Vietnamese economy bounces back in May: WB
The Vietnamese economy has begun to recover after the social distancing period, according to the WB
In its latest update released on June 3, the World Bank (WB) said Vietnam’s economy has gradually bounced back since social distancing measures were eased.
The WB noted that in May, the country’s industrial production index grew 11 percent from April though it was still 3 percent lower than the figure in the same period last year.
Sharing the same trend, exports were up 5 percent month on month but down 5.5 percent year on year. Retail sales and processing-manufacturing also began to recover, expanding by about 10 percent from the previous month but also lower than in May of 2019.
Meanwhile, foreign demand has weakened as seen in the slight declines of export revenue and FDI inflows, with 13.9 billion USD of capital committed during the past five months.
The WB also pointed out that credit growth in the country currently stands at some 10 percent, about three times faster than the GDP growth pace between January and April, following the State Bank of Vietnam’s step-by-step easing of the monetary policy./.
Hanoi starts welcoming more visitors
The number of tourists to Hanoi in May reached 258,000, including 12,000 foreigners, a sign of recovery after the social distancing period due to COVID-19.
Most of the foreigners came to the capital for diplomatic or working purposes.
The average occupation rate of local hotels was estimated at 19.26 percent, up 6.46 percent from April.
Between January and May, Hanoi’s tourism sector earned over 16.6 trillion VND (714.99 million USD), a deep reduction compared to the same period last year. However, it was still an encouraging figure, as both the country’s and global economies have been impacted by the pandemic.
To boost the local market, tourism businesses have been requested to launch programmes to stimulate tourism demand, improve services quality, and apply more technological advances in management.
There are 3,499 tourist accommodation facilities with 60,782 rooms in Hanoi. Among them, 66 hotels with 9,953 rooms have three to five star ratings, and eight condotels with 1,534 rooms have four or five star ratings.
According to the Vietnam National Administration of Tourism, international tourist arrivals to Vietnam in the first five months of this year totalled 3.7 million while the number of domestic holidaymakers stood at 16 million, down 50 percent and 58.5 percent, respectively, from the same period last year.
Revenue from tourism plunged over 47 percent to 150.3 trillion VND (6.47 billion USD)./.
Vietnam Report announces Top 10 most reputable building contractors
Hoa Binh Construction Group has topped the list of Vietnam’s Top 10 Most Reputable Building Contractors in 2020, according to an independent report by Vietnam Report.
It was followed by Coteccons Construction JSC and Ricons Construction Investment JSC in the 2nd and 3rd places, respectively.
Meanwhile, Hoa Phat Group JSC ranked first in the Top 10 Most Reputable Building Material Companies in Vietnam this year, followed by Viglacera Corporation and Vicostone JSC.
Vietnam Report announces Top 10 most reputable building contractors hinh anh 2
Hoa Phat Group JSC ranks first in the Top 10 Most Reputable Building Material Companies in Vietnam this year. (Photo: Vietnam Report)
The rankings are based on studies of multiple financial factors, corporate reputation on the media and surveys of experts in the industry.
According to the report, 73.9 percent of asked companies said they believed 2020 would be a difficult year while 13 percent were optimistic that the construction and building material industry would see growth this year. Some 4.3 percent said that the industry would maintain stability compared to 2019.
Notably, about 8.7 percent of the respondents said it is likely that the real estate market would experience slowdown in the first half of the year and make a comeback in the second half as the COVID-19 pandemic is brought under control.
A survey by the General Statistics Office found that up to 47.5 percent of firms said they were struggling, 33.7 percent maintained stable production and 18.8 percent saw better performance in the first quarter of the year.
During the period, the construction and building material sector reported revenue and after-tax profit declining 9.5 percent and 10.2 percent, respectively./.
PetroVietnam’s oil equivalent output totals 8.99 million tonnes in five months
The Vietnam Oil and Gas Group (PetroVietnam) has reported oil equivalent output of 8.99 million tonnes in the first five months of 2020, 4.4 percent higher than its target.
In May, crude oil output reached 0.96 million tonnes, 2.1 percent higher than the monthly plan while gas production fulfilled the monthly goal at 0.84 billion cu.m.
The firm generated 2.05 billion kWh of electricity and produced 149,800 tonnes of nitrogenous fertiliser, surpassing the monthly targets by 4.7 percent and 4.2 percent, respectively.
Its production of oil and petroleum exceeded 1.01 million tonnes during the month, only equivalent to 91.5 percent of the monthly goal, largely because the Nghi Son Oil Refinery were cutting capacity for maintenance and the PetroVietnam Oil Corporation (PV Oil) reduced production of petroleum as demand dropped.
The company has made drastic efforts to cut nearly 8.7 trillion VND in costs during the first five months of the year to deal with declining oil prices and the COVID-19 pandemic.
From January to May, the State-owned enterprise earned 124.2 trillion VND (5.33 billion USD) in revenue, down 29 percent from a year earlier. Its post-tax profit nosedived 49 percent year on year to 7.1 trillion VND./.
Indonesia’s economic growth projected at 1 percent in Q2
Indonesia's economic growth in the second quarter of 2020 is expected to be much lower than that of the first quarter, only about 1 percent due to the large-scale social restrictions (PSBB) imposed nationwide, said Finance Minister Sri Mulyani at an online press conference on June 3.
However, Indonesia's economic growth forecast for 2020 will not be as negative as many other countries affected by the COVID-19 pandemic.
Sri Mulyani said she is optimistic with the national economic recovery programme (PEN) implemented by the government.
According to the Statistics Indonesia (BPS), the local economic growth in the first quarter of this year reached only 2.97 percent due to the impact of COVID-19./.
