BUSINESS NEWS HEADLINES APRIL 19

Businesses exhausted after spending Q1 fighting COVID-19

BUSINESS NEWS HEADLINES APRIL 19

The spread of the novel coronavirus (COVID-19) epidemic has served to rob millions of workers of their income, while numerous businesses throughout the country are struggling for survival or are facing up to the possibility of going bankrupt.

Discussing the harrowing economic developments with a VOV reporter, Nguyen Huu Thanh, Director of Eurolink Joint Stock Company, said that regrettably his company is no longer able to maintain production due to enduring a 80% drop in first quarter revenue, with revenue in March down 95%. With production halted it has hampered the target of achieving 120% revenue growth compared to 2019’s figures, with many firms in a similar situation facing bankruptcy.

For many years, Eurolink's production and business operations have been entirely dependent on the flow of import and export goods. In fact, the company usually imports materials every three months, with up to 80% of its materials being imported from Italy, one of the world's worst hit by the COVID-19 in Europe.

In addition to a shortage of raw materials, Eurolink is also facing the prospect of capital depletion, therefore increasing the possibly that the firm will be forced to completely halt operations by April 20.

With a total of 300 members of staff, up to 85% of employees operating across two industries, garments along with leather and footwear, have been cut, with only 15% of the labour force being maintained in order to conduct small orders domestically. Thanh added his hopes of the government's support packages serving to help his company deal with issues relating to the salaries of staff, insurance, union fees, and other matters until it is able to resume operations.

Moreover, many local garment and textile enterprises are encountering a similarly negative situation, with all of them being hit by the consequences of the raging epidemic. This has led to approximately 70% of businesses moving to cut their staffing in March, whilst 80% are poised to lay off personnel in April and May.

According to the Vietnam Textile & Apparel Association, after Chinese manufacturers successfully restored roughly 80% of the supply of raw materials in March, the United States and Europe, two main markets which account for over 60% of the country’s total export turnover for textile and apparel products, experienced outbreaks of the epidemic. Consequently, local garment and textile enterprises have suffered major difficulties due to being unable to export their products.

The association has calculated that if the epidemic ends in June, the textile and garment industry will lose approximately VND12,000 billion, whilst the falling demand could lead to a price drop of more than 20%.

A recent survey conducted by the Private Economic Development Research Board of the Prime Minister's Administrative Procedures Advisory Council indicates that, if the epidemic drags out for six months, 74% of businesses surveyed could go bankrupt. Furthermore, nearly 30% of enterprises will lose between 20% and 50% of their turnover, whilst 60% of firms will lose more than half of their turnover.

Regarding the export sector, the Ministry of Industry and Trade believes that if the disease continues in the short term, import and export growth between the country and the EU will be relatively low. However, if the epidemic continues into the middle of the year, the nation’s exports to the EU may decrease by between 6% and 8% in Q1 and Q2.

A number of key products such as computers along with phones and their components are predicted to endure a sharp decline due to difficulties occurring in both supply and falling market demand.

Bamboo Airways runs two more Hanoi-HCM City daily flights

Vietnamese budget carrier Bamboo Airways said on April 18 that it will operate two more daily flights between Hanoi and Ho Chi Minh City from April 18-22.

Apart from the Hanoi-HCM City flight departing at 9:00 and the return flight at 12:00, passengers now could choose the flight at 16:00 and the return flight at 19:00 during the period.

Passengers are advised to wear face masks during the check-in process, boarding and flight while keeping themselves at least 2m far from others.

Further information could be found on the hotline 19001166, the website www.bambooairways.com, or ticket agents.

Nearly 21.3 million USD mobilised from Government bond auction

The State Treasury mobilised 500 billion VND (21.87 million USD) through a Government bond auction on the Hanoi Stock Exchange (HNX) on April 15.

Some 3.5 trillion VND worth of G-bonds were offered, including 10-year and 15-year bonds each valued at 1.5 trillion VND, and 30-year bonds valued at 500 billion VND.

The State Treasury raised 300 billion VND worth of ten-year bonds with an annual average yield rate of 2.28 percent, up 0.1 percent from the previous auction on March 11.

A total of 100 billion VND was mobilised from 15-year bonds with an annual interest rate of 2.63 percent, up 0.1 percent from the auction on March 18.

Meanwhile, 100 billion VND worth of 30-year bonds were sold with a yield rate of 3.1 percent, up 0.1 percent as compared with the March 11 auction.

So far this year, the State Treasury has raised over 33,513 billion VND from G-bond auctions at the HNX./.

Key fly-over bridge to boost west zone traffic links

Trung Nam Land company, a member of Trung Nam Group, has proposed a plan to build a fly-over bridge on the Nam Hai Van-Tuy Loan ring-road.

Chairman of Trung Nam Group Nguyen Tam Thinh said the fly-over would help ease traffic on the ring-road and the La Son-Tuy Loan Expressway, while creating a safe route for residents travelling between Hoa Vang and Lien Chieu districts.

He said the bridge would be built from the group’s fund of 120 billion VND (5.2 million USD).

The city’s construction department said the fly-over would reduce ground level junctions with the ring-road and the expressway, while boosting traffic connection among planned Lien Chieu port, north-south railway and highway system; industrial parks, Kim Lien railway cargo station and the East-West Economic Corridor that links Myanmar, Thailand, Laos and Vietnam.

Trung Nam has developed the Golden Hills urban area and the Da Nang information technology park, calling for investment from the US, the Republic of Korea, Japan and Malaysia.

Also on April 14, the city said it had asked the government for investment from the private sector in Lien Chieu port.

