BUSINESS NEWS HEADLINES DECEMBER 18

High-tech supply chain the key to sustainability for VN agriculture: experts

BUSINESS NEWS HEADLINES DECEMBER 18
Technology is imperative to improve the quality and scale of Viet Nam’s agriculture sector, Dao Ha Trung, chairman of the HCM City High Technology Association, tells a conference in HCM City on Tuesday. 


New technologies are key to advancing the agriculture sector since they can boost the value of products to make them more competitive on the global market, experts said.

Speaking at a conference on the use of high technology in the agricultural supply chain in HCM City yesterday, they said advanced technologies like blockchain could help companies, organisations and households in the agricultural sector raise productivity, save costs and create higher-quality products.

Dao Ha Trung, chairman of the HCM City High Technology Association, said many of Viet Nam’s famous agricultural products such as potatoes, carrots, persimmons, strawberries, onions and other vegetables were affected by poor-quality fakes from foreign countries.

Blockchain technology helps make product origins transparent and facilitates protection of the domestic market by enabling the public to identify genuine Vietnamese products, according to the chairman.

So the city is fostering blockchain technologies in agriculture to connect Vietnamese products with the world market.

"Since e-commerce is developing rapidly and new trading platforms are used across the world, agricultural outputs must meet customers’ needs and ensure the quality of the whole production chain," he said.

The Vietnamese agricultural sector was trying to integrate into the world market, but had faced challenges related to product quality, supply chains and transparency, he said.

Development of high-tech agriculture was the right policy and should be done soon, and this dovetailed with current global trends and would also help Viet Nam’s agriculture sector resolve its problems like lack of value-added products for export, low global competitiveness and inconsistency in quality, he added.

By using blockchain technology, firms could cut back on the cost of product origin management to near zero, Vu Truong Ca, chairman of agricultural supply chain company Lina Network, said.

But the Vietnamese agricultural sector had yet to understand the importance of a well-functioning value chain or the advantage of using such a modern technology, he said.

He said investment in the agricultural field was limited because of the high risks due to Viet Nam’s climate change threat and under-developed infrastructure in remote and rural areas.

In order for farmers to sustainably develop agricultural value chains, he advised strengthening linkages between rural agricultural co-operatives and distributors and creating public-private partnerships to develop infrastructure.

The Government should offer businesses incentives such as low-interest loans and subsidies while zoning large-scale agricultural production areas in a concentrated and modern manner, he added. — VNS

Rubber exports top 2 billion USD in 11 months

Vietnam earned 2.02 billion USD from exporting 1.5 million tonnes of rubber between January and November, rising 7.6 percent in value and 8.1 percent in volume year on year.

In November alone, about 200,000 tonnes of rubber were shipped abroad, bringing home 260 million USD. The figures respectively increased 4.2 percent and 4.3 percent from the previous month, and 11.3 percent and 16.2 percent from the same period last year, according to the Ministry of Agriculture and Rural Development.

Export price in the month also grew 4.5 percent year on year to 1,300 USD per tonne.

The ministry said the rubber farming area nationwide expanded from 800,000ha in 2011 to 965,000ha in 2018, about 165,000ha more than the plan.

Vietnam aims to gain over 2 billion USD from the export of natural rubber in 2020.

Hanoi attracts highest FDI in 11 months

Hanoi attracted the most foreign direct investment (FDI) in Vietnam during the first 11 months of this year with US$7 billion, accounting for nearly a quarter of the total, according to the Hanoi Department of Planning and Investment.

This figure was higher than the $6.3 billion registered in the same period last year.

Total registered investment capital for new projects and additions to existing projects reached about $2.1 billion, including $1.6 million for 788 new projects and $580 million for 160 existing projects.

During the 11 months, foreign investors poured $5.3 billion into Hanoi through capital contributions and share purchases.

Foreign investors have chosen Hanoi thanks to its good infrastructure, completed industrial zones and convenient transportation. The capital is one of the centres of economy, industry, trade and services and the population is rising sharply, creating a huge demand for housing.

Unsurprisingly, the largest recipients of FDI include real estate, manufacturing and processing, commercial services, and information and communications, according to the department.

The largest foreign investors in Hanoi are Japan, Singapore and the Republic of Korea (RoK).

This year, the city is looking to attract over $7.5 billion in FDI, but many experts predict it will surpass $8 billion.