Cambodia’s garment, footwear sectors propose EU postpone EBA withdrawal
The Garment Manufacturers Association in Cambodia (GMAC), the Cambodia Footwear Association (CFA) and the European Chamber of Commerce in Cambodia (EuroCham) on June 2 requested the European Commission to postpone its withdrawal of the ‘Everything But Arms’ (EBA) preferential trade scheme for 12 months so that the apparel, footwear and travel goods sectors recover.
Their joint letter to the EC said the COVID-19 pandemic has halted production and slowed global demand to a crawl, delivering a devastating blow to the country’s apparel, footwear and travel goods manufacturers and workers.
It said some 250 Cambodian apparel, footwear and travel goods factories have had to suspend operations and more than 130,000 workers in the sector, most of whom are women, have lost their jobs and this number is likely to rise sharply.
In the first quarter of the year, many buyers cancelled orders after they were completed or while under production, the letter said. It is estimated that the Cambodian apparel, footwear and travel goods sales in the second quarter of the year will likely fall by 50-60 percent on a yearly basis.
GMAC Chairman Van Sou Ieng said the EC’s scheduled August 12 implementation of the decision to withdraw the tariff preference for 20 percent of apparel imports, 30 percent of footwear imports, and all travel goods imports from Cambodia would be a massive blow to Cambodia.
“The EU must not ignore the gravity of the situation and the devastating impact of removing EBA benefits in August,” he added.
EuroCham chairman Arnaud Darc said the pandemic’s effects were not limited to Cambodia.
The EU is Cambodia’s largest trading partner, accounting for 45 percent of Cambodian exports in 2018.
Exports to the EU single market reached 4.9 billion EUR (5.5 billion USD) in 2018 – almost double the 2.5 billion EUR recorded in 2013./.
Connectivity crucial for domestic tourism to reboot post-COVID-19
Enhancing connectivity between tourism service providers and promoting the role of major travel companies would help the domestic tourism sector address its existing problems, a recent meeting in Hanoi heard.
Proposals were submitted given the increasingly fierce competition between tourism service providers post-COVID-19, when they have no choice but to focus on the domestic market.
Many major players have conducted large promotional programmes, pushing smaller firms to the brink of bankruptcy.
Jointly held by the Vietnam National Administration of Tourism (VNAT), the Vietnam Tourism Advisory Board (TAB), and the Private Economic Development Research Board, delegates at the meeting suggested that localities, tourism sites, and tourism businesses join hands to develop attractive packages with good quality and reasonable prices.
Major firms should play a leading role in order to create momentum, which would contribute to restarting the domestic tourism market, Head of VNAT Nguyen Trung Khanh said.
TAB Chairman Tran Trong Kien said large companies need to commit to not offering unsafe or low-quality products or cutting prices to below cost to stymie the competition.
VNAT has also established a tourism promotion alliance with the participation of leading companies in all tourism service supply chains.
A survey conducted by the TAB found that more than 53 percent of respondents are ready to travel this summer now that the pandemic has been brought under control in Vietnam.
They prefer destinations that are safe from the disease and are secure, while only 20 percent prioritize service discounts.
Half selected short tours, while 89 percent said they wish to travel with families or friends.
Nearly 45 percent of respondents opted for online tour bookings.
Many localities have joined hands recently to develop tourism products while airlines have played an active role in launching budget tour packages, which bode well for the domestic tourism sector./.
Ca Mau forecasts growth of 5.28 percent this year
The COVID-19 outbreak and the severe drought will make it difficult for the southernmost province of Ca Mau to achieve this year’s growth target of 7 percent but a figure of 5.28 percent is certainly achievable, local authorities have said.
At a meeting of the provincial People’s Committee on June 2, officials noted that local socio-economic conditions have been substantially affected, with supply chains, trade flows and production and business activities interrupted by both the pandemic and the drought.
Localities such as U Minh, Thoi Binh, Tran Van Thoi, and Cai Nuoc districts as well as Ca Mau city have also suffered from heat waves and high salinity, which subsequently affected animal husbandry and aquaculture. Some 817.4ha of the province’s aquatic farming area has been damaged, while its fisheries exports still face a host of difficulties.
These problems will hamper Ca Mau’s gross regional domestic product (GRDP) from growing by the targeted 7 percent this year.
Director of the provincial Department of Planning and Investment Truong Dang Khoa predicted that the province’s GRDP would rise 5.28 percent this year, adding that Ca Mau may fail to achieve seven of the 21 socio-economic development targets set for 2020: exports, GDP, budget collection, budget spending, poverty reduction, job creation, and unemployment insurance coverage.
To shore up socio-economic conditions for the remainder of the year, People’s Committee Chairman Nguyen Tien Hai said Ca Mau will adopt several solutions, such as accelerating the restructuring of key sectors, boosting technology transfer and technology application in production, processing, and services to raise productivity and product quality, taking drastic action to improve the business climate, and supporting businesses, especially small- and medium-sized enterprises (SMEs), to develop.
Ca Mau will also step up tourism promotion, attract more investors in tourism, and enhance links with nearby localities in tourism development, he added./.
Thai Cabinet approves 9 billion USD upgrade for U-Tapao airport
The Thai cabinet on June 2 approved a bid by the BBS consortium for an airport development project worth 290 billion THB (over 9 billion USD).
The project will add a third passenger terminal at U-Tapao International Airport and develop other facilities like air cargo and aviation maintenance centres.
The Eastern Airport City Project at U-Tapao airport is one of the five megaprojects under the government's infrastructure development in the Eastern Economic Corridor (EEC).
