Shrimp exporters accelerate production
Vietnamese shrimp producers are accelerating production to reach their export target this year.
Shrimp processing enterprises in Ca Mau, Soc Trang and Bac Lieu – the three leading localities in shrimp output and production of the country – are facing difficulties due to the COVID-19 pandemic and social distancing measures.
For the firms, it is not only difficult to circulate goods, buy and sell seed, harvest shrimp, but also causes a shortage of workers, so factories have also had to reduce processing capacity by 60-70 per cent.
Minh Phu Seafood Corporation has set a target of maintaining more than 70 per cent of their production capacity from now until the end of this year by actively applying safety measures for pandemic prevention.
A representative of Minh Phu Corporation said to achieve the target, the corporation has provided personal protective equipment for nearly 10,000 of its employees.
Currently, the demand for shrimp imports from key markets has many positive signals. The US and EU markets have eased social distancing measures, reopened and vaccines are being widely administered. Demand for shrimp imports from these markets, especially large-sized shrimp, is very high from now until November to serve Christmas.
The Ministry of Industry and Trade reports that in the remaining months this year, demand for shrimp in the European and American markets has been bouncing back. In addition, incentives on tariffs such as in the Viet Nam-Europe Free Trade Agreement (EVFTA), will continue to help Vietnamese shrimp products be competitive in the European market.
Vo Van Son, Deputy General Director of Ca Mau Seafood Processing and Import-Export JSC (CAMIMEX), said his company’s nine-month export turnover was estimated at US$42 million. The remaining months will become the peak of purchasing, processing and exports for shrimp exporters. CAMIMEX will strive to obtain its export sales of between $62- $70 million for 2021.
In the first nine months this year, despite many difficulties due to the COVID-19 pandemic, his company had prepared measures to maintain production and business performance during periods of social distancing.
With flexible measures in production and pandemic prevention, shrimp processors and exporters in the Mekong Delta have come a consensus to fulfill their export targets for 2021.
Viet Nam's aquatic product exports are forecast to rake in $8.4 billion this year, equivalent to the figure in 2020, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).
The export value of shrimp is predicted to reach about $3.8 billion, up three per cent year on year. Meanwhile, the export of tra fish is likely to earn $1.5 billion, equal to last year's turnover, and seafood exports are predicted to drop three per cent to $3.1 billion.
According to VASEP Vice Secretary General Nguyen Hoai Nam, seafood production and exports will recover slowly and continue to face difficulties until the end of the year due to a lack of raw materials and labourers, and an increase in costs of labour, transport, and COVID-19 prevention.
The ratio of workers vaccinated against COVID-19 in provinces with a thriving fishery industry remains low, he noted, adding that the localities should give priority to increasing the vaccine coverage for workers in seafood production chains.
In the future, it is necessary to effectively and practically implement mechanisms and policies to support workers, especially those related to social insurance, unemployment insurance, and trade unions, Nam said.
He suggested authorities continue to support enterprises in accessing new loans, reschedule debt repayments, reduce interest rates and issue mechanisms to stabilise prices and production costs.
Reference exchange rate remains stable
The State Bank of Vietnam set the daily reference exchange rate at 23,131 VND/USD on October 28, unchanged from the previous day.
With the current trading band of +/-3 percent, the ceiling rate applicable to commercial banks during the day is 23,824 VND/USD and the floor rate 22,438 VND/USD.
The opening-hour rates at commercial banks stayed stable.
At 8:15am, Vietcombank listed the buying rate at 22,625 VND/USD and the selling rate at 22,855 VND/USD, unchanged from October 27.
Similarly, BIDV also kept both rates unchanged at 22,655 VND/USD (buying) and 22,855 VND/USD (selling)./.
Digital transformation vital to businesses in the new-normal and beyond
Adapting to the 'digital transformation is key for Vietnamese businesses to not only recover from the COVID-19 pandemic but also enhance their competitiveness in the long run.
During a webinar called “Digital Transformation: International Experience in Employment Security & the Future of Skills for Vietnamese Workers” in Ha Noi on Monday, Le Van Thanh, Deputy Minister of Labour, Invalids and Social Affairs (MOLISA) said that the digital transformation has been already changed all areas of social life including labour and employment.
"Since 2019, there have been many forecasts that digital transformation will affect the employment structure, requiring employees to change their working methods to be able to adapt and seize opportunities. Businesses must change the traditional way of operation to fit a digitally transformed society and the government must make flexible and timely decisions and digitise the form of management," Thanh said.
Thanh said Viet Nam is a country with a labour force in its golden age. In 2020, the national labour force was about 54.8 million people; the labour force participation rate was 74.4 per cent.
"Securing jobs and enhancing skills for workers in the context of digital transformation is one of the important goals of every country, especially a developing country with a large workforce like Viet Nam.
"In particular, in the past two years, it can be seen that the impact of the COVID-19 pandemic, in some ways, has been a factor accelerating the process of digital transformation in the field of labour and employment in Viet Nam," he said, adding that as vaccination is deployed globally and in Viet Nam as well, the domestic labour market is expected to recover from 2022 onwards.
However, the pandemic, which is forecast to be very unpredictable, will require the labour and employment sector to be more prepared, to change most of the way it operates in the direction of modernity and digitisation to adapt to the ‘new normal’, Thanh said.
Comprