VIETNAM BUSINESS NEWS JUNE 30

Australia reduces coffee imports from Vietnam

VIETNAM BUSINESS NEWS JUNE 30

Vietnam’s coffee exports to Australia made up 13.08% of Australia's total coffee imports during the opening four months of the year, much lower than the figure of 19.02% recorded in the corresponding period of 2020, according to the Ministry of Industry and Trade.

Data released by the International Trade Center indicate that Australia imported 35,520 tonnes of coffee worth US$162.93 million throughout the reviewed period, representing annual rises of 7.2% in volume and 24.6% in value.

The average import price of coffee in the Australian market surged by 16.2% to reach US$4,587 per tonne compared to last year’s corresponding period.

The International Trade Center said Australia imported 9,730 tonnes of coffee worth US$26.83 million from Brazil during the four-month period, up 26.5% in volume and up 26.8% in value, making up 27.4% of its market share.

While Australia increased coffee imports from the majority of suppliers, it reduced imports from the Vietnamese market. Data show it consumed 4,650 tonnes of coffee from Vietnam worth US$7.9 million, dropping 26.3% in volume and 29.8% in value.

Australians have consumed more coffee during the pandemic time as they are required to stay at home due to lockdowns, a fact that presents greater opportunities for businesses to boost their coffee exports to Australia, according to experts.

More opportunities than risks on the stock market: expert

Despite worries that Viet Nam’s stock market might correct in the near future after growing dramatically, experts believe that there are more opportunities than risks for investors.

The market benchmark VN-Index on the Ho Chi Minh Stock Exchange (HoSe) closed Monday at a historic high of 1,405.81 points. The index has soared since the beginning of the year, up nearly 25.5 per cent and continuously hit new highs.

According to Ta Thanh Binh, Director of Stock Market Development Department under the State Securities Commission of Vietnam (SSC), the market’s rally is normal as it corresponds to the global trend.

“The gain has not only occurred on Viet Nam’s stock market, but most major stock markets in the world have experienced strong increases since early 2021,” Binh said in the “Stock market and forecast” talkshow, hosted by Kinh te va Du bao magazine on June 28.

“As of June 15, the US market climbed 12.4 per cent, the UK market rose by 10 per cent, and the French market jumped by 19 per cent. Countries in Asia such as Korea, Thailand and Japan, all posted gains of over 10 – 12 per cent compared to the beginning of the year.”

The stock market moves ahead of the general economy. Therefore, the recent strong rallies of the market show investors' expectations for the recovery of the economy as a whole post-pandemic.

The global market was reinforced by recoveries of big economies like China and US as they have contained the pandemic, helping to strengthen investors’ confidence.

Similarly, the local stock market was also supported by the country’s macro-economy with positive readings in the first five months of this year. Accordingly, export growth was more than 30 per cent, while credit rates remain at low levels.

Cash flow into other assets like real estate or cryptocurrencies had slowed due to policies from the Government to control these sectors, leading to an increase of investment into the stock market, Binh added.

The market liquidity surged recently with some sessions witnessing trading value of more than US$1 billion.

Another factor supporting the market’s rally is listed companies’ good performance during the pandemic. Despite the general picture that many enterprises lost profits or even filed for bankruptcy, listed companies still posted positive results in the first quarter.

“Instead of disruptions like the previous outbreaks, some companies said that they even received more orders in the ongoing fourth wave of COVID-19. They are just short of workers,” Phan Duc Hieu, deputy director of Central Institute for Economic Management (CIEM), said at the event.

Data showed that listed companies’ revenues and profits grew 10.9 per cent and 66.8 per cent, respectively, in the first quarter.

In addition, the participation of individual investors is also considered the driving force for the bullish market. However this is also a predictable trend in the market, Hieu said.

“The stock market has attracted more individual investors during the pandemic as many people have to stay at home or lost their jobs, so they want to earn money through stock investment.

“But because they are untrained investors, their orders rely on their instincts, causing uncertainty in the market,” Hieu added, recommending these investors should attend classes or learn about the market before joining to reduce risks for themselves and the market.

Bullish months ahead

While the market is thriving and local investors jumped in, foreign investors have seemed to be reluctant to step in as they kept net selling. However, the head of the Stock Market Development Department doesn’t see it as a negative signal.

“Foreign investors net sold stocks, but net bought bonds. There was just a change in their portfolios. Moreover, it was just net selling, not withdrawing,” Binh said.

In May, the net selling force from foreign investors was high, but it was just at an average level compared to other markets in the region, she added. “For example, while they net sold $497 million on Viet Nam’s stock market, the number was US$1.1 billion on Thailand’s market, $2.1 billion on Taiwan’s market and $7.97 billion on the Chinese market.”

As the fundamental factors are still intact, Binh is optimistic about the market in the next six months.

“With macro-economic policies, listed companies’ inner strength, the attractiveness of the stock market and cash outflows from real estate and the crypto market, there are more opportunities than risks for investors,” Binh said.

Surging stocks in the previous rallies will certainly correct, but the overall market is still up, she added. 

Vietnam Airlines plans to raise additional VND8 trillion ($347.8 million)

Vietnam Airlines will seek the approval of its upcoming shareholders' meeting in July to sell stocks to raise VND8 trillion ($347.83 million).

In case the plan is successful, Vietnam Airlines will regain its position of the Vietnamese airline with the largest charter capital with VND22.183 trillion ($96.5 million).