It said businesses could invest in the port logistics service, warehouse system, container yard and forwarding service.

The city said the port would commence construction in late 2020 for operation in 2022./.

TopCV receives US$424,000 investment

The recruitment platform TopCV has received nearly VNĐ10 billion (US$424,000) in investment from NextTech Group through the group’s start-up fund Next100.

The investment aims to help labourers nationwide seek job opportunities to increase incomes from working at home. It would also help firms choose high quality human resources with suitable fees, thus promoting their businesses during and after the COVID-19 pandemic.

After receiving the investment, TopCV quickly launched its portal to help businesses recruit labourers remotely at http://remote.topcv.vn.

The COVID-19 pandemic has seen complicated developments, causing an increase in the unemployment rate due to an economic downturn and halting of production and business.

Statistics from TopCV showed that after three months of the COVID-19 outbreak in Việt Nam, the number companies recruiting was reduced by 30 to 35 per cent. Many firms had to halt their operations or shut down completely, causing workers to lose their jobs or take a pay cut.

“It’s time for firms to have flexible changes not only in business models but also recruiting labourers in a new way, enhancing remote working ability,” said Trần Trung Hiếu, CEO of TopCV.

The TopCV platform collects jobs according to kinds of projects, part-time or full-time jobs. During the pilot project, there were 100 companies changing their business model and recruiting around 1,000 people remotely on the TopCV platform.

Shark Nguyễn Hòa Bình, CEO of NextTech Group, said providing technology solutions that help accelerate digital transformation of traditional sectors to increase value has been one of key investments of Next100.

Established in 2015, TopCV is the second biggest job platform in Việt Nam with nearly three million candidates, 95,000 employers and 10,000 applications updated everyday. TopCV connects more than 150,000 candidates with recruiters a month. More than 80 per cent of CVs sent to employers are built in TopCV.

Dong Thap helps fish exporters amid lower demand during COVID-19

The Department of Agriculture and Rural Development of Dong Thap province is working with the Department of Industry and Trade to help fishery businesses enter countries that have signed free trade agreements with Vietnam as demand has fallen due to COVID-19.

The province is also examining export activities to propose solutions to ministries and authorities about exporters' problems.

Due to difficulty in selling their harvests, farmers are incurring losses of 1,000-6,500 VND (0.04 – 0.28 USD) per kilo of fish.

Huynh Tat Dat, deputy director of the Department of Agriculture and Rural Development, said that COVID-19 is affecting shark catfish exports, with the price of raw catfish around 18,000-18,500 VND per kilo, which is 4,500 VND less than the same period last year.

The price may not improve in the second quarter of the year.

Most processing businesses are using much of their cold storage because raw material sources remain abundant with fewer exports.

Fishling production is also facing difficulties due to slow consumption of commercial shark catfish, which has reduced the price of fishlings. In addition, farmers are not refilling their farms after harvests as much as they usually do.

The price of snake heads has dropped to 24,000-25,000 VND, which is 12,000 VND cheaper year-on-year.

The province has 4,000 hectares of land for fisheries, mainly shark catfish, snakehead and red tilapia. There are 20 fishery processing businesses in Dong Thap, providing jobs for around 21,000 workers./.

Vietnam and China seek to bolster agricultural trade amid COVID-19

Minister of Agriculture and Rural Development Nguyen Xuan Cuong joined the Chinese Ambassador to Vietnam at a meeting in Hanoi on April 16 to explore ways to boost co-operation in agricultural development and the mutual trade of farm produce in the face of the growing economic impact of the COVID-19 epidemic.

The main topic under discussion during the meeting was ways in which to open up more markets for agro-forestry-fishery products, along with how to boost cross-border trade. This involved proposing the compilation of a list of exporters who will be given an exemption from inspections in order to reduce the time it takes for their products to pass through the border gate.

Both sides will agree on a number of goods from designated firms and recognise the respective quarantine results of each other without the need to place Vietnamese export goods into quarantine.

The two countries will look to co-ordinate the operating of a "priority flow" with regard to customs clearance. Therefore the time that agricultural products of both parties can cross the border will be extended with the new hours being from 7am to 10 pm (Hanoi time) via the Kim Thanh international border gates on Road No. 2 from the northern province of Lao Cai to Bac Son in Hanoi.

The trade of agro-forestry-fishery products between both nations have undergone a series of positive developments in recent years. However, since the start of the year the impact of the COVID-19 has served to cause an annual 6.9%, equivalent to US$2.21 billion, drop in the total import-export turnover of these items, including US$1.65 billion from exports, and US$561.7 million from imports.

Hanoi strives to untie "knots" faced by businesses

Secretary of the Hanoi Municipal Party Committee Vuong Dinh Hue has said that the city is willing to listen to enterprises’ feedback to untie “knots” regarding policies, site clearance and planning adjustments, as public and private investment is an economic lifesaver of the city's economy.

During a dialogue with businesses in Hanoi on April 16, Hue said the COVID-19 pandemic is seriously hurting the world economy, including Vietnam. Hanoi’s economy grew by 3.72 percent in the first quarter this year, lower than the country’s average.

Calling on investors to develop agriculture, he said Hanoi is determined to raise agriculture’s growth by 4.62 percent this year by increasing heads of cattle and poultry.

According to the official, the city is reviewing land plots so as not to leave them unused. In the outlying district of Ba Vi, 41 ha could be used for clean vegetable cultivation so that investors could consider working on them immediately, he said.

Hue said the municipal authorities will also hold a working session with the Ministry of Information and Communications next week to achieve the target of having one business, even a start-up in the field of information technology, digital economy and public services, per 1,000 people.