Hanoi is planning to attract more FDI associated with sustainable development, while prioritising quality projects as well as value-added and highly competitive products.

The city is continuing to improve the investment environment, promote start-ups, improve the provincial competitiveness index and simplify administrative procedures.

During Prime Minister Nguyen Xuan Phuc's recent visit to the RoK, the leader of the Hanoi People's Committee Nguyen Duc Chung signed a memorandum of understanding with South Korean firms to invest $4 billion in Hanoi.

By 2025, Hanoi will need investment capital of about VND3 quadrillion ($130 billion) for development. The city’s budget can only meet about 20 per cent of the demand, so it will need to find a way of attracting the remaining.

According to the Department of Planning and Investment, in November, the city welcomed 60 new FDI projects with total registered capital of $600 million, including 52 wholly-foreign invested projects and eight joint venture projects.

Besides that, eight projects registered to increase their investment capital by $6.7 million in total while foreign investors poured $72.9 million into the city through capital contributions and share purchases.

Vietnam’s aircraft fleet expands 3.5 times last decade

Vietnam’s fleet of aircraft expanded 3.5 times over the last decade, Director of the Civil Aviation Authority of Vietnam Dinh Viet Thang told a recent seminar on Vietnam’s aviation industry in Hanoi.

The seminar on opportunities and challenges of Vietnam’s aviation industry was held by the Ministry of Transport on December 11.

From 2008 – 2019, the industry saw impressive growth, Thang said, with the number of passengers and volume of cargo experiencing 5.2-fold and 3.2-fold increases, respectively. The number of domestic and international flights grew by 2.4 times and 2.44 times, respectively, he continued.

Such rapid growth corresponds to the development of the economy and promotes competitiveness in the industry which benefits passangers, he said.

Singaporean firm interested in Quang Tri Airport project

The central province of Quang Tri has asked CPG Consultants Pte Ltd, a major provider of infrastructure, building management and consultancy services from Singapore, to support developing Quang Tri Airport project.

Chairman of the provincial People’s Committee Nguyen Duc Chinh recently had a meeting with representatives from the Singapore-based firm to discuss the possible cooperation between the two sides in the project.

Chinh gave his guests a brief overview of the province’s legal procedures on planning, calling investment and developing an airport.

He expected with years of experience and networking in aviation infrastructure development, the company will help the province in calling investment and developing Quang Tri Airport.

He assigned the Quang Tri Investment, Trade and Tourism Promotion Agency to serve as a contact point in the follow-up.

Jeannie Chew from the CPG Consultants thanked the province authorities for their warm welcome and support, saying the company is ready to help the province connect with potential strategic investors for the project.

CPG Consultants Pte has engaged in major airport projects around the world, such as Changi Airport (Singapore), Zhang Jia Jie and Shanghai Airports (China), Benazir Bhutto Airport (Pakistan).

In Vietnam, the firm has involved in developing Can Tho, Phu Quoc, and Ban Me Thuot airports, and most recently Van Don International Airport in Quang Ninh.

The Quang Tri Aiport will be built at an estimated cost of more than 5.7 trillion VND (244.64 million USD) for both civil and military aviation purposes.

The airport is planned to cover 312ha in Quang Tri’s Gio Quang Commune, Gio Linh District, about 7km from Dong Ha City.

The plan aims to create runways large enough to accommodate A320 and A321 aircrafts and their equivalents.

The passenger terminal is planned to serve up to one million passengers per year, with reserve land set aside for future expansion.

Vietjet CEO among world’s 100 most powerful women

Vietjet Air CEO Nguyen Thi Phuong Thao is one of 100 most powerful women in the world this year, according to a Forbes listing.

The only Vietnamese woman on the list, Thao was placed 52nd, down eight places from last year. This is the third year in a row she has been included in Forbes magazine’s list of 100 most powerful women in the world.

The list was compiled based on assets, impact, spheres of influence and media presence, the magazine said.

It estimated that the budget carrier CEO and the richest woman in Vietnam to have a net worth of around $2.7 billion as of December 13.

Thao, 49, has done business in Vietnam and abroad in many fields, including finance, banking, aviation, real estate, and retail.

She launched Vietjet in 2011. The airline now leads the domestic market with a 45 percent share. It operates 385 flights daily within Vietnam and to Japan, Hong Kong (China), the Republic of Korea, Taiwan (China), Singapore, mainland China, Thailand, Myanmar, and Malaysia.