The national carrier will organise its annual shareholders' meeting on July 14 after multiple delays due to COVID-19 where the management board will put the capital mobilisation plan through the issuance of VND8 trillion worth of shares to current shareholders. Moreover, information related to the VND4 trillion ($173.9 million) credit package from SeaBank, Maritime Bank, and SHB will be also specified at the meeting.

A few days ago, Dang Anh Tuan, head of communications at Vietnam Airlines revealed that procedures were being completed for the VND4 trillion financial support package, saying “The airline will receive the sum in late June or early July.”

News of the life-saving credit package gave a slight rise to the airlines’ stocks on HSX, bumping it up from VND27,100 to VND27,700 ($1.18-1.20).

Vietnam Airlines came into the spotlight about a week ago with a report by the Ministry of Planning and Investment revealing that the company was on the verge of bankruptcy with the estimated losses of VND4.8 trillion ($208.7 million) over this year’s first quarter and VND10 trillion ($434.8 million) during the first half.

Construction of Long Thanh International Airport must be completed before Q2/2025

The investors will have to complete the four component projects of Long Thanh International Airport before March 31, 2025 so that the airport can begin pilot operations in the second quarter.

The deadline was set by Minister of Transport Nguyen Van The for the first phase of the Long Thanh International Airport project. Accordingly, the pilot operation is expected to start in the second quarter of 2025 and commercial operations would start in Q4 of the same year.

The minister urged the Civil Aviation Authority of Vietnam to approve the general construction plan of four component projects before June 8, 2021.

The $16 billion project was kicked off this January, with the first phase including one runway with a length of 4km, taxiways, an apron, and a passenger terminal with other auxiliary works to serve 25 million passengers and 1.2 million tonnes of cargo each year.

Airports Corporation of Vietnam (ACV), the investor of the first phase of the Long Thanh project, is conducting the removal of unexploded ordnances and the erection of a fence until September.

The construction of the passenger terminal will be kicked off in early 2022.

Upon completing all three phases, the airport will have four runways and four passenger terminals. It is designed to handle 100 million passengers and five million tonnes of cargo per year by 2040 as a major international aviation hub in the region.

Malaysia's KAB ventures into Vietnam's renewable energy market

Malaysia-based mechanical and engineering organisation Kejuruteraan Asastera Bhd. (KAB) has inked a deal with Janakuasa Pte., Ltd. via its wholly-owned subsidiary KAB Energy Power Sdn., Bhd. to enter Vietnam’s renewable energy market.

As reported by Focus Malaysia, KAB Energy Power and Janakuasa will form a special purpose vehicle to scoop up the majority stakes in three hydropower plant projects in the country with an aggregate installed capacity of 180MW. The projects have existing power purchase agreements (PPA) with Electricity of Vietnam (EVN) which will expire between January 2030 and 2039. They have commenced commercial operations between 2015 and 2019

Janakuasa, an established private energy investor based in Malaysia and Singapore, is a leading investor in thermal power and renewable energy in Vietnam. Janakuasa has been developing the Ecotech wind farm project since 2015. To date, Janakuasa has over 1,000MW of power projects under construction in Vietnam and a further 300MW of wind and 200MW of mini hydro projects in development.

Janakuasa is teaming up with its partners to construct two power plants in Vietnam, including a coal-fired power plant in Duyen Hai 2 with a capacity of 1,200MW and a wind power plant in Hiep Thanh with a capacity of 78MW. Both are located in Tra Vinh.

“We are proud to be given an opportunity to form a synergistic partnership with Janakuasa as we are able to leverage their experience and knowhow,” said KAB’s managing director Datuk Lai Keng Onn. “Concurrently, with the huge growing demand for electricity in Vietnam, we are confident that our first foray into the Vietnamese market will be successful.”

On the same note, Janakuasa’s chairman Ti Chee Liang pointed out, “Given that Vietnam is ASEAN’s rising star with the most promising economic growth and growing population, demand for energy has increased exponentially.”

Vietnam’s rapid economic growth and growing population is driving demand for new energy. The country’s strong wind and solar resources make it an attractive investment destination for the development of multiple renewable assets in Southeast Asia. Furthermore, Vietnam has set major renewable energy targets seeking to rise from 0.5 per cent renewable energy reliance in 2016 to 25 per cent by 2030.

Following the partnership, both KAB Energy Power and Janakuasa will actively seek to increase its renewable portfolio in Vietnam and support the Vietnamese government to meet its renewable energy targets in the shortest possible time.

Domestic groups prepare for future with M&A transactions

While some foreign funds have stopped considering new investments in the Vietnamese market, domestic real estate businesses are actively acquiring projects and increasing land funds to prepare to invite overseas partners when the pandemic is finally under control.

EXS Capital Group, a specialist private equity fund into real estate business and platforms across Asia, announced that it has put its investment into Vietnamese real estate on hold for now.

Eric Solberg, chairman and CEO of EXS, did not disclose the reason for the move, but it was assumed by market observers that COVID-19 developments have hindered activities in Vietnam and consideration of more investment.

Since it entered the Vietnamese real estate market, EXS has so far poured in more than $200 million into SonKim Land, one of the leading high-end real estate developments in the country.

Meanwhile, Truong Van Viet, vice chairman of Hung Thinh Corporation, told VIR that the company is now calling on other partners to co-develop Hai Giang Merry Land Quy Nhon, the largest tourism complex in the central province of Binh Dinh. However, due to the pandemic, only international partners with offices in Vietnam can reach the corporation to discuss in-depth cooperation. Other significant partners are continuing to wait for re-opening air routes to visit and negotiate for ventures.