About public investment, Hanoi has had over 107 trillion VND (4.65 billion USD) over the past five years, or 10 percent of the country’s total, he said, adding that the city stays determined to disburse nearly 40 trillion VND of public investment to ease difficulties for businesses.

In order to mitigate the impacts of the COVID-19 epidemic, he said Hanoi will continue effectively implementing the Law on Support for Small and Medium-sized Enterprises (SMEs), process administrative procedures online at level 3, and step up online registration for procedures involving businesses at level 4.

In his view, Hanoi will promptly devise a scheme to support SMEs for the 2021-2025 period, boost start-ups and innovation, improve the quality and diversify business support services, as well as realise the Government’s mechanisms and policies to back production, trade and social welfare for those hit by the epidemic in line with resolutions by the Party Central Committee, the Government and the municipal Party Committee.

Speaking at the event, Chairwoman of BRG Group Nguyen Thi Nga suggested that the Ministry of Planning and Investment should reduce corporate tax by 50 percent, apply added value tax from 0 percent or cut it by 50 percent, and offer land use tax exemption.

Other corporate executives also proposed tax exemption or reduction.

In the first quarter of this year, Hanoi’s regional gross domestic product rose by 3.72 percent, industrial index up 4.44 percent, total retail up 2.3 percent. The total social investment hiked by 5.2 percent to 63.04 trillion VND.

There were 6,350 newly-registered firms, raising the total to over 285,300 as of March 31.

During the period, more than 4,200 companies suspended operations, up 36 percent year-on-year. Exports reached over 2.74 billion USD, down 18.1 percent while imports topped 5.83 billion USD, down 21.3 percent annually.

Almost all sectors saw decrease in revenues, including textile and garment down 30 percent, footwear 20 percent, transportation and hospitality services 20-50 percent./.

VietGAP mango fetches high incomes for farmers in Kien Giang

The cultivation of Hoa Loc mango to Vietnamese good agricultural practices (VietGAP) standards provides steady outlets and incomes for farmers in Tho Son commune in Kien Giang province.

The commune in Hon Dat district is the largest mango producer in the Mekong Delta province, with its weather and soil especially suitable for growing mangoes, especially the specialty Hoa Loc variety.

It has set up the Hon Dat Hoa Loc Mango Cooperative to promote the cultivation of VietGAP quality mangoes and link up with companies to secure outlets.

Nguyen Thanh Do is a member of the cooperative and has been growing VietGAP quality mangoes in the commune’s Hon Me hamlet in recent years.

The cultivation and post-harvest processes take time and labour but ensure quality and high prices, he said.

Farmers who grow VietGAP-quality mangoes strictly follow standards laid down for fertiliser and chemical use and cover unripe fruits with plastic bags to protect them from pests.

After harvest, the mangoes are classified and labelled with a QR code for origin tracing. Consumers can know the growing process and place and contact address by scanning the code.

VietGAP quality Hoa Loc mango cultivation offers them an income of 300 million VNA (12,800 USD) per hectare a year, according to cooperative members.

Nguyen Thanh Thai, director of the cooperative, said members harvest the fruits twice a year, each time getting a yield of four tonnes per hectare.

The fruits fetch steady prices since they are preferred by consumers for their high quality, he said.

The cooperative sells to clean agricultural produce shops in Rach Gia city and Phu Quoc district and An Huu market in Tien Giang province’s Cai Be district.

Tran Xuan Nghi, Chairman of the Hon Dat District Farmers Association, said the association had asked the province Department of Science and Industry for support to create a collective brand name for Hon Dat Hoa Loc Mango.

This would help promote the market and improve the value of the fruit, he said.

Tho Son grows more than 360ha of various varieties of mangoes.

The commune has determined that mango, rice and shrimp are its three agricultural products with high development potential.

Many farmers in the commune with unproductive rice fields and growing fruits and other crops are switching to Hoa Loc and other mango varieties, according to the local People’s Committee.

Nguyen Van Duc of Hon Me hamlet got a soft loan to grow Hoa Loc mango trees in his orchard, and has earned high incomes. After the success of the first harvests, he planted more trees, he said.

Farmers in the commune have adopted advanced farming techniques to grow mangoes in the off-season to earn higher prices, especially during festivals like Tet (Lunar New Year)./.

Bangkok revitalises waterway services

The Bangkok Metropolitan Administration (BMA) has approved a plan to buy electric boats to serve commuters along Khlong Phadung Krung Kasem in the capital city's Old Town.

The purchase is a part of BMA's plan to revitalise public transportation along Bangkok's canals, a feasibility study for which was completed by BMA's Transport Policy Office in March 2020.

Bangkok Deputy Governor Sakoltee Phattiyakul said the new electric boat service will be operated by BMA's investment arm, Krungthep Thanakhom (KT), which is expected to receive 117 million baht (3.58 million USD) to run the service along Khlong Phadung Krung Kasem.

The service will be launched in November this year, and operated by KT for 660 days. Afterwards, BMA will open a tender to select a private operator to run the service, he said.

With 1,161 canals stretching some 2,272km within its limits, Bangkok was originally envisioned as a canal town, with the capital's waterways service as its main transport means./.

Cambodian government to stock food, help farmers

The Cambodian government will ensure food security and sustainability in the Kingdom as it tackles the spread of Covid-19, Ministry of Agriculture, Forestry and Fisheries spokesman Srey Vuthy said on April 15.

He told The Phnom Penh Post that the ministry had been preparing to stock around 130 tonnes of pork per day for the next three months.

