VIETNAM BUSINESS NEWS OCTOBER 13

Vietnam grasps opportunities to expand agricultural export market

Viet Nam's agricultural products are being exported to more than 180 countries and territories, particularly products moving from the mid-range market to the higher-end segment.

This information was provided at an online trade connection programme with the participation of representatives and business communities of India and three countries of the Greater Mekong Sub-region (GMS), namely Viet Nam, Thailand and Cambodia on Monday.

This formed part of a series of activities of a project to strengthen international integration of small and medium-sized enterprises (SMEs) of India and the GMS countries, towards promoting global value chains and trade between India and the GMS countries, which is financed by the Asian Development Bank (ADB).

Le Hoang Tai, Deputy Director of the Viet Nam Trade Promotion Agency under the Ministry of Industry and Trade, emphasised that farm produce and food were key exports of Viet Nam.

In the first nine months of 2021, Viet Nam earned US$20.1 billion from exporting food and agricultural products, up 10.8 per cent over the same period in 2020. The growth was attributed to a significant increase in both export volume and the value of many agricultural products.

The export markets of Viet Nam's agricultural products have expanded to more than 180 countries and territories. In particular, there is a shift from medium-segment markets to higher segment markets.

Tai said the participation in new-generation free trade agreements and extensive international economic integration brought great opportunities for Viet Nam, adding that Viet Nam could cooperate with India, Cambodia and Thailand to expand export markets for its agricultural products.

Vivek Sharma, General Director of Aarna Agro & Angel Fine Foods, said that the Vietnamese market could utilise equipment serving agricultural production.

Viet Nam had imported many products from India such as cotton, spice products, and especially rice, he added.

Participants expressed their interest in tariffs and import-export procedures of the GMS countries and India. 

Hai Long offshore wind selects consortium to deliver two offshore substations in Taiwan

Yushan Energy, a subsidiary of low carbon energy developer Enterprize Energy, and Canadian independent power producer Northland Power, have selected a Vietnamese consortium led by Semco Maritime and PTSC M&C to construct two offshore substations for the Hai Long 2 and Hai Long 3 wind projects off the coast of Taiwan (China).

The sites will deliver more than 1 GW of green wind energy once they are commissioned in 2025-26. Yushan Energy, a consortium led by Enterprize Energy and Mitsui & Co, are co-developers of the Hai Long Offshore wind portfolio, owning 40 percent, with Northland Power owning 60 percent.

The agreement includes design, engineering, procurement, construction, and commissioning of the two offshore substations. The substation jackets will be manufactured at PTSC M&C’s yard facilities in Vung Tau, a port city in south Vietnam, at the heart of the country’s offshore oil and gas industry. The deal represents the largest offshore substation contract awarded for a Taiwanese project to date, and the first in Vietnam.

The consortium and ISC Consulting Engineers will execute the project from Q4 2021, with offshore installation planned in 2024 and commissioning in 2026. Semco Maritime will lead the consortium with PTSC M&C, cooperating closely with ISC Consulting Engineers as the primary sub-contractor.

90 percent of firms in Binh Duong expected to resume operation in late October

90 percent of firms in Binh Duong expected to resume operation in late October hinh anh 1

The southern province of Binh Duong is striving to have 90 percent of its enterprises resume operations by the end of this month, and 100 percent by the end of this year.

So far, as many as 4,216 firms have applied for “three on site”, “One route, two destinations”, and “three green” working models with 444,496 workers.

Of them, 2,289 enterprises are in industrial parks (IPs) with 314,354 workers, 69 in industrial clusters with 9,109 workers, and 1,858 outside IPs with 121,033 labourers.

The management board of provincial IPs are stepping up vaccinations for experts and workers. They also established mobile medical stations in IPs to ensure workers’ access to medical services as well as safety in production.

Secretary of the provincial Party Committee Nguyen Van Loi also committed all possible support to firms to return to work in safe conditions.

The province has basically contained the COVID-19 pandemic, thus enabling production and business activities to gradually resume. However, many firms are facing such difficulties as a shortage of workers because migrant workers had returned to their home towns during the lockdown period. Rising costs of materials pose another problem. 

Reference exchange rate continues upward trend

The State Bank of Vietnam set the daily reference exchange rate at 23,181 VND/USD on October 13, up 7 VND from the previous day.

With the current trading band of + /- 3 percent, the ceiling rate applicable to commercial banks during the day is 23,875 VND/USD and the ceiling rate 22,486 VND/USD.

The opening-hour rate at commercial banks saw decreases.

At 8:30 am, Vietcombank listed the buying rate at 22,620 VND/USD (buying) and the selling rate 22,850 VND/USD (selling), down 10 VND from October 12.

BIDV also cut both rates by 5 VND from October 12, listing at 22,655 VND/USD (buying) and 22,855 VND/USD (selling)./. 

Vietnamese car market recovers after bottoming out

After a record decline in August, Vietnam's car sales in September have bounced back, a positive sign for the year-end shopping season.