In the first half of the year, the real estate market witnessed several exciting mergers and acquisitions (M&A) deals in the land fund and corporate equity.

According to economist Le Minh Hoang, domestic investors have recently been actively expanding their portfolios by M&A deals to prepare for the post-pandemic period.

“This expanded land fund will be a crucial factor for those developers to ensure a stable development strategy in the coming time, and after COVID-19 is fully controlled, foreign partners can resume their investment in Vietnam,” Hoang said.

At the beginning of June, Phat Dat Corporation announced it had completed the purchase of 99.5 per cent shares of Binh Duong Building Development and Investment Real Estate JSC. Phat Dat has the right to own and develop the Binh Duong Tower apartment project located on a 4.5-hectare land plot in Thuan An city, about 20km from Ho Chi Minh City.

Vo Quoc Khanh, CEO of TTC Land, released that the company is carrying out M&A procedures for 300ha of land on Phu Quoc Island. The project could take up the company’s development activities into the next five years.

Currently, TTC Land is developing 11 projects with a total of more than 32ha, located mainly in Ho Chi Minh City, Danang, and Lam Dong province. By 2025, TTC Land wants to expand its portfolios to Dong Nai, Long An, and Phu Quoc.

More M&A deals are expected later this year within domestic groups to ensure a large enough land fund for development.

An Gia Group, for example, plans to spend VND3-5 trillion ($130-215 million) to find land fund for projects in the next three years through M&A, prioritising clean land fund, clear legality, and fast implementation times.

Nam Long Group, meanwhile, expects to spend about VND2 trillion ($86.9 million) each year expanding land funds. The strategic locations that Nam Long targets besides Ho Chi Minh City and its neighbouring provinces are Hanoi, Haiphong, and Can Tho.

Novaland also has an ambitious plan to add around 10,000ha into its current of 5,500ha size in the next decade.

Trang Bui, JLL Vietnam senior director of Markets, said that the real estate market is growing strongly in many areas. Despite being affected by COVID-19, M&A activities are still active, especially from large domestic investors. They focus on collecting land for future development in many segments such as housing, residential areas, and commercial real estate.

For foreign investors, according to Bui, Vietnam is still a strategic market full of growth potential. Some famous developers and investors in Vietnam such as Keppel Land, CapitaLand, Frasers Property, and Gamuda Land are still committed to looking for new projects.

Previously, they focused on investing mainly in the commercial and residential segments, but they are expanding through the industrial zones (IZs) and logistics segments.

Bui forecasts that IZs, warehouses, and factories will continue to have large M&A deals in the second half of the year. “Due to the impact of the pandemic with the policy of distancing and restricting travel, the implementation of M&A deals with foreign funds may take longer to complete, compared to 3-6 months of negotiation as before,” she said.

Vietnam posts trade gap of US$1.47 billion in first half of 2021

Vietnam recorded a trade deficit of US$1.47 billion in the first six months of 2021, data released by the General Statistics Office shows.
Exports were estimated at US$157.63 billion, up 28.4% while imports rose 36.1% to US$159.1 billion.

In the first half of 2021, the United States was the largest buyer of Vietnamese goods, importing US$44.9 billion, followed by China and the EU, which purchased US$24.4 billion and US$19.3 billion worth respectively.

Vietnam’s exports to other major trading partners, including ASEAN, the Republic of Korea and Japan were US$13.8 billion, US$10.5 billion and US$9.9 billion, respectively.

On the import side, China was the largest source of Vietnamese imports at US$53.4 billion, followed by the Republic of Korea at US$25.2 billion and ASEAN at US$20.9 billion.

Vietnam also imported US$10.6 billion worth of goods from Japan, US$8.1 billion from the EU and US$7.7 billion from the US.

In other economic data released by the GSO, the consumer price index (CPI) in June rose by 0.19% as against the previous month but the average CPI in the first six months climbed by only 1.47% compared to the same period last year, the lowest figure since 2016.

The number of foreign arrivals in the first six months of 2021 was estimated at 88,200, down 97.6% year on year, as Vietnam continued to take measures to prevent the spread of Covid-19 and has yet to open its borders to international travel.

Tourism revenues fell 51.8% to VND4.5 trillion (US$195 million), also in part due to less buoyant domestic tourism as social distancing measures were imposed across many localities to curb the resurgence of the virus.

Vaccine strategy determines economic recovery

Vietnam is accelerating the process of vaccination against COVID-19. The successful response, prevention and control of the pandemic will play a decisive role in macro stability and economic recovery in the remaining months of the year.

Vietnam is entering its largest vaccination campaign in history with 150 million doses of the COVID-19 vaccine to be administered to 70% of the population, aiming to achieve herd immunity by the end of 2021 or early 2022.

This campaign will also face many difficulties, including access to the vaccine, the purchase and distribution of the vaccine to people on a large scale and more importantly, the materialisation of a long-term vaccine strategy for the future.

In a meeting with Deputy Minister of Planning and Investment Tran Quoc Phuong, a representative from the World Bank (WB) recommended that, besides efforts to promote growth drivers, vaccination is one of the most urgent responses needed in Vietnam, and the country should attempt to arrange capital to quickly buy vaccines for its people.

Recently, the State has allowed enterprises and organisations to buy and import vaccines while announcing which types of vaccines they can import into Vietnam and assigning the Ministry of Health to provide consultancy and help enterprises during the process.