“The ministry will provide raisers with animals – particularly poultry which generate a quick return of profit – and feed to further expand their production capacities,” said Vuthy.

At the same time, Cambodia can supply 716,113 tonnes of vegetables per year, accounting for 68 percent of total demand, he said. The remaining 32 percent must be imported from neighbouring countries.

According to the official, the Cambodian government has issued a number of measures to maintain food security during the coronavirus pandemic such as locating potential sites to grow vegetables and ensuring sufficient water sources for production throughout the year.

It will provide farmers, especially poor ones, with the necessary seeds, vegetables, equipment and modern technology and agricultural practices to increase the production of safe vegetables.

Annual local demand for meat in Cambodia is 290,000 tonnes, including 82,000 tonnes of beef, 153,000 tonnes of pork, 54,000 tonnes of poultry and 165 tonnes of other meat.

The Kingdom is able to produce around 239,000 tonnes of meat, or 82 percent of demand./.

Dong Thap helps fish exporters amid lower demand during COVID-19

Dong Thap Province’s Department of Agriculture and Rural Development is working with the Department of Industry and Trade to help fishery businesses enter countries that have signed free trade agreements with Viet Nam as demand has fallen due to COVID-19.

The province is also examining export activities to propose solutions to ministries and authorities about exporters' problems.

Due to difficulty in selling their harvests, farmers are incurring losses of VND1,000-6,500 (US$0.04 – 0.28) per kilo of fish.

Huynh Tat Dat, deputy director of the Department of Agriculture and Rural Development, said that COVID-19 is affecting shark catfish exports, with the price of raw catfish around VND18,000-18,500 per kilo, which is VND4,500 less than the same period last year.

The price may not improve in the second quarter of the year.

Most processing businesses are using much of their cold storage because raw material sources remain abundant with fewer exports.

Fishling production is also facing difficulties due to slow consumption of commercial shark catfish, which has reduced the price of fishlings. In addition, farmers are not refilling their farms after harvests as much as they usually do.

The price of snake heads has dropped to VND24,000-25,000, which is VND12,000 cheaper year-on-year.

The province has 4,000 hectares of land for fisheries, mainly shark catfish, snakehead and red tilapia. There are 20 fishery processing businesses in Dong Thap, providing jobs for around 21,000 workers.

Tien Giang’s Q1 fruit exports up 20.3%

The southern province of Tien Giang exported 1,920 tonnes of fruit in the first quarter with US$3.9 million in turnover, a 20.3 per cent increase in value year-on-year.

Aside from China, Tien Giang’s raw and processed fruit products are also sold to markets such as Europe, the US, Japan and Korea.

Many challenges, however, face the province’s fruit industry, as the COVID-19 pandemic is hampering demand.

The provincial People’s Committee has instructed departments and districts to work with businesses on solutions to facilitate produce purchasing and exporting.

Businesses and organisations such as the Big C supermarket chain and My Tinh An Commune dragon fruit co-operative group have taken part in the province’s programme to increase fruit purchases.

The province is focusing on hi-tech applications, smart agriculture, and improvement of its network of 130 agriculture co-operative groups to foster sustainable value chains.

Tien Giang is a key agricultural production province in the Mekong Delta. It has over 79,000 hectares of land for growing numerous kinds of fruit, producing over 1.49 million tonnes of fruit annually.

Many of its fruits have received certificates of geographical indication and are favoured by domestic and foreign customers.

VPBank launches “Household Business Academy” programme

VPBank on Tuesday officially launched the “Household Business Academy” programme, which enables business owners to conduct transactions via online channels in light of the social distancing order, as well as to maintain their revenue sources.

 

The programme would provide support to some 50,000 household businesses nationwide by offering online training courses and direct training from the bank’s staff. This aims to help them shift from offline to online methods, thus maintaining their business amid the COVID-19 pandemic. All the training courses are free.

Household businesses could register to participate into the programme on Facebook https://bit.ly/hocvientt with the leading specialists in Viet Nam. After each lesson, people could easily apply the skills in doing business on social networks such as Zalo and Facebook; opening shops on e-commerce platforms (Tiki, Shoppee, Lazada); working with delivery firms (Now, Be, Grab) as well as upgrading management skills of non-cash payments and financial management.

A representative from VPBank said their survey showed that most household businesses only used social networks for communication and entertainment though 100 per cent have smartphones and 80 per cent join in social networks. As many as 70 per cent of household businesses have not had business online. This is mainly due to familiarity with the traditional selling method and not being instructed to do online business.

It was the reason that most of household businesses are suffering losses or even stopping operations during social distancing.

“We therefore determined to accelerate the Household Business Academy programme to help them do business online in the digital era. We will help them become 4.0 household businesses,” he added.

Earlier, VPBank has launched many programmes to support customers amid the pandemic such as reducing lending rates by 3 per cent for firms, restructuring and rescheduling debts. It also encourages customers using e-banking services such as internet banking and VPBank online for money transfers, bill payments and savings.

VPBank and its member companies have been one of the businesses pioneering in corporate social responsibility activities. The bank donated VND15 billion (US$641,399) to the Việt Nam Fatherland Front in fighting COVID-19 and launching the “Cheer up Viet Nam” programme.

DOJI Group sells 6.5 million shares of Bamboo Capital, no longer a major shareholder

DOJI Gold & Gems Group JSC (DOJI) announced it has sold more than 6.5 million shares of Bamboo Capital JSC, and is no longer a major shareholder of the company.

