Vietnam’s wood firms should apply technologies to increase competitiveness
Chairman of the Handicrafts and Wood Industry Association of Ho Chi Minh City (HAWA) Nguyen Quoc Khanh said Vietnam’s wood processing firms should apply technologies and take heed to production models to increase competitiveness.
Advancement of CNC precision technology plus new technologies such as artificial intelligence, big data, cloud computing, and robots have helped woodworking technologies to make progresses.
Moreover, these technologies give businesses opportunities to improve quality and reduce dependence on labor as well as sustainable growth.
Vietnam is approaching to be a major furniture supplier in the world in this time when many US importers are shifting China orders to many countries including the Southeast Asian.
However, the wood processing industry has faced challenges when more foreign investment capital has poured in the country.
From the early this year, forestry industry showed a strong increase in export value from the beginning of the year. Overseas shipment of forestry product exports in first nine month reached US$7.9 billion, a year-on-year growth of 18.1 percent, accounting for 26.4 percent of total agro-forestry and seafood export.
Export turnover of the whole year is estimated to reach $11 billion increasing $1.7 billion compared to last year. With average growth of 13 percent from 2010, the industry has stable development with export value of $6.06 billion by September.
Vietnam has risen to exceed Malaysia to be one of major exports in the Asian region just behind China thanks to skilled workers and low production cost.
There have been increase in number of experienced FDI enterprises and a fast and large shift of foreign investors coming to the country, said Director of Vi Dai Company Cao Duy Tam.
Experienced FDI enterprises with technologies and strong finance have helped Vietnamese wooden processing sector to be stronger; nevertheless, competition between FDI enterprises and local ones has become fierce resulting in a shortage of laborers.
HAWA Chairman Khanh said that waves of FDI enterprises coming to Vietnam resulted in shortage of laborers in the sector whereas training can’t keep up with demand.
Desperate shortage of laborers plus increased demand have caused a pause in production. In 2018, it took 75 days to complete an order but it is 90 days or even 120 days now.
Worse, Vietnam's labor productivity is among the lowest in Asia. According to the Ministry of Labor, Invalids and Social Affairs, Vietnam's labor productivity last year was US$11, 142 equivalent to 7.3 percent of Singapore’s, 19 percent of Malaysia’s, 37 percent of Thailand’s, 44.8 percent of Indonesia’s and 55.9 percent of the Philippines’
Another challenge is digitalization which has been changing processing industry, business management, and design. Online business also makes changes in designing industry and production methodologies.
Local wood processing firms are facing many matters simultaneously including solving its internal problems to finish orders and improve added value to keep new customers.
Total pig herd remains at around 25 million pigs
The prices of pork have been skyrocketing, forcing several families to replace pork by poultry meat. Meanwhile, the Ministry of Agriculture and Rural Development assured that the shortage of pork was merely around 200,000 tons, while other sources forecast a shortage of 500,000 tons of pork.
Many provinces in Vietnam have been facing a shortage of pork after the outbreak of the African swine fever started from March this year as the demand for pork increases ahead of festive season, causing the price of pork to rocket.
Within the past month, the prices of pork at many provinces have started to soar heavily due to inadequate supply, raising concerns about higher and higher prices as a shortage of pork is likely to continue at the end of the year.
Underprivileged families could not afford pork because of high prices so they had to switch to buy food with more stable prices, such as chicken, duck and fish.
Meanwhile, in China, the African swine fever raging from last year to the beginning of this year has made the prices of pork escalate sharply. The price of pig has risen to above VND100,000 per kilogram at some places.
At a regular press conference held by the Ministry of Agriculture and Rural Development on October 14 in Hanoi, Mr. Nguyen Van Trong, deputy director of the Department of Livestock Production, said that average price of pork in the North has risen to VND63,000 per kilogram by October 14 whereas it fell to merely VND20,000-VND25,000 per kilogram in the second quarter of this year.
In the Central of Vietnam, average price of pork was VND50,000-VND57,000 per kilogram.
The price of pig in Hanoi and Dong Nai Province, the two key places of pig-farming industry, on October 14 was VND59,000 per kilogram and VND62,000 per kilogram respectively.
Some people concerned that the forecast of a shortage of 200,000 tons of pork at year’s end as well as the number of dead pigs of around 5 million pigs being destroyed in the past seven months was not accurate and the actual figures might be much higher.
However, Mr. Nguyen Van Trong affirmed that up to now, 56 cities and provinces have already reported the output and the number of pig available. Accordingly, total pig herd at 56 provinces was above 22 million pigs. If including the number of pigs of the rest seven provinces which have not reported, total pig herd of the country will be at around 24-25 million pigs.
As for concern that pigs will be sold to China as the demand to import pork in this country is extremely high as China’s pig farming industry was also hit by the African swine fever, leading to food crisis. Mr. Trong said that at the present, China only allows pork to be imported officially instead of via cross-border trade so Vietnamese pork will not able to export to China.
In order to make up for a shortage of pork and stabilize supply for the market, the ministry has just held two conferences to promote cattle and poultry farming.
Deputy minister Phung Duc Tien affirmed that the ministry will not let a shortage of food happen as well as not let the prices of pork to highly climb. Currently, alternative food sources have increased significantly, of which beef has risen by 42 percent; poultry meat has edged up 13 percent; and seafood has surged 60.2 percent. If it is necessary, the ministry will allow enterprises to import pork to stabilize the price.
Vietnam to participate in world’s leading fair on consumer goods
Vietnamese enterprises will showcase their products at the 2020 world’s leading trade fair for consumer goods, Ambiente, which is scheduled for February 7-11, 2020 in Frankfurt, Germany.
