VIETNAM BUSINESS NEWS JUNE 13

Tra fish exports expected to continue recovering

VIETNAM BUSINESS NEWS JUNE 13

The Vietnam Association of Seafood Exporters and Producers (VASEP) forecasts that Vietnam's tra fish (pangasius) exports will continue to grow in the coming months thanks to the control of the COVID-19 pandemic in importing countries, said VASEP Secretary Truong Dinh Hoe.

According to VASEP, after having COVID-19 vaccines, the economic and trade activities of many countries have started to recover, so the countries have also increased imports of seafood from Vietnam, especially tra fish products.

Việt Nam’s total export value of pangasius in the first five months of 2021 reached 600 million USD, an increase of 10 percent compared to the same period in 2020.

The large export markets of Vietnamese pangasius in this period were China, US, Brazil and Thailand. Of which, the tra fish export value reached about 27 million USD to Brazil and 26 million USD to Thailand, a year-on-year increase of 38.7 percent and 8.5 percent, respectively.

"The export growth to Thailand, the largest pangasius importer in ASEAN, is a good signal to increase the pangasius export value to this region in the next quarter," said Hoe.

In addition, the US market also increased imports of Vietnamese pangasius from the beginning of 2021, according to the association. In May, Vietnma’s tra fish export value to the US increased by 120 percent over the same period last year, reaching more than 35 million USD. Since the end of 2020, the inventory of pangasius in the US has been limited.

Meanwhile, the domestic catfish production has also declined. Therefore, the US has increased imports of frozen tra fish products from the beginning of this year.

The total value of pangasius exports to Hong Kong in the first five months reached 146 million USD, accounting for nearly 24 percent of Vietnam's total pangasius export value. This market returned to the list of largest pangasius export markets for Vietnamese tra fish products, VASEP reported.

The pandemic has had a significant impact on the sales strategy of Vietnamese seafood enterprises. Besides reducing trade activities due to the social distancing policy in many countries, high transportation costs and the shortage of containers have also had great impacts on Vietnam’s seafood exports, it said.

This forces the local seafood processing and exporting enterprises to change their sales strategies to keep customers and overcome difficulties during this period, according to VASEP.

Truong Tien Dung, general director of the Saigon Seafood Trading Joint Stock Company (APT), said the company’s exports of pangasius and catfish products in the first five months of this year increased by 10 percent over the same period in 2020.

To achieve this result, APT must actively discuss with customers to produce products according to demands of the export market, instead of offering products that the company produces. Therefore, it has enhanced production of new processed products from pangasius and catfish.

According to Ong Hang Van, Deputy General Director of the Truong Giang Seafood Joint Stock Company in Dong Thap province, in the context of COVID-19, many seafood businesses have also changed their trading methods with partners.

Instead of signing CIF contracts that the local enterprises have delivered goods at the port in importing countries, the enterprises have signed FOB contracts, in which the enterprises deliver goods at ports in Vietnam. With this method, the importers must take care of transporting the country's export goods to the importing countries.

The Ministry of Industry and Trade’s Import-Export Department also forecasts that Vietnam's seafood exports by year end will continue growing due to increasing demand in the US and EU markets.

After increasing 22 percent to 749 million USD in April 2021, Vietnam's seafood export continued to surge by 24 percent in May to 790 million USD. This export value in the first five months of this year rose by 14 percent to reach 3.27 billion USD.

Although the economic recovery in the EU market is slower than that of the US, consumption demand is recovering because the pandemic is being controlled gradually. European importers tend to be more interested in Vietnamese seafood suppliers due to tariff advantages from the EVFTA and stable raw materials, according to VASEP.

Vietnam's seafood export value to the EU in May increased by 30 percent to 95 million USD. The export value in the first five months reached 380 million USD, up 15 percent over the same period last year.

For the US market, the implementation of the COVID-19 vaccination campaign along with economic stimulus package of the US Government have encouraged quick recovery of seafood consumption demand in this market. The higher seafood demand is not only in retail but also services, restaurants, hotels and entertainment after a period of social distancing due to the pandemic. The market has higher demand for shrimp, tuna, salmon, pangasius, squid, octopus, crabs and molluscs such as clams and mussels.

In addition, Vietnam's seafood exports to countries with free trade agreements also increased sharply in the first five months, including to Australia (65 percent), Canada (12 percent), and to the UK (17 percent). These markets are expected to play a significant role in promoting Vietnam's seafood export growth in 2021 and beyond./.

Vietnam still lacks low-priced apartments

Vietnam has less than half of the low-income houses it targeted for in 2020, according to data from the Ministry of Construction (MoC).