After the sale, the ownership of DOJI in Bamboo Capital decreased from 10.8 million shares, equivalent to 10 per cent, to more than 4.23 million shares, representing 3.92 per cent.

Of the 6.5 million shares, DOJI sold more than 3.9 million shares on December 3 last year at an average selling price of VND8,800 per share, with total trading value of more VND34.34 billion (US$1.5 million).

The other 2.66 million shares were put up for sale on January 8 this year with an average selling price of VND6,900 per share, totalling trading value of more than VND18.37 billion.

Due to the impacts of the COVID-19 pandemic on the stock market, BCG shares have plummeted since the beginning of the year by 34 per cent, from approximately VND8,000 per to VND5,100 per share.

Pyn Elite Fund and Dragon Capital sells off Mobile World shares

Finland-based Pyn Elite Fund sold 1.36 million shares of Mobile World (MWG) to a group of nine other foreign investment funds last week, the Viet Nam Securities Depository announced Monday.

Also last week, the group of investment funds run by Dragon Capital transferred more than 250,000 MWG shares to two foreign funds, Polen Capital Managemeny LLC and Cavendish Asset Management Limited.

MWG, one of the biggest mobile phone and accessory retailers in Viet Nam, has occupied a large proportion in the investment portfolios of Pyn Elite Fund and Dragon Capital for many years.

At the end of 2019 and early 2020, the two funds also transferred a large number of MWG shares to other foreign investors such as Arisaig Asia Consumer Fund Limited, which bought about 11 million MWG shares.

Recently, the impact of the COVID-19 pandemic has significantly affected MWG shares. From early this year till the end of March, MWG plunged by 50 per cent from VND117,000 (US$5.02) per share to VND58,900 per share. However, in recent sessions, MWG has recovered to more than VND70,000 per share.

In the first two months this year, MWG recorded consolidated net revenue of VND20.5 trillion, up by 18 per cent and post-tax profit of VND845 billion, up by 16 per cent year-on-year.

While many companies suffered from damage due to the pandemic, mostly in March, MWG still reported revenue of VND8.5 trillion, higher than last year’s figure of VND7.62 trillion.

ADB triples COVID-19 response package to $20 billion

The Asian Development Bank (ADB) on Monday tripled the size of its response to the novel coronavirus disease (COVID-19) pandemic to $20 billion and approved measures to streamline its operations for quicker and more flexible delivery of assistance.

The package expands ADB’s $6.5 billion initial response announced on 18 March, adding $13.5 billion in resources to help ADB’s developing member countries counter the severe macroeconomic and health impacts caused by COVID-19. The $20 billion package includes about $2.5 billion in concessional and grant resources.

“This pandemic threatens to severely set back economic, social, and development gains in Asia and the Pacific, reverse progress on poverty reduction, and throw economies into recession,” said ADB President Masatsugu Asakawa. “Our expanded and comprehensive package of assistance, made possible with the strong support of our Board, will be delivered more quickly, flexibly, and forcefully to the governments and the private sector in our developing member countries to help them address the urgent challenges in tackling the pandemic and economic downturn.”

ADB’s most recent assessment, released on 3 April, estimates the global impact of the pandemic at between 2.3% and 4.8% of gross domestic product. Regional growth is forecast to decline from 5.2% last year to 2.2% in 2020.

The new package includes the establishment of a COVID-19 Pandemic Response Option under ADB’s Countercyclical Support Facility. Up to $13 billion will be provided through this new option to help governments of developing member countries implement effective countercyclical expenditure programs to mitigate impacts of the COVID-19 pandemic, with a particular focus on the poor and the vulnerable. Grant resources will continue to be deployed quickly for providing medical and personal protective equipment and supplies from expanded procurement sources.

Some $2 billion from the $20 billion package will be made available for the private sector. Loans and guarantees will be provided to financial institutions to rejuvenate trade and supply chains. Enhanced microfinance loan and guarantee support and a facility to help liquidity-starved small and medium-sized enterprises, including those run by female entrepreneurs, will be implemented alongside direct financing of companies responding to, or impacted by, COVID-19.

The response package includes a number of adjustments to policies and business processes that will allow ADB to respond more rapidly and flexibly to the crisis. These include measures to streamline internal business processes, widen the eligibility and scope of various support facilities, and make the terms and conditions of lending more tailored.

All support under the expanded package will be provided in close collaboration with international organizations, including the International Monetary Fund; World Bank Group; World Health Organization, UNICEF, and other UN agencies; and the broader global community.

Vietnam Macroeconomic Report-Quarter I 2020 unveiled

The Vietnam Institute for Economic and Policy Research (VEPR) joined with the Konrad Adenauer Stiftung to co-host a workshop in Hanoi which unveiled the Quarter I Independent Assessment of Vietnam’s Macroeconomic Performance, with several senior economic experts also participating in the event.

In introducing the occasion, Pham The Anh, VEPR’s chief economist, outlined the global macroeconomic picture before going into more detail about activities relating to the Vietnamese economy during the first quarter of the year.

The report indicates that the novel coronavirus (COVID-19) is responsible for the slowdown in economic growth occurring in several major countries during the first quarter of 2020. Moreover, oil prices have substantially decreased as a result of both the low demand and the collapse of talks between OPEC and Russia to cut supply.

The People’s Bank of China have cut the required reserve ratio by 0.5 to 1%, therefore releasing CNY550 billion into their economy in an attempt to negate the effects of the pandemic.

Elsewhere, the United States government has introduced different measures to stabilise the economy in response to the pandemic, including introducing a stimulus package, tax relief, tax extensions, and cash handouts. In addition, the Federal Reserve System has also moved to decrease federal fund rates while also buying financial securities.