The information was released at a press conference for the event in Hanoi on October 17.
Covering an area of 331,000 square metres, the fair will cover three areas of dining, living and giving, featuring the most important aspects of the entire spectrum of consumer goods.
The major commodities will be tableware, kitchenware, household goods and leisure as well as gifts, interior decoration and interior design.
The event is expected to feature the participation of around 4,900 exhibitors from over 90 countries around the world, including 65 from Vietnam. To date, around 70 Vietnamese enterprises have registered for the fair.
Notably, from Ambiente 2020 onwards, a special Hall 6.0 will be added as a dedicated Dining area that concentrates on exhibitors in the HORECA sector (hotels, restaurants and catering).
Speaking at the press briefing, Stephan Kurzawski, Senior Vice President of Messe Frankfurt Exhibition GmbH, said: “Ambiente is the central hub of the entire consumer goods industry. Exhibitors from over 90 countries will be acting as trendsetters in and beyond the year 2020”.
“In the future, our visitors will be able to focus even more closely on topics at the interface between hospitality, tableware and interior design”, he added.
A wide variety of other activities will also be held on the sidelines of the fair such as Ambiente Academy with exciting presentations by well-known specialists and industry celebrities, the Ethical Style Guide which will draw attention to manufacturers of sustainable products, and a Talents programme aiming to assist young designers.
At the next year’s fair, Brazil will be the partner country for a special presentation called ‘Focus on Design’, featuring its outstanding products and providing detailed insights into recent design highlights.
The Ambiente 2019 attracted 4,460 exhibitors from 92 countries and welcomed 136,081 visitors from 167 nations. As many as 61 Vietnamese enterprises participated in the event and signed many important contracts, particularly in handicrafts for home and decoration.
Messe Frankfurt is the world’s largest trade fair, congress and event organiser with its own exhibition grounds.
Vietnam Airlines bolsters loyalty management with Sabre Dynamic Rewards
The Sabre Corporation, the leading technology provider to the global travel industry, has announced that Vietnam Airlines is the first carrier in Asia-Pacific to leverage the industry-leading loyalty redemption solution, Sabre Dynamic Rewards.
National flag carrier the first in Asia-Pacific to leverage Sabre Corporation's industry-leading loyalty redemption solution.
Marking a new milestone in its long-term alliance with Sabre, Vietnam Airlines is upscaling its Lotusmiles loyalty program and delivering an optimized offering to customers. Equipped with new ways to redeem rewards across digital and offline channels, the Sabre solution, fueled by the Sabre Commercial Platform, provides an enhanced redemption experience for the carrier’s most frequent travelers.
“Sabre is pleased to support Vietnam Airlines as it aims to enhance the experience it provides to its customers,” said Mr. Dasha Kuksenko, Vice President, Regional General Manager, North Asia, Sabre Travel Solutions, Airlines. “Vietnam Airlines is taking a strategic stance on making loyalty management and personalization a priority. Sabre is proud to support their endeavor with our cutting-edge platform.”
With the adoption of Dynamic Rewards, Vietnam Airlines reiterates its commitment to refining the customer experience for its most loyal customers, by offering an easy and seamless shopping flow that optimizes the overall redemption booking process. As the fastest-growing national flag carrier in Southeast Asia, adopting this innovation will be instrumental in Vietnam Airlines’ continued success, both inside and outside of Vietnam.
As demand for domestic and international travel is on the rise in the country, Vietnam Airlines has made customer-centricity essential to its business strategy. Sabre Dynamic Rewards provides an easy and flexible method for travelers to redeem rewards. For the carrier, it will optimize processes and deepen the breadth of its existing reward platform, Lotusmiles, transforming it from a passive point-collecting program into a dynamic program that delivers unique customer experiences.
Powered by the Sabre Commercial Platform, Dynamic Rewards empowers Vietnam Airlines to seamlessly customize its offer to customers, supporting multiple redemption types, partner redemption options, and end-to-end servicing for un-flown redemption bookings.
The Sabre Corporation is the leading technology provider to the global travel industry. Its software, data, mobile, and distribution solutions are used by hundreds of airlines and thousands of hotel properties to manage critical operations, including passenger and guest reservations, revenue management, flight networks, and crew management. Sabre also operates a leading global travel marketplace, which processes more than $120 billion of global travel spend annually by connecting travel buyers and suppliers. Headquartered in Southlake, Texas, Sabre serves customers in more than 160 countries and territories around the world.
Fruit and vegetable exports plummet in nine months
Fruit and vegetable exports fell by 5.1 per cent to US$2.81 billion during the first nine months of the year in comparison to last year’s corresponding period, according to statistics released by the General Department of Vietnam Customs.
September alone saw fruit and vegetable exports surge by 0.8 per cent to US$272.16 million over the previous month, representing a fall of 4.7 per cent against the same period last year.
The Import and Export Department under the Ministry of Industry and Trade noted that although fruit and vegetable exports to markets such as the United States, the Republic of Korea, Japan, the Netherlands, Taiwan, Hong Kong, and Thailand have increased dramatically in recent times, it has not been enough to compensate for fall in exports to the Chinese market.
Overall, the fruit and vegetable exports to China has dropped by 14.4 per cent to US$1.9 billion on-year. This decline can be attributed to escalating trade tensions between the US and China which have reduced China’s agricultural exports to the US market. As a result, the Asian superpower’s agricultural products have focused more inwardly on domestic consumption.
According to data by the Department of Agricultural Product Processing and Market Development under the Ministry of Agriculture and Rural Development, fruit and vegetable exports have suffered a sharp fall as the export value of a number of major fruit and vegetable products have plunged.