According to the statistics, the total area of more than 5.1 million sq.m of built social housing accounted for only 41.4 percent of the target of 12.5 million sq.m of proposed housing in the National Housing Development Strategy by 2020.

According to realty insiders, the supply of low-priced apartments was still very scarce. The affordable segment, which was more expensive than the low-income segment, was also not easy to find while the need to improve the accommodation for people with limited income was growing.

The MoC said since 2016 there have been about 1,040 projects to build social housing for low-income people in urban areas and industrial park workers, including 507 independent housing projects and 533 social housing projects built on 20 percent of the land fund of commercial housing and urban development projects.

Up to now, only 248 projects have been completed with a construction scale of more than 103,500 apartments in a total area of more than 5.1 million sq.m. Another 264 projects with a construction scale of about 216,500 apartments and total area of about 10.8 million sq.m were being built.

While the segment of low-priced apartments dominated in terms of total number of transactions on the market, the supply will not be further improved until the end of 2022.

A representative of the MoC said: “The tightening of administrative procedures in project construction and development limited the new supply of real estate projects.”

The MoC’s latest report on the real estate market showed that affordable apartments are priced below 25 million VND per sq.m in big cities while prices for each sq.m of a low-income house far from the centre was below 25 million VND.

The report also said as there was little supply of low-income houses, the prices increased from less than 20 million VND to less than 25 million VND per sq.m.

Professor Dang Hung Vo told local media: “The State's affordable housing developers can only meet 15 percent of the housing supply for immigrants and the rest of them have to take care of themselves.”

Vo added: “These people are in need of cheap commercial housing, ranging from 700 million VND to 1 billion VND each.”

He calculated the supply of cheap houses was nowhere near the demand.

Due to the lack of supply, according to most insiders, social housing has never experienced a crisis in transactions and the liquidity was always the most stable in the market.

The latest data and reports from realty research firm Savills Vietnam said household size in HCM City has tended to decrease over the past ten years. The household size was 3.5 people per household in 2019, much lower than the rate of 3.9 people per household in 2009.

The firm also said 66 percent of households have from two to four members, and there is a trend of separating households, which led to an increase in housing demand.

According to Savills Vietnam, the number of apartments offered for sale on the market with a value of 2 billion VND each or less accounted for about 10 percent of the total number.

Many investors and developers are following the trend of reducing the area to fit the needs of small families and make the value suitable for buyers. However, the number of apartments of less than 2 billion VND, from 50 to 60sq.m, was not many.

Vo Thi Khanh Trang, deputy director of Savills Research Department in Ho Chi Minh City, said as the land fund was limited and the price of construction materials was increasing, the prices of houses would increase.

Trang said in order to increase the supply for the low-price and affordable housing segment, "it is necessary to have co-operation from local authorities with policies to support businesses to quickly solve administrative procedures and businesses which build such projects."

On April 15, the MoC representatives met with Korean housing experts in HCM City to share experience in social housing development of the Republic of Korea (RoK) as part of a project on the building of a master policy on Vietnam's social housing development for the 2021-30 period, carried out using non-refundable official development assistance (ODA) from the RoK government via the Korea International Cooperation Agency (KOICA).

Director of Korea Housing and Land Research Institute (LHI) Moon Hyogon said in the current economic growth context, relying on government support alone cannot provide enough housing to meet people's needs, especially in the low-income segments.

Moon Hyogon said using money from the private sector in housing provision should be a solution, saying: “As more Vietnamese businesses can earn profits from low-income household building, they should put a certain amount of the revenues to increase development funds for developing low-income housing.”

The Korean expert said the formation of such a fund was expected to carry out the unified, systematic management of many aspects including financial resources, thereby achieving successful results for Vietnam./.

Close to 1 tonne of Vietnamese lychees arrive in France

A ‘thieu’ lychee batch, weighing close to a tonne, from the northern province of Hai Duong arrived at the Paris Charles de Gaulle Airport in France on June 12, informed the Ministry of Industry and Trade.

Labeled with Vietnam’s itrace247 origin tracing stamp, the batch was shipped thanks to trade promotion efforts by the Vietnam Trade Office in France and the ministry’s Trade Promotion Agency (Viettrade) following a series of business matching sessions involving Hai Duong lychees.

The batch, transported to France by the Red Dragon Service Trading Manufacture Co., Ltd, will be available at the Asia supermarket chain in Paris.  

Vu Anh Son, head of the office, said collaboration between Vietnamese agencies and businesses and French importers encountered various difficulties due to COVID-19.

Before the arrival of the batch, the Vietnamese fruit was imported in a small amount and made almost no appearance at big local shopping malls.  

A plan has been set for more than 10 tonnes of Vietnamese lychees to enter the market by sea and air in 2022./.