The carrier launched its IPO on the Ho Chi Minh City Stock Exchange in February 2017, becoming the first airline in Vietnam to list publicly.

Vietjet has now surpassed national flag carrier Vietnam Airlines in terms of passengers carried. It has a fleet of 80 aircraft flying to 120 destinations.

German Chancellor Angela Merkel was adjudged the most powerful woman in the world for the ninth consecutive year. She was followed by French politician Christine Lagarde, who serves as the President of European Central Bank, and Speaker of the US House of Representatives Nancy Pelosi.

Vietnam’s November PMI up from last month

The Vietnam Manufacturing Purchasing Managers’ Index registered 51.0 in November, up from the neutral reading of 50.0 in October, according to the latest IHS Markit report released in early December.

The rise in PMI signaled a marginal improvement in the health of the sector.

Vietnam’s manufacturing sector returned to growth in November, as output increased for the first time in three months and new orders expanded at a faster pace.

Employment rose for the first time in three months amid increased new orders.

Latest data signaled a continued lack of inflationary pressures within the sector. Input costs rose only marginally and at the weakest pace in the current eleven-month sequence of inflation. This lack of pressure on input costs meant that manufacturers were able to offer discounts to customers. Output prices decreased, following a first increase in almost a year in October.

Business sentiment dipped from October, but remained positive as around two-fifths of respondents predicted an increase in output over the coming year. According to survey participants, optimism was centered on expected growth of new orders and efforts to expand capacity.

Forum urges leather-footwear sector’s actions to grasp chances

The leather-footwear industry of Vietnam has established its foothold in the global market, but challenges are still lying ahead, requiring it to work harder to grasp big chances created by new-generation free trade agreements (FTAs).

This was the focus of the Supporting Industry Forum 2019, held in Ho Chi Minh City on December 13.

Deputy Minister of Industry and Trade Do Thang Hai said leather-footwear is one of the key exporting industries of Vietnam. With an annual export growth rate of over 10 percent, the industry earned the country approximated 20 billion USD in 2018 and over 10 billion USD in the first half of 2019.

The Vietnam Leather, Footwear and Handbag Association (Lefaso) forecast this year’s leather-footwear exports at some 21.5 billion USD, up 10 percent from 2018.

Vietnamese footwear has been shipped to more than 100 countries, including 50 with imports worth over 1 million USD from Vietnam. The largest markets are the US, the EU, China, Japan and the Republic of Korea.

Vietnam is the world’s second biggest footwear exporter, and this industry is now a great contributor to the national economy, Lefaso said, noting that many companies have expanded production, renovated technology and diversified design to meet consumers’ demand.

However, Lefaso admitted that those achievements are mainly contributed by FDI firms which account for just over 10 percent of all businesses but make up 70 – 80 percent of total export revenue of this industry.

Additionally, the sector is facing numerous challenges such as rising workers’ wage, the Fourth Industrial Revolution, and global economic uncertainties amidst growing protectionism and trade war between the world’s two biggest economies.

According to the association, FTAs like the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the EU-Vietnam FTA are generating considerable opportunities for the leather-footwear sector. Once these deals become fully effective, tariff barriers in EU and CPTPP members will be removed, promising stronger export growth for the industry.

However, to capitalise on these chances, Lefaso and its member businesses have to deal with existing bottlenecks, including underdeveloped supporting industry and a lack of support policies, plans on value chain development, strong brands, design personnel, as well as research and development centres.

Deputy Minister Hai said these challenges require the industry to pay more attention to promoting productivity and human resources quality, forming value chains, and applying science-technology to improve products’ value and keep foreign investors in the country.

Garment and textile sector enjoys trade surplus of US$16.6 billion

After enjoying US$39 billion in export turnover throughout the year, the apparel and textile industry has recorded a trade surplus of US$16.6 billion, up U$$2.25 billion over last year’s figure, according to the Vietnam Textile and Apparel Association (VITAS).

Most notably, the export turnover figure of US$39 billion recorded throughout the year indicates growth of 7.55 per cent compared to a year earlier. Meanwhile, the textile and apparel import turnover stood at an estimated US$22.38 billion.

VITAS Chairman Vu Duc Giang noted that this year’s export turnover has seen a 22-fold increase from the US$1.75 billion documented in 1999, while the sector’s trade surplus stood at US$17.7 billion, a 106.5-fold rise compared to the figure of US$85 million in 1999.