At present, the country exports nine types of fruit to China, including dragon fruit, watermelons, litchi, longan, bananas, mangoes, jackfruit, rambutan, and mangosteen. During the first eight months of the year, China largely imported mangosteen from Thailand, Indonesia, and Malaysia.
China and Vietnam first signed a protocol to open the market for Vietnamese mangosteen on April 26. This was followed by China's Ministry of Agriculture and Rural Affairs publishing reports in late August relating to quarantining local mangosteen that have fully met the export requirements.
Accordingly, Vietnam’s mangosteen will officially appear in supermarkets and stores across China in the coming months, which will open a window of opportunity for businesses to exploit the northern neighbour’s large mangosteen market.
The Department of Agro-Processing and Market Development stated that once the new generation free trade agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) come into force, local agricultural products will enjoy greater opportunities to penetrate demanding markets of European nations, the US, Japan, the Republic of Korea, and Australia.
Simultaneously, foreign agricultural products will enjoy advantages from gaining entry to the Vietnamese market with an import tax of zero per cent.
According to experts, there are positive signs for the domestic fruit and vegetable sector in the coming months as local mangoes have been granted permission to enter the Chilean market.
Moreover, Vietnamese fresh longans were also allowed to be exported to the Australian market in August.
Promoting tourism links between HCM City and Mekong Delta region
The HCM City Department of Tourism held a conference on October 17 to discuss connecting the southern hub’s tourism stimulus program with provinces and cities throughout the Mekong Delta region.
Participants expect to launch tourism programs connecting HCM City to provinces and cities throughout the Mekong Delta region, whilst also promoting the transport, trade, and tourism links among the region.
Speaking at the conference, Bui Ta Hoang Vu, Director of Ho Chi Minh City Department of Tourism, said the southern metropolis’s stimulus program has yielded initial encouraging results.
Since being implemented on January 1, participating businesses in the tourism stimulus program have served a total of 71,000 visitors, with foreign visitors accounting for 92 per cent of the figure and domestic guests making up 8 per cent.
Representatives from the Departments of Tourism in the Mekong Delta provinces have expressed their hope that the conference will help enhance connectivity and co-operation between businesses from the city’s tourism sector and those from provinces in the Mekong Delta.
Many are also hopefully that the occasion will create a range of diversified and high-quality tourism products suitable for tourists.
During the conference, representatives from various departments and businesses from both Ho Chi Minh City and localities in the Mekong Delta signed a memorandum of understanding pledging greater co-operation to build brands to further develop the region’s tourism industry.
Efficient use among best solutions amid rising power demand
Saving and using energy efficiently is one of the best solutions to ease the pressure on power supply amid large- and medium-sized hydropower plants in Vietnam already operating at their maximum capacity, experts have said.
In March 2019, the Government approved a national target programme on economical and efficient energy use for 2019 – 2030, which aims to save 5 – 7 percent of the total energy consumed during 2019 – 2025 and raise this rate to 8 – 10 percent during 2019 – 2030.
The Ministry of Industry and Trade (MoIT) cited the results of an energy audit at 10 businesses that showed that they used to consume about 3.7 million tonnes of oil equivalent (TOE) worth nearly 672.77 million USD each year. After applying efficient energy use solutions, they have saved nearly 174 TOE, equivalent to 78,000 USD, and reduced 606,808 tonnes of CO2 emissions every year.
According to the MoIT’s Energy Efficiency and Sustainable Development Department, the energy saving potential of industries in Vietnam is considerable, about 20 – 30 percent. Industries such as cement, steel, textile-dyeing and chemical production could save up to 40 percent of the energy they consume.
Experts said to promote efficient energy use in industries, aside from turning energy saving into a habit, it is critical to apply new technological solutions to replace energy intensive technologies.
Do Huu Hao, Chairman of the Vietnam Energy Conservation and Energy Efficiency Association, said the State should carry out concrete activities to assist businesses in applying energy efficient solutions.
The MoIT said in the scenario of an annual GDP growth rate of 7 percent, the electricity demand could reach 235 billion kWh in 2020, 352 billion kWh in 2025 and 506 billion kWh in 2035.
Although the growth rate of power demand will slow to about 8.5 percent in 2021 – 2025 and 7.5 percent in 2026 – 2030, the demand will remain very high.
Trinh Quoc Vu, Deputy Director of the Energy Efficiency and Sustainable Development Department, said saving and using energy efficiently is one of the best solutions to ease pressure on power supply.
He noted large- and medium-sized hydropower plants in Vietnam are operating at their maximum capacity. Besides, coal, oil and gas resources will decline soon while renewable energy does not yet satisfy demand on large scale due to high production costs.
Apart from easing the pressure on energy production, economical and efficient energy use will also help conserve energy resources, protect the environment and reduce greenhouse gas emissions, according to the MoIT./.
Pork prices forecasted to continue rising
The Ministry of Agriculture and Rural Development (MARD) has forecasted that pork prices would continue sharply rising until the Tet Holiday.
Pork prices have been increasing since early this month and have reached VND55,000-63,000 (USD2.39-2.73) per kilo to date. The northern province of Bac Giang and Vinh Phuc have seen the highest price of VND63,000, meanwhile, the prices in the central and Mekong Delta regions range from VND50,000-60,000 per kilo.
According Trong, pork prices in Vietnam would keep growing, but not as high as in China as the number of pigs remains high at 25 million pigs, including 2.7 million sows at present.
He also warned of pork shortage following the massive pig cull due to the recent African swine fever.
Nguyen Van Trinh, who was ever owner of a big pig farm in the northern province of Nam Dinh’s Nghia Son Commune, said that almost no local pig farms have been maintained so far, following African swine fever.