Viet Nam's tra fish exports expected to continue recovering

The Viet Nam Association of Seafood Exporters and Producers (VASEP) forecasts that Viet Nam's tra fish (pangasius) exports will continue to grow in the coming months thanks to the control of the COVID-19 pandemic in importing countries, said VASEP secretary Truong Dinh Hoe.

According to VASEP, after having COVID-19 vaccines, the economic and trade activities of many countries have started to recover, so the countries have also increased imports of seafood from Viet Nam, especially tra fish products.

Viet Nam’s total export value of pangasius in the first five months of 2021 reached US$600 million, an increase of 10 per cent compared to the same period in 2020.

The large export markets of Vietnamese pangasius in this period were China, US, Brazil and Thailand. Of which, the tra fish export value reached about $27 million to Brazil and $26 million to Thailand, a year-on-year increase of 38.7 per cent and 8.5 per cent, respectively.

"The export growth to Thailand, the largest pangasius importer in ASEAN, is a good signal to increase the pangasius export value to this region in the next quarter," said Hoe.

In addition, the US market also increased imports of Vietnamese pangasius from the beginning of 2021, according to the association. In May, Viet Nam’s tra fish export value to the US increased by 120 per cent over the same period last year, reaching more than $35 million. Since the end of 2020, the inventory of pangasius in the US has been limited. Meanwhile, the domestic catfish production has also declined. Therefore, the US has increased imports of frozen tra fish products from the beginning of this year.

The total value of pangasius exports to Hong Kong in the first five months reached $146 million, accounting for nearly 24 per cent of Viet Nam's total pangasius export value. This market returned to the list of largest pangasius export markets for Vietnamese tra fish products, VASEP reported.

The pandemic has had a significant impact on the sales strategy of Vietnamese seafood enterprises. Besides reducing trade activities due to the social distancing policy in many countries, high transportation costs and the shortage of containers have also had great impacts on Viet Nam’s seafood exports, it said.

This forces the local seafood processing and exporting enterprises to change their sales strategies to keep customers and overcome difficulties during this period, according to VASEP.

Truong Tien Dung, general director of the Saigon Seafood Trading Joint Stock Company (APT), said the company’s exports of pangasius and catfish products in the first five months of this year increased by 10 per cent over the same period in 2020.

To achieve this result, APT must actively discuss with customers to produce products according to demands of the export market, instead of offering products that the company produces. Therefore, it has enhanced production of new processed products from pangasius and catfish.

According to Ong Hang Van, deputy general director of the Truong Giang Seafood Joint Stock Company in Dong Thap Province, in the context of COVID-19, many seafood businesses have also changed their trading methods with partners.

Instead of signing CIF contracts that the local enterprises have delivered goods at the port in importing countries, the enterprises have signed FOB contracts, in which the enterprises deliver goods at ports in Viet Nam. With this method, the importers must take care of transporting Viet Nam’s export goods to the importing countries.

The Ministry of Industry and Trade’s Import-Export Department also forecasts that Viet Nam's seafood exports by year end will continue growing due to increasing demand in the US and EU markets.

After increasing 22 per cent to $749 million in April 2021, Viet Nam's seafood export continued to surge by 24 per cent in May to $790 million. This export value in the first five months of this year rose by 14 per cent to reach $3.27 billion.

Although the economic recovery in the EU market is slower than that of the US, consumption demand is recovering because the pandemic is being controlled gradually. European importers tend to be more interested in Vietnamese seafood suppliers due to tariff advantages from the EVFTA and stable raw materials, according to VASEP.

Viet Nam's seafood export value to the EU in May increased by 30 per cent to $95 million. The export value in the first five months reached $380 million, up 15 per cent over the same period last year.

For the US market, the implementation of the COVID-19 vaccination campaign along with economic stimulus package of the US Government have encouraged quick recovery of seafood consumption demand in this market. The higher seafood demand is not only in retail but also services, restaurants, hotels and entertainment after a period of social distancing due to the pandemic. The market has higher demand for shrimp, tuna, salmon, pangasius, squid, octopus, crabs and molluscs such as clams and mussels.

In addition, Viet Nam’s seafood exports to countries with free trade agreements also increased sharply in the first five months, including to Australia (65 per cent), Canada (12 per cent), and to the UK (17 per cent). These markets are expected to play a significant role in promoting Viet Nam's seafood export growth in 2021 and beyond.

Textile and garment companies struggle in fourth Covid-19 wave

Most textile and garment companies in the country have received large orders for the second half of the year but the fourth Covid-19 wave is threatening to hinder production.

According to the Ministry of Industry and Trade, textile and garment orders increased significantly after the Covid-19 pandemic was brought under control in the United States, the European Union and Japan, some of Vietnam’s main importers of textile and garment products.