To implement the vaccine strategy, the Government requires the acceleration of vaccine purchase as soon as possible. In particular, it is important to ensure coordination between the relevant agencies for the smooth implementation of licensing, management, and the quality of vaccines and to prevent competition between private and State agencies.

In fact, people and businesses are willing to join hands with the Government to buy enough vaccines for all the people as demonstrated through the contributions to the COVID-19 Vaccine Fund.

However, it is difficult to buy vaccines in large quantities. Many experts recommend that amid the shortages in the global supply of vaccines and the competition in buying them, Vietnam needs to negotiate with pharmaceutical companies to buy at market prices.

Besides the AstraZeneca vaccine, it is necessary to expand negotiations with Pfizer, Moderna and others while taking advantage of relations with other countries to find vaccines they have yet to use.

Experts have made major recommendations that Vietnam should send a message that it has the financial resources and is willing to buy vaccines at market prices. This is a lesson learned from countries that have successfully conducted vaccination on a large scale by allowing organisations and businesses to buy vaccines, the State having a mechanism to monitor and manage risk to avoid buying fake, poor quality or expired vaccines.

According to economic experts, with the first priority given to ensuring people's health, the key to Vietnam's economic growth will come from the prevention of the spread of the pandemic and speeding up vaccination. The government is taking drastic measures to accomplish this.

Before the fourth outbreak of the pandemic, the GDP growth target for the whole year at 6.5% was already a high target with many challenges. With a GDP growth rate of 4.48% in the first quarter, the GDP growth must reach 7.11% in the second quarter and 6.73% and 7.04% in the third and fourth quarters respectively. However, the negative impacts of the COVID-19 pandemic on industrial production since the end of April have made the second quarter's growth rate lower than the set target.

Dr. Nguyen Duc Kien, head of the Prime Minister’s Economic Advisory Group said that strong vaccine competition on a global scale has made the COVID-19 vaccine a political issue, not just an economic one.

“If we wish the vaccine not to become a political story, we must return to the Party's orientation 15 years ago which stated that external forces are important, but internal forces are decisive. It means we must promote our own vaccine production capacity as aligned with negotiating to buy vaccines and reopening the economy. A lot of analysis around the world predicts that the COVID-19 vaccine will not give immunity for life, but instead will need to be repeated every year. Therefore, if we cannot produce vaccines and have to buy them or rely on aid, the country's pandemic prevention and control results will be affected. It is necessary to speed up the research and production of homegrown vaccines to meet the urgent requirements of both pandemic control and economic recovery and development,” said Dr. Nguyen Duc Kien.

The Prime Minister's Economic Advisory Group has issued a report to the Government on its international experience in applying a wartime production law in relation to the production and supply of vaccines. The report stated that countries such as Russia and the US have all applied wartime laws to produce their COVID-19 vaccines.

Specifically, the wartime law on vaccine production signed by former US President Donald Trump in April 2020 has two important points. The first is that all vaccine manufacturers must stop other production activities to focus on manufacturing according to the orders of government and they will be shut down if they do not follow the law. The second is that pharmaceutical companies are allowed to only carry out trials until the second stage and then they can bring products to market, meaning that the law allows the distribution of the vaccines in parallel with research.

The COVID-19 vaccine policy has been implemented by countries around the world under this state of emergency to give stronger authority to the heads of law enforcement agencies to decide on the urgent policies needed to meet the real requirements of pandemic prevention.

In Vietnam, pandemic prevention and control has seen certain successes. However, to meet the new deadlines, it is necessary to promote a vaccine research and production strategy through a large public investment programme with the participation of the private sector.

IFC provides US$40 million to facilitate SMEs’ post-pandemic recovery

The International Finance Corporation (IFC), a member of the World Bank Group, is providing a US$40 million loan to help small and medium enterprises (SMEs) in Vietnam make a resilient recovery after the Covid-19 pandemic through the Southeast Asia Commercial Joint Stock Bank (SeABank).

This is the first phase of an up to US$150 million financing package, which will help expand lending to SMEs, especially women-owned businesses, increase access to climate finance and boost international trade opportunities.

The package will comprise up to US$80 million from IFC's own account and US$50 million to be mobilized from international lenders, in addition to a US$20 million trade finance line.

While the investment aims to increase SeABank's SME lending portfolio, at least US$20 million will be earmarked for women-owned SMEs, with support from the Women Entrepreneurs Finance Initiative.

With a strategy to expand its reach to women-owned and -led SMEs, IFC's funding will help the bank triple its current lending for women-owned SMEs, accounting for about 25% of its total SME portfolio by 2024.

Climate finance is a new area in Vietnam with a US$753 billion climate investment opportunity between 2016 and 2030 as the country aims to reduce greenhouse-gas emissions by 9% by 2030 to mitigate the climate change impact. IFC is helping SeABank support the country with US$30 million to be allocated for climate-friendly projects.

Further, IFC's support is expected to help SeABank build a US$60 million climate-finance portfolio by 2024.

"IFC's long-term financing and technical advice will enable SeABank to focus on two strategic segments - women-owned SMEs and climate financing. Given the pandemic, IFC's timely investment also allows us to extend support to more businesses at a critical time, while contributing to the stability of Vietnam's overall financial market," said Le Thu Thuy, general director of SeABank.

Besides, IFC's US$20 million trade guarantee line under its Global Trade Finance Program will boost SeABank's capacity to provide financing for importers and exporters to minimize the disruption of trade given the ongoing pandemic.

