NIM ratio if they have high current account savings account (CASA) ratio – or the proportion of demand deposits out of total deposits.

Besides, CASA also reflects customers' belief and assessment of banks’ service quality, especially payment services. Therefore, increasing CASA has become extremely important in retail banking strategy and many banks consider it one of the top targets in recent years.

Before 2018, Vietcombank and MBBank were the two banks with the largest proportion of CASA in the banking system. While Vietcombank had an advantage in luring demand deposits through transactions of State-owned agencies and enterprises, MBBank benefited from defence agencies and enterprises.

However, in the past two years, Techcombank has risen to the top and is increasingly outstripping the two banks. According to Techcombank's financial statements, its demand deposits in 2020 increased by 60.6 percent to 128 trillion VND (5.56 billion USD). The bank’s CASA ratio by the end of 2020 reached 46.1 percent, a sharp increase from 34.5 percent at the end of 2019 and also higher than Vietcombank (about 33 percent) and MB (about 37 percent).

Techcombank has so far had an ambitious target to increase its CASA ratio to 55 percent by 2025.

Besides Techcombank, many other private banks, such as TPBank and VPBank, also posted impressive CASA growth last year.

At VPBank, demand deposits increased by 28 percent to more than 35.4 trillion VND, helping the bank increase its CASA rate from 13.2 percent to 15.6 percent. TPBank's demand deposits increased by 48 percent last year to more than 21.2 trillion VND, pushing the bank’s CASA rate up from 16.5 percent to 19.4 percent.

To increase CASA, banks have taken many policies, including offering free money transfers and investing in digital technology to attract customers.

Techcombank can be considered the first private bank to initiate this wave when it focused on building advantages in payment. Since 2016, this bank has implemented many promotion programmes for customers such as free of charge e-banking transactions and account management.

Following suit, many other private banks have also entered the race of providing free service. VIB has introduced a policy of free of charge money transfers and withdrawals for new customers or payment accounts with an average balance of at least 5 million VND. Customers transferring money online via TPBank also received the free service policy.

The increasingly fierce competition in the race to lure demand deposits has forced Vietcombank and MBBank to take action.

Vietcombank has recently announced integrated transaction account packages that cover account services, digital banking and debit cards, helping customers transfer money free of charge on VCB Digibank.

Meanwhile, besides implementing a series of digital products, MBBank has implemented a programme to open accounts with lucky numbers at the request of customers in the past year. In 2020, the bank also offered free money transfer service on MBBank app. As a result, the bank's CASA also increased significantly from 34 percent in 2019 to 37 percent in 2020./.  

Chu Lai Port seeks to serve international flow of goods

Chu Lai Port in the Chu Lai Open Economic Zone, the central province of Quang Nam, is striving to establish itself as a major point of transit for goods in not only Vietnam but also other countries.

Recently, 7,200 tonnes of paper pulp of the Sun Paper Savannakhet, a company based in the Lao province of Savannakhet, were exported to China via Chu Lai Port.

The batch was transported from Savannakhet to Chu Lai Port by road and then to China by sea.

The Lao firm produces 400,000 tonnes of recycled pulp annually to supply packaging paper factories of the Shandong Sun Paper Industry in China.

Highly valuing the infrastructure, equipment and shipping routes in Chu Lai, the business chose this port to deliver pulp to China.

Sun Paper Savannakhet said it plans to ship about 180,000 tonnes of paper pulp via Chu Lai Port in 2021, equivalent to a monthly average of 15,000 tonnes.

The port investor, Truong Hai Auto Corporation (THACO), noted efforts have been made to diversify sources of import and export via Chu Lai Port, including those in the central and Central Highlands regions of Vietnam, southern Laos, and northern Cambodia, thereby gradually turning this port into a major point of transit for goods in Vietnam and the world./.

Agriculture minister views export target of 44 bln USD as feasible

The agriculture sector’s export target of 44 billion USD this year, set by Prime Minister Nguyen Xuan Phuc, is a high but feasible goal, Minister of Agriculture and Rural Development Nguyen Xuan Cuong has said.