The latest data by the Vietnam Automobile Manufacturers’ Association (VAMA) reveals that a total of 13,537 cars were sold in September, up 52 per cent against August but down 50 per cent on-year.

The sales of passenger cars in September jumped 34 per cent over August to 8,347 units. Commercial vehicle deliveries increased by 108 per cent to 4,886 units while special-purpose vehicles contracted 2 per cent to 304 units.

Deliveries of completely knocked down (CKD) vehicles grew 37 per cent to 7,316 units. Meanwhile, sales of Completely Built Unit (CBU) vehicles surged 76 per cent to 6,221 units over a month earlier.

As of September, the total industry recorded sales of 188,937 units, up five per cent against the same period last year.

TC Motor, the distributor of Hyundai cars in Vietnam, said it sold 4,079 units in September, up 87 per cent from August. Likewise, Vinfast also saw strong growth in the month with 3,497 vehicles sold, up 51.4 per cent compared to August.

In September, Hyundai took the lead in Vietnam's passenger car market followed by Vinfast with 3,497 cars and Toyota with 2,942 vehicles. Mazda held the fourth position with 2,184 vehicles while Ford ranked fifth with 1,359 vehicles.

for the three months left of the year, experts forecast the Vietnamese car market to post double-digit growth compared to 2020 if the pandemic is controlled from now until the end of the year.

In addition, domestic carmakers hope that the government will soon agree to lowering registration fees by 50 per cent to stimulate demand. If the proposal is greenlit, the market could revive to its usual flourishing performance at the end of the year and before Lunar New Year.

Agriculture sector ready to resume production

 The agricultural sector, one of the pillars of the domestic economy, has plans to restore production in the south immediately after the COVID-19 pandemic is controlled.

Pham Van Binh, director of Binh Phuoc Department of Agriculture and Rural Development, said the department had set up a working team to remove difficulties in production, supply and consumption of agricultural products.

Vice chairwoman of the Can Tho City Business Association Nguyen My Thuan said that to restore safe production, localities needed to have a production plan suitable with the pandemic situation there and also ensure close coordination among them. That aimed to reach production and business targets in economic sectors.

Nguyen Phuong Lam, director of the Viet Nam Chamber of Commerce and Industry (VCCI)’s Can Tho branch, said a company could have a factory located in one locality but workforce and raw materials from other localities while its market was also in other places. Therefore, there must be a connection between localities in the southern region with the centre being HCM City.

Deputy Prime Minister Le Van Thanh said the supply chain of enterprise was not only in one province or one region. Therefore, coordination between localities and regions was very important. The Government, localities and businesses all expected to quickly restore production and business.

Nguyen Quoc Toan, director of the Department of Agricultural Product Processing and Market Development under the Ministry of Agriculture and Rural Development, noted that the Government had offered key and effective solutions to restore production, especially Resolution 105 on supporting cooperatives and small and medium enterprises.

The ministry expected this resolution would be implemented quickly in localities so that it could completely revive production in the agricultural sector, Toan said.

One of the priority solutions to restore production at present would be to vaccinate workers against COVID-19. Along with that, mechanisms, policies and solutions supporting people, workers and businesses would be effectively deployed to help them overcome difficulties and restore production in the last months of the year.

However, enterprises said that the pandemic was still unpredictable, so the Government should have an appropriate plan on restoring production.

In order to restore efficiently production, they proposed to have consistency in the method of goods circulation between localities in a province/city and in a region and to prioritise vaccination for employees at enterprises.

At the same time, according to them, the provinces should have an agency receiving direct reports on difficulties and obstacles in production and business from the enterprises.

Vo Quan Huy, chairman of the My Thanh Shrimp Association, said during the recent social distancing period, shrimp producers, traders and processing enterprises faced difficulties in production and trading of shrimp when they had a shortage of labour for harvesting and processing, and difficulties in transporting materials for shrimp farming.

However, from the beginning of September, the production and business of enterprises in Soc Trang Province and the Mekong Delta region have been significantly restored, according to Huy.

Vo Van Phuc, general director of the Viet Nam Organic Fisheries Joint Stock Company, said after easing the social distancing measures, the enterprise had enhanced purchases of shrimp to ensure enough raw materials for production.

According to the Dong Thap Department of Industry and Trade, output of commodities in September was higher than that in the previous month.

Meanwhile, the supply chain of agricultural and aquatic products was maintained during the social distancing period. It could see fast recovery when social distancing measures were eased, especially the supply chain of five key commodities, including rice, ornamental flowers, mangoes, pangasius and ducks. 

VIETNAM BUSINESS NEWS OCTOBER 13

APO funds cold storage equipment for Phu Yen

The Asian Productivity Organisation (APO) and People’s Committee of the central province of Phu Yen signed an agreement on the funding of cold storage equipment package during an online ceremony on October 12.

The activity was within the framework of the APO’s project on improving the capacity of cold storage facilities to help countries ease the impacts of COVID-19 pandemic on farm produce supply chain, which is funded by the Japanese Government.