This year’s export results of US$39 billion have made a significant contribution to the nation’s export-import turnover, which has surpassed the US$500 billion mark, he added.

The country is now ranked third among the largest textile and apparel exporters globally, behind only China and India. At present, approximately 7,000 garment and textile businesses have operated, generating jobs for roughly 3 million workers and accounting for a quarter of the industry’s entire workforce.

Ahead in 2020, the global textile and apparel market is forecast to be affected by the ongoing trade war between the United States and China, while the sector has set a target of recording US$42 billion in total export value whilst striving to reach a turnover of US$60 billion by 2025.

As a result, the sector is aiming to secure US$110 billion in export turnover by 2030 and has plans to be home to at least 30 brands that will contribute to the world's textile and apparel industry.

Outsourcing farming model contributes to change livestock appearance

Developing large-scale outsourcing farms is ideal to promote the sustainable development of the livestock sector because it ensures safe and stable supply in the context of the African swine fever while creating stable benefits for both farmers and livestock companies.

Vietnam’s pig breeding industry has been under increasing pressure due to the disease. Notably, the tide of African swine fever (ASF) sweeping across Vietnam is showing no signs of abating, killing almost all pigs of small-scale farming households and decimating the herds of breeding companies. The virus destabilised supply in the entire market, leading to near-constant price hikes and speculative hoarding of pork products.

The development of large-scale pig farms to act as outsourcing units for breeding companies has been urged for years now but managed to get no traction among farmers, especially in mountainous areas. The advantages of this model have come to the fore after small-scale farms proved far less resilient to the ASF.

Double benefits

As of now, ASF is present in 63 cities and provinces of Vietnam and shows no signs of retreating. The virus is fatal for pigs and wild boars and can be transmitted in a number of ways, including direct contact and contamination of food waste and feed.

Nguyen Kim Doan, vice chairman of the Animal Production Association in Dong Nai province, the crisis of the price of pork as well as hoarding present an opportunity to restructure the pig breeding industry and increase co-operation between farmers and livestock companies to develop large-scale farms.

Almost all livestock farming companies, including C.P. Vietnam and Japfa Comfeed Vietnam, are stepping up the deployment of the industrial pig farming model and they encourage households to join. This model would dual benefits for farmers and the country’s livestock industry.

Accordingly, the farmers only have to invest in building out a farming system and livestock farming companies will supply seed, feed, medicine, and the closed processing loop. This would enable farms to approach modern farming techniques and technologies. The model would also include a technician dispatched on the farms to prevent and control the spread of diseases. The other advantage of this model is to limit the risk of the disease outbreaks upon the re-population of the herds.

Do Hoang Long, development and sales manager of Japfa Comfeed Vietnam Ltd., said, “This model is safe because when livestock farming companies, especially Japfa, select partners, they issue strict requirements about biological safety and have strict supervision policies. Thus, these farms will be much more resilient to disease outbreaks than household farms.”

“This model offers massive benefits for farmers. For example, at Japfa, along with the wage for herding pigs, farmers will receive a bonus based on their feed conversion ratio (FCR). Besides, it will minimise risks and damage for farmers because they are ensured a stable income even during disease outbreaks and price fluctuations in the market,” Long said.

Contributing to sustainability

As of now, livestock companies are the main supply for the pork market because supply from small-scale farms has all but dried up. Besides, re-population efforts are facing difficulties while the ASF is at large.

The role of livestock companies in creating a stable supply was highlighted when the authorities had to call on these companies to join hands with the government to stabilise the price of pork, especially for the occasion of Lunar New Year when demand usually spikes.

Another advantage of outsourcing farms is that the model limits the amount of untreated wastewater into the environment. Notably, pig breeding households do not usually install wastewater treatment facilities and only collect manure while discharging untreated wastewater into the environment. Besides, in general, these small-scale farms are located quite near residential areas which increases damage.

Meanwhile, at outsourcing farms, livestock companies pay attention to the quality of wastewater treatment system and they require partners that the expenditure for building the wastewater treatment system make up 10 per cent of the total cost of developing the farm.

Long from Japfa Comfeed said that the wastewater generated at each farm goes through a three-step filtration and treatment process, from collecting and regulating tanks, aerobic biological tanks, and sedimentation tanks, before being discharged into the environment.