The manufacturing index of the textile and garment sector in May 2021 rose 2.2% from the previous month and 10% compared with the same period last year. From January to May, the index grew 8.1% year-on-year.

The country exported over US$12 billion of textile and garment products in the first five months of the year, increasing 15% year-on-year.

However, textile and garment companies are struggling with disruptions caused by the ongoing fourth Covid-19 wave, which began on April 27.

Vu Duc Giang, chairman of the Vietnam Textile and Apparel Association, said at least 45 textile and garment companies had to suspend their operations over the past two weeks. They are facing a number of problems including rising costs, salary payments to maintain the staff and compensation for customers in case of late shipments.

“If a textile and garment company has to shut down for 14-21 days, its production plan for the entire year may be ruined,” he said.

Le Tien Truong, chairman of the Vietnam National Textile and Garment Group (Vinatex), said even if textile and garment companies remain operational, they may not be able to maintain their workforce as workers staying in areas under lockdown or social distancing are not allowed to travel to the workplace. This can cause a loss of billions of dollars and affect the reputation of the Vietnamese textile and garment sector.

Nguyen Xuan Duong, chairman of the board of Hung Yen Garment Corporation, said the Government should accelerate Covid-19 vaccination for workers of industrial parks and export processing zones, especially in current hotspots such as Bac Ninh, Bac Giang, HCMC and Hanoi. These hotspots are also home to many industrial parks and export processing zones.

Enterprises under Vinatex said they are willing to use their own money to vaccinate their workers against Covid-19. The cost is estimated at VND100-200 billion.

 

“We hope the Covid-19 vaccination will be prioritized for workers in the textile and garment sector so that we can stabilize our production in the coming time,” Duong said.

Quang Tri seeks to build VND7.7-trillion expy

The Quang Tri government has proposed the prime minister and the ministries of Transport and Planning & Investment add the Cam Lo-Lao Bao expressway project to the country’s expressway development plan in the 2021-2025 period, with a vision toward 2030, at a cost of VND7.7 trillion.

The expressway project connecting Cam Lo District with the Lao Bao international border gate in Huong Hoa District will be 70 kilometers long and 17 meters wide and have four lanes.

Some 28.3% of the total investment of the project, which will be executed under the public-private partnership, is expected to be sourced from the State budget, the local media reported.

The construction of the expressway is aimed at helping to link economic zones and key traffic routes, enhance transport capacity and promote socioeconomic growth.

It is necessary to develop the expressway to ease the burden on National Highway 9 connecting Dong Ha City and the Lao Bao border gate and stimulate export-import activities, said the provincial government.

Over the past few months, the number of vehicles, mainly container trucks, using the national highway to transport goods between Vietnam and Laos has surged.

In 2020, the value of imports and exports through the Lao Bao and La Lay international border gates reached US$379 million with 1.28 million tons of goods. Besides, over 17,000 shipments of goods weighing 1.5 million tons were transited at the Lao Bao international border gate.

Quang Tri Province is forecast to see a boom in import-export activities in the 2021-2030 period.

HCMC’s 2020 revenue from land use fees lowest since 2015

HCMC collected only VND7.6 trillion in revenue from land use fees in 2020, the lowest since 2015, according to a report by the HCMC Real Estate Association (HoREA).

HoREA cited statistics from the HCMC Tax Department to state that the revenue from the land use fees was only higher than the VND6 trillion in 2014 and much lower than that of other years in the past decade, news site VnExpress reported.

The revenue was equal to a third of the figure in 2017 and half of that of 2019 although the market was experiencing a slowdown in 2019.

From 2015-2018, the real estate market recovered strongly after a recession period with abundant supply and the land use fee revenue hit VND15.7-21.7 trillion.

HoREA attributed the decline in the land use fee revenue in 2020 to the plunge in housing supplies and the Covid-19 pandemic, which hindered the development of new projects.

HoREA Chairman Le Hoang Chau said the revenue from the real estate market and land use fees reflected the developments of the local property market over the past decade.

The total land use fee revenue from 2011 to 2020 reached VND125.27 trillion, accounting for only 4.26% of the city’s budget revenue. The land use fee revenue plummeted in the 2011-2014 period as a consequence of the market’s recession in previous years.

From 2014, the market recovered, so the land use fee revenue increased, hitting over VND16 trillion in 2015, up 2.66 times over that of 2014.

Proposal to suspend domestic flights to Phu Quoc disapproved

The provincial government of Kien Giang decided not to endorse the suspension of domestic flights to Phu Quoc Island as previously suggested by the island city’s authorities, said a local official.