Accordingly, the APO will fund Kuraban containers and Sea Snow ice makers using Japanese technology worth 57 million JPY for the provincial Department of Science and Technology. The package could prolong the shelf life of fresh food by 3-10 times.

Speaking at the event, Minister of Science and Technology Huynh Thanh Dat said the ministry will partner with APO and sponsors to help Phu Yen implement the project, contributing to its economic recovery post-pandemic.

Chairman of the provincial People’s Committee Tran Huu The expressed his hope that the APO’s funded package will help Phu Yen gradually modernise its seafood exploitation, thus meeting its development goal./.  

Vietnam sees FDI shift to hi-tech industries: Experts

Foreign direct investment (FDI) flows into Vietnam are shifting to hi-tech sectors, Assoc. Prof. Dr. Ha Van Hoi from the UEB-VNU has said.

The FDI from large corporations who own advanced technologies is setting the scene for transfer of technology, know-how and expertise to Vietnamese enterprises to improve their competitive edge and build capacity for local economic sectors, he told an international conference on “Global FDI and Responses of FDI Enterprises in Vietnam in the New Context” held last week.

Echoing Hoi’s view, Assoc. Prof. Dr. Nguyen Thi Minh Nhan from the University of Commerce said studies show that there is a shift in FDI from the textile and garment industry to hi-tech industries, for example, computer and electronics manufacturing.

Hoi made several recommendations to help Vietnam lure more new-generation FDI, saying it is necessary to produce outstanding and competitive incentives to attract high-tech, eco-friendly projects, particularly those building R&D and innovative centres in Vietnam; and to strengthen linkages between foreign and domestic investors and facilitate technology transfer.

The country should also accelerate investment promotion to catch the eye of financially capable and experienced multinationals; keep a close watch on the movement of FDI and technologies into Vietnam to select proper investment projects; and enhance human resources quality, he added.

According to Assoc. Prof, Dr Nguyen Truc Le, Rector of the Vietnam National University (VNU)’s University of Economics and Business (UEB), Vietnam was named among the world’s Top 20 FDI recipients for the first time last year.

The “new normal” may pose various challenges to Vietnam but it also provides the country with many chances, he said, adding that these opportunities have been driven by the government’s highly-regarded effort to keep the COVID-19 at bay and boost economic growth at the same time for months. Vietnam is also taking advantage of new-generation free trade agreements to draw more FDI, he continued.

The launch of new incentives to selectively attract FDI and improve business climate also play a role in enhancing the quality of the FDI, he cited.

Expectation from the EU-Vietnam Free Trade Agreement (EVFTA) and EU-Vietnam Investment Protection Agreement (EVIPA) is driving the FDI from the EU into Vietnam, said Prof. Dr. Andreas Stoffers, Country Director of Friedrich Naumann Foundation for Freedom in Vietnam.

Vietnam is the most attractive destination among ASEAN member states, Stoffers said. Having one of the most liberal economic systems in the region, Vietnam offers appealing conditions for foreign investors to actively do business in the country, he noted, adding that it was not without reason that Vietnam was chosen by the EU to sign a trade pact with./.

Fourth wave of COVID-19 severely affects labour market

The severe and prolonged fourth wave of COVID-19 seriously affected the Vietnamese labour market, pushing the rate and number of underemployed people in the third quarter this year to the highest level in the past 10 years.

The information was released at a seminar held Tuesday in Ha Noi on the labour market in the third quarter of this year, by the General Statistics Office.

“More than 1.8 million people of working age were underemployed in the third quarter of this year, an increase of 700,000 compared to the previous quarter and an increase of 620,000 over the same period last year,” said Pham Hoai Nam, director of the GSO's population and labour statistics department.

The underemployment rate of people of working age in urban areas is higher than in rural areas, reaching 5.33 per cent and 3.94 per cent, respectively.

“This is different from the common trend observed in our country with underemployment in rural areas often more severe than in urban areas,” Nam said.

According to GSO, more than 1.7 million people of working age were unemployed in the third quarter of 2021, an increase of 532,200 compared to the previous quarter and an increase of 449,600 compared to the same period last year.

Unemployment is a situation when a person seeking a job is unable to find one. Underemployment is a situation when a person is working but isn't working at his full capability.

Nam said that the complicated developments of the 4th wave of COVID-19 and the prolonged social distancing period in many localities had pushed the unemployment rate in the third quarter far beyond the usual 2-per cent figure.

The unemployment rate of people of working age was 5.54 per cent, up 2.18 percentage points from the previous quarter and 1.6 percentage points over the same period last year.

In particular, the unemployment rate of young people aged 15-24 in Q3 was 8.89 per cent, an increase of 1.42 percentage points compared to the previous quarter and an increase of 0.75 percentage points over the same period last year. That rate in urban areas was 12.71 per cent, 5.56 percentage points higher than in rural areas.

In the first nine months of 2021, the number of unemployed people of working age was more than 1.3 million people, up by 126,5000 compared to the same period last year. The unemployment rate of people of working age was 2.99 per cent, up 0.35 percentage points over the same period last year. The unemployment rate in urban areas was 4.02 per cent, 1.64 percentage points higher than in rural areas.

In 9 months, the unemployment rate of young people between 15-24 years old was 7.9 per cent, up 0.13 percentage points over the same period last year. That rate in urban areas was 10.79 per cent, up 0.26 percentage points over the same period last year.

“The labour market is facing a serious crisis with a series of negative records being set, millions of workers have lost their jobs, their incomes have been cut. It is now more difficult for workers to find jobs than ever before," said Nam.

"This fact has posed great challenges for the Government in its efforts to achieve the growth targets for 2021.

"The Government needs to focus on promoting a wide-scale vaccination strategy, using all resources to provide enough COVID-19 vaccines for the people to create a community immunity mechanism as soon as possible. Support packages for businesses and workers need to be rolled out soon to help them recover from the pandemic."

Reopening of economy – important to reverse GDP growth in Q4

Reopening the economy is being considered an inevitable path to create an opportunity to reverse gross domestic product (GDP) growth in the fourth quarter and improve that of the whole year 2021.

This is also a way for Vietnam not to miss a beat of the world economy’s recovery, according to experts.

The nation’s GDP declined by 6.17 percent annually in the third quarter of 2021, making the GDP growth rate in the first nine months up only 1.42 percent, much lower than the target set at the beginning of this year.

Speaking at a recent webinar on Vietnam’s economic outlook, economist Nguyen Xuan Thanh, senior lecturer at Fulbright Vietnam University, affirmed that reopening is crucial to recover the economy. To achieve positive economic growth, Vietnam should soon reopen its economy, maintain the opening status, and avoid the imposition of large-scale social distancing again.

Vu Tien Loc, President of the Vietnam International Arbitration Centre (VIAC), said that GDP will continue contracting if the situation is not improved.

According to him, the world economy is forecast to grow by 5.6 percent in 2021. Therefore, if Vietnam does not reopen its economy soon, it can miss the world’s recovery beat, and stand apart from the resumption of global supply chains.

Based on the growth rates in the third quarter and the first nine months of 2021, the Ministry of Planning and Investment has proposed two GDP growth scenarios for the whole year, at 3 or 3.5 percent. To achieve the GDP growth rate of 3 percent or 3.5 percent in 2021, that of the fourth quarter must hit at least 7.06 percent or 8.84 percent, respectively.

Representatives from the foreign business associations suggested the Vietnamese Government have a clear roadmap for the reopening as soon as possible./.

Indices gain on back of some pillar stocks

The market firmed on Tuesday despite losses in many large-cap stocks, while foreign investors net sold on both main exchanges again.

The benchmark VN-Index on the Ho Chi Minh Stock Exchange (HoSE) closed the trading session at 1,394.8 points, up 0.71 points, or 0.05 per cent. The index gained slightly despite the negative market breadth. Accordingly, 175 stocks climbed yesterday, while 228 stocks decreased.

The liquidity remained high with 742.8 million shares traded on the southern market, worth nearly VND22.2 trillion (US$975 million).

The index’s gain was mainly driven by some large-cap stocks with positive performance as the 30 biggest stocks tracker VN30-Index finished lower yesterday.

The VN30-Index lost 0.7 points, or 0.05 per cent, to 1,509.57 points. Of the VN30 basket, 17 stocks rose, while eight slid and five ended unchanged.

Data compiled by vietstock.vn showed that Vingroup (VIC) led the supporting group with an increase of 1.09 per cent. It was followed by Mobile World Investment Corporation (MWG), Duc Giang Chemicals Group (DGC) and BIDV (BID). These stocks gained in a range of 0.63 – 5.4 per cent.

However, the market was weighed by stronger selling pressure as big gains in the previous session triggered some profit-taking activities.

Vietcombank (VCB), Masan Group (MSN) and Novaland (NVL) were the three biggest losers, down in a range of 0.51 – 1.02 per cent.

PetroVietnam Gas (GAS), which was the biggest gainer in the morning trade, also reversed course to inch 0.44 per cent lower in the afternoon session.

Analysts from Saigon - Hanoi Securities (SHS) expected that the VN-Index is likely to struggle and correct to retest the level of 1,370 – 1,380 points, then continue rally to head toward the old peak hit in July at 1,415 – 1,425 points.

On the Ha Noi Stock Exchange (HNX), the HNX-Index also rose 0.01 points, or 0.01 per cent, to 375.68 points.

Investors poured over VND2.48 trillion into HNX, equivalent to a trading volume of nearly 107 million shares.

Meanwhile, foreign investors were net sellers on both main exchanges, with a total value of VND53.66 billion. Of which, they net sold a value of VND41.35 billion on HoSE, and a value of VND12.31 billion on the northern bourse. 