In order to ensure the objectivity of the environmental impact assessment reports of its outsourcing farms, the company asks farms to also send wastewater samples to an independent unit for testing every quarter, and the results are sent to the ward and district authorities. This way, authorities can monitor and control the amount of wastewater discharged into the environment, something they cannot do at household-scale pig farms.

The company affirms that 100 per cent of the wastewater produced by its outsourcing farms will have to be carefully treated so that chemical and waste levels are low enough to be safely discharged into the local sewage system.

Besides, restructuring the pig breeding industry in the direction of the outsourcing model will improve the government, ministries, and local authorities’ oversight of the overall pork market and help them prepare both short-term and long-term development strategies for the country’s livestock industry.

With both economic and environmental advantages, the outsourcing model stands to make powerful contributions to the sustainable development of the livestock sector.

Textile industry urged to create highly added value products

Prime Minister Nguyen Xuan Phuc has asked the textile and garment industry to strongly shift from processing to production, aiming to create more highly added value products.

 

Speaking at a ceremony to mark the 20th founding anniversary of the Vietnam Textile & Apparel Association (VITAS) in Hanoi on December 13, PM Phuc stressed that with 7,000 enterprises operating in the field, the sector is making important contributions to the country’s development.

He praised VITAS for well performing its task as a bridge between the Government and enterprises, as well as in giving policy consultations, especially in negotiating free trade agreements (FTAs) between Vietnam and partners.

The PM urged the sector to swiftly converting production model in order create higher added value products, saying that with its increasingly export turnover through years, the sector is contributing to ensuring social security, increasing budget collection and promoting economic structure shifting.

PM Phuc also pointed out shortcomings and difficulties facing the industry, saying that the production still depends on imported materials.

He stressed the need for textile enterprises to focus on building trademarks for their products, take measures to promote sustainable development, and fully tap advantages brought by FTAs that Vietnam has joined.

The government leader asked the sector make more efforts to reach a higher ladder in the national economic value chain, towards helping the country maintain its position of the world’s third biggest textile and garment producer.

On the occasion, the PM presented the Government's Emulation Flag to the VITAS.

Vietnam’s textile export turnover is forecast to hit 39.5 billion USD in 2019, up 9.1 percent year-on-year. The figure is expected to reach 110 billion USD in 2030.

HCM City calls on US firms to boost investment

Ho Chi Minh City is prioritising foreign investment into projects on urban infrastructure and environment treatment, said Permanent Vice Chairman of the municipal People’s Committee Le Thanh Liem on December 13.

At a working session with representatives of the American Chamber of Commerce in Vietnam, the official further said authorities of the southern hub also hope the US business community will take an active part in investing in and providing technical support for the city.

Liem elaborated that HCM City authorities are prioritising foreign investment into projects on smart city, innovative city, waste and effluent treatment, and urban infrastructure, and asked the US business community to contribute ideas to the acceleration of the relations between the city and the US.

For her part, Chairwoman of the chamber Amanda Rasussen said her organisation’s members highly value efforts by the municipal authorities in renovating the management methods and reforming administrative procedures, adding that they hope to help the city solve urban issues.

At the session, representatives of the US firms held that HCM city is very attractive to many investors, including those from the US, and proposed that municipal authorities should prioritise the upgrade and completion of the transport infrastructure.

As for the waste treatment, they said they can provide high-tech services but the city needs to work out and apply effective measures to classify wastes right at the source. Besides, they also hoped for a clear, transparent and open legal system to facilitate foreign investors.

More work needed to popularise Vietnamese goods

While Vietnamese goods have become more popular in the domestic market, there's still a long way to go before local products rule the roost.

A recent survey on 10 years of the 'Vietnamese people prioritise using Vietnamese goods campaign' revealed 88 per cent of Vietnamese had interested in the campaign.

Sixty-seven per cent said they would buy Vietnamese goods, 52 per cent said they recommended relatives buy Vietnamese goods and 36 per cent said they had shifted from buying foreign goods to domestic goods.

However, Nguyen Van Than, chairman of the Vietnam Association of Small and Medium Enterprises (Vinasme), said that there were still many problems with the campaign.

Supermarkets, trade centres and convenience stores had improved fast but they were mostly in cities and towns, he said.

Additionally, small and micro businesses struggled to get capital, land and construction licences.

Another difficulty was growing competition from foreign distributors in Vietnam, cutting into the market share of domestic products.