The provincial government on June 9 chaired a working session with departments, the government of Phu Quoc City, representatives of the Kien Giang Maritime Administration, the Southern Airports Authority and four local carriers that operate flights to Phu Quoc.

Nguyen Luu Trung, chairman of the provincial government, told Thanh Nien newspaper that the province made the decision after evaluating the Covid-19 development in the region, reviewing efforts to fight the disease over the past period, collecting feedback from the relevant agencies, as well as following the anti-virus guidelines of the Government and the Ministry of Health.

The Mekong Delta province will continue to tighten control over people entering Phu Quoc by air and by sea, ensuring that no virus-hit individuals from other localities spread the disease to residents of the island.

Air passengers visiting Phu Quoc have to show a negative Covid-19 test certificate conducted 24 hours prior to their departure. Or else, local competent forces will perform a Covid-19 test for the passengers and the latter will have to cover the testing fees.

As for air passengers coming from areas under lockdown in line with the prime minister’s Directive 16, they will be subject to a 21-day mandatory quarantine period.

Passengers traveling to the island by sea are required to make health declarations and scan the QR code at wharves to check in. The Kien Giang Maritime Administration was told to ask the operators of ships and ferries to collect adequate and accurate information from passengers when tickets are sold to them.

Earlier, the government of Phu Quoc Island on June 4 had written to the provincial government proposing the suspension of domestic flights, especially those from Covid-19-hit provinces and cities, to prevent the spread of the disease.

Freight costs weigh down on disrupted businesses

Vietnamese businesses are reeling under financial stress as ocean-freight costs soar to a new record level, hindering local exporters’ ambitions to further expand in foreign markets. 

Phan Van Viet, chairman of jeans and khaki producer Viet Thang Jean Co., Ltd. (VitaJean), said that the costs to ship goods in a shipping container have tripled during the global health crisis. The rate for a container from Vietnam to Europe has risen from $3,000 pre-pandemic to $10,000 last month, the highest on record. This has caused several obstacles for VitaJean’s export activities to overseas markets.

Viet further noted that despite rising shipping-container rates, the company could not increase selling prices with the contracts already signed before. High ocean-freight rates discourage customers to place new orders while some make slower payments than usual. As the situation continues to deteriorate, it is likely to weigh on the firm’s profit margin this year.

Meanwhile, Nguyen Dinh Tung, general director of fruit exporter Vina T&T Group, told VIR, “We have dealt with the challenges caused by rising ocean freight rates since July last year. This year, the company has to pay $6,000 per container to export its goods from Vietnam to the United States, which is three times higher than the rate of $1,800-2,000 last year. Headwinds in ocean freight result in several challenges including rising expenses and higher prices, which in turn lowers the competitiveness of made-in-Vietnam products.”

Although international carriers raise the freight rates, there is still strong demand in the market. Many companies accept higher fees to export their products from Vietnam to the US and Europe. While this trend hurts exporters and importers, ocean carriers are enjoying growing profits.

“While companies are struggling with the difficulties from another major outbreak in Vietnam, the rise of seaborne-freight costs sees no sign of cooling down. Thus, I hope that the government can work with foreign ocean carriers to address this problem soon,” Tung added.

According to the Vietnam Logistics Association (VLA), the spike in ocean freight rates comes from the fluctuating supply and demand in the market. US and European importers are ramping up the restocking of goods to serve the surging consumption demand. Meanwhile, the pandemic has disrupted the trade flow and affected the turnaround time of container vessels, which results in a shortage of empty containers. Thus, freight costs are projected to wind down when the demand for imports go down.

According to data from container liner Maersk, due to the pandemic there was a precipitous drop in the demand for container services in the second quarter of 2020. The demand plunged from 2.2 per cent in the preceding quarter to minus 8.3 per cent.

Starting from the second half of 2020, the restocking in the US and Europe has been raising demand whilst global measures to contain the pandemic have been causing severe strains across the supply chain, from a lack of vessels, containers, and trucks to significantly reduced productivity across ports, warehouses, and inland terminals.

And on top of these bottlenecks in the global supply chain, issues like the Suez Canal blockage and Yantian Port closure continue to put pressure on supply chains. A spokesperson from Maersk explained that the current market situation is exceptional. The current supply/demand picture has caused freight rates to spike, also driven by increased network costs from less efficient vessel operations, steep increases in charter rates, and box prices as well as alternative solutions to support customer supply chains.

“Equipment supply and the repositioning of empty containers remains a concern, but to further lessen the impact on our customers’ supply chains, given the extraordinary market conditions triggered by the global pandemic, we are accelerating the injection of new dry containers into our fleet,” she added. “By the end of the second quarter, we will have added around 260,000 twenty-foot equivalent units (TEU). This comes after the 400,000 TEUs already added to our fleet from July 2020 to January. We also have deployed all available vessels in our fleet and chartered in all available capacity.”