He told the Dien dan Doanh nghiep (Business Forum) newspaper in a recent interview that 2020 was a year full of challenges and difficulties for Vietnam’s economy, including the agriculture sector, due to the COVID-19 crisis. The sector also had to face natural disasters, including unprecedented drought.

The growth and trade targets for the sector last year were also the highest ever, with exports set at over 41 billion USD.

However, Cuong noted, thanks to the efforts of the entire political system, ministries, sectors, localities, and economic elements, the agricultural sector managed to secure growth of about 2.65 percent and post export earnings of 41.25 billion USD, with nine groups of commodities enjoying shipments of over 10 billion USD.

These were good results amid a market filled with fluctuations caused by COVID-19, the minister said, adding that the sector eyes growth of some 2.7-3 percent this year and exports of 42 billion USD.

Meanwhile, the PM recently stated that agriculture offers important support for the economy, and set this year’s export target at 44 billion USD, which expresses his high expectations for the sector.

The target is considerable but also feasible, according to Cuong.

He quoted the PM as saying that the Government has been working to address issues relating to international markets, and with such efforts the country is confident of handling ties with major markets of Vietnam’s agricultural products.

Vietnam earned about 3.49 billion USD from exports of agricultural, forestry, and fisheries products in January, up 27.1 percent year-on-year, data from the Ministry of Agriculture and Rural Development shows.

Under a plan recently approved by the PM, Vietnam expects the annual figure to reach some 60-62 billion USD by 2030./.

Quang Ninh looks to become a strong marine-based economic hub

The northern province of Quang Ninh has outlined key measures to develop its marine-based and coastal economy, with a focus on eco-friendly tourism, maritime services, and coastal industry.

In a recent interview with the Vietnam News Agency, Permanent Vice Chairman of the provincial People’s Committee Cao Tuong Huy said Quang Ninh is on the way to becoming one of the country’s strong marine-based economic hubs, serving as a gateway and driving force of development in the northern key economic region with a network of deep-water seaports.

Key localities such as Ha Long, Cam Pha, Mong Cai, Quang Yen, Van Don, Co To, and Hai Ha will be connected to marine-based economic sectors and become national tourist destinations linked with major international tourism hubs in the region and the world via waterways.

Regarding maritime tourism and services, Quang Ninh is striving to become an international tourism hub with modern and concerted infrastructure, possess diversified and quality tourism products, a strong trademark imbued with the national cultural identity, and high competitiveness compared to countries in the region and the world, be a driving force of rapid and sustainable socio-economic development, and guarantee national defence and security.

The province will enhance investment in building tourism and trade infrastructure in coastal and island areas, making it easier for economic sectors to develop quality sea-island ecological tourism, community-based tourism, and international trade hubs. Ha Long will be developed into a modern and civilised marine tourist city while Van Don - Co To will become a high-quality sea and island tourism centre and a world-class regional entertainment hub by 2030.

The province will upgrade its fishing ports and wharves, offer fisheries logistics services in Co To and Van Don districts, and establish three key fishing centres in combination with aquaculture and key fishing grounds in localities and two seafood trade centres in Ha Long.

It will also develop logistics infrastructure to make it a sector providing high added value in tandem with promoting foreign trade.

Regarding coastal industry and new-model economic sectors, Huy emphasised that Quang Ninh has prioritised eco-friendly high-tech industrial sectors, manufacturing and processing such as shipbuilding and repair, and cruise tourism, while boosting connectivity between shipbuilding and support industries and encouraging foreign investment in support industries for shipbuilding.

It will develop the processing of aquatic products by using modern technology and improving efficiency, with a focus on food safety, to meet the quality standards demanded by major markets globally.

Quang Ninh will also make use of the achievements of Industry 4.0 to switch from the export of raw materials to deep processing, thus creating added value and saving marine resources.

At the same time, it will study several industries in service of the marine-based economy, seaport-logistics services, the new materials industry, tourism, and entertainment.

The Hai Ha seaport industrial zone will be developed into a major industrial and seaport centre. The province will also pay attention to several marine-based economic sectors based on advantages in marine resources and biodiversity./.

UKVFTA hoped to push door larger for Vietnamese agricultural exports

The UK-Vietnam Free Trade Agreement (UKVFTA), which came into effective from January 1, will open the door larger for Vietnam’s key agricultural exports to the UK, Minister of Industry and Trade Tran Tuan Anh has said.