Nguyen Huu Duong, chairman of the management council of Hoa Binh Co Ltd, said that if there were no convenient places to sell products, it would be difficult for domestic enterprises to develop.

Up to 90 per cent of standard trading centres were held by foreign groups, he explained.

For Vietnamese enterprises to survive and thrive, places to introduce and sell products were vital, Duong emphasised.

Each province and district needed at least one trade centre to sell essential commodities produced by Vietnamese enterprises, he said.

Duong also asked for preferential policies on space hiring fees to help local enterprises and farmers.

Tran Anh Tuan, deputy head of the Vietnam Fatherland Front's movement board, said it was necessary to complete a legal framework to develop modern means for trade.

As 98 per cent of Vietnamese businesses were small and medium enterprises, they faced many difficulties accessing capital.

Therefore, Nguyen Tri Hieu, chairman of Verig consulting council, suggested using peer-to-peer (P2P) lending, allowing fintech companies to connect investors with lending businesses via technology apps.

This would support investors and lending businesses when the banking system was overloaded, he said.

Bringing Vietnamese goods to industrial parks

Tran Thi Phuong Lan, deputy director of the Hanoi Department of Industry and Trade, said the capital city had integrated bringing Vietnamese goods to industrial parks and processing zones with market stabilisation programmes to meet the shopping needs of labourers.

Selling Vietnamese goods in processing zones and industrial parks had brought practical benefits to employees, Lan said, adding that distribution businesses such as Big C, Hapro and Co.opmart had implemented many discount and gift-giving programmes, which attracted a large number of workers to shop.

She said industrial zones needed to work with enterprises in communication and create favourable conditions in tax, space and rental fees.

To promote Vietnamese goods among workers, Le Viet Nga, deputy director of the Domestic Market Department under the Ministry of Industry and Trade, said the ministry had built 104 selling points in 58 locations nationwide, with many near industrial parks and export processing zones.

These models had helped workers in industrial parks save time and money in accessing quality Vietnamese goods, she said.

However, there were still many retailers that were not interested in these programmes.

Explaining this, Nguyen Thi Hai Thanh, deputy general director of Hanoi Trade Corporation (Hapro), said the programmes did not bring much profit.

To boost the consumption of Vietnamese goods, Dinh Thi My Loan, chairman of the Vietnam Association of Retailers, asked the Ministry of Industry and Trade and local authorities to develop a long-term strategy to encourage consumers to prioritise Vietnamese goods.

She also advised enterprises to participate in fairs held in industrial and processing zones and to improve the quality of products to win customers' trust.

Promoting cashless payments to boost internet economy

Cashless payments would not only increase of the circulation of capital, it would also help boost the internet economy, said Deputy Prime Minister Vu Duc Dam.

He was speaking at the E-payment Eco-system Development Forum 2019 under the theme “Motivation by Chip Technology” in Hanoi on December 10.

The forum was co-organised by Thoi bao Kinh te Vietnam (Vietnam Economic Times) and the National Payment Corporation of Vietnam (NAPAS).

The Southeast Asian economy was dynamic with an internet economy of US$100 billion that was expected to triple in the next five years,” said Dam.

In order to promote the internet economy, a consensus was needed between State agencies, enterprises and banks, he said.

Infrastructure must be changed at a cost but it would be worthwhile for economic efficiency in the long run, he said.

Technology had to be promoted to integrate information, including personal, health insurance and banking data, said Dam.

Deputy Prime Minister Vu Duc Dam also noted that the Politburo and Government had adopted resolutions, strategies, directives and decisions on how to utilise Industry 4.0.

Specifically, the proportion of cash payments would be below 10 per cent by the end of next year, and below eight per cent by 2025.

The Government has already instructed companies to collect cashless payments for tax, insurance, telecommunications and electricity.

The Government also decided to make education and health targets for non-cash payments earlier this year, the Deputy Prime Minister emphasised.

Dao Nguyen Cat, editor-in-chief of Vietnam Economic Times, said the Government had repeated that the country must constantly strive to catch up with Industry 4.0.

Science and technology, the Internet of Things, artificial intelligence, cloud computing and Big Data would be an opportunity for poor countries and developing economies like Vietnam to embrace and change their destiny, said Cat.

Digital economy and e-commerce were an inevitable trend of the times.

The pressure to innovate to update new technologies in banking and financial services has pushed the banking system as well as financial and non-financial organisations in Vietnam.