Thua Thien Hue aims to welcome six million tourists by 2025

The tourism industry of Thua Thien Hue province plans to receive approximately six million visitors by 2025, with total tourism revenue anticipated to reach roughly VND13,000 billion, according to the provincial Thua Thien Hue Provincial People's Committee.

Under the details of the plan, Thua Thien Hue aims to become a unique tourism centre and turn into a festival city, as well as being an clean ASEAN tourist city.

Accordingly, Thua Thien Hue province will strive to have 10 five-star hotels and resorts by 2025, with the local tourism industry setting a target of attracting approximately six million visitors by 2025.

In relation to the figure, international guests will account for between 45% and 50% of total estimated tourism revenue of roughly VND13,000 billion.

 

Furthermore, the province will continue to institutionalise policies on tourism development and focus on digital transformation in the tourism industry, thereby giving priority to smart management, invest in building technical infrastructure for tourism development, and design unique tourism products imbued with the local Hue culture.

Nguyen Thanh Binh, vice chairman of the People's Committee of Thua Thien Hue province, said the province will devise solutions aimed at reopening tourism and service activities to provide fresh impetus to local socio-economic development.

Digital transformation vital for logistics firms’ competiveness: insiders

Most of Vietnam’s logistics firms may struggle to operate and sharpen their competitive edge in the new context if they are not quickly to engage in digital transformation.

Of the 4,000 existing logistics firms, 95 percent are small- and medium-sized enterprises (SMEs), and Vietnamese ones only account for 20 percent of the market share.

Statistics of the Vietnam Logistics Business Association (VLA) showed that COVID-19 has forced 15 percent of logistics companies to suffer a 50 percent reduction in revenue, and more than half of them to cut down 10-30 percent of services compared to 2019.

In such context, information technology (IT) application and digital transformation are considered urgent solutions for logistics firms. To maintain operations, they have stepped up IT application and e-commerce.

Dr Vu Tien Loc, member of the National Assembly’s Committee for Economic Affairs, said that logistics cost in Vietnam remains high compared to others in the region and the world. This delivers a blow to firms’ competitiveness and the economy as a whole.

To address this issue, administrative reforms are necessary, along with stronger infrastructure investment and especially new technology and digital transformation application in the sector.

VLA Vice President Dao Trong Khoa underlined that logistics businesses need to foster digital transformation, blockchain applications and artificial intelligence to build a digital platform integrated with current logistics technologies so as to reduce costs.

As a large number of logistics firms only handle some parts and services, they face difficulties in investment in and use of suitable software, said VLA President Le Duy Hiep, adding that the firms should implement digitalisation from fundamental tasks.

Given that most of firms in the sector are SMEs and lack financial sources, there must be incentives and loans to support them in digital transformation and solutions, experts said.

Digital transformation has become an urgent task to help logistics firms recover and develop in order to safely live with COVID-19, and authorities have been called on to complete a legal framework in this regard./.

Vietnam remains attractive investment destination: Nestle Vietnam CEO

Vietnam has shown its attractiveness as a sustainable and long-term investment destination thanks to the country's numerous advantages, according to CEO of Nestle Vietnam Binu Jacob.

Speaking to the Vietnam News Agency, he said that Vietnam, with a population of 100 million, has a young workforce and enjoying a golden population structure, which gives the country great opportunities in socio-economic development.

Vietnam is also showing active regional and global economic integration, while owning a skilled and enthusiastic workforce, he added.

Despite impacts from COVID-19, Nestle Vietnam has announced that it will pump an additional 132 million USD in Vietnam to double its production of high-quality coffee products in Vietnam, raising the company's total investment to nearly 730 million USD.

Nestle is confident in Vietnam’s future prospects as a global and regional production centre, he said, stressing that the company will continue to expand sustainable investment activities in the Southeast Asian country. Nestle is proud to be one of the pioneering companies making foreign direct investment in Vietnam, thus contributing to the sustainable and inclusive growth of the country, he stated.

The CEO said that during the past two decades in Vietnam, Nestle has received great support from the Vietnamese Government, ministries, sectors, agencies and localities.

Nestle commits to help with the completion of “dual targets” given by the Vietnamese Government, and supports the strategic policy orientations of Vietnam in living safely with COVID-19 and reopening the economy, he said, stressing the need for immediate actions.

He held that one of the important factors deciding the success of an enterprise is policy support and specific actions from the Government in encouraging the development of businesses in general and private companies in particular.

Jacob lauded the efforts of the Vietnamese Government in improving institutions, making the investment and business environment more open and healthier.

He expressed his delight that the Vietnamese Government has listened to opinions of the private business community, especially FDI enterprises, and appreciated the Vietnamese Government’s priority to COVID-19 vaccination in Ho Chi Minh City and the southern economic region./.

Vietnam seeks to expand export markets for farm produce

Representatives of trade promotion agencies and business communities of India and three countries in the Greater Mekong Sub-region (GMS), namely Vietnam, Thailand and Cambodia, gathered at an online India-Mekong trade connection programme on October 11.