Automobile companies offer discount pushing its sales to soar

As the Covid-19 pandemic unfolded in early 2020 and lockdowns have been implemented in some cities and provinces in the country, automobile companies had no choice but decreased the prices of cars which pushed its sales to soar.

When the coronavirus disease re-occurred in the Southeast Asian country, automobile manufacturers have offered incentive programs through which they discount the price of a car to their dealers for a promotion period.

For instance, Toyota Motor Corp offered a discount of VND20 million – VND30 million for some cars. Similarly, KIA lowered the prices of two kinds of cars.

Earlier in June, buyers enjoyed a discount of VND200 million if they purchased a BMW 3-Series or an MG-HS as the importer of Subaru decreased retail price for the two kinds. Additionally, it also offered a discount of VND159 million for another car model.

Unlike the time before, automobile manufacturers only offered discounts on "out-of-fashion" lines, but now companies are racing to reduce car models, especially popular models with deeper discounts to stimulate demand, said Ngo Thanh Tri, Sales Department of Ford Dealership Kinh Duong Vuong in Ho Chi Minh City’s Binh Tan District. For example, Ford is applying a strong discount from VND 45 million -VND95 million on the SUV model.

Generally speaking, customers were attracted by deep price reductions; therefore, the car market has shown good signs amid the epidemic. According to the Vietnam Automobile Manufacturers’ Association (VAMA), total sales by the end of May of the whole market increased by 53 percent against the same period last year.

In which, passenger cars increased by 51 percent, commercial vehicles hiked by 56 percent, and specialized vehicles soared by 59 percent over the same period. Particularly, sales of domestically assembled cars increased by 42 percent while imported cars leaped by 69 percent year on year.

Paradoxically, even though the country is trying to reduce prices to sell cars due to concerns about sluggishness and inventories because consumers tighten their spending, imported cars have still flooded into the port.

According to the General Department of Customs’ latest data, Vietnam imported more than 65,736 cars, worth about US$1.5 billion in the first five months of 2021, up 78 percent in volume and 83.1 percent in value compared to the first five months of 2020.

Aside from that, 43,500 cars with nine seats or less were imported in Vietnam, increasing 53 percent against the same period last year. Huynh Le Nguyen, an expert in the auto industry, said the number of imported cars now usually follows manufacturers’ set plan. Presently, it is likely that imported cars will be in stock, waiting for the market to return to normal.

The General Department of Customs’ figure has shown that 6,172 cars of all kinds completing customs clearance procedures into the Vietnamese market in the first 15 days of June, worth US4146 million. Of 6,172 cars, passenger cars with less than 9 seats accounted for 65.6 percent, 1,512 trucks were made of 24 percent.

 

Domestic vehicle manufacturers and assembly companies have spent more than $242 million to import auto parts and components in the first 15 days of June, increasing the industry’s import turnover by more than $2.398 billion from the beginning of the year to June 15.

Business household survey to begin on July 1 

The results will help the Government better assess the current economic state and socio-economic development trend.

The General Statistics Office (GSO) will survey over five million individual business households and 45,000 religious groups nationwide from July 1-31.

This is the second phase of the 2021 national economic census, said GSO Deputy Director General Nguyen Trung Tien on June 29.

In the first phase, which was carried out from March 1-May 30, the GSO collected data from enterprises, cooperatives, administrative units, and associations. In localities, with over 8,000 enterprises, the data collection process is scheduled to complete in August.

“To date, the first phase has progressed as planned with data transferred and stored in the main server of the GSO,” noted Tien, saying IT has been instrumental in ensuring efficiency in the data collection.

Tien said the main objective of the national economic census is to collect data from different economic components, including enterprises, cooperatives, associations, business households, religious groups, and assess their development in terms of quantity, scale, and a number of employees.

Results from the process would help the government better assess the current economic state and socio-economic development trend, which serve as the basis for drafting national development strategies and plans.

The GSO would mobilize around 30,000 staff to take part in the process, he added.

“Collecting timely and accurate data across the country while ensuring data privacy amid the Covid-19 pandemic is a huge challenge, which requires flexible management and safety virus-countermeasures,” Tien stressed.

Vu Thi Thuy from the GSO’s Statistical Data Collection and Information Technology Application Department said in case a business household is being temporarily closed during the survey, statistics staff should contact owners to arrange an appropriate time for an interview.

Carried out every five years, the preliminary result of the 2021 national economic census is set to publish in December 2021 and the final one in the second quarter of 2022.

The 2021 national economic census is one of three important censuses conducted by the statistics sector that will provide comprehensive data on the industry, construction, and service sectors. It also helps to reflect the scale of GDP, the structure of each economic sector in GDP, as an important premise for the calculation of the national GDP data and the GRDP of each locality.

Over 67,000 new businesses established in first half of 2021

In the first half of 2021, Viet Nam recorded more than 67,000 new businesses with a total registered capital of VND942.6 trillion (US$40.84 billion), up 8.1% on year in the number of enterprises and up 34.3% in terms of the registered capital.

This meant the average registered capital per newly established enterprise was VND14.1 billion (approximately US$611,000), representing an increase of 24.2% over the same period in 2020, according to the General Statistics Office (GSO).

Over the reviewed period, 26,100 firms resumed their operations across the country, up 3.9% on year.

In June alone, the number of newly formed enterprises fell by 2.5% from the previous month to 11,300, but the registered capital rose by 9.1% to reach VND164.3 trillion (US$7.11 billion), resulting in the average registered capital per new business at VND14.5 billion, up 11.9% against May 2021 and up 43.3% compared to June 2020. 