Pig numbers in many southern provinces such as Dong Nai and Can Tho has dropped by 60%.
Multi-level marketing network found illegally operating in Vietnam
The Vietnam Competition and Consumer Protection Authority under the Ministry of Industry and Trade have warned people not to join a multi-level marketing network which has been found to be illegally-running in Vietnam.
The agency were recently informed about many individuals and organisations held meetings to introduce Greenleaf-branded clothes and cosmetic products made in China. They called on people to open accounts to develop business activities of the products through the website greenleafgroup.cn. They also promised attractive bonuses for people who did well.
According to the agency, the network has signals of multi-level marketing activities. The agency added that the network had not yet been licensed to operate in Vietnam.
The Vietnam Competition and Consumer Protection Authority have advised people not to join the network’s activities.
Under Vietnamese law, any individual and organisation participated in unlicensed multi-level marketing activities could be fined up to VND5 billion (USD217,391) or sentenced to five years in prison.
Vietnam Fintech Conference & Exhibition 2019 on horizon
The Vietnam Fintech Conference & Exhibition 2019 (VIO 2019) will be held in Ho Chi Minh City on October 30 and 31, according to an announcement from the HCM Computer Association (HCA)’s Secretary General Vu Anh Tuan.
Experts told the briefing that financial technology (fintech) has greatly disrupted the way that banks and financial institutions operate today and with cash still being the main payment mode, a youthful demographic, and growing smartphone penetration, Vietnam offers great opportunities for fintech developers
According to HCA, around 10,000 fintech companies are operating globally, competing with banks in all fields, from payment services, deposits, lending, and foreign exchange trading to investment consulting.
Fintech companies in Vietnam currently focus on only three services: payment, peer-to-peer (P2P) lending, and crowdfunding, and some 70 per cent are startups.
Dr. Lillian Koh, CEO of Fintech Academy Singapore, was quoted by the Vietnam News Agency (VNA) as saying that the information and communications technology (ICT) sector is a key enabler for almost every industry and has enhanced Singapore’s competitiveness by raising productivity and transforming business processes in industries like finance, services, and manufacturing.
Fintech came as a disruptor but is now embraced as innovation and transformation, she noted.
VIO 2019, to be jointly organized by HCA, Fintech Academy Singapore, the Vietnam Banking Association, and the Institute for Development and Research in Banking Technology at Ho Chi Minh City’s Vietnam National University, will help technology businesses become updated on the latest global trends and technologies.
Entitled “Shaping the Future of Vietnam’s Fintech”, the conference will discuss topics such as fintech and changes in technology and payment services; cybersecurity challenges for fintech; fintech and the workforce; policies and platform development for the fintech industry; machine learning and AI in the fintech marketplace; and fintech and innovative startups.
VIO 2019 will also feature the 2019 Top ICT Vietnam awards ceremony on October 30, honoring outstanding IT and telecom companies and products and services and with an exhibition where banks and fintech and IT companies can showcase their products.
VPBank buys back nearly 25 million shares
The Viet Nam Prosperity Joint Stock Commercial Bank (VPB) has bought back 24.7 million shares, equivalent to 49.5 per cent of the registered amount, in the period from October 2 to 11.
The bank needs to buy 25.3 million more shares in the second half of October.
At the end of September, VPBank announced that it had planned to buy back 50 million shares in the market, equivalent to nearly 2 per cent of the charter capital, from October 2 to October 31, under either agreement or matching method.
The purchase aims to stabilise stock prices in the market and increase the rate of return per share for investors, VPBank said.
Capital for the purchase was sourced from undistributed profits.
By the end of 2018, VPBank's undistributed profit stood at VNÐ6.3 trillion (US$269.3 million).
At a meeting with market experts in the middle of last week, VPBank's leaders said the buying back of shares would not affect the bank's capital adequacy ratio.
As of June 2019, VPBank's equity was more than VNÐ38.2 trillion. The bank's capital adequacy ratio stood at 11.2 per cent, much higher than the minimum level of 8 per cent, calculated under the Basel II standards.
Buying back stocks will not affect the capital source for the expansion of business operations because VPBank still has many other options to increase capital, VPBank said.
Transimex (TMS) to pay dividend at rate of 25 per cent
Transimex Corporation (TMS) plans to pay 2018 dividends in cash and shares with a ratio of 25 per cent, of which 10 per cent is in cash and 15 per cent in shares.
Transimex, specialising in freight forwarding, container and barge transport, warehousing and port services, will spend about VNÐ54.9 billion (US$2.3 million) in cash and will issue 8.23 ??million new shares to shareholders.
The dividend payment plan was approved at the 2019 annual shareholder meeting.
The capital used to pay dividends is sourced from undistributed after-tax profit estimated in the 2018 audited consolidated financial statements of the company.
Expected payout time is in the fourth quarter of 2019.
In 2018, TMS’s revenue reached nearly VNÐ2.3 trillion, up 9 per cent year-on-year and completing 99 per cent of the yearly plan.
Pre-tax profit touched more than VNÐ263 billion, up 9 per cent against last year and exceeding 4 per cent of the year’s profit target.
Post-tax profit was VNÐ235 billion, up 11 per cent year-on-year.
As of December 31, 2018, the undistributed post-tax profit was recorded at nearly VNÐ640 billion.
In the first half of 2019, TMS recorded revenue of nearly VNÐ1.2 billion, up 6 per cent year-on-year, pre-tax profit was VNÐ128.6 billion, up 11 per cent, equivalent to 48 per cent of revenue target and 48 per cent of profit target, respectively.