The scale of the pandemic to hit Europe has forced many countries to close borders, resulting in disturbances to occur in supply chains and manufacturing activities. This has seen the European Central Bank maintain interest rates but spend an additional EUR120 billion to buy assets until the end of the year.

Amidst all this, the Vietnamese economy was poised to grow by 3.82% in the first quarter of 2020, its lowest rate in 10 years.

Factors such as climate change, saline intrusion, and African swine fever have all had a huge effect on the country’s agro-forestry-fisheries industry, only increasing by 0.08% during the first quarter of the year. Simultaneously, the COVID-19 has significantly hurt services, the commercial sector, and international trade in general.

Throughout the reviewed period, a total of 29,711 new enterprises registered for establishment, with registered capital totaling VND351,400 billion.

Along with this figure, the number of firms ceasing operation increased sharply to 30,902 while the average inflation rate stood at 5.56% on-year. High demand for goods during the Lunar New Year and for medical supplies during the recent pandemic can be attributed to causing price hikes.

The VND/USD exchange rate at both commercial banks and the State Bank of Vietnam (SBV) had increased sharply by the end of the first quarter, standing at VND23,660 per US$1. On March 16, the SBV decreased operating interest rates in an effort to support the economy.

Domestic gold prices have followed a similar pattern to international gold prices. As uncertainty increases due to the pandemic in major economies, gold prices are expected to remain high.

Assuming that the pandemic does not occur locally in the same manner as it hit Wuhan, it is estimated that the country’s economic growth will be 4.2% in the best-case scenario, and -1% in the worst-case scenario.

Garment and textile firms ready to export face masks to US, Europe

The export of face masks can be considered as a ‘last-gasp’ for local garment and textile firms to compensate for the loss in revenue from export orders that have either been delayed or canceled by foreign partners as a result of the novel coronavirus (COVID-19) pandemic.

This comes after Garment 10 Corporation Joint Stock Company received an export order for 400 million medical face masks to be delivered by July.

In addition, the company has also received export orders from both Germany and the United States to manufacture 200 million antibacterial cloth masks.

Furthermore, TNG is also looking to export batches of face masks to Europe over the course of a month by sending millions of antibacterial nano cloth masks to France, Belgium, and Germany.

Nguyen Van Thoi, chairman of TNG Investment and Trading Joint Stock Company, said there remains plenty of room for firms to export antibacterial cloth masks to the US market in the coming months due to widespread demand.

This comes after TNG donated 500 antibacterial nano cloth masks to the New York City Police Department on April 6. However, in order to make further inroads into the US market, the company is required to obtain certificates confirming the quality of their products issued by the US Food and Drug Administration. The process of being granted the correct certifications is due to be complete next week.

Thoi also unveiled plans to be able to produce medical face masks by mid-May due to the company moving to import raw materials for production with production lines being installed over the course of the next 40 days.

Than Duc Viet, general director of Garment 10 Corporation, said that export orders of face masks account for approximately 30% of their revenue this year, helping ensure the jobs of roughly 12,000 workers.

Similarly, TNG’s domestic sales during the first quarter reached more than VND63 billion, an increase of 10% against the same period last year, the majority of which was contributed from the production of face masks.

Aside from making face masks, firms have also shown a desire to create production lines in order to manufacture protective suits which has served to open up the prospect of boosting exports in the remainder of the year.

There remains a number of obstacles that enterprises must overcome in order to export face masks or protective clothing, said the TNG Chairman.

During a meeting on April 13, the National Steering Committee for the COVID-19 Prevention and Control affirmed that it will be encouraging the export of these products only after domestic demand is sufficiently met and when enterprises are being proactive in seeking raw materials for production.

Abundant supply and COVID-19 keep pepper prices low

The domestic pepper industry is poised to encounter a variety of challenges over the course of the year due to there being an abundant supply of produce, in addition to the negative impact of the COVID-19 pandemic, according to the Agro Processing and Market Development Authority.

March alone saw the country export 33,000 tonnes of pepper with a value of US$70 million, raising the country’s total export volume for the first quarter of the year to 74,000 tonnes with a value of US$163 million, representing a 3.9% rise in volume but a fall of 13.9% in value on-year.

The two months of the year saw the United States, India, Pakistan, Myanmar, and Germany remain the nation’s five largest buyers of local peppers, making up 45.5% of the country’s total pepper export turnover.

The average export price of peppers throughout the reviewed period suffered a year-on-year decline of 17.9% to US$2,305 per tonne.

The nation successfully retained its position as the largest supplier of peppers to the US market in the opening two months of the year, with its pepper market share of total US pepper imports increasing from 57.7% last year to 63% this year.

According to the Department of Import and Export under the Ministry of Industry and Trade, the price of black and white peppers within the domestic market in early April slumped to lows of VND35,500 per kilo and VND57,000 per kilo, respectively.

Despite having large reserves, the nation usually exports peppers in their raw form, resulting in a low value for the domestic industry.

The global pepper market, especially the US and Europe who are the world’s largest pepper consumers, is projected to suffer negatively from the COVID-19 pandemic, leading to a sharp decline in import demand.

Moreover, the global pepper market has also faced a range of hurdles relating to disruptions occurring in supply sources due to the majority of countries worldwide imposing social distancing measures and placing trade restrictions on the customs clearance of goods to prevent the spread of the COVID-19.
Consequently, the global pepper market in the long-term is anticipated to have an abundant supply of goods, according to insiders.