In addition, Viet Nam saw 4,867 enterprises returned to operations this month. 

Gov't issues resolution on promoting economic growth, disbursement of public investment

The Government has issued Resolution No. 63/NQ-CP on key tasks and solutions to boost economic growth, disbursement of public investment and sustainable exports in the remaining months of 2021 and early 2022.
The resolution has set out five goals:

1 - Striving to fulfill the major goals and targets set in the National Assembly’s Resolution No. 124/2020/QH14 and the Government’s Resolution No. 01/NQ-CP;

2 - Focusing on controlling and repelling the COVID-19 pandemic, pushing for the realization of vaccination strategy to achieve herd immunity as soon as possible;

3 - Maintaining macroeconomic stability, controlling inflation, and ensuring major balances of the economy; working towards harmonious and sustainable trade balance;

4 - Speeding up the disbursement of public investment from State budget, towards meeting 95-100 pervent of the plan assigned by the Prime Minister at the beginning of the year (striving to reach at least 60 percent by the end of Q3 2021);

5 - Maintaining socio-political stability; ensuring national defense and security; proactively promoting comprehensive and extensive international integration; and maintaining a peaceful environment and creating favorable conditions for rapid and sustainable development.

Nine key tasks and solutions

To realize the aforementioned goals, the resolution has proposed nine key tasks and solutions, including:

1 - Putting high level of focus on combating the pandemic and facilitating socio-economic development;

2 - Maintaining macroeconomic stability and ensuring major balances of the economy;

3 - Fostering decentralization, administrative reform, and digital transformation;

4 - Reviewing and perfecting legal regulations to remove institutional barriers;

5 - Speeding up the disbursement of public investment;

6 - Boosting import and export towards a harmonious and sustainable trade balance;

7 - Taking measures to support people and businesses;

8 - Enhancing the information and communication work to create social consensus, raising the sense of responsibility, self-discipline and activeness in pandemic prevention and control and boosting production and business; strengthening cyberspace monitoring to remove malicious information; and actively fighting and refuting false and distorted views of hostile forces;

9 - Consolidating national defense and security, maintaining political security and social order and safety, improving the efficiency of foreign affairs and international integration, and maintaining a peaceful, stable and favorable environment for national development.

In particular, the Government requests ministries, agencies and localities to strictly implement COVID-19 prevention and control measures under the spirit of “fighting the pandemic is like fighting the enemy” and the motto “5K plus vaccine”, while strengthening the application of technology in the work.

The Government also asks for the harmonious, reasonable and effective combination between disease prevention and fighting./.

Argentina interested in Vietnamese tropical fruits: ambassador

Argentina is interested in Vietnamese tropical fruits, and hopes that Vietnam will help the South American country understand more about the products, Argentine Ambassador Luis Pablo Maria Beltramino has said.
At a recent meeting with Vietnamese Deputy Minister of Agriculture and Rural Development Le Quoc Doanh, the ambassador said Argentina has opened door for Vietnamese lychee, longan, mango and dragon fruit.
 
Highlighting the development of trade in agricultural products between the two countries, he asked that Vietnam create conditions for Argentina’s pork and beef to penetrate the Vietnamese market.

For his part, Doanh said despite difficulties caused by COVID-19 last year, two-way trade still reached 3.95 billion USD, up 4.3 percent against 2019. Argentina is now Vietnam’s third largest trade partner in South America, after Brazil and Mexico.

The two countries have great potential for agricultural cooperation and their products are reciprocal, according to the official.

The deputy minister underlined the imbalance in farm produce trade between the two countries, with Vietnam’s exports valued at only about 3 million USD each year, while its imports from Argentina  is estimated at 3 billion USD, urging the two sides to work together to deal with the imbalance.

Many Vietnamese products can satisfy Argentina’s consumer demands like pangasius, shrimp, tropical fruits and wooden furniture, he said. 
Doanh also suggested the two countries cooperate in agricultural technologies and climate change response./. 

Da Nang’s GRDP up nearly 5 percent in H1The central city of Da Nang posted a gross regional domestic product (GRDP) growth rate of 4.99 percent in the first half of this year, the municipal statistics office said on June 29.

The services sector saw the highest expansion in the reviewed period, at 5.34 percent. The industrial sector and construction gradually recovered, up 2.85 percent and taxes on products surged nearly 8 percent.

Agro-forestry and fishery sector, however, was down 0.08 percent against the same period last year.

In terms of the GRDP scale, the city took the lead amongst localities in the central key economic region, and retained its 16th place out of 63 centrally-run provinces and cities nationwide.

State budget collection of Da Nang had reached 10.7 trillion VND as of June 20, a year-on-year decline of 3.5 percent. Meanwhile, budget spending had neared 15.18 trillion VND, up 7.6 percent compared to the same period last year.

The unemployment rate in the city was 7.27 percent in the first six months of the year. By the end of June, local authorities had allocated more than 501.7 billion VND to support 326,141 people, primarily laid-off workers, small-sized household businesses and policy beneficiaries.

The city has set a target to obtain a growth rate of over 6 percent in 2021./.

Son La mangoes exported to Australia

Twenty-five tonnes of green-skinned mangoes from Mai Son district, Son La province have just been exported to the Australian market.

The export of the first batch of mangoes in this season to the Australian market affirms that Son La's mangoes are reputable and qualified to be exported to fastidious markets.