In the market, TMS shares are currently trading at around VNÐ27,450 per share, an increase of 5 per cent compared to the beginning of the year.
Quang Ninh: Private sector breathes fresh air into local infrastructure
The private economic sector has played an important role in creating a facelift to the infrastructure development in the northern coastal province of Quang Ninh over the recent past.
Large-scale projects spring local development
According to Chairman of the provincial People’s Committee Nguyen Duc Long, it would take the province 10 years to complete its comprehensive and modern infrastructure if Quang Ninh only relied on State allocation and local budget. However, the province has made a quantum leap with various measures taken to lure private investment.
Long said thanks to concerted efforts to improve local business climate, the province secured 36 trillion VND (1.55 billion USD) during 2015-2018 to develop transport projects, three quarters of which were mobilised from the private sector.
A line-up of investors have come to the province to build key transport projects under build-transfer (BT), build-operate-transfer (BOT), and public-private partnership (PPP) contracts.
A 474.4-million-USD highway is being constructed under a BOT and PPP contract by the joint venture of Long Van Infrastructure Investment and Development Co., Ltd, Van Don Sun JSC and Cong Thanh Transportation and Construction Corporation. The 80.2km-long highway is designed to have four lanes, and expected to shorten travel time from Van Don to Mong Cai from two hours to nearly one hour upon completion in 2021.
The other three key transport projects in the locality are Ha Long – Cam Pha coastal road and an undersea tunnel through Cua Luc Bay (the gateway to Ha Long Bay) implemented under BT contracts.
Particularly, the Van Don International Airport, invested at a total cost of nearly 7.5 trillion VND, has stayed in the limelight of the local infrastructure system. This is the very first airport project in Vietnam to apply the BOT investment model.
The presence of Van Don airport which was officially put into operation in December 2018 is hoped to help Quang Ninh achieve its target of welcoming 15-16 million tourists, including 7 million foreigners, by 2020 and 30 million arrivals, including 15 million foreigners, by 2030.
In his remarks at the inauguration ceremony for Van Don airport, Prime Minister Nguyen Xuan Phuc hailed the local efforts to develop such an important transport work, saying Quang Ninh province was successful in infrastructure development in the context of limited capital.
Meanwhile, Deputy Prime Minister Trinh Dinh Dung affirmed at a conference held by the Ministry of Transport that other localities should follow Quang Ninh province, an excellent example of making breakthroughs in infrastructure development.
In addition, Quang Ninh province has adopted various incentives to attract big investors like VinGroup, Sun Group, FLC Group, BIM Group and Tuan Chau, who have developed a wide range of high-class resort, shopping and entertainment complexes in Ha Long, Cam Pha, Uong Bi, Van Don, Co To and Mong Cai.
Infrastructure – catalyst for economic and tourism development
Well-developed infrastructure has served as a catalyst to boost economic and tourism development in Quang Ninh province.
The locality enjoyed 11.9 percent in economic growth in the first nine months of the year, surpassing set target for the whole year and 0.8 percent higher than the same time in 2018.
As business climate and competitive capacity have been improved a lot, the province had 1,700 newly-established firms with a total registered capital of 10 trillion VND during January-September.
Also in the period, the province welcomed 11.3 million visitors, as compared to 12 million recorded for the whole of 2018. Earnings from tourism services were estimated to surged 29 percent year on year.
As of September 10, Van Don International Airport hosted a total of 1,364 flights transporting nearly 183,000 domestic and foreign passengers, and 604,000 tonnes of cargo.
The airport has been connected to Ho Chi Minh City in the south, the Republic of Korea’s Seoul, and China’s Hunan and Shenzen. In the coming time, more flights will be operated between Van Don and China’s Hainan, Kunming, Nanning, Zhengzhou and Guangzhou, Japan and Thailand, as well as many domestic locations.
Quang Ninh and its strategic partners are working to accelerate the construction of key projects to complete local tourism panorama, aiming to develop the province into one of the four national tourism hubs. The move will also help Vietnam to realise its target of welcoming 20 million international visitors by 2020./.
Vinh Phuc: ideal destination for foreign investors
The northern province of Vinh Phuc has been an ideal destination for investors thanks to its geographical location and preferential policies for investment attraction.
Over the years, Vinh Phuc has been focusing on luring foreign direct investment (FDI), and this year the province has been sending delegations overseas to promote investment.
In September this year, the locality coordinated with the Vietnamese embassies in the Netherlands and the US to organise seminars introducing investment and cooperation opportunities in Vinh Phuc.
As of July this year, Vinh Phuc had drawn 362 FDI projects from 17 countries and territories with a total investment of over 4.8 billion USD, ranking 19th out of the 63 localities nationwide in FDI attraction.
Currently, the province is home to two US-funded projects in the processing-manufacturing sector with a combined capital of 15.6 million USD.
The province is calling for more investment to automobiles, electronics, support industries, technology agriculture, new materials, renewable energy, tourism, education-training, healthcare, the environment, and smart city development.
Along with promoting investment activities, the locality has also concentrated on improving the quality of the local administration through administrative reform, enhancing the provincial competitiveness index, developing a smooth, transparent and attractive investment environment, and creating optimal conditions for all economic sectors to operate in.
The province has also completed infrastructure in industrial parks and clusters, while speeding up ground clearance to hand over the ground to investors in Thang Long Vinh Phuc industrial park, Sections A and B of Tam Duong II industrial park, as well as Phuc Yen, Chan Hung, Lap Thach, Song Lo, and Tam Duong I industrial parks.
Meanwhile, the local administration has dealt with the difficulties and obstacles facing businesses to help them boost production. Regular meetings between leaders of the provincial People’s Committee and local firms have been held with the same purpose.