Since becoming effective from August 2020, the EU-Vietnam Free Trade Agreement (EVFTA) has created a big push for Vietnam’s agricultural exports such as seafood, rice, vegetables and fruits, and wood products to the UK,

As the UKVFTA inherits existing commitments in the EVFTA and contains those to market opening the same as the EVFTA, plus additional quotas for competitive products, Vietnamese businesses will see more export opportunities.

Nguyen Dinh Tung, Chairman and CEO of Vina T&T Group – a leading fruit exporter, said the UK is a big market for vegetables and fruits in Europe with diverse import demands.

According to him, Vietnam’s vegetables and fruits could be exported to the UK in particular and the EU in general, if they win orders and meet the countries’ requirements on food safety and plant quarantine.

The UK also has huge demand for wood and wood products, which creates numerous opportunities for Vietnamese exporters as their merchandise have competitive prices, good materials and high quality.

General Secretary of the Vietnam Association of Seafood Exporters and Processors (VASEP) Truong Dinh Hoe said that the UK is also a potential market for Vietnam’s aquatic products.

Despite the COVID-19 pandemic, the export value of Vietnamese aquatic products to the UK had hit nearly 258 million USD as of late September 2020, up 23 percent year-on-year.

The pandemic is changing the UK’s consumer and import trends, with cheap products easy to consume and cook at home being a top choice.
 
Therefore, frozen tra fish of Vietnam has a huge advantage and has become a key export of the Vietnamese agricultural sector.

However, insiders said that the UKVFTA also brings about more challenges with stricter requirements.

They advised Vietnamese businesses to improve production, harvesting, preservation and processing to gain better product quality./.

Kien Giang promotes border trade infrastructure connectivity with Cambodia

The southern border province of Kien Giang has facilitated the implementation of a memorandum of understanding on border trade infrastructure development and connectivity between Vietnam and Cambodia.

Ha Tien city and Giang Thanh district have been asked to build a list of border trade infrastructure items, with priority given to connectivity with Cambodian localities, according to the Vice Chairman of the provincial People’s Committee Nguyen Duc Chin.

Kien Giang has also supported trade promotion and the attraction of investments in border trade infrastructure construction.

Local competent agencies have taken measures to simplify administrative procedures in order to make it easier for traders and border residents in customs clearance.

The province has effectively implemented cooperation agreements with Cambodian localities and joined hands with the Cambodian side in national defence as well as external affairs in border areas./.

Tan Cang-Cat Lai Port welcomes six vessels

Tan Cang-Cat Lai Port of the Saigon Newport Corporation received six commercial vessels on the 2021 Lunar New Year’s eve, which fell on February 11, handling 11,990 TEUs of goods in total.

The first container was loaded onto a foreign ship having a deadweight tonnage (DWT) of 38,079.

The port welcomed an average of 12 commercial vessels per day during the Tet holidays, handling 83,000 TEUs of cargos, equivalent to more than 1 million tonnes of freights.

The Saigon Newport Corporation fulfilled its production and business targets last year 10 days ahead of schedule, despite the adverse impacts of the COVID-19 pandemic.

The firm has further affirmed its position as a leading container port of Vietnam, holding a lion’s share of 62 percent of containers handled nationwide. It also ranked 19th among the busiest container ports across the globe last year, up one place compared to 2019./.

Vietnam earns 2.6 billion USD from garment exports in January

Vietnam raked in 2.6 billion USD from exports of textiles and garments in January 2021, up 3.3 percent year-on-year, according to the Ministry of Industry and Trade.

The ministry said in January 2021, the textile production index and the apparel production index increased by 16.6 percent and 9.9 percent, respectively, over the same period in 2020. The production of fabrics was estimated at 92.4 million sq.m, up 20.4 percent.

According to Vu Duc Giang, Chairman of the Vietnam Textile and Apparel Association (VITAS), the COVID-19 pandemic will continue to affect the sector until 2022.

If COVID-19 vaccines are available in the first and second quarter of 2021, the pandemic is expected to be controlled by the end of 2023. Then, the textile and garment market could see recovery, Giang said.