The Drewry World Container Index released on May 27 showed the rate for a 40-foot container from Asia to the Europe shot above $10,000 for the first time on record. Industry insiders predict that the trend of high freight costs will continue to the third quarter of 2021, impacting exporters’ business results.

Targets being tweaked by prepared pharma

There remains caution over interruption in the ingredient supply chain in Vietnam’s lucrative pharmaceutical industry, but new strategies to intensify growth potential ahead will ensure pharma groups maintain their profitability moving forward. 

According to financial statements from Vietnamese pharma titans like DHG Pharmaceutical JSC, Traphaco JSC, and Imexpharm Pharmaceutical JSC (IMP), there were strong rises in both revenues and profit in the first months of 2021.

DHG, the biggest publicly-traded drugmaker, made consolidated revenue of $50 million, up from just over $40 million in the same period last year. Consolidated after-tax profit hit $8.87 million, up 15.24 per cent on-year.

Similarly, Traphaco, the country’s second-largest publicly-traded drugmaker, saw on-year rises of 20.87 per cent and 34.06 per cent in consolidated revenue and consolidated after-tax profit respectively during the period. IMP, Vietnam’s fourth-biggest, witnessed a 23.1 per cent on-year increase in before-tax profit in the first four months, while its net revenue rose 9 per cent.

To adapt to the pandemic and prepare for the long-term future, DHG, Traphaco, and IMP are building new strategies. Traphaco, which now has South Korean leadership, aims to achieve a strong growth rate in 2021-2025 by continuing to increase the market share of the eastern medicine segment, while investing more in development of the western medicine business with support from South Korean shareholders. The drugmaker will intensify cooperation and partnership, especially with South Korean pharma firms, while accelerating tech transfer. Traphaco now boasts three big shareholders – State Capital Investment Corporation (35.67 per cent), Magbi Fund Ltd. (24.99 per cent), and Super Delta Pte., Ltd (15.12 per cent).

In 2021, South Korea’s Daewoong will boost transfer of technology for production of western medicines for Traphaco, with the figure reaching 70 products by 2025, focusing on cardiovascular, diabetes, and digestion drugs which target the ethical drugs channel (ETC), with a vision for future export. Traphaco expects that cooperation with Deawoong will produce revenue from 2022.

Traphaco now has strong advantages in nationwide distribution and rich experience in distribution of over-the-counter products – however, growth in this segment has tended to mature. Meanwhile, the ETC has strong growth potential, although this segment saw a fall in 2020 as COVID-19 decreased the number of patients at hospitals.

Tran Tuc Ma, general director of Traphaco said, “We define that 2021 is the year of standardisation of all processes. We are focusing on upgrading and improving inefficient processes, while strengthening the core advantages”.

Traphaco is not the only group to see high potential of the western medicine channel. DHG is setting the goal of continuing to expand business over the next few years to retain its position as Vietnam’s largest generic pharmaceutical company.

It has equipped two production lines meeting Japan-GMP standards, and certified by the Japan Pharmaceuticals and Medical Devices Agency. Currently, Vietnam has only three enterprises with their production lines meeting the same standards – DHG Pharma, Rohto-Mentholatum, and Mekophar. With these lines, DHG aims to boost domestic sales and exports to 14 international markets, as well as outsource for Japanese pharma partners. The company’s main foreign shareholders are Japan’s Taisho (51.01 per cent) and FTIF - Templeton Frontier Markets Fund (2.83 per cent).

Elsewhere, IMP is seeking EU-GMP recognition for its IMP 4 factory in a move to venture further into the ETC segment. However, the proposal may be delayed till 2023. According to SSI Securities Corporation (SSI), IMP has recently decided to send most of antibiotic products to bids for the hospital channel, while enhancing research and development activities on new functional foods.

SK Investment Vina III Pte., Ltd. is now the biggest foreign stakeholder at IMP with 24.02 per cent, followed by KWE Beteiligungen AG at 15.13 per cent.

Driven by a strong rise in profit in 2020, Traphaco, DHG, and IMP set higher targets for 2021. Industry insiders said that some targets are ambitious in the context that pharma firms in the overall picture have been facing challenges in growth in recent years as shown in statistics from financial database analysts Finn Pro, which has gathering information from 37 of the 61 listed pharma firms, accounting for 50.9 per cent of market capitalisation.

According to SSI, the COVID-19 outbreaks are placing worries on rising prices of active pharmaceutical ingredients (API). At a recent shareholders’ meeting, IMP raised their concerns over rises in API costs in the first quarter due to shortfalls in supply from India, the world’s second-largest API producer.