This formed part of a series of activities of a project to strengthen international integration of small and medium-sized enterprises (SMEs) of India and the GMS countries, towards promoting global value chains and trade between India and the GMS countries, which is financed by the Asian Development Bank (ADB).

Le Hoang Tai, Deputy Director of the Vietnam Trade Promotion Agency under the Ministry of Industry and Trade, emphasised that farm produce and food are key exports of Vietnam.

In the first nine months of 2021, Vietnam earned 20.1 billion USD from exporting food and agricultural products, up 10.8 percent over the same period in 2020. The growth was attributed to a significant increase in both export volume and value of many agricultural products.

The export markets of Vietnam's agricultural products have expanded to more than 180 countries and territories. In particular, there is a shift from medium-segment markets to higher segment markets.

Tai said the participation in new-generation free trade agreements and extensive international economic integration bring great opportunities for Vietnam, adding that Vietnam can cooperate with India, Cambodia and Thailand to expand export markets for its agricultural products.

Vivek Sharma, General Director of Aarna Agro & Angel Fine Foods, said that the Vietnamese market can utilise very well equipment serving agricultural production.

Vietnam has imported many products from India such as cotton, spice products, especially rice, he added.

Participants expressed their interest in tariffs and import-export procedures of the GMS countries and India./.

Wood businesses capitalize on FTA to boost exports to UK

Vietnamese timber and wood exports to the United Kingdom during the past nine months surged by 25% year on year to US$201.2 million as local firms have effectively maximised incentives from the UK-Vietnam Free Trade Agreement (UKVFTA).

However, September saw firms rake in just US$13 million from their exports, a drop of 41.9% from a year earlier due to the adverse impact of the COVID-19 pandemic, reported the Vietnam Timber and Forest Product Association (VIFOREST).  

Wooden furniture represented a major export product to the UK market, accounting for 91.7% of the country’s total export turnover of timber and wood products.

According information provided by mordorintelligence.com, the consumption demand for home furniture in the UK market is consistently increasing and is likely to achieve an average growth rate of over 3.2% throughout the 2021 - 2026 period, creating opportunities in which local firms can boost exports to the market in the future.

In addition, the enforcement of the UKVFTA is anticipated to help several timber and wood products enjoy tariff rates of 0% within five years, with wooden furniture significantly benefiting from the trade deal.

Experts have pointed out that the trade pact will serve to help balance the advantages for local enterprises in the international playing field, increase transparency on quality standards, improve business climate in the Vietnamese market, and attract further FDI inflows into the domestic wood processing industry.

To take full advantage of the trade deal, VIFOREST has recommended that local businesses invest more to meet management standards and procedures, pay close attention to social responsibility and be transparent with information, particularly relating to labour and production environment amidst fierce competition in the international market. 

Experts have emphasised the positive outlook for Vietnam’s timber and wood product exports to the UK in the remainder of the year, especially when the pandemic is being brought under control and social distancing measures are being eased.

Many apparel, footwear firms incur contractual penalties for delivery delays

Contractual penalties have been imposed on several apparel and footwear enterprises for delays in delivery this year by their partners, while these firms are facing a cancellation of orders in 2022.

Over 68% of firms incurred contractual penalties for delayed delivery, while 12.2% suffered unexpected order cancellations and had to pay compensation, according to the results of a survey, jointly conducted by the Vietnam Textile and Apparel Association (VITAS), the Vietnam Leather, Footwear and Handbag Association (LEFASO) and a public-private partnership group in September.

Besides, 21% of surveyed firms saw their partners cancel orders, but were not asked for compensation, representatives of VITAS and LEFASO told an online talk show on October 8.

Nearly half of the apparel and footwear firms participating in the survey attributed delays in delivery to the prolonged social distancing and hike in logistics and shipping fees.

The results of the survey also showed that great expense caused by the prolonged social distancing period and shortages of human resources had put much pressure on apparel and footwear enterprises, said Do Quynh Chi, director of the Research Center for Employment Relations.

During the social distancing period, when enterprises were applying the stay-at-work model, they had to cover further weekly expenses of VND2.2 million for each worker on average for allowances, meals and Covid testing.

As a result, a firm with 1,000 employees had to spend an additional VND2.2 billion to maintain its production activities under the stay-at-work model.

Due to increased expenses, over 65% of apparel and footwear firms suspended their operations in September, according to the survey.

Another concern facing these firms, mainly those in the southern region, was a severe shortage of workers as a large number of migrant workers have been rushing back to their hometowns.

Truong Van Cam, vice chairman of VITAS, said that millions of workers, mainly in the apparel and footwear sectors, had returned to their hometowns, plunging the supply chains to the verge of protracted disruption.

Data from the Ministry of Industry and Trade showed that the export of handbags, valises and caps between January and September amounted to US$2.24 billion, down 3.7% year-on-year. Exports of footwear dipped by 44.2% in volume year-on-year, while the apparel sector saw exports drop by 18.6% in volume.