He said textile and garment businesses must change production and business models as the pandemic has made global purchasing power for apparel products, including many traditional export garment products of Vietnam, fall by 70-80 percent.

 

This is a big challenge for the Vietnamese textile and garment industry. Businesses need to learn about changes in domestic and global markets to find solutions in production and business this year, according to Giang.

He said the domestic textile and garment industry needs to build production chains, especially with countries in blocs that have signed trade agreements with Vietnam and ASEAN.

The textile and garment industry also needs to have a sustainable development strategy, including changes in production and business models according to the needs of brands and global consumers. They should pay attention to standards, certificates of origin and certification of environmental assurance, energy saving, renewable energy and product safety.

To implement a sustainable development plan for the textile and garment industry, VITAS proposes the Ministry of Industry and Trade and the Government to issue the textile and garment development strategy in the 2030-2040 period. That would create favourable conditions to call investment to industrial zones to produce material that faces a supply shortage.

The Ministry of Industry and Trade said that the textile and garment industry has great development opportunities from the recently signed free trade agreements, especially the potential of increasing exports to major markets.

Of which, the Regional Comprehensive Economic Partnership (RCEP) signed in November 2020 is expected to create opportunities for Vietnam's textile and apparel products and also to replace some other export markets. Because the pandemic is not controlled and that has a great impact on the major export markets of Vietnamese textile and garment products such as Europe.

RCEP is a positive factor for production and business activities of Vietnam's textile and garment industry in 2021 and beyond.

Le Tien Truong, Chairman of the Vietnam National Textile and Garment Group (Vinatex), said in addition to the efforts of garment makers, the government should consider lowering borrowing costs so that they can meet new requirements as well as invest in producing materials to meet rules of origin contained in new free trade agreements.

He also suggested the government introduce specific policies to support the garment sector’s development and direct the relevant agencies to reduce logistics costs and other tax burdens.

At the same time, the Ministry of Industry and Trade should continue helping enterprises take full advantage of free trade agreements by issuing guidelines on rules of origin and opening a portal for enterprises to examine the benefits of such pacts.

Vietnam aims to export 39 billion USD worth of garment products this year, according to national textile and garment group Vinatex.

Last year, Vietnam’s garment export revenue was estimated at 35 billion USD due to the impact of the pandemic, as well as US-China trade tensions, protectionism and Brexit./.

FPT, Toyota launch digital transformation joint venture

Vietnam’s leading IT services provider FPT Software, a subsidiary of FPT Corporation, and Smart Holdings of Toyota Group have recently launched FPT Smart Technologies - a joint venture providing digital transformation services and solutions.

FPT Software holds 51 percent of stake in the joint venture.

The joint venture was launched at a time when Japan is looking toward a 5.0 society – a super-smart society fueled by smart technologies and innovations among industries.

It will offer digital transformation services and solutions in manufacturing, automobiles and construction industries by combining technological expertise, experiences and domain knowledge of the two companies.

Firms told brand building is key to success

Vietnamese enterprises need to make greater efforts to build their brand names to gain a competitive edge amidst rapid international integration, according to experts.

According to the Ministry of Industry and Trade’s Trade Promotion Agency, although the number of businesses honoured with Vietnam National Brand recognition has increased throughout the years (from 30 in 2008 to 124 in 2020), it lagged behind expectations.

Deputy head of the agency Hoang Minh Chien said the Vietnam National Brand (Vietnam Value) Programme has raised the awareness of many local firms and corporations of the important roles of brands in improving the value of their products and the businesses themselves.

It is difficult to develop Vietnamese brand for specific products, he said, adding despite being the world’s leading agro-forestry-fisheries exporter, Viet Nam lacks branded products in its shipments.

Up to 80 per cent of Vietnamese agricultural exports lack brands. Many export products in the nation’s 'one-billion USD' club such as timber, rubber, pepper and cashew nuts don't have their own brand names yet, according to agricultural specialist Hoang Trong Thuy.

Chairwoman of the Ngan Ha Science and Technology Company Limited Pham Thi Kim Loan said a good brand is developed from good-quality products as well as customer service and marketing strategies.