The Department of Import and Export has therefore recommended that, in the context of the COVID-19 pandemic, the domestic pepper industry should upgrade its processing stage as a way of improving product value. Simultaneously, efforts should be made to improve its competitiveness in the global market moving forward.

COVID-19 causes coffee prices to tumble to record 10-year low

The first quarter of the year saw the country export 474,000 tonnes of coffee worth US$801 million, a year-on-year decline of 3% in volume and 5.6% in value, according to figures released by the Agro Processing and Market Development Authority (Agrotrade) under the Ministry of Agriculture and Rural Development.

Among the largest consumers of the Vietnamese coffee, Germany, the United States, and Italy lead the way with the average export price throughout the reviewed period dropping by 2.8% to $1,692 per tonne on-year.

The Agrotrade notes that March saw the domestic coffee market experience wild fluctuations in terms of price, matching the trends seen in the global market. Evidence for this can be seen in the price of Robusta coffee from provinces in the Central Highlands which endured a fall of up to VND800 per kilo to approximately VND30,700 per kilo compared to February.

Elsewhere, the domestic price of Robusta coffee plummeted to a record 10-year low, causing enterprises to face a shortage of supply sources for export as coffee growers began to limit sales in order to bring the price under control.

The price of coffee is not expected to immediately recover as import and export activities have been suspended due to the increasingly complicated developments relating to the novel coronavirus (COVID-19) which has forced many freight forwarding ports to close, according to insiders.

Moreover, there has been lower levels of coffee consumption with firms lacking purchasing power as a result of the COVID-19. This is especially true due to the imposition of trade restrictions by major markets such as the EU and the US, which has caused heavy losses for the coffee industry, especially growers.

Businesses advised to outline long-term vision for CPTPP benefit

Local firms must outline a long-term vision and implement institutional reforms in order to maximise the benefits presented by the Comprehensive and Progressive Agreement for Trans- Pacific Partnership (CPTPP), according to insiders.

Experts believe that there remains plenty of room for local textile, footwear, and beverage industries to boost their exports among other CPTPP members with Vietnamese firms operating in these sectors able to develop production by strengthening institutional reforms through the trade pact.

Aside from promoting exports, local enterprises are expected to enjoy opportunities to import raw materials, machinery, and equipment from other CPTPP members at a reasonable cost whilst also gaining access to high-quality logistics production and telecommunications services.

At present, the novel coronavirus epidemic has slowed global trade with several countries moving to impose travel restrictions which are hindering the country’s import-export prospects.

However, taking advantage of the incentives given by free trade agreements like the CPTPP is expected to accelerate domestic production and export figures over the long term.

According to the World Bank, Vietnam’s exports to other CPTPP countries by 2030 is predicted to increase from US$54 billion to US$80 billion, accounting for 25% of the country’s total export turnover.

Most notably, the market share of export turnover for the footwear, textile, wooden, and beverage industries stands at 12.5%, 16.04%, 20%, and 23.46%, respectively.

Nguyen Anh Duong, Head of the Macroeconomic Policy Department under the Central Institute for Economic Management, says businesses have so far only paid attention to short-term issues such as taxes and tax reduction. Indeed, many have failed to gain an insight into the rule of origin, Sanitary and Phytosanitary measures, technical barriers to trade, and lack information regarding the networks of domestic and foreign suppliers.

As a means of utilising the benefits of the CPTPP, firms must tackle challenges and improve competitiveness in the implementation of the CPTPP, Duong emphasises.

Vo Tri Thanh, Director of the Research Institute for Brand and Competitiveness Strategy, notes that aside from efforts by local enterprises, the government should focus on improving the legal framework in line with commitments, serving to meet new trends. This can ensure that the economy develops in a sustainable manner and speeds up institutional reforms to remove hurdles that businesses face, especially small and medium-sized enterprises.

Social enterprises need specific Gov't support policies

A survey has found that 59 per cent of social enterprises will cancel their support for disadvantaged groups to ensure their businesses survive if the global COVID-19 pandemic lasts until September this year.

A social enterprise is a humane business model used to solve specific social and environmental problems. Its purpose is to create jobs for disadvantaged groups, which includes people who lose the ability to work and live independently and live on social welfare and Government support.

The survey, conducted by the National Economics University’s Center for Social Innovation and Entrepreneurship (CSIE) from April10-12, aimed to assess the impacts of COVID-19 on social enterprises, and then form recommendations. It involved 30 businesses in the fields of food, organic agriculture, vocational training and handicrafts.

It revealed that 68 per cent of social enterprises were maintaining efforts to continue operations until the end of the second quarter of this year, while 38 per cent said they would halt operations or go bankrupt if the pandemic lasted until the end of this year.

A CSIE report showed that Viet Nam had about 1,000 social enterprises operating under the 2014 Law on Enterprise, and 21,000 social-impact businesses (SIB), which were small-scale with below 20 workers – accounting for 4 per cent of Viet Nam’s total enterprises.

About 163,000 people working for social enterprises and 3.5 million people employed by SIBs who had not received support from their enterprises since the pandemic hit the country.

CSIE researchers asked the Government and State management agencies to recognise the social enterprises’ important role in sharing the burden of social security and development within the country.

They recommended the Government give social enterprises access to a credit package of VND62 trillion (US$2.65 billion) designed to support around 20 million workers who have lost their jobs or been affected by the pandemic, with simplified procedures and detailed instructions.

The researchers said that international experience, including from the UK and South Korea, showed that the Vietnamese Government has taken timely actions on social security for businesses and the public, but there was still a lack of policies specific to social enterprises.

In addition, it is needed to help social enterprises by calling on the community to buy their products or directly fund disadvantaged groups.