The Thai navy is scheduled to sign a 50-year contract with the BBS consortium, comprising of Sino-Thai Engineering and Construction, Bangkok Airways and BTS Group Holdings, on June 16.
The project will generate 305 billion THB for the government from the land lease and revenue-sharing agreement. It is further expected to bring in 62 billion THB in taxes and create 15,600 jobs in the first five years.
It is expected to be complete by 2023, according to EEC Office’s Secretary General Kanit Sangsubhan./.
Vinh Phuc province luress nine new foreign-invested projects
The northern province of Vinh Phuc attracted nine new foreign direct investment (FDI) projects and permitted 17 existing ones to increase capital with a combined sum of over 88 million USD in the first five months of 2020.
Of the total, nearly 25 million USD were newly-registered capital while the remainder was added to the existing projects, equaling 25 percent of the figure in the same period of 2019 and fulfilling 27 percent of the yearly plan.
The province is now home to 301 FDI projects with a total investment of more than 4.15 billion USD.
Vinh Phuc is an ideal destination for investors thanks to its geographical location and preferential policies for investment attraction.
According to the provincial People’s Committee, Vinh Phuc now has 18 industrial zones approved by the Prime Minister with a total area of over 5,700ha. It is expected to house 21 industrial complexes on a site of nearly 500ha by 2020 and 31 ones covering about 700ha by 2030./.
Indonesia raises budget deficit to 6.34 percent of GDP
The Indonesian Government widened the state budget deficit to 6.34 percent of the gross domestic product (GDP), or 1,039.2 trillion IDR (73.28 billion USD), in the revised state budget 2020, from earlier 5.07 percent, or 852.9 trillion IDR.
Finance Minister Sri Mulyani Indrawati said at an online press conference on June 3 that the government will amend Presidential Regulation No. 54 of 2020 on revision of the state budget 2020.
This is to help accommodate expenditures for economic recovery and COVID-19 handling, the minister noted.
The changes will boost the size of the 2020 budget to 2,738.4 trillion IDR, she said.
According to Indrawati, the COVID-19 combat is predicted to cost 677.2 trillion IDR, including 87.55 trillion IDR for health.
The government has also offered tax incentives worth 123.01 billion IDR to private and State-owned enterprises./.
Indonesia disburses 3.7 billion USD to support 12 SOEs
The Indonesian government has decided to spend 52.5 trillion Rp (about 3.7 billion USD) to help 12 state-owned enterprises (SOEs) resume their post-pandemic operations, towards reviving the national economy, said Finance Minister Sri Mulyani on June 3.
The selected SOEs are considered as important contributors to Indonesia's economy, the minister said.
The move, which is part of the National Economic Recovery Programme (PEN), came in the context that Indonesia’s economy has been seriously affected by the COVID-19 pandemic. The country's economic activities have been almost completely halted, causing enormous pressure on the national economy.
Mulyani said the SOEs will receive direct cash support, and other financial assistance related to fuel, electricity and water for their production activities./.
Viettel to set up Tier-4 companies abroad
Prime Minister Nguyen Xuan Phuc has approved a project on establishing Tier-4 companies of the Viettel Military Industry and Telecoms Group (Viettel) in Mozambique, Tanzania, Timor Leste, Burundi, Haiti and Cambodia.
Accordingly, the Ministry of Defence was assigned to direct Viettel to set up the companies of this kind in accordance with laws of Vietnam and the above-mentioned countries.
It is also responsible for monitoring the companies’ operation as well as strengthening measures to prevent risks.
The PM asked the ministry to take full responsibility for the entire process of establishing the companies and managing their operation, towards bringing the most benefits to the country./.
IZs, EZs attract US$4.3 billion in January-May
Industrial zones (IZs) and economic zones (EZs) attracted 390 foreign-invested projects with a total registered capital of US$4.3 billion in the first five months of this year, according to the latest updates of the Ministry of Planning and Investment.
So far, there have been 9,850 FDI projects in IZs and EZs nationwide with a total registered capital of $195 billion, more than 70 per cent of which has been disbursed.
Besides, a sum worth about VND46 trillion ($1.98 billion) in domestic investment was registered to be poured into 295 projects in IZs and EZs in January-May, bringing the total number of domestic-invested projects to 9,650 with a total registered capital of VND2.3 quadrillion. The disbursement rate of domestic capital was around 45 per cent.
The report of IZs and EZs management board showed that companies in IZs and EZs strove to maintain production and business despite the impact of the COVID-19 pandemic which caused a year-on-year drop of 8 per cent in the total revenue to $81 billion in the first five months of this year.
However, their export revenue rose by 4 per cent to $58 billion and import revenue by 1.5 per cent ot $47 billion.
Companies in IZs and EZs created more than 3.82 million jobs, nearly 30,000 jobs lower than the end of 2019.
The ministry said that some 120 companies in IZs temporarily halted operation due to the COVID-19 pandemic from the beginning of this year.
As of the end of May, there were 336 IZs founded, 260 of which were in operation with a total area of 68,800 hectares while 76 others were under construction at land clearance stages with a total area of 29,200 hectares.
There were 37 IZs within EZs.
The occupancy rate of IZs was 76.1 per cent.
In addition, 17 coastal economic zones had been founded with a total land and water area reaching more than 845,000 hectares and area for lease reaching 40,000 hectares.
Quy Nhon Port opens transport service route to Northeast Asia
The port of Quy Nhon launched a direct transport service to Northeast Asia on Wednesday.
Ho Lien Nam, head of the port’s sales department told Vietnam News Agency that to expand production and business, the port has opened many new transport service routes, including a route from Quy Nhon port to Northeast Asia, connecting central Viet Nam with South Korea, Japan and China.
Nam said: “The volume of goods between Southeast Asia and Northeast Asia has grown and a direct service route from Quy Nhon port to these areas holds a lot of potential.”
He said without a direct route, normally 60 per cent of goods from the port, included timber, compressed wood pellets and tapioca starch, as well as high-value items such as frozen fruit, have not been transferred directly.
They must go through Singapore before entering Northeast Asia, extending transportation time, adding shipping costs and reducing the value of specific export items such as fresh fruit.
Nam said: "Therefore, a direct route will solve the above shortcomings and open up ways to exploit a new market for the port."
Nam estimated that the service will transport about 1,400 containers, equivalent to about 17,000-19,000 tonnes of goods each month. The port planned to run the route once a week now and increase to twice a week by the middle of August.
According to the Viet Nam National Shipping Lines (Vinalines), the route was very important and a new development stage for the central region and also for Binh Dinh Province to develop the market in North Asia by reducing time and transportation costs as well as increasing its competitiveness in the region.
Vinalisnes’ leaders also said: “The route will bring many benefits to import-export enterprises.”
After officially belonging to Vinalines since last June after buying shares from Hop Thanh Mineral Joint Stock Company, Quy Nhon Port maintained good growth thanks to its petrol and oil supply service, and logistics services.
In the first quarter of 2020, the volume of goods handled through the port reached more than 2.4 million tonnes, up 14 per cent over the same period of 2019. In the same period, the port’s revenue reached VND212 billion (US$9 million), an increase of 18 per cent compared to the same period of 2019.
Enterprise arrangement and development support fund to be abolished
The Ministry of Finance has proposed the collection from the restructuring of State-owned enterprises (SOEs) to go directly to the State budget instead of the Enterprise Arrangement and Development Support Fund in an effort to improve efficiency in using this revenue.
This was highlighted in the draft decree about managing and using State money collected from transferring ownership at enterprises and State capital divestment, which the ministry recently made public for comments.
Under the current regulations, the sums collected from restructuring and equitising SOEs and State capital divestment were paid to the Enterprise Arrangement and Development Support Fund first then sent to the State budget or spent in the restructuring of SOEs.
However, this mechanism proved to be inefficient. Due to the lack of strong punishments, many sums were not paid to the fund on time.
If the decree is approved, the Enterprise Arrangement and Development Support Fund would be abolished.
The fund also had no reason for existence any longer as the National Assembly’s Resolution No 60/2018/QH regulated that the sums collected from equitising and divesting SOEs must be paid adequately and on time and must be included in the annual State budget plan and medium-term public investment plan.
The ministry said that it was necessary to issue the decree to improve the efficiency in using this revenue, prioritise important projects to bring the highest socio-economic efficiency while ensuring resources for the SOE restructuring process.
The decree was expected to be submitted to the Government for approval in the third quarter of this year.
Statistics showed that from 2016 to 2019, the Enterprise Arrangement and Development Support Fund transferred VND205 trillion (US$8.84 billion) to the State budget to allocate for the 2016-20 medium-term public investment plan.
Firms must be aware of increasing trends of investigations for trade remedy evasion: ministry
The Ministry of Industry and Trade has urged enterprises to be aware of and not participate in origin fraud, illegal transshipment and evasion of trade remedies to avoid the risks of being sued.
Enterprises played decisive roles in minimising the risks, the ministry said.
The fact showed that if origin fraud, illegal transshipment and evasion of trade remedies were detected, the importing country could impose heavy sanctions, the ministry said, adding that in many cases, enterprises could lose the entire export market involved.
The ministry said that some producers, when facing trade defence measures, shifted their products out of the countries subjected to the measures and Viet Nam was among destinations, given the country’s advantageous policies for foreign investors.
With rapid increases in exports of some products, Viet Nam was facing higher risks of investigations and being imposed trade defence measures, the ministry said.
The ministry said that origin fraud, illegal transshipment and evasion of trade remedies tended to increase in the context of the US – China trade war, and that Viet Nam was participating in a number of new-generation free trade agreements, including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the EU – Viet Nam FTA (EVFTA).
Statistics showed that seven cases of investigations for evasion of trade remedies were initiated during the period from 2017 to the end of the first quarter of this year, in comparison with 15 cases in 17 years fro 2000 to 2016. Of all, ten cases were initiated by the US.
If Viet Nam did not have measures to prevent origin fraud, illegal transshipment and evasion of trade remedies, not only would certain industries be negatively affected but also the competitiveness of the entire economy, especially when Viet Nam was joining FTAs with strict origin rules, the ministry warned.
The ministry said that it would focus on enhancing the trade defence capacity for local industries this year, especially improving awareness of small- and medium-sized enterprises about trade defence instruments, to protect their legitimate rights and improve the efficiency of the international integration process.
NSH Petro to debut on HoSE in late June
Nam Song Hau Petroleum Investment JSC (NSH Petro) will debut on the Ho Chi Minh Stock Exchange on June 24.
The company will trade 126.2 million shares with stock code PSH at a debut price of VND16,000 (US$0.69) each, valuing the firm at VND2.02 trillion ($87.4 million).
The share price will be able to move by a maximum of 20 per cent on either side, ranging from VND12,800 to VND19,200 apiece.
NSH Petro was founded on February 14, 2012 with initial charter capital of VND60 billion. The capital is now VND1.26 trillion.
As of January, the company had a total of 425 shareholders. Chairman Mai Van Huy is the largest shareholder, having 84 million shares or 66.7 per cent of the capital.
The company is among the biggest players in the sector in the Mekong Delta and distributed gas and oil products for 480 sellers last year.
The company in 2019 recorded total net revenue of VND9.15 trillion, down 12 per cent year-on-year, as production decreased.
Post-tax profit in 2019 fell a quarter year-on-year to VND123 billion.
In 2020, NSH Petro eyes a 31 per cent year-on-year increase in revenue and a 22 per cent year-on-year growth in post-tax profit.
HCM City pledges to implement Japanese ODA projects effectively
Ho Chi Minh City has committed to coordinating closely with the Japan International Cooperation Agency (JICA) to effectively carry out projects using the Japanese Government’s ODA.
The pledge was made by Chairman of the municipal People’s Committee Nguyen Thanh Phong while receiving the new JICA Chief Representative in Vietnam, Shimizu Akira, on June 3.
Phong told the guest that the city has basically controlled the spread of the COVID-19 in community and moved to the new normal state, with the dual target of disease prevention and economic recovery and development.
In this context, it defines that stepping up public investment disbursement is one of the important measures to support its economic development and helps speed up the process of Japan’s ODA projects.
The official acknowledged efforts by JICA and investors in speeding up the construction on these projects, including Metro Line 1, amid the COVID-19 outbreaks.
He suggested Akira soon sign the final loan agreement for the project, encourage the contractors to focus their resources on finishing it by year-end, and help speed up the construction on water, and wastewater projects.
Akira expressed his hope that Ho Chi Minh City’s economic recovery policies and activities will soon take into effect, thus contributing to stabilising Vietnam’s economy.
He proposed the city’s leaders continue facilitating the construction of on-going projects, resume the granting of visas for Japanese experts and engineers, and support the import of equipment and machines serving these projects.
In the time to come, JICA will work with the locality in carrying out the urban railway projects and study the possibility of cooperation in the environmental field and flooding prevention, he added./.
Seafood sector urged to diversify products
Diversifying products and adapting quickly to market fluctuations will help create growth momentum and remove difficulties for seafood exports, experts have said.
Since the beginning of the year, exports of the two main seafood products of Vietnam, tra (pangasius) fish and shrimps have declined sharply.
Tra fish exports, in particular, were severely impacted by the COVID-19 pandemic, which had a negative impact on domestic production, pushing the tra fish price in the Mekong Delta region down.
According to Vietnam Association of Seafood Exporters and Producers (VASEP), tra fish import demand in China, which accounts for 22.5 percent of Vietnam's total export value, has recovered. However, other markets are still being affected by the pandemic.
VASEP said tra fish exports to big markets would be unlikely to rise to positive growth rates compared to the same period last year till at least the end of the second quarter.
This means fish farmers and businesses need to continue to balance farming, production and processing.
The association forecast that China, the US and EU would still be major export markets for tra fish in the next five years, accounting for 65 percent of the country’s total export value.
Truong Dinh Hoe, VASEP’s general secretary said the quality and requirements of food safety exported into these markets are increasingly strict. However, Vietnamese tra fish have met all market requirements, such as recognition from the US Department of Agriculture (USDA).
In addition, the US Department of Commerce (DOC) lowered anti-dumping duties on frozen tra fish fillets from Vietnam in the 15th period of review (POR15).
The move was the DOC’s preliminary conclusion after investigating tra fish exported by certain Vietnamese firms from August 1, 2017, through July 31, 2018.
In addition, most big Vietnamese tra fish exporters such as Vinh Hoan Joint Stock Company and Bien Dong Seafood Company Ltd have continued to enjoy zero tax. This has been a positive for local tra and basa exporters in a difficult situation due to the pandemic.
In the first quarter of this year, shrimp exports saw relatively high growth. In April, there was a sharp decrease due to COVID-19, but there are still opportunities for Vietnam’s shrimp and other seafood products to take advantage of post-pandemic.
Many seafood products are expected to have higher growth in the EU when the EU-Vietnam Free Trade Agreement (EVFTA) is expected to take effect in the middle of the year as most shrimp materials would be reduced to from 12-20 percent to zero tax. Imported tax for processed shrimp will also be lowered to zero after seven years. Meanwhile, tra fish will enjoy an import tax of zero after three years.
The US, the second biggest importer of Vietnamese shrimp, is expected to have high demand. VASEP recommends local businesses focus on processed products with high added value as well as changing packaging process to suit the retail segment.
In addition, if the COVID-19 pandemic is basically resolved by the end of the second quarter and the world market re-opens, Vietnamese shrimp can take advantage of opportunities. Shrimp exports tend to be better when import and consumption demand increase, making export prices recover. VASEP forecasts that shrimp export value could recover and even increase by 3-4 percent compared to 2019, reaching 3.45-3.5 billion USD.
For seafood products, the 35 percent reduction in oil prices compared to the end of 2019 has led fishermen to ramp up their activities. However, some seafood products, especially tuna, are still in short supply due to difficulties in importing raw materials due to the COVID-19 outbreak. Many businesses still receive orders for canned tuna but lack the raw materials for export processing.
VASEP predicted that seafood demand in China, the Republic of Korea and Japan would be reduced while the canned segment would increase. Firms should focus on canned seafood products with suitable prices to meet increasing demand from markets affected by the pandemic, the body said.
However, due to the impact of social distancing and the shortage of domestic raw materials, it will be difficult for seafood enterprises to increase exports in the second and third quarters this year.
Tran Dinh Luan, General Director of the General Department of Fisheries, said the industry would work with localities to improve breeds’ quality by intensifying inspection on conditions and granting certificates for establishments producing aquatic breeds. It will also supervise to ensure food safety and build an electronic traceability system for production, processing and export chains.