Quang Ninh plans big post-pandemic tourism promotions

The northern province of Quang Ninh, home to the world heritage site Ha Long Bay, plans to hold 50 events and programmes during the remainder of the year aimed at promoting local tourism, the provincial administration has revealed.

Quang Ninh has not recorded a single coronavirus case in the community over the past weeks, paving the way for the locality to resume its tourism services for domestic visitors at present and even foreign holidaymakers in the near future.

The province has developed a plan to recover tourism and attract more visitors in the fourth quarter of the year, with a primary focus on designing a safe tourism model and minimizing epidemic risks for visitors and local residents.

Under the model, each tourism establishment in the locality must provide their best quality products and offer safe services to guests at a reasonable price, by taking advantage of tourism stimulus policies in the province.

Localities will implement a number of measures aimed at stimulating domestic tourism in line with local strengths as well as guidelines on COVID-19 prevention and control.

Quang Ninh is speeding up its vaccination campaign, and once all local residents are fully vaccinated in November, the province will implement a pilot scheme to welcome domestic tourists from provinces and cities nationwide that have the pandemic under control.

It will also reopen the door for foreign visitors with a vaccine passport as soon as conditions permit.

Investors of three N-S Expy sections face difficulties in accessing bank loans

Investors of three subprojects executed under the public-private partnership (PPP) model of the North-South Expressway—Dien Chau-Bai Vot, Nha Trang-Cam Lam and Cam Lam-Vinh Hao—are finding it hard to access bank loans, according to a report sent by the Government to the National Assembly.

The difficulties were attributed to the requirements of banks to apply articles on revenue sharing in line with Article 82 of the Law on the Public-Private-Partnership Investment.

Specifically, the article regulates that if real revenue from a project is higher than 125% of the revenue estimated in the project’s contract, the investor and the project owner will share half the balance between the real revenue and the 125% level of the estimated revenue with the State.

If the real revenue is lower than 75% of the estimated revenue, the State will share half the balance between the 75% level of the estimated revenue and the real revenue with the investor and the project owner.

However, when the Ministry of Transport built the three PPP North-South subprojects, the Law on Public-Private-Partnership Investment was yet to be issued. Therefore, the three subprojects cannot apply the revenue-sharing policy as required by banks.

To eliminate the difficulties, the investors and enterprises in charge of the three subprojects have worked with banks to arrange loans for the subprojects and mobilized other legal capital resources, such as increasing the equity and issuing corporate bonds.

The three projects were expected to be completed in 2023 and 2024.

According to the Government, the investment model of these projects was complicated and the processes of bidding, investor selection, negotiations and contract signing had taken place amid the changing of relevant regulations.

In addition, the Law on Public-Private-Partnership Investment, which took effect on January 1 this year, has prolonged the negotiation and contract signing time.

The investors of the three projects have been chosen and the Ministry of Transport has signed PPP contracts with the investors.

As for preparations for their execution, the sites have been handed over for the Dien Chau-Bai Vot and Nha Trang-Cam Lam subprojects. The design formulation, contractor selection and manpower and equipment mobilization are underway.

Meanwhile, the company in charge of the Cam Lam-Vinh Hao subproject has coordinated with localities it will pass through to soon take over the site for the subproject and has conducted preparations to start work on the project.

Gia Lai coffee aims for global branding

Covering an area of 97,000 hectares at an average height of 700m above sea level, Gia Lai coffee is a high quality centre of the Việt Nam coffee map and global value chain, bringing the ‘Gia Lai taste and flavour’ to the world’s coffee connoisseurs.

At least 50 businesses specialize in processing coffee in the Central Highlands region, contributing 50 per cent to the provincial total exports, earning around US$300 million per year.

Sustainable coffee production and farming has gradually been chosen by local farmers as a positive solution to pursuing high quality and brand building.

Nguyễn Huỳnh Phú Lâm, director of Classic Coffee joint-stock company, has been developing the ‘sustainable coffee’ brand in a value chain co-operation over a total of 1,200 hectares with 800 households in four districts – Chư Sê, Ia Grai, Chư Prông and Đak Đoa – since 2011.

The ‘sustainable coffee’ community in the four districts benefit from bilateral business-farmer partnerships when they changed to high-quality farming under standards of the common code of the coffee community (4C) and Vietnamese Good Agricultural Practices (VietGAP).

“We encourage farmers to change to quality in production rather than quantity at low standard. Each kilo of standard coffee will earn a higher price from our company,” Lâm said.

“It brings benefits in two ways as we can collect the best quality coffee (green or raw coffee) for exportable processing, while farmers do not have to worry about unstable prices.”

Lâm, founder of Classic Coffee, said farmers should understand the value of the coffee they grow and care for.

He said more people now preferred a ‘clean’ and healthy product and paid higher for tasting ‘safe’ coffee, so farmers and businesses have to provide high-value coffee to the market.