The State Bank of Vietnam (SBV) planned to build, amend and supplement the legal corridor for banking and payment activities to meet the requirements of new business models and products and services on IT platforms, with a focus on digital banking and payments, said SBV's deputy governor, Nguyen Kim Anh.

Sharing the achievements of implementing non-cash payments at the Ministry of Health, Tran Quy Tuong, director of the Electronic Health Administration, said 15 banks supported payment for medical examinations and treatment with QR codes in hospitals.

The number of patients paying for medical fees without cash accounted for 35 per cent of total transactions, he said.

Also at the event, the Vietnam National Petroleum Group (Petrolimex) and Napas signed a memorandum of understanding to promote non-cash payments in Vietnam.

Petrolimex and Napas will focus on optimising the experience of Petrolimex’s customers through domestic contact and contactless cards via Napas and payment by QR codes issued by the SBV via mobile applications, payment intermediaries and electronic wallets.

Poor logistics system hinders agricultural products’ trade

Despite being considered as the driving force of Vietnam’s economic growth, agriculture has been held back by an incomplete logistics system which fails to ensure quality and connect farms with markets, according to Ministry of Agriculture and Rural Development (MARD).

Vietnam has recently opened its doors for agricultural products to be exported to the international markets, yet struggled to win over customers and couldn’t compete with products from other countries in terms of quality and price due to drawbacks of the existing logistics system.

Most small- and medium-sized enterprises fail to afford the cost of logistics services.

According to Vietnam Association of Logistics Services Enterprises, the expenses for storing and transporting agricultural products account for up to 30 percent of selling prices, higher than those of Thailand and Singapore.

Meanwhile, low-cost logistics services lack quality control indicators, causing high losses due to damage and bacterial infection.

Hai quan (Customs) newspaper reported that the percentages of food loss and waste in the supply chain for HCM City’s market, for example, are 32 percent for vegetables, 14 percent for meat and 12 percent for fish.

Tran Thanh Hai, deputy head of the Department of Import and Export under Ministry of Industry and Trade, blamed poor storage and delivery systems as the main causes to low business indexes of agricultural products in Mekong Delta.

Despite being Vietnam’s largest rice bowl and agricultural region, the area does not have a completed supply chain while scattered ports have limited capacity, increasing logistics expenses from 7 to10 USD for each tonne of agricultural products.

Up to 90 percent of rice grown in Mekong Delta is sold directly to traders, then re-distributed for rice processing companies and exporters. The process is similar to other types of fruit and vegetable due to the lack of collection centres which can sort, pack and preserve agricultural products following food safety standards.

As agricultural products come through many stages before finally approach markets, prices are pushed higher while farmers do not benefit from the process.

Although provincial authorities in Vietnam have recognised these problems and plan on building their own logistics centres, a network linking these centres which involves land reserve, infrastructure and facilities have not been developed.

In the Mekong Delta, goods are transported via waterways while in other parts of the country, road transportation is the most common.

Poor logistics systems also hinder border trade.

According to Vietnam Border Traders Association, the total value of goods exchanged through border gates, including rice, peppercorn, rubber and coffee, reaches 30 billion USD per year, increasing by more than 20 percent per year.

However, MARD said storage systems, especially cold storages, at border gates were unable to satisfy the rising demand of agricultural exports while cargoes are still mostly manually loaded, slowing down cross-border clearance activities.

Tran Cong Thang, deputy head of the Institute of Policy and Strategy for Agriculture and Rural Development, said degraded markets at border gates and insecure payment services restrained border trade between Vietnam and neighbouring countries.

Promotional campaigns fail to lift automobile sales

Car sales in November failed to meet expectations even though the year-end shopping season has started and despite various discounts of up to hundreds of millions of dong.

According to the Vietnam Automobile Manufacturers' Association (VAMA), its members sold a combined 29,846 units in November, up only 3 percent from the previous month but down 3 percent from the same period last year.

If sales of TC Motor included, the total number came to 35,638 units.

However, some brands such as Audi, Jaguar, Land Rover, Mercedex-Benz, Subaru, Volkswagen, Volvo, and VinFast did not announce their sales. As a result, the above figure did not reflect the actual purchase power in the market.

Total sales for the 11-month period added to 289,128 units, up 14 percent on a yearly basis, including 212,361 passenger cars (up 23 percent), 71,954 commercial vehicles (down 3.9 percent) and 4,813 special purpose vehicles (down 27 percent).