The Ministry of Agriculture and Rural Development (MARD) recommended seafood processors continue to diversify frozen products and increase exports to markets which are being affected by COVID-19.
MARD’s Deputy Minister Phung Duc Tien said they had asked management agencies and associations to have plans to meet with increasing demand post-pandemic.
Online solutions providers gain traction in surging online market
With e-commerce surging during the COVID-19 pandemic owing to changing consumer shopping behaviour, solution providers like Sapo and EcomEasy have been making tremendous gains as online shopping rises.
Most recently, Sapo Technology JSC, which provides multichannel e-commerce management tools for online sellers, has completed its latest funding round and received seven-digit investment (in US dollars) from South Korean Smilegate Investment and Vietnamese Teko Ventures. The firm will use the funds to develop and strengthen its payment and financing services.
According to Dung Le, director of growth at Sapo, the COVID-19 outbreak and social distancing have led consumers to make online purchases more frequently instead of buying in store. Vendors also had to follow government regulations and temporarily closed physical stores, as well as prepared masks and hand sanitiser for shippers, while ensuring minimum distance between customers and staff.
On the other hand, they stock on-demand products and increase selling on social media and online marketplaces. This creates additional demand for omnichannel sales management software like Sapo.
Additionally, EcomEasy, a startup providing marketing and sales solutions for e-commerce has also received funding from Viet Valley Ventures. It focuses on e-commerce and live streaming tech to help more brands increase sales through multiple e-commerce platforms and different means of shopping, from image-based advertising to keyword optimisation and then live streaming.
Nguyen Tran Bich Ngoc, CEO and co-founder of EcomEasy said that the move from offline to online goes faster than ever before. The annual growth rate of online shopping is 25 per cent, based on a Nielsen study from 2019, while in 2020 it is estimated to reach above 30 per cent. At some brand partners of EcomEasy where the online channel usually contributes 3 per cent of total retail sales, in the first quarter and in the middle of the second quarter of 2020 this figure increased to 5 per cent.
“We help brands make e-commerce easier. In particular, we help them set up their official stores on platforms like Shopee, Lazada, Tiki, or Sendo – even Alibaba. Then we help manage these stores to sell and run marketing campaigns to get new customers and get sales for brands through reasonable investment,” Ngoc explained.
Julien Brun, managing partner of CEL Consulting highlighted four critical factors for success for online distribution service providers to scale up their presence. According to him, these companies need to ensure data integrity because a system is as good as the data these companies put into it. Additionally, solution providers should provide forecasting capabilities by using historical data to foresee what could happen in the near future, which is a feature that will become more and more popular.
Furthermore, most solutions offer a lot of various modules that tend to be rather limited and sometimes unusable. Most of these companies will have to figure out what in their solution portfolio has more usage, more value add, and focus on these specific capabilities instead of trying to cover a wide amount of functions. Also, the ability to integrate to other cloud-based solutions seamlessly is necessary.
These solutions are comparable to Kiotviet's, which has been in the business for a while and has a large customer base already. Other foreign players like Odoo (more focused on enterprise resource planning with multi-channel capabilities), Atemiscloud (more focused on client relationship management) or more established ones like Oracle are also present in the market, yet no clear leader nor innovator can be identified at this stage.
How to capitalise on EVFTA opportunities amid COVID-19
With the European Union-Vietnam Free Trade Agreement (EVFTA) poised to come into force, many believe that it will present more diversified market opportunities for local businesses, therefore helping them to regain growth momentum following the novel coronavirus (COVID-19) pandemic.
The EVFTA is believed to bring a wealth of opportunities to businesses after the COVID-19 pandemic
A report conducted by the Ministry of Industry and Trade (MoIT) directly responds to questions raised by the National Assembly regarding the COVID-19 epidemic strongly affecting both production and the import-export situation regionally and globally.
Many economic experts believe that this year's economic growth will fail to achieve the previously set goals. Amid this context, the implementation of the EVFTA can be considered to be an important step in helping to offset the economic slowdown during the epidemic period.
Indeed, recent years have seen domestic enterprises struggle to survive in the European market due to fierce competition from other large-scale industries worldwide, particularly China, as Vietnamese products are usually being priced between 10% and 20% higher than those of its northern neighbour. As a result, the country’s market share of goods within the EU remains modest.
Meanwhile, the EU represents the second largest import market in the world. Each year the EU imports goods with a value of approximately US$2,338 billion, while the Vietnamese export market share in the EU currently standing at a mere 2%. Moreover, just over 42% of Vietnamese exports to the EU have enjoyed a 0% tax rate in line with the Generalized System of Preferences.
Tran Thanh Hai, deputy director of the Import and Export Department under the MoIT, said that, with a strong commitment to boost trade with the market, eliminating import taxes by close to 100% in line with the tariffs stated in the EVFTA will see the country enjoy plenty of opportunities to increase export growth in the near future.
This is especially true with the country already successfully containing the COVID-19 epidemic. Additionally, the Vietnamese business community will enjoy greater opportunities to stay active as they restart their operation, as opposed to many firms in other countries that are still facing complex developments from the disease.
“The EU is a big market and is creating very high values for Vietnamese imports and exports of traditional products with advantages such as garments and textiles, footwear, agricultural and fishery products, and wooden products. In recent times, we have also penetrated and increased the turnover in this highly lucrative market. With the EVFTA in effect, Vietnam will have more advantages in accessing the market when most of the goods exported to this bloc within the seven to ten-year roadmap, the tax rate will be 0%," Hai said.