Meanwhile, Chairman of the Advice Council to the Institute for Brand and Competitiveness Strategy Nguyen Quoc Thinh said that besides financial resources, businesses need determination and in-depth knowledge of brand building.

Chien said the Ministry of Industry and Trade will work with enterprises to develop and popularise their brand names, adding focus will be sharpened on raising public awareness of brand development, helping businesses satisfy the criteria of the Vietnam National Brand Programme, and introducing the brands to domestic consumers and international partners.

According to Brand Finance, the value of the 'Vietnam Nation Brand' skyrocketed 175 per cent from US$141 billion in 2016 to $319 billion in 2020. The country also jumped 17 places from 2016 to 33rd in the list of the world’s 100 most valuable brands compiled by the UK consultancy firm. 

Steady prices of consumer goods, higher sales mark Tet

Demand for consumer goods during Tet in HCM City was higher than last year despite the economic impacts of COVID-19.

According to many businesses, this year customers began their Tet shopping earlier than usual, and sales ended up around 30 per cent higher than last year.

Most supermarkets had made careful preparations and stocked up early on high-quality goods, with their stocks being 12 - 21.2 per cent higher than last year.

During the festival, the number of customers visiting supermarkets to buy fresh produce, processed foods and fruits for Tet spiked, and long lines could be seen in many places.

Retailers also offered discounts on produce and non-food items - up to 49 per cent the latter - and extended their opening hours to meet the increased shopping demand.

Mobile retailers also went to industrial parks and remote districts to meet shopping demand.

Traditional markets also saw increased business.

But despite the spike in demand, the prices of most goods remained relatively steady in HCM City, with some like meat and eggs even seeing slight drops due to abundant supply.

Flower prices were not much higher than during normal days, with some being sold at half the prices prevailing during Tet last year.

The city Department of Industry and Trade even had to exhort locals to buy flowers to help farmers and businesses before shops could sell their stocks.

Apricot blossoms, one of the most popular Tet flowers, did not sell well after blossoming early due to the abundance of rain.

Prices of fruits were steady with those of dragon fruit and pomelo falling by half.

Logistics sector to step up digital transformation

Logistics, considered a backbone of Viet Nam's economy, is among eight sectors prioritised by the national programme for digital transformation until 2025.

According to the Vietnam Logistics Business Association (VLA), the sector has grown 14-16 per cent annually over recent years. It now gathers together some 3,000 domestic firms and 30 others offering transnational services. Of those, 89 per cent are domestic businesses and 10 per cent are joint ventures while the number of foreign-funded companies represents just 1 per cent of the total.

The VLA said the cost of logistics in the country as a proportion of GDP is 18 per cent, compared to 9-14 percent in developed countries. The high cost is attributable to limited seaport infrastructure and weak cost reduction efforts. Together with fierce competition, the digital economic boom, and pressure from the COVID-19 pandemic, these have made digitisation in the sector a must.

Vietnamese logistics companies offer between two and 17 services, mostly in transport, warehousing, and fast delivery. About half apply technology in their operations.

Nguyen Tuong, VLA Deputy General Secretary, said investment shortages from the very beginning, difficulties in choosing suitable technological applications, a sense of distrust in technology, and a fear of change are hindering the sector from pressing ahead with digital transformation.

Tran Thanh Hai, Deputy Director of the Agency of Foreign Trade at the Ministry of Industry and Trade, said transformation in this core sector would trigger a similar process in other parts of the supply chain.

Experts have said that smart logistics involve master plans and strategies with the involvement of cloud computing technology, adding that it will be conducive to improving customer services, information flows, and automation.

To reduce logistics costs, Nguyen Hoang Long, Deputy General Director of the Viettel Post Joint Stock Corporation, said the engagement of both the Government and enterprises is needed. While the Government should offer planning and assistance for the building of national logistics centres, as well as preferential land and port taxes, enterprises need to invest in better management and boosting connectivity within the sector, he said.

Administration reform and capital support are also necessary for logistics firms undertaking digital transformation, insiders have said.

Garment export revenue up to $2.6b in Jan

Exports of textiles and garments in January 2021 were estimated at US$2.6 billion, up 3.3 per cent year-on-year, according to the Ministry of Industry and Trade.