With its comprehensive efforts, Vinh Phuc has seen good results in FDI attraction. As of the end of September 2019, local industrial parks were home to 343 projects, including 283 FDI ones worth over 3.76 billion USD.
The Republic of Korea is the leading foreign investor of Vinh Phuc in terms of both project number and capital. Many major firms from the Republic of Korea as well as multinational businesses are operating in the province, including Patron, Heasung Vina, Interflex, Bangjoo, Cammsys, Toyota, Honda, and Sumitomo.
According to the Vinh Phuc Industrial Park Management Board, in the first nine months of 2019, local industrial parks drew 53 new FDI projects. Together with capital poured into 38 ongoingprojects, so far this year, the parks have lured 612.35 million USD, reaching 219 percent of the yearly target.
At the same time, the parks have wooed over 2.66 trillion VND for eight new and four ongoing domestic projects, equivalent to 190 percent of the goal for the whole year.
BinhXuyen district is the leading locality in the province for investment attraction. The district is home to seven industrial parks with a total area of nearly 1,900 hectares, namely Binh Xuyen, Binh Xuyen II, Ba Thien, Ba Thien II, Thang Long Vinh Phuc, Son Loi and Nam Binh Xuyen. The parks are home to about 200 projects worth 2.11 billion VND, mostly in garments and textiles, electronic accessories, automobile and motorbike assembly, brick and steel production. The projects employ more than 35,000 labourers.
In Thang Long industrial park alone, 11 Japanese firms are operating with a combined capital of 200 million USD.
Thanks to the province’s endeavors to complete infrastructure in industrial parks and a transport system connecting them, as well as efforts to improve the business environment and reform administrative procedures, Vinh Phuc has become more popular among foreign investors./.
Opportunity to accelerate gas power development in VN
The Prime Minister has recently agreed to assign AES Group (U.S.) to be the investor of the Son My 2 Gas Power Plant Project, which is expected to contribute to accelerating the development of gas power in Viet Nam.
The Son My 2 gas-fired thermal power project is part of a series of Son My thermal power projects (including Son My 1, 2 and 3) in the central province of Binh Thuan with a total capacity of 4,000 MW. AES Group plans to complete the financial arrangement for the project in 2021, and will start commercial operation of the power plant from 2024.
Using the U.S. capital and technology is an optimal choice at the moment, especially the production of power from liquefied natural gas (LNG) and the US’ famous shale gas and oil technology.
Under the revised 7th power development plan, Viet Nam will have about 15,000 MW of gas power by 2025, accounting for 15.6% of the total capacity of power sources and equivalent to the production of 19% of total power output. The figure will increase to 19,000 MW by 2030, equivalent to requiring 22 billion cubic meters of gas, 50% of which comes from the imported LNG.
According to the Department of Oil, Gas and Coal (Ministry of Industry and Trade), gas supply for power production in Viet Nam stands at 8 billion cubic meters, but the current capability will only be maintained until 2022. From 2023, the gas output brought ashore will decline and there will be a shortage.
Meanwhile, the exploitation of oil and gas in Viet Nam is facing obstacles, and the U.S.’ shale oil is considered a future technology which is capable of filling the gap for the whole world.
AES Group’s acceleration of investment in gas power development will contribute to breaking the structure in a beneficial way, helping reduce commercial electricity prices, while addressing the pressure from gas shortage.
The solar power lesson still remains “hot” when a series of large projects are implemented and are currently at risk of output cut due to the excess of plan limits. This is a paradox that needs to be resolved before Viet Nam wishes to take advantage of high-quality FDI.
Vietnam Treasury would miss target of mobilizing US$11.2 billion via G-bonds
In the context of slow public investment disbursement, there is no tremendous pressure put on the State Treasury of Vietnam to achieve the plan.
It is highly possible that the State Treasury of Vietnam (VST) could miss the yearly target of mobilizing VND260 trillion (US$11.2 billion) via government bond auctions in 2019, according to Viet Dragon Securities Company (VDSC).
The VST mobilized VND52.6 trillion (US$2.26 billion) via government bond sales in the third quarter this year, equivalent to 70% of the quarterly plan and down 2.5% year-on-year.
In the first nine months of 2019, the VST raised only VND155 trillion (US$6.68 billion) through a similar process, completing 59% of the yearly plan but the winning/offering ratio rose to 80% from 50%.
According to VDSC, bond yields have been on the decline since May and recorded a big drop in September after a policy rate cut of the State Bank of Vietnam (SBV). Primary yields decreased by 15-30 basis points (bps) while five-year bond yield plunged from 3.8% annually to 3.1%.
The report suggested the VST has intentionally reduced the offering amount in recent months.
Although the winning/offering ratio is higher than last year, the raised amount is still low. In the context of slow public investment disbursement, there is no tremendous pressure put on VST to achieve the plan. In a low inflation environment, such decrease in offering amount not only softens upside risks for bond yields but also reduces the concerns about crowding-out effect due to a gradual slip of money supply. Up to September 2019, total money supply grew at 8.4% year-to-date, below the 8.7% during the same period in 2018.
The secondary market was more active as total trading surged by 33% year-on-year. Foreign investors net bought US$180 million in the quarter, compared with a similar net-sold amount last year. In the January – September period, foreigners poured US$600 million into Vietnam’s government bond market in contrast to net selling of US$105 million recorded in the same period last year.
VDSC’s report said government bond yields are approaching the bottom seen at the beginning of 2018. However, the current situation is more stable and sustainable as the gap between US-Vietnam 2-year government bond yields is around 1% instead of 0% in the second quarter of 2018.