At the same time, it helps the province improve the reputation of mango quality, ensuring healthy competition in the market, protecting the legitimate interests of producers and consumers, creating a close connection and sustainable development for the Son La mango brand to become a national agricultural product brand.

The province currently has more than 19,000 hectares of mangoes, with output estimated at 65,000 tonnes. The harvest time is from May to August./.

Six-month core inflation drops to lowest level since 2011: GSO

The Consumer Price Index (CPI) rose 1.47 percent year-on-year in the first half of 2021, the lowest since 2016, according to the General Statistics Office (GSO).

The index in June edged up 0.19 percent month-on-month, 1.62 percent against last December and 2.41 percent year-on-year, GSO General Director Nguyen Thi Huong told a press conference in Hanoi on June 29.

The rises are largely due to increases in prices of materials, fuels, electricity and fresh water, Huong explained.

She said core inflation in June inched up 0.07 percent compared to May and 1.14 percent from the same period last year. The figure in the first half of the year rose by 0.87 percent year-on-year. Both June’s and six-month figures are the lowest since 2011.

Based on these figures, it is completely feasible to keep the inflation below 4 percent this year, Huong stressed.

The average fuel price in H1 surged 17.01 percent year-on-year, pushing the CPI up 0.61 percentage point, while rice prices grew 6.97 percent, contributing to a rise of 0.18 percentage point in the CPI, she said.

Prices of construction materials, such as cement, iron, steel, and sand, jumped 5.03 percent, adding 0.1 percentage point to the CPI.

In contrast, H1 prices of food declined 0.39 percent from the same period last year, contributing to a 0.08-percentage-point slide of the six-month CPI. It is because of drops in prices of staples, for example, pork (down 4.15 percent), and chicken (down 2.04 percent).

A decrease of 3.06 percent in electricity price in H1 also made the CPI to edge down 0.1 percentage point.

The COVID-19 resurgence has been curbing travel during the first six months of the year, causing rail tickets and airfares to fall 3.41 percent and 17.05 percent, respectively.

The average gold price spurred 18.06 percent year-on-year between January and June./.

Tien Giang’s industrial production edges up 1.13 percent in H1

The industrial production in the Mekong Delta province of Tien Giang grew by 1.13 percent to over 32.86 trillion VND (1.42 billion USD) in the first half of 2021, according to deputy head of the provincial Industrial Zones Authority Nguyen Thanh Liem.

The province’s industrial parks and clusters are currently home to 186 projects, employing more than 105,000 labourers. Of the number, 84 projects are invested by FDI firms, with total registered investment of nearly 2.98 billion USD.

From January-June, FDI enterprises generated more than 1.37 billion USD in revenues, up 3 percent year on year, while domestic firms’ revenues exceeded 5.67 trillion VND (245.78 million USD).

Those in industrial parks and clusters earned over 1.43 billion USD from exports during the period, a year-on-year increase of 13.67 percent. The growth is quite high, given that the COVID-19 resurgence is ravaging in many cities and provinces nationwide, including Tien Giang, said Liem.

In response to the pandemic, local factories have imposed tighter preventive rules against the virus to ensure safety for their workers while maintaining stable production./.

HCM City assures food supply adequate despite Hoc Mon wholesales market closure

Goods from other cities and provinces that were to be sold at the Hoc Mon District agricultural products wholesale market in HCM City that will be shut for a week since yesterday due to COVID-19 outbreak will now be diverted to Binh Dien and Thu Duc wholesale markets, according to the city Department of Industry and Trade.

Nineteen cases were detected in the Hoc Mon market and more related to it were found in other localities, and as a result the district People’s Committee signed an emergency order suspending delivery of goods there between June 28 and July 4.

To prevent a disruption in the supply of goods, especially food and foodstuffs, the department has instructed modern retail outlets and firms participating in the city’s price stabilisation programme to increase the supply of goods to compensate for the temporary closure of the market.

The department and related authorities have promised to keep a close eye on the market to ensure adequate supply and come up with measures to deliver goods to traditional markets or organise wholesale points for traders at traditional markets.

The city will strengthen mobile sales to ensure adequate supply of essential food products to meet the consumption needs of the city.

The department has worked with businesses and districts to ensure no small trader will abruptly increase the price of goods.

Nguyen Nguyen Phuong, deputy director of the department, said the total volume of agricultural products and foods to wholesale markets on June 27 was more than 6,500 tonnes, the same as normal.

Whatever the situation, authorities and key businesses would ensure supply of goods is always adequate, provided people do not hoard since that would put great pressure on supply, he said.

The department said the 1,962 food supply points (106 supermarkets, 220 traditional markets and 1,636 convenience stores) in the city have stockpiling plans in place to ensure the supply of food and essential items is adequate.

With the largest pork wholesale market in the city having to temporarily shut down, retailers said they had plans to increase pork stock to fully meet demand and not increase prices.

A Saigon Co.op spokesperson said on knowing that the Hoc Mon wholesale market would be temporarily closed, Saigon Co.op had doubled the stock of pork at its Co.opmart, Co.opXtra and Co.op Food.

Similarly, Nguyen Thi Ngoc Thuong, sourcing department manager at Bach Hoa Xanh, said her chain had increased the stock of goods in the city by 180 per cent, with a focus on pork, vegetables, tubers, and fruits.

"We can further increase stocks if needed and offer online shopping and home delivery. We will meet demand.”

A Vissan spokesperson said the company would increase the supply of fresh pork to make up for the shortfall due to closure of the Hoc Mon market.