Industrial insiders hoped that sales would accelerate in the last month of the year when the shopping season reaches its peak.

Innovation challenge for SMEs launched

The Qualcomm Vietnam Innovation Challenge 2020 was officially launched on December 12 to support the development of Vietnam’s rising technology eco-system.

The contest will be open to innovative small- and medium-sized enterprises (SMEs) and encourage them to design new products in 5G, Internet of Things, machine learning, smart cities, wearable devices and multimedia utilising mobile platforms and technologies of Qualcomm Technologies, a subsidiary of Qualcomm Incorporated.

This will offer an opportunity to help Vietnamese entrepreneurs enter new markets around the globe.

The application will be open after the Lunar New Year. Ten finalists will be selected to move forward to the incubation stage which will involve business coaching, access to engineering resources at Qualcomm Vietnam’s Hanoi labs for product development and assistance in protecting intellectual property through guidance in the filing of patents.

Qualcomm Vietnam which is well-known for breakthrough technologies like 5G will hold a series of roadshows in cities across the country next year to offer information about the challenge.

Details of the application will be announced on its website.

At the challenge’s launching ceremony, Deputy Minister of Science and Technology Tran Van Tung said developing an innovation start-up eco-system has been one of the top priorities of the Vietnamese Government in recent years.

As the agency assigned by the Government to be in charge of innovation, the Ministry of Science and Technology has closely co-operated with other ministries, agencies and localities to implement specific plans to promote the formation and development of Vietnam’s innovation start-up eco-system, especially in a number of important technology areas which the Qualcomm Vietnam Innovation Challenge focuses on developing.

“We strongly support this initiative to create a platform for people and start-ups with innovative ideas in Vietnam. We hope to set an example in innovation and entrepreneurship with the Vietnam Innovation Challenge,” he said.

Jim Cathey, senior vice president and president of global business operations, said: “The Qualcomm Vietnam Innovation Challenge is an exciting new programme that builds on our close work with Vietnam’s growing mobile technology industry over the past several years. We are delighted to receive support from many Vietnamese Government agencies, especially the Ministry of Science and Technology, for the development of Vietnam’s domestic technology capabilities and help local companies realise their global ambitions.”

Coating, printing ink firms need to be greener

With consumers paying increasing attention to the effects of paint and printing ink products on human health and the environment, producers need to develop more eco-friendly products, a seminar heard in Ho Chi Minh City on December 12.

Speaking at the seminar on Vietnam paint and printing industry towards making safe and environmentally friendly products, Nguyen Thi Lac Huyen, chairwoman of the Vietnam Paint and Printing Ink Association, said the industry has been growing at 10 per cent a year on average and now sales top over US$1 billion annually.

The products not only meet domestic demand but are also increasingly exported, she said.

Vu Thi Hung of the Chemical Agency’s Vietnamese Centre for Emergency Response, said, “The average paint output per capita in Vietnam is still low; so the industry’s growth opportunity is still very large.”

The printing ink segment is expected to grow along with the consumer goods sector and exports, she said.

Firms in the industry have constantly improved their technologies and developed high-tech inks such as nano ink and grafted gravure ink, she said.

Nguyen Chi Thanh, head of chemical industry development division at the Ministry of Industry and Trade’s Chemical Agency, said many countries have regulations limiting the content of harmful chemicals in paints and printing ink products.

Many new technologies for producing environment-friendly products have been introduced, he added.

Duong Thi Thuy Huong, deputy director of the Dong Nam A Paint Company, said: “With increasing incomes, consumers tend to pay more attention to the safety of the products they use, and paint and printing inks are no exception.”

Thanh said in the context of globalisation and the fourth industrial revolution enterprises have to be relentlessly innovative in terms of technology and products.

The 2020 Coatings Expo Vietnam to be held in HCM City would be an ideal opportunity for firms to learn about the latest trends and demands in the market and enhance co-operation with their local and foreign counterparts, he said.

To be held from June 17 to 19 next year at the Saigon Exhibition and Convention Centre, the seventh international exhibition and conference on the coatings and printing ink industry is expected to attract 150 local and international exhibitors.

Organised by the Minh Vi Exhibition and Advertisement Services Co., Ltd and the China National Chemical Information Centre, the event is expected to welcome over 3,500 trade visitors.

 
 

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