In terms of imports, domestic enterprises will be able to enjoy many benefits from imported sources of goods and materials at a more reasonable price from the EU. Therefore, as we move into the post-epidemic phase, Vietnamese firms will have a great advantage once the trade deal comes into effect, largely from reduced or eliminated tariff barriers which will occur in order to exploit the vast market of US$18 trillion.
In response to specific and impactful assessments of the EVFTA and the epidemic, especially with regard to the growth of industries, employment, and social security, the MoIT stated that the COVID-19 epidemic remains very complicated.
This is especially true in European nations who are major trading partners of the country, therefore making it hugely difficult for firms to achieve trade and investment targets as expected.
Despite this, it is clear that with the strict commitments within the agreement, the EVFTA can be considered a huge opportunity for Vietnamese enterprises to change in a positive direction and take full advantage of the benefits brought about by the trade deal.
Moreover, this will give a chance to the country to review its legal system in accordance with international practices as well as other commitments outlined in the EVFTA.
Positive signs of recovery ahead for national economy
Despite the economic picture for the opening five months of the year appearing gloomy due to the impact of the novel coronavirus (COVID-19) with the majority of indicators being low in comparison to last year, May, the first month after social distancing, has seen the gradual recovery of manufacturing, tourism, and transport firms.
According to a report released by the General Statistics Office, the first five months of the year has seen the index of industrial production increase by 1%, the lowest increase recorded in several years. The complicated developments relating to the pandemic has caused disruptions in the supply chain of raw materials for production, thereby having a serious negative effect on industrial production.
Despite this, the manufacturing sector enjoyed a surge of 11.2% in May from the previous month, while the number of employees working in industrial enterprises also grew by close to 1%. This boost coincided with increased return growth occurring within the corporate sector.
Indeed, as many as 10,700 businesses were established nationwide over the past month, an increase of 36% compared to the figures from April.
The number of enterprises returning to operation also increased following the conclusion of the social distancing period, with May seeing the number of enterprises resuming operations increasing by close to 33% in a month. Meanwhile, the number of enterprises registering to halt their business for a period of time fell by nearly 20%.
The Manufacturing Purchasing Managers' Index (PMI) rose by ten points throughout May, reaching a total of 42.7 points compared to the record low of 32.7 that was recorded in April. Despite the fact that the figure has yet to return to above 50 points, the PMI ultimately signals expansion or contraction, which also indicates if the manufacturing sector is declining or growing.
Moreover, the return to daily activities is also reflected through retail sales of goods and services with trade and service activities during May increasing by roughly 27% compared to the figures seen in April. Of which, retail sales of goods soared by a total of 17%, whilst revenue from accommodation and catering services also enjoyed an increase of nearly 96%.
A number of other indicators also signify positive features, these include investment capital from the State budget which marked the fastest increase from the previous five years, while the transportation sector registered double digit growth.
IHS Markit, a London-based global information provider, believe that despite the country’s PMI in May being higher, indicating that business conditions declined slightly, the new data reveals that the health of the manufacturing sector remains at a low level.
However, the nation’s success in bringing the COVID-19 pandemic under control will serve to allow the economy to begin to make a full recovery. Although the PMI data for May shows that there is still a long way to go.
According to Andrew Harker, economics director at IHS Markit, the return to growth may be a gradual process with little support from overseas markets, at least in the near future, with the pandemic continuing to affect many regions globally.
If services, industrial production, and retail can be considered positive signs, then import and export continues to show difficulties. The total import and export turnover during the reviewed period stood at an estimated US$197 billion, a fall of 2.8%, while the trade balance of goods reached a trade surplus of US$1.9 billion.
“The COVID-19 pandemic continues to see increasingly complicated developments in markets which are major trading partners of our country, causing negative impacts on export and import activities," the General Statistics Office said.
Despite many drastic measures being taking in terms of management, the average consumer price index for the opening five months of the year compared to last year remained at their highest level in the past three years with a rise of 4.39%. Meanwhile, food and catering services enjoyed an increase of nearly 11%, of which foodstuff rose by roughly 14% due to an increase occurring in the price of pork.
HCM City turns attention to reviving economy
The chairman of the HCM City People’s Committee has urged agencies to have specific solutions to support enterprises as part of its effort to gradually revive business activities following the containment of the COVID -19 pandemic.
Speaking at a meeting on Thursday to review the socio-economic situation in the first five months, Nguyen Thanh Phong said the city had basically contained the outbreak and not detected any community infection for two months.
The city had entered a new normal status with the task of both containing the pandemic and reviving the economy, he said.
The top priority would be to help businesses maintain production and avoid bankruptcy, and prevent workers from losing jobs, he said.
“We must ensure that enterprises restore production and services as soon as possible to meet domestic demand. It is important to encourage domestic production to replace imported goods and expand domestic value chains.
“In the long term, the city must focus on creating a favourable environment for businesses.”
More than 14,200 new enterprises with total registered capital of VND185 trillion have been licensed in the first five months while more than 2,000 others have closed for good and 7,257 temporarily suspended operations (40 per cent up year-on-year).
Small and medium-sized enterprises, which account for 98 per cent of all enterprises, had been seriously impacted, he said.
It was also important to support start-up creation and technological innovation for production and promote the commercialisation of research products.
Le Ngoc Thuy Trang, deputy director of the Department of Finance, said the city had a revenue target of nearly VND406 trillion (US$17.46 billion) this year.
But the pandemic hit revenues sharply in May, and they were worth only VND18.2 trillion, or 56 per cent of the collection in the same period last year.
Phong urged the Departments of Finance and Taxation and the city Customs Department to work with the Ministry of Finance to ensure revenue targets are achieved.