Hoc Mon is one of the city’s three largest wholesale markets, selling 3,500-4,000 pork, 2,000 tonnes of vegetables and 1,000 tonnes of fruits every day. 

Vietjet sets 2021 revenue target of $945million

Vietjet Aviation Joint Stock Company (HoSE: VJC) targets a consolidated revenue of VND21.9 trillion (US$945million) in 2021, achieving year-on-year growth of 20 per cent.

In particular, Vietjet will strive to achieve an air transport revenue of VND15.5 trillion ($670 million) by the year-end.

These figures were announced at the company's Annual General Meeting of Shareholders 2021 in HCM City on Tuesday.

Such goals will be mainly driven by an exponential increase in cargo revenue, new services in air transport, personnel training and aircraft maintenance and several investments in projects and finance, according to Vietjet.

Vietjet will keep revolving around its customer-focused strategy while striving for innovation and creativity. It is expected to digitalise every service available and operation protocols, growing business while improving its productivity and service quality.

In 2021, it is aiming to have its passenger load factor reaching 80 per cent, on-time performance standing at over 90 per cent, and to serve up to 15 million passengers across its flight network.

Vietjet’s President and CEO Nguyen Thi Phuong Thao said: “As a better future lies ahead, we’ll work hard and relentlessly to make it come closer.”

In his speech at the event, General Director of Civil Aviation Authority of Vietnam Dinh Viet Thang praised Vietjet’s enormous efforts to remove obstacles and sustain its business during the pandemic, especially in abiding by strict COVID-19 prevention regulations.

He said that the company had played an active role in many of the Government’s campaigns including repatriating Vietnamese overseas and airlifting disease prevention equipment.

Deputy Minister of Transport Le Anh Tuan said he believed that Vietjet would be able to stay on this track once the pandemic is over.

During the event, Vietjet shareholders also allowed the Board of Directors (BOD) to decide on a plan to raise charter capital through private placement of shares at a maximum of 15 per cent of the charter capital in order to guarantee sufficient resources for a safe and efficient comeback of Vietjet.

The BOD will also consider a $300 million international bond offering in 2021-22 to allow Vietjet to improve its financial position and to stay on track of sustainable growth.

The shareholders also passed an employee stock ownership plan (ESOP) to issue up to 10 million shares. It is expected to give a boost to innovation and creativity, encouraging the working spirit and employee retention for the sake of Vietjet’s development. 

Actis to invest over US$20 million in An Phat 1 Industrial Park

Actis – a leading global investor in sustainable infrastructure will invest more than US$20 million in An Phat 1 Industrial Park to own 49 per cent of the company’s shares.

Actis and An Phat High-Technology Industrial Park Company Limited (An Phat Complex), a member of An Phat Holdings, have signed a co-operation agreement for the investment. Additionally, the two parties have also signed a Memorandum of Understanding (MoU) to form a ready-built factory and warehouse (RBF/RBW) development joint venture programme worth $250 million.

Under the MoU, the two sides would focus on two areas including the development of industrial parks and RBF/RBW for lease.

Brian Chinappi, Partner and Actis’ Head of Asia Real Estate, said: “The industrial and logistics sector is consistent with our strategy to invest in sustainable infrastructure in growth markets in Asia and globally.

"We see compelling opportunities to pursue our build-to-core strategy in the industrial and logistics sector, reinforced by what we at Actis refer to as the 4Ds: Demographic shifts, Digital disruption, Deficient supply and Demand for yield.

“Viet Nam’s industrial and logistics real estate market is poised for outsized growth given the sustained relocation of manufacturing base from markets like China, strong growth in domestic exports and imports, and an accelerating shift to e-commerce retailing.

"An Phat Holdings has a strong track record in this space, a clear development strategy, and like Actis, it is fully committed to sustainable development. An Phat 1 Industrial Park will be the beginning of our strategic partnership with An Phat Holdings and we are excited to jointly pursue industrial park and RBF/RBW development opportunities on a large scale,” he added.

Dinh Xuan Cuong, Vice Chairman, Chief Executive Officer of An Phat Holdings, said: “This is the first step in the long-term co-operation between An Phat Holdings and Actis, aiming to develop An Phat 1 Industrial Park into a leading, green industrial park in the North.

"For us, this co-operation provides funds and also provides An Phat Holdings with more resources to deploy to new projects and unlock potential of the industrial real estate segment. Along with that, we can improve reputation, product and service quality, and maximise operating capacity of An Phat 1 Industrial Park.”

Actis has a strong emerging markets heritage across Africa, Asia and Latin America, raising more than $19 billion in over 260 investments in the last 20 years. It connects the world’s leading institutional investors with investment opportunities in sustainable infrastructure sectors.

At present, the company has a team of more than 120 investment professionals, working across 17 offices globally.

An Phat 1 Industrial Park is one of its four new industrial parks in Hai Duong Province, with an area of 180 ha in phase 1 with charter capital of VND375 billion. When it comes into operation, An Phat 1 Industrial Park aims to attract 50 – 70 manufacturing plants, creating jobs for approximately 12,000 workers, and reaching a 100 per cent occupancy rate by 2024.

The IP is at the site clearance stage in preparation for construction to begin in July. It is expected that the IP will come into operation and start commercial activities from the fourth quarter of 2021.

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

VIETNAM BUSINESS NEWS JUNE 29

VIETNAM BUSINESS NEWS JUNE 29

Processing-manufacturing industry takes lead in FDI attraction

 
 

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