VinaCapital becomes major shareholder of Phuoc Hoa Rubber

VinaCapital Fund Management Company and its flagship fund Viet Nam Opportunity Fund (VOF) have purchased 50,000 and 60,000 shares of Phuoc Hoa Rubber JSC (PHR), respectively, news site ndh.vn reported on Tuesday.

After the acquisition, VinaCapital and VOF have raised their ownership in PHR to 4.66 per cent and 0.13 per cent, respectively.

Thus, VinaCapital, one of Viet Nam's leading investment company group with US$1.8 billion in assets under management, now owns a total of 6.77 million PHR shares, equivalent to 5.01 per cent of the company’s capital, becoming a major shareholder.

The transaction took place on April 8.

In the first quarter this year, Phuoc Hoa Rubber reported consumption of rubber reached more than 4,900 tonnes, equaling 74 per cent of the same period last year and fulfilling 12.4 per cent of the yearly plan.

Average selling price of rubber reached VND34.6 million ($1,500) per tonne, up 7.8 per cent over the same period last year.

Total revenue in Q1 was VND334.7 billion, up 18 per cent against 2019 and fulfilling 13.6 per cent of the whole year’s plan. Pre-tax profit touched VND172.5 billion, up by 158 per cent and fulfilling 15 per cent of the whole year’s plan.

In the second quarter, the company expects an average selling price of VND32 million per tonne and consumption of 3,620 tonnes, both lower than Q1.

However, revenue is expected to be VND480 billion, higher than Q1, of which revenue from rubber trading is VND116 billion. Pre-tax profit is estimated at VND350 billion, completing 30.5 per cent of the year’s plan.

This year, Phuoc Hoa sets a revenue target of VND2.46 trillion, pre-tax profit of VND1.15 billion, up by 46 per cent and 115 per cent year-on-year, respectively.

The Board of Directors said that no matter when the COVID-19 pandemic ends, the company will still fulfill its pre-tax profit plan for 2020, but the revenue target will only be fulfilled 84 per cent if the disease ends in the fourth quarter.

Da Nang helps firms complete investment procedures amid COVID-19 outbreak

The Department of Planning and Investment in Da Nang has pledged to continue working with relevant units to accelerate the completion of investment procedures for projects, with a view to helping businesses implement them and speed up the economic recovery.

The department will also take measures to help businesses solve difficulties during their formation and operation.

According to the municipal statistics office, the city’s total development investment was estimated at over 7 trillion VND (298 million USD) in the first quarter of 2020, down 8.1 percent compared to the same period last year. Notably, FDI disbursement reached 1.79 trillion VND, up 92.1 percent year-on-year.

Director of the office Tran Van Vu said the FDI sector has seen a rise in investment attraction thanks to the implementation of several big projects. Meanwhile, the main reasons for a decline in the implementation of state-owned projects is the slow allocation of investment capital in the first months of the year, the slow completion of documents to implement new projects, and delays to site clearance due to the COVID-19 pandemic.

Statistics from the municipal department show that in the first quarter, Da Nang attracted 79.4 million USD in foreign investment. To date, the city has welcomed 844 valid FDI projects totalling 3.47 bilion USD.

Along with Hanoi in the north and Ho Chi Minh City in the south, Da Nang is Vietnam's major economic hub in the country's central region./.

Indonesia ramps up production of protective gear to fight COVID-19

Indonesia will be able to produce up to 16,000 personal protective equipment (PPE) units per day to fight the COVID-19, Minister of Industry Agus Gumiwang Kartasasmita announced on April 15.

The ministry is cooperating with the domestic textile association and National Disaster Mitigation Agency (BNPB) to produce PPE that meet World Health Organisation (WHO)’s standards, said Agus following his meeting with President Joko Widodo.

PPE is the main protection for medical workers at the vanguard of the battle against COVID-19. However, Indonesia had experienced a shortage of PPE stockpiles, which had an adverse effect on the safety of doctors and medical workers.

When the COVID-19 began to spread, many medical personnel and doctors were using unsuitable and inadequate protective gears such as disposable raincoats due to the shortage of PPEs.

Indonesian President Joko Widodo said in the meeting that the availability of medical devices, medicines, and pharmaceutical raw materials must be ensured for now and in the future. This also pertains to the availability of PPEs for doctors and medical personnel, he said.

The president asked ministers and heads of institutions to reevaluate all the potential resources of the domestic industry, such as the pharmaceutical raw material industry, the PPE industry, masks, and ventilators.

He also reiterated that exports of goods related to handling COVID-19 must be allowed selectively with domestic needs prioritised, and the import of raw materials for making medical devices and pharmaceutical goods to combat the COVID-19 facilitated./.

USAID helps improve small Vietnamese companies’ capacity

The Ministry of Planning and Investment and the US Agency for International Development (USAID) on April 15 signed a financial support agreement worth 42 million USD aiming to help improve the capacity of small and growing businesses in Vietnam.

Accordingly, businesses, including those owned by people from vulnerable groups, will be helped to access technology, giving them a better capital management ability and improving competitiveness.

The agreement is expected to further promote entrepreneurship, and deepen connections between Vietnamese startups with corporations, investment funds and other supporting organizations in the international startup and innovation ecosystem.

It will also contribute to promoting development of high-quality human resources, which is necessary for a strong knowledge-based economy.

US Ambassador to Vietnam Daniel J. Kritenbrink stressed that the agreement represents the continued commitment of the US government to support Vietnam’s efforts on the path to becoming a more open, innovative and inclusive economy./.

 
 

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