“IMP’s inventories can be enough for three months of production. The impact from a rise in ingredients costs may happen in the second half of 2021,” said SSI expert Nguyen Ly Thanh Luong.

Nonetheless, growth potential remains high. According to an IBM Market Research forecast, revenues in the Vietnamese pharma market will reach $7.7 billion in 2021 and $16.1 billion in 2026 with a compound annual growth rate of 10.6 per cent.

Eight wind power plants in Soc Trang to be finished by October

Contractors building eight wind power plants in Soc Trang province have promised to speed up work so that they can begin generating electricity before the end of October.

Pham Quoc Hung, Director of Quoc Vinh Soc Trang Wind Power Co., Ltd., said his company’s plant in Vinh Chau township, to have an output of 30MW in its first phase, would have its turbines put together on site in June and begin commercial operation in September.

The seven other plants, being built in the town along the coast, are 30-70 percent completed and will begin operating in September or October.

Eight wind power plants in Soc Trang to be finished by October hinh anh 2
A way leading to some wind turbines at sea under construction in Soc Trang province (Photo: VNA)
Speeding up the work would mean the national grid would have access to this clean energy sooner, according to Lam Van Man, Secretary of the provincial Party Committee.

The wind power turbines could themselves become tourist attractions, he added.

Soc Trang has around 72 kilometres of coast with constant strong winds, suitable for generating power.

It plans to have 20 wind power plants in all with a total output of 1,435MW.

Sixteen have been approved, with nine of them now under construction./.

Businesses struggle with rising costs during COVID-19

Many businesses have closed down or are struggling with rising overheads due to COVID-19.

From January to the end of May, nearly 60,000 businesses around the country closed. As many as 31,800 of them closed temporarily, while the rest were dissolved or are in the process of dissolution.

Many others are struggling with rising production costs.

Ly Kim Chi, chairwoman of the Food and Foodstuff Association of Ho Chi Minh City, said that since the start of the year businesses have been struggling with rising costs for raw ingredients such as condiments, rice and seafood.

Production materials and items like packaging and rubber gloves have also risen in cost.

Do Van Khuol, supply director of the Saigon Food Company, said that COVID-19 was driving up the cost of imported ingredients, and prices could rise by 10-25 per cent in the third and fourth quarters.

Last month the Vietnam Association of Seafood Exporters and Producers called for HCM City to delay its plan to charge extra fees for using seaport infrastructure works and utilities.

The city planned to begin doing this from July 1 to raise funds to upgrade seaport infrastructure.

The association proposed delaying that plan until at least 2022.

If the plan begins in July, businesses will face a serious financial burden on top of existing problems such as rising sea transportation costs and falling purchase demands, according to the association.

Although HCM City’s seaports play a key logistical role in transportation within the southern region and the Mekong Delta, traffic infrastructure for the seaports is still underdeveloped, leading to frequent congestion and high logistics costs.

Chi said that the next few months will see businesses importing a high volume of raw ingredients.

Businesses have asked that the proposed seaport fees be lowered so they can recover and improve competitiveness more easily, she added.

Businesses are also asking the Ministry of Industry and Trade to facilitate cooperation between them and e-commerce platforms to boost their business activities./.

Source: VNA/VNS/VOV/VIR/SGT/Nhan Dan/Hanoitimes

VIETNAM BUSINESS NEWS JUNE 12

VIETNAM BUSINESS NEWS JUNE 12

Economic growth to slow down in Q2, but production keeps rising

 
 

Other News

.
China resumes importing Vietnamese dragon fruit, bananas
China resumes importing Vietnamese dragon fruit, bananas
BUSINESSicon  10/09/2021 

China has agreed to resume importing Vietnamese dragon fruit and bananas through the Kim Thanh International Border Gate in Lao Cai province following a hiatus due to COVID-19.

Digital transformation to increase productivity: the only way to not lag behind
Digital transformation to increase productivity: the only way to not lag behind
FEATUREicon  10/09/2021 

At Garment 10 Company, productivity increased exponentially after new technologies and digitalization of the production line were applied.

Welcoming visitors with "vaccine passports"
Welcoming visitors with "vaccine passports"
FEATUREicon  10/09/2021 

Van Don international airport in Quang Ninh province was selected to welcome the first visitors with a "vaccine passport" on September 4. 

Vietnamese households to spend more on food
Vietnamese households to spend more on food
BUSINESSicon  10/09/2021 

The average Vietnamese household will spend 20.8 per cent of their total household budget on food in 2025, marginally increasing from 20.1 per cent in 2005, according to global financial services provider Fitch Solutions.