The ministry said in January 2021, the textile production index and the apparel production index increased by 16.6 per cent and 9.9 per cent, respectively, over the same period in 2020. The production of fabrics was estimated at 92.4 million sq.m, up 20.4 per cent.

According to Vu Duc Giang, chairman of the Viet Nam Textile and Apparel Association (VITAS), the COVID-19 pandemic will continue to affect the sector until 2022.

If COVID-19 vaccines are available in the first and second quarter of 2021, the pandemic is expected to be controlled by the end of 2023. Then, the textile and garment market could see recovery, Giang said.

The VITAS chairman said textile and garment businesses must change production and business models as the pandemic has made global purchasing power for apparel products, including many traditional export garment products of Viet Nam, fall by 70-80 per cent.

This is a big challenge for the Vietnamese textile and garment industry. Businesses need to learn about changes in domestic and global markets to find solutions in production and business this year, according to Giang.

He said the domestic textile and garment industry needs to build production chains, especially with countries in blocs that have signed trade agreements with Viet Nam and ASEAN.

The textile and garment industry also needs to have a sustainable development strategy, including changes in production and business models according to the needs of brands and global consumers. They should pay attention to standards, certificates of origin and certification of environmental assurance, energy saving, renewable energy and product safety.

To implement a sustainable development plan for the textile and garment industry, VITAS proposes the Ministry of Industry and Trade and the Government to issue the textile and garment development strategy in the 2030-2040 period. That would create favourable conditions to call investment to industrial zones to produce material that faces a supply shortage.

The Ministry of Industry and Trade said that the textile and garment industry has great development opportunities from the recently signed free trade agreements, especially the potential of increasing exports to major markets.

Of which, the Regional Comprehensive Economic Partnership (RCEP) signed in November 2020 is expected to create opportunities for Viet Nam's textile and apparel products and also to replace some other export markets. Because the pandemic is not controlled and that has a great impact on the major export markets of Vietnamese textile and garment products such as Europe.

RCEP is a positive factor for production and business activities of Viet Nam's textile and garment industry in 2021 and beyond.

Le Tien Truong, the Viet Nam National Textile and Garment Group (Vinatex)’s chairman, said in addition to the efforts of garment makers, the government should consider lowering borrowing costs so that they can meet new requirements as well as invest in producing materials to meet rules of origin contained in new free trade agreements.

He also suggested the government introduce specific policies to support the garment sector’s development and direct the relevant agencies to reduce logistics costs and other tax burdens.

At the same time, the Ministry of Industry and Trade should continue helping enterprises take full advantage of free trade agreements by issuing guidelines on rules of origin and opening a portal for enterprises to examine the benefits of such pacts.

Viet Nam aims to export $39 billion worth of garment products this year, according to national textile and garment group Vinatex.

Last year, Viet Nam’s garment export revenue was estimated at $35 billion due to the impact of the pandemic, as well as US-China trade tensions, protectionism and Brexit. 

Construction firms urged to apply technology to improve efficiency

The impacts of the COVID-19 pandemic and Industry 4.0 required construction firms to invest in technology to improve efficiency.

According to the Ministry of Construction, more than 1,500 enterprises operating in the construction industry completed dissolution procedures in 2020, demonstrating that the COVID-19 pandemic had negative impacts on the operation of these companies, although the Government lowered banking interest rates last year to aid enterprises.

Another problem was that input costs increased significantly while real estate prices did not see a corresponding increase, which also affected operation efficiency.

The ministry said that the real estate market was showing signs of recovery but the recovery was not taking place as rapidly as expected. In addition, legal problems at a series of property projects were causing stagnation in construction.

Large firms also encountered difficulties.

Nguyen Xuan Dong, general director of Vinaconex Corporation, said that the company’s revenue in 2020 fell by 42 per cent against the previous year, in which construction revenue dropped by 45 per cent and real estate business by 86 per cent.

Economic expert Can Van Luc said that the Vietnamese economy expanded at three per cent in 2020 despite the impacts of the COVID-19 pandemic, higher than the world’s average.