Tran Anh Tuan, deputy director of the Department of Planning and Investment, said total retail sales of goods and revenues from consumer services in May were estimated to be 11.4 per cent down year-on-year to VND94.3 trillion ($4.05 billion).
Retail sales of goods and services were estimated at VND506.7 trillion ($21.78 billion) in the first five months, down 4.9 per cent.
The city’s index of industrial production rose by 7.94 per cent month-on-month in May but fell by 15.5 per cent from May last year, according to the city Statistics Office.
In the first five months the sectors that achieved negative growth were metals (down 46.5 per cent), wood and bamboo and wood products (34.1 per cent), machinery and equipment (24.6 per cent), pre-fabricated metal products (22.8 per cent), and beverages (21.2 per cent).
There were some that achieved growth, including high rates, like chemicals and chemical products (up 23.2 per cent), medicines, pharmaceutical chemicals and pharmaceutical raw materials (19.4 per cent) and electronics, computers and optical products (11.8 per cent).
According to a survey done by the city Statistics Department of more than 16,300 enterprises in various industries, 49.45 per cent of enterprises affected by the pandemic thought the domestic consumer market had shrunk. Some 15.32 per cent said manufactured goods could not be sold domestically.
More than half of State-owned enterprises that export and 48.45 per cent of foreign enterprises said they had been unable to export this year.
Agriculture Ministry to boost sales of tra fish at fair in Hanoi
The Ministry of Agriculture and Rural Development expects to boost the consumption of tra fish in the local market through the 2020 Tra fish and Seafood Fair in Hanoi City on June 9 as the ongoing coronavirus pandemic has affected export activities.
The fair is aimed at connecting suppliers and consumers across the country and boosting the marketing of clean seafood brands.
The three-day event is expected to help ease the problems plaguing the production and consumption of seafood products and contribute to the sustainable development of the tra fish sector, said Tran Dinh Luan, head of the Directorate for Fisheries of Vietnam.
During the first few months of 2020, the export and production of tra fish were significantly scaled down due to the impact of the coronavirus pandemic and severe saline intrusion, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).
Moreover, revenue from tra fish exports between January and April amounted to US$449.5 million, dipping by 26% year-on-year. Tra fish shipments to the European Union, ASEAN and China over the four-month period dropped by 36.1%, 24.4% and 20.2%, year-on-year, respectively.
Due to the heavy reliance on exports, local tra fish exporters face difficulties when their partners cancel or suspend orders, according to VASEP.
VNU-HCMC to get VND2-trillion hospital
As part of a cooperation agreement that the HCMC Finance and Investment Company (HFIC) and VNU-HCMC signed on June 4, the Vietnam National University HCMC (VNU-HCMC) campus will soon have a 500-bed hospital with a total investment of VND1.5 trillion-VND2 trillion aimed at developing VNU-HCMC into an education-healthcare hub of the city’s Eastern Smart Urban Area.
It will be executed under the public-private partnership model and the build-operate-transfer contract.
Under the deal, HFIC will also offer VNU-HCMC loans or support to access other sources of funding to develop the school’s training and learning activities
Speaking at the signing ceremony, Nguyen Ngoc Hoa, chairman of the board of members at HFIC, said the partnership with VNU-HCMC to construct the university hospital is aimed at educational training and offering medical checkups and treatment to local residents.
According to Duong Anh Duc, vice chairman of the municipal government, the city is looking at multiple ways to invest in its education and healthcare system.
VNU-HCMC had previously taken loans from the company to invest in the facilities of its member universities, namely the HCMC International University and the HCMC University of Economics and Law. Last year, VNU-HCMC broke ground on three projects to develop training activities for students majoring in various fields.
Hanoi should lead in 5G tech deployment: Info minister
The city strives to become a hub of cybersecurity and a large artificial intelligence center of the country by 2026.
Hanoi should aim to take the lead in Vietnam in 5G deployment, making it the foundation and motivation for its socio-economic development, Minister of Information and Communications Nguyen Manh Hung suggested.
Firstly, industrial parks need to be at the forefront of 5G deployment as the city prepares for a new wave of investment, Minister Hung stated at the meeting on June 5 with Hanoi's top leaders.
At the meeting, which reviewed results from the development cooperation between the MIC and the Hanoi city government, Secretary of the Hanoi Part Committee Vuong Dinh Hue stressed that science and technology always plays an important role for the city's development.
Hanoi has focused on developing telecommunications infrastructure applying the latest technologies. Up to now, 1,501 out of 1659 administrative procedures are carried out online at stages 3 and 4 out of a 4-level scale.
Hanoi is one of the first three localities in the country to integrate public services into the National Public Service Portal with 88 procedures. It is expected that by the end of 2020, 261 services will be processed online, said the municipal Party secretary.
Hanoi’s authorities are also determined to pursue e-government and smart city building as Covid-19 showed the importance of developing online public services, Hue added.
The city’s authorities have asked for the support from the MIC to identify a longer-term perspective for the development of the information technology, communications and digital technology industry.
Hue also hoped the MIC would assist the city in building a digital transformation strategy so that by 2026 Hanoi would become a hub for cybersecurity and a large artificial intelligence center of the whole country.
Minister Hung asked Hanoi to consider the telecommunications network as a type of infrastructure, because it could create many jobs for the city.
Hung said that telecommunications infrastructure, including new generation telecommunications infrastructure, is essential for the economy and society. However, Hanoi has not been focused on investing in this field which needs the leading role of the public sector.
The MIC expects from 2020, the Hanoi Department of Information and Communications will set up a plan to develop digital infrastructure, thereby calling for investment.
For e-government building, Minister Hung said that Hanoi should set the goal of providing 100% of online public services at stage 4 by 2021.