Two out of five Vietnamese consumers will abandon long online banking account applications
Two out of five Vietnamese consumers will abandon long online banking account applications
BUSINESSicon  10/09/2021 

Vietnamese consumers expect a seamless banking experience when it comes to opening an account via a mobile app or website, with two in five expecting to answer 10 questions or less or they will abandon the process.

NA Deputy warns of property bubbles
NA Deputy warns of property bubbles
BUSINESSicon  10/09/2021 

State Bank of Vietnam Governor Nguyen Thi Hong has sent a document replying to Ha Sy Dong, a National Assembly Deputy from the central province of Quang Tri, who spoke about property bubbles at the first session of the 15th NA on July 25.

Hanoi enterprises resume operation, but with high caution
Hanoi enterprises resume operation, but with high caution
FEATUREicon  10/09/2021 

The enterprises in yellow and green zones of Hanoi have been asked to continue anti-pandemic measures during the production process. The ‘three on the site’ model (work, eat, stay) is being used in high-risk zones.

Garment-textile, footwear may take long time to recover: insiders
Garment-textile, footwear may take long time to recover: insiders
BUSINESSicon  10/09/2021 

Viet Nam’s garment-textile and footwear sectors have endured the brunt of COVID-19 and firms may take a long time to recover, experts said.

VN industrial, logistics real estate a resilient asset class: analysts
VN industrial, logistics real estate a resilient asset class: analysts
BUSINESSicon  09/09/2021 

Demand for e-commerce and pharmaceuticals ensure that the industrial and logistics real estate segments remain the most resilient asset class in 2021, experts have said.

VIETNAM BUSINESS NEWS SEPTEMBER 10
VIETNAM BUSINESS NEWS SEPTEMBER 10
BUSINESSicon  10/09/2021 

VN-Index bounces back on blue chip recovery

Vietnam to issue a tax decree on cross-border e-commerce
Vietnam to issue a tax decree on cross-border e-commerce
BUSINESSicon  09/09/2021 

Vietnam intends to issue a new decree to regulate cross-border e-commerce deliveries amidst the e-commerce boom.

State Bank agrees to extend debt rescheduling for six months
State Bank agrees to extend debt rescheduling for six months
BUSINESSicon  09/09/2021 

The State Bank of Vietnam (SBV) has agreed to extend debt rescheduling for customers for a further six months.

VIETNAM BUSINESS NEWS SEPTEMBER 9
VIETNAM BUSINESS NEWS SEPTEMBER 9
BUSINESSicon  09/09/2021 

Wood exports plummet as amid virus outbreak

Food prices in Vietnam the cheapest in Southeast Asia
Food prices in Vietnam the cheapest in Southeast Asia
BUSINESSicon  09/09/2021 

According to a report by iPrice, grocery prices in Vietnam are among the cheapest in Southeast Asia after comparing prices for groceries in Southeast Asia from Numbeo.

Plans afoot to push production ahead
Plans afoot to push production ahead
BUSINESSicon  08/09/2021 

Domestic production has been hit hard this year, with numerous enterprises facing greater woes and leaving the market. However, the situation could be eased by a new special taskforce established by the prime minister.

Longer-term FDI strategy in need of situational tweaks
Longer-term FDI strategy in need of situational tweaks
BUSINESSicon  09/09/2021 

The pandemic is forcing a number of factories to either stop operations or pare down capacity, which has increased pessimism about the short-term outlook of Vietnam’s business environment.

Businesses in green zones resume operation
Businesses in green zones resume operation
FEATUREicon  09/09/2021 

With control loosening, businesses in green zones in Hanoi will be able to restart their production and business activities. But they fear that control may tighten again if the outbreak gets worse.

Jan-Aug period sees 24 wind power plants commissioned
Jan-Aug period sees 24 wind power plants commissioned
BUSINESSicon  08/09/2021 

Twenty-four wind power plants with a combined capacity of 963 MW began commercial operations in the year to August, according to the Vietnam Electricity Group (EVN).

Driving force needed for economic recovery in HCMC after Covid-19 pandemic
Driving force needed for economic recovery in HCMC after Covid-19 pandemic
BUSINESSicon  09/09/2021 

A research team from the University of Economics and Law under the National University of Ho Chi Minh City, on September 6, announced the result on the topic "Creating the driving force for economic recovery in HCMC in the fourth wave of Covid-19".

Local auto industry needs support amid pandemic
Local auto industry needs support amid pandemic
BUSINESSicon  08/09/2021 

Domestic automobile manufacturers have urged the Ministry of Finance to revise criteria for production capacity so as to enjoy a preferential tax incentive policy for imported automobile parts.

 
 
 
Leave your comment on an article

OR QUICK LOGIN