Country risk premium, the gap between US-Vietnam 10-year government bond, has recovered and moved around 2%. That is higher than Thailand’s (-0.1%), Malaysia’s (1.7%), China (1.6%) but lower than Indonesia (5.1%). The gap between Vietnam 10-year- and 2-year government bond yields has also gone up in recent months.
HCMC seeks to popularize products in Australia, Thailand
The HCMC Department of Industry and Trade will team up with partners to organize two trade promotion programs in October and November to introduce products in the Thai and Australian markets, Nguoi Lao Dong newspaper reported.
“Vietnamese Goods Week in Thailand” is scheduled to take place from October 23 to 27 in the Thai capital of Bangkok, offering a number of enterprises in the city the chance to promote local products, expand their businesses, boost trade links and seek potential business partners in Thailand.
The event will feature 120 booths of 80 HCMC-based firms.
Besides this, the organizer will also launch “Vietnamese Goods Week in Melbourne, Australia” on November 24. The event, which is set to wrap up on November 28, will offer some 50 Vietnamese enterprises a chance to market their products to this foreign market.
This is the first time the HCMC Department of Industry and Trade has organized promotional programs in foreign markets for firms in the city, stated Nguyen Huynh Trang, deputy director of the municipal department.
The items and products to be showcased at the upcoming events include consumer goods, textiles, processed food and various services, she noted.
Apart from the participation of major firms in HCMC such as Chi Thanh Plastics Company, Saigon Food, NutiFood, Duy Tan Plastics and Vinamit, prestigious enterprises based in many other provinces and cities across the country will join the events.
The two programs are part of the city’s plan to support enterprises hoping to expand their market in 2019.
As for the local market, in late September, the department organized a goods supply and demand matching conference between HCMC and other provinces and cities nationwide to open the door for enterprises to seek cooperation opportunities. As many as 513 agreements were signed at the conference, the largest event of its kind in the city that attracted over 2,340 firms from 45 localities.
Seminar talks Vietnam business development in Sydney
The Vietnamese Entrepreneurs Association in Sydney (VEAS) held a seminar on start-ups, governance and business development in Sydney on October 19.
Speaking at the annual event, Chairman of the Black Sheep Capital – one of the leading investment funds of Australia, Dan Gavel, said he has seen many potentials from the Vietnamese market, especially in logistics and technology.
He also advised firms to firmly grasp risk governance skills to secure success.
VEAS Chairman Nguyen Ba Luan expressed his wish that the event would help connect Vietnamese enterprises in Sydney with Sydney counterparts that want to invest in Vietnam.
He also announced the signing of a cooperation agreement between the VEAS and the Hanoi Young Business Association with an aim to jointly holding events, admitting more members and developing business operations for Vietnamese enterprises in both countries.
Founded in February 2018, the VEAS looks to uphold the ability of Vietnamese firms in Sydney, contributing to the economic partnership between Vietnam and Australia./.
Vietnam attends first India-CLMV Reverse Buyer Seller Meet
A delegation of 25 Vietnamese businesses attended the first India-CLMV Reverse Buyer Seller Meet in Chennai city, the capital city of India’s Tamil Nadu state on October 16.
Jointly held by the Indian Ministry of Commerce and Industry and the Confederation of Indian Industry (CII), the event aims to implement cooperation activities between Indian and Cambodia, Laos, Myanmar and Vietnam (CLMV).
It is part of India’s efforts to realise its “Act East” policy, focusing on promoting collaboration between India and the Association of Southeast Asian Nations (ASEAN), including CLMV.
With the theme “Build economic integration through regional value chains,” the meeting brought together nearly 300 delegates from India and the four ASEAN countries.
Apart from promoting agricultural products of India and CLMV, the event sought measures to strengthen road, aviation and navigation connectivity, as well as collaboration in services and science-technology.
The delegates also touched upon cooperation opportunities in energy, especially new and renewable energy.
The Vietnamese representatives briefed the meeting on outcomes of cooperation between Vietnam and India and CLM countries in such spheres as economy, trade, investment and tourism./.
Vietnam promotes trade, investment cooperation with Algeria’s Constantine
Vietnamese Ambassador to Algeria Pham Quoc Tru has paid a two-day working visit to Constantine province to boost trade and investment with the third largest city of Algeria, which holds strengths in tourism, husbandry, plantation and pharmaceutical industry.
During his stay on October 16-17, he had a working session with governor of Constantine Abdessamie Saidoun, during which they discussed measures to promote bilateral cooperation in various sectors on the basis on thriving relations between the two countries.
They expressed their interest in cooperating in agriculture, tourism and labour export.
On the occasion, the Vietnamese Embassy joined hands with the Constantine Chamber of Commerce and Industry (CCCI) to organise a forum on introducing import-export cooperation and investment potential.
CCCI president Souici Larbi called Vietnamese businesses to enhance collaboration with local firms in agriculture, tourism and pharmaceutical industry.
Many Constantine enterprises said they were interested in working with Vietnamese partners in the fields, while asking the Vietnamese authorities to create favourable conditions in legal procedures so that they can study and seek investment opportunities in the Southeast Asian nation.
Highlighting sound cooperation between the two nations in the past time, Ambassador Tru stressed the Vietnamese Government and Embassy will give necessary support to Algerian businesses who want to boost cooperation and investment with Vietnamese companies in the fields of their strengths.
On October 17, Ambassador Tru and the working delegation from the Vietnamese Embassy met with several Algerian pharmaceutical businesses at the international fair and exhibition on pharmaceutical industry and cosmetics 2019 to enhance cooperation and trade exchange with the firms./.