The gross domestic product (GDP) growth rate in the 2018-19 period averaged around 6.8 per cent, forecast at 6.5-7 per cent in 2021 and seven per cent on average in the next 10 years. The positive economic prospects would fuel the development of the real estate market and provide opportunities for construction enterprises to expand operation and enhance efficiency in the future, Luc said.

According to Cao Van Ban from the Viet Nam Association of Construction Economy, the macroeconomic situation and the positive prospects for real estate market recovery were opening new opportunities for construction companies to develop but also bringing challenges and new requirements.

Ban said that constrution firms must raise solutions to speed up construction progress, lower costs and improve quality.

“The most important thing to construction companies at the moment is to take advantage of science and Industry 4.0 to create breakthroughs,” Ban stressed.

For State-owned construction enterprises, it was necessary to strengthen restructuring and renovation through privatisation to improve efficiency, he said.

Renovating technology is an unavoidable trend, not only for construction enterprises.

The Prime Minister in late January issued a national technology renovation programme to 2030 which set the target that the number of enterprises renovating technology increases by 20 per cent per year on average. 

Investment booms as Soc Trang improves business climate

Soc Trang Province's efforts to improve its business climate is paying off with more and more investors, both domestic and foreign, coming since 2016.

It has worked with hundreds of potential investors seeking to invest in areas where the province has strengths like hi-tech agriculture, tourism and wind and solar power.

It approved 116 projects with a total investment of VND27.3 trillion (US$1.18 billion) in 2016-20, 5.5 times the amount in the previous five years.

Nine of them are FDI projects.

Soc Trang authorities have been making efforts to improve the investment climate and provincial competitiveness by focusing on infrastructure and providing lands for projects.

They are keen on projects that are sustainable and environment-friendly.

Nguyen Thi Thuy Nhi, deputy director of the province’s Department of Natural Resources and the Environment, said her department had been reforming administrative procedures, boosting the province’s competitiveness in terms of attracting investment and business climate.

One key infrastructure project is the upgrade of Tran De deep-water port, which will reduce logistics costs for exports from the Mekong Delta.

The recently approved Chau Doc - Can Tho - Soc Trang highway will connect to the port, aiding goods transportation and improving links with the rest of the country.

The province is also creating a start-up eco-system with development assistance, incubation programmes and sponsorship for creative small and medium-sized businesses.

In the last five years 1,900 new businesses were set up, a 47.2 per cent increase from 2011 – 15. Many companies have invested in manufacturing in the An Nghiep Industrial Park, creating tens of thousands of jobs.

In 2021 – 25 Soc Trang seeks to further improve its business climate and competitiveness, focusing on business assistance services, labour training and helping investors start projects smoothly.

There are 3,300 registered businesses in the province with a total charter capital of VND33 trillion.

Soc Trang’s economy grew by 6.75 per cent in 2020. 

Source: VNA/VNN/VNS/SGGP/VOV/NDO/Dtinews/SGT/VIR   

 
 

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Need for digital transformation personnel sees sharp rise: report
Need for digital transformation personnel sees sharp rise: report
BUSINESSicon  27/03/2021 

As firms are accelerating digital transformation, the need for information technology (IT)-related roles, namely data engineer, infrastructure engineer, or chief technology officer (CTO), is also rising significantly.

MIC focusing on popularising Mobile Money
MIC focusing on popularising Mobile Money
BUSINESSicon  27/03/2021 

The successful implementation of Mobile Money is one of the major targets of the Ministry of Information and Communications (MIC).

Private sector unable to create necessary value chain
Private sector unable to create necessary value chain
BUSINESSicon  26/03/2021 

Vietnamese enterprises are facing setbacks and obstacles in the process to build value chains, which are essential for growth, healthy competition and more export opportunities in foreign markets.

Mobile money attempts to topple classic banking
Mobile money attempts to topple classic banking
BUSINESSicon  27/03/2021 

The newly-launched mobile money pilot programme is expected to heat up competition for domestic players but also open collaboration opportunities to cash in on the niche market.

Ministry aiming to collect taxes from e-commerce sellers
Ministry aiming to collect taxes from e-commerce sellers
BUSINESSicon  26/03/2021 

The Ministry of Finance has asked digital-based businesses and delivery service companies to provide information about e-commerce sellers using their platforms and services so they can be taxed.