The climate and basalt soil in Gia Lai in the Central Highlands region is suitable for growing Robusta coffee with a ratio of caffeine higher than Arabica coffee.

“There’s still a difference in processing between Robusta and Arabica. Coffee growers often dry coffee beans just after harvest time, while Arabica coffee beans are soaked in water before drying,” Lâm said.

“Vietnamese prefer the strong bitter taste of Robusta and making daily coffee by filter, but Europeans love drinking Arabica coffee. It’s the reason I’m thinking of improving Robusta coffee so it tastes as good as Arabica from crops and processing innovations. Robusta coffee processing should be improved to earn a larger market share.”

Workers complete the final stage of coffee production at a factory in Pleiku City of Gia Lai Province. Coffee earns 50 per cent of Gia Lai province's export turn-over each year. Photo courtersy of Classic Coffee 
He said farmers earn a surplus VNĐ700 (30 US cents) profit from the base purchasing price on every kilo of 4C or VietGAP brand coffee in comparison to low quality coffee from businesses.

The farmers could benefit from added value on each kilo of roasted coffee by about VNĐ8,000 to 12,000.

Lâm explained that business reserve a percentage of the surplus income for farmers was a way of ensuring high-quality plantation transformation.  

“Farmers should know how to benefit from sustainable coffee farming rather than easy and low quality crops as usual. The bilateral business-farmer partnership will play a key role in marking Gia Lai Robusta coffee in Việt Nam and the global coffee manufacturing community,” he said.

Đoàn Ngọc Có from the provincial department of agriculture and rural development said more than 8,000 households, of which 50 per cent were ethnic minorities, had begun growing coffee under standards of VietGap or 4C for export.

He said organic farms were built in key coffee zones for improving the quality of Gia Lai brand coffee and offering diversified products in the future.

Trần Thiện Văn, a coffee grower in Chư Sê District, said his family reserved one hectare – a third of their total area – for collecting 6 tonnes of high quality raw coffee.

A shop introduces Gia Lai coffee to customers. Gia Lai Province produces 220,000 tonnes of coffee per year. Photo courtesy of Classic Coffee 
He said his family would grow two more hectares in the next crop for a higher income and stable price.

“Several years of pilot growing standard coffee earned me a bigger income on the crops,” Văn said.

Nguyễn Ngọc Nghĩa from Đak Đoa District – a key coffee farming zone – said he harvested 7 tonnes of raw coffee from each hectare of his own 20-hectare high quality farm, bringing high revenue of VNĐ100 million per hectare per crop.

Chairman of Việt Nam Coffee and Cocoa Association Lương Văn Tự said coffee production in Gia Lai had remained stable in term of quality and output as well as manufacturing over past decades.

He said many coffee producers in the province had invested lots in technology, innovation and sustainable production for promoting the local coffee brand.

At least 50 enterprises in the province joined such processing, producing 3.5 per cent of the provincial coffee output (about 220,000 tonnes) each year.

Lâm expects the high quality coffee farm area in the province to be expanded as a base for improving Robusta coffee quality.

“Someday coffee connoisseurs in the world will be tasting the best Gia Lai Robusta coffee brand as local farmers have improved their coffee flavour to suit consumers' taste,” Lâm said.

Local live pig prices take nosedive

Efforts in reviving pig herds and increased pork imports have sent live pig prices plunging down over the past few months.

After African swine fever outbreaks in several provinces and cities last year, the prices of live pigs rose strongly, up to VND90,000 per kilogram due to the undersupply. However, the domestic pig price has tumbled to some VND40,000 per kilogram.

In the northern region, live pig prices are hovering between VND38,000 and VND42,000 a kilogram, while the central region is seeing prices of VND41,000-47,000 a kilogram. A kilogram of live pigs in the Central Highlands region is VND43,000-44,000.

Nguyen Van Quyet, vice chairman of the Animal Husbandry Association of the Southeastern region, said that the hike in pig prices after the African swine fever outbreaks had urged farmers to revive their pig herds, while the Government ordered the relevant agencies to regulate the market by raising pork imports.

“A concurrence of domestic pig farming activities and pork imports has sent pig prices down sharply,” he said.

As of August, the southern region had a total of some eight million live pigs with an output of 869,000 tons of pork, up 3% year-on-year, according to data from a working team of the Ministry of Agriculture and Rural Development.

An additional 430,000 tons of pork is expected to be supplied to the market during the rest of the year.

Between January and August, Vietnam imported some 257,000 tons of pork worth US$508 million, surging by 62.2% in volume and 83.8% in value year-on-year, according to the Department of Livestock Production under the ministry.

As the price of live pigs has surged, it is necessary to import pork to regulate the market, said Quyet, adding that the volume of imports should be controlled to protect domestic farmers.

If farmers face heavy losses due to the drop in pig prices, they might stop farming pigs, resulting in negative impacts on agricultural production activities.

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

VIETNAM BUSINESS NEWS OCTOBER 12

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