Conference talks boosting HCM City’s dwindling exports
Ho Chi Minh City’s exports are still growing, but slowing down, and so it needs to take measures to boost them if it wants to retain its position as the country’s economic hub, a recent conference heard.
Speaking at the conference on the city’s investment and export situation, Nguyen Thanh Phong, Chairman of the municipal People’s Committee, said export growth has fallen below 10 percent a year in the last 10 years.
Nguyen Ngoc Hoa, deputy director of the city's Department of Industry and Trade, said the city’s exports as a ratio of the country’s has gradually decreased from 50 percent in 2000 to just 16 percent last year when it was around 38 billion USD.
China is still the city’s largest market, followed by the US, Japan and the Republic of Korea, he said. But exports to the EU account for a very low rate, not commensurate with the potential, he said.
Exports are increasingly dependent on foreign businesses. In 2005, Vietnamese companies accounted for 55 percent of the city’s exports but last year foreign firms accounted for 51.1 percent.
Many items with high export turnover such as electronics products, textiles and footwear are mainly produced and exported by FDI firms.
Dinh Cong Khai, Director of the Institute of Public Policy, said the city's exports have been losing their competitive advantage, and its ability to diversify its export products and markets remains low. Its export has still focused on quantity growth, and there is no export development strategy based on its comparative advantages.
The most obvious outcome is that its export growth rate tends to be lower than that of other localities like Bac Ninh, leading to a decrease in the proportion of its exports to the country’s, he said.
According to Khai, the city has have not properly assessed the causes constraining export growth based on the competitiveness of industries and their value chains.
Besides, the city has not identified industries and products with high export growth potential and their competitive advantages based on scientific analyses, he said.
It is necessary to evaluate the competitiveness of export products and industries to identify which ones the city should support for boosting exports, he added.
Delegates said in the short term the city has to continue exporting product groups that fetch large revenues such as electronics, textiles, footwear, agriculture - fisheries, rubber, chemicals, and furniture, but must actively prepare the foundations for upgrading industry and restructuring exports in the long term.
Talking about export orientation for the next decade, Hoa said the city would focus on quality and move towards export support services, enhancing the exports of intangible goods and services such as software and digital content and improving value addition.
The city would work to improve the competitiveness of industries with high export growth potential and help enterprises diversify their export markets, especially those that have free trade agreements with Vietnam, and develop their human resources, he said.
It would also further improve administrative services and have policies to create a sound environment for businesses to boost exports, he added.
Do Ha Nam, General Director of the Intimex Group JS Company, said the city should further improve its logistics and transport infrastructure to facilitate exports.
Phi Anh Tuan, Deputy Chairman of the HCM City Computer Association, said the city needs to have policies to support universities in training human resources who could handle new technologies in future and help businesses adopt technologies to transform their operations./.
Binh Phuoc province invites Thai investors
The southeastern province of Binh Phuoc held a workshop in Bangkok on October 17 to invite Thai investors to do business in the province.
In his speech at the event, Vice President of the Federation of Thai Industry (FTI) Veerachai Monsintorn highlighted that Vietnam continues to be among top destinations for foreign direct investment (FDI) in the ASEAN. He said in 2018, the country ranked third in terms of FDI attraction in ASEAN, after Singapore and Indonesia, adding that the FDI flow into Vietnam in the first five months of this year was the highest for the period in the past four years, reaching 16.74 billion USD.
Veerachai remarked that the Vietnamese Government is working hard to support foreign investors and attract more to come through trade and tax incentives, while developing infrastructure in large industrial areas. He also noted the young and skilled labour force in Vietnam, along with growing domestic market in both scale and purchase power.
Vice Chairman of Binh Phuoc People’s Committee Huynh Anh Minh introduced the province’s potential and advantages, including a convenient geographic location and easy access by all transport means. The province is an industrial hub for textile-garment, leather-footwear, electric and electronic appliance, wool processing and renewable energy, especially solar power.
According to Minh, eight industrial parks with complete infrastructure are operating in the country with an occupancy rate of 70 percent. The province plans to have 13 IPs with total area of 4,686ha by 2020, along with the 28,364ha Hoa Lu border economic zone.
Last year, 34 investment projects capitalized at 348.7 million USD were licensed in Binh Phuoc, the official reported.
He called on Thai firms to invest in the support industry, hi-tech industry and farm processing in Binh Phuoc, stressing that the province will create the best possible conditions for foreign investors, especially those from Thailand.
Businesses from Binh Phuoc took the occasion to meet and reach some cooperation deals with Thai partners./.
Summit backs super connected Asia for sustainable development
The 10th Asian Business Summit (ABS) in Hanoi on October 17 adopted a joint statement on a super connected Asia for sustainable development, showing the Asian business community’s commitment to the goal of inclusive, sustainable and prosperous development.
The annual summit, initiated by the Japan Business Federation (Keidanren) in 2010, is held on a rotational basis in big Asian economies.
This year’s event attracted leaders from 12 key economic organisations in Asian countries, including Japan, the Republic of Korea, India, Singapore, Malaysia, Thailand, China, Taiwan (China), the Philippines, and Vietnam.
At the press conference later the same day, Chairman of the Vietnam Chamber of Commerce and Industry (VCCI) Vu Tien Loc, who also co-chaired the 10th ABS, said the summit shared the view that close cooperation among economies in the region is key to sustainable and inclusive development.
Its joint statement features content about a digital Asia which mentions growth strategies for promoting development and reform, and the building of a society that is smart in terms of agriculture, health care, urbanisation and environment to ensure sustainable development.
Meanwhile, the section on a global Asia talks about global value chains and free trade which are necessary to boost the comprehensiveness in economy and infrastructure and human resources development through the enhancement of regional cooperation, Loc noted./.