Vietnam GDP growth set to rebound to 6.6% in 2021: WB
Vietnam GDP growth set to rebound to 6.6% in 2021: WB
BUSINESSicon  27/03/2021 

Vietnam and China are the only two economies in East Asia and Pacific experiencing a V-shaped rebound where output has already surpassed pre-pandemic levels.

Wind power overdevelopment faces risks
Wind power overdevelopment faces risks
BUSINESSicon  27/03/2021 

Sharing the same fate as solar power, sales of wind power in Vietnam are expected to be difficult because of "severe excess electricity" at some point in time.

Gardener confirms mutant orchid transaction, promises to pay tax
Gardener confirms mutant orchid transaction, promises to pay tax
BUSINESSicon  26/03/2021 

Bui Huu Thanh, the owner of the mutant orchid garden, said that he has actually sold a Ngoc Son Cuoc mutant orchid for VND250 billion following reports that the transaction was fake.

Trade deficit with China grows as imports soar
Trade deficit with China grows as imports soar
BUSINESSicon  26/03/2021 

The value of Chinese imports in the first months of 2021 alone reached $15.42 billion, twice as much as the value of Vietnamese exports to the market.

Regional tensions throwing investing trajectory up in air
Regional tensions throwing investing trajectory up in air
BUSINESSicon  25/03/2021 

Political stability has been seen as one of the main reasons for Vietnam’s success in recent years in terms of attracting foreign investment. 

Investors forced to wait on HSX technical upgrades
Investors forced to wait on HSX technical upgrades
BUSINESSicon  25/03/2021 

However, despite the vast potential of the equity market, the ongoing technical outages at the HSX have lowered investors’ appetite, as their buy and sell orders rarely match up.

VIETNAM BUSINESS NEWS MARCH 26
VIETNAM BUSINESS NEWS MARCH 26
BUSINESSicon  26/03/2021 

Anti-dumping investigations launched into imported welding material products

Female tycoon leaves post, daughter makes US$1 billion
Female tycoon leaves post, daughter makes US$1 billion
BUSINESSicon  25/03/2021 

Southeast Asia Commercial Joint Stock Bank (SeABank) on March 24 listed more than 1.2 billion SSB shares on the Ho Chi Minh Stock Exchange - HOSE (HSX) with the reference price of VND16,800 per share and the price range of +/- 20%.

Agencies, local authorities give back tens of trillions of VND
Agencies, local authorities give back tens of trillions of VND
BUSINESSicon  25/03/2021 

Ten ministries and agencies, as well as 45 localities, are giving back the capital allocated to them as they did not spend all the money they received in 2020.

Five suburban districts to become inner districts, land price soars
Five suburban districts to become inner districts, land price soars
FEATUREicon  25/03/2021 

The plan to turn some suburban districts in HCM City into inner districts is only on paper but it has triggered a new land fever in localities.

Investors lose big money after buying land near airport projects
Investors lose big money after buying land near airport projects
FEATUREicon  24/03/2021 

Land prices in some areas skyrocketed after rumors spread about new airport projects, helping some investors to get rich but causing many others to go bust.

Private airlines ask for VND15 trillion in preferential loans
Private airlines ask for VND15 trillion in preferential loans
BUSINESSicon  24/03/2021 

A credit package of VND12 trillion has been approved to help Vietnam Airlines, which has been hard hit by the impact of Covid-19. Private airlines have also asked for a VND15 trillion loan.

Big hoteliers still flock to Vietnam despite Covid-19
Big hoteliers still flock to Vietnam despite Covid-19
BUSINESSicon  24/03/2021 

Five-star hotel brands are ready to receive travelers back to the country with the strong belief that the tourism industry is coming back to life.

Private sector revamp key for progress
Private sector revamp key for progress
BUSINESSicon  24/03/2021 

Being the key mainstay of the economy, the Vietnamese private sector is set to enjoy a more favourable business and investment climate, 

VIETNAM BUSINESS NEWS MARCH 25
VIETNAM BUSINESS NEWS MARCH 25
BUSINESSicon  25/03/2021 

Tra export companies suffer low profits in mainland China, Hong Kong

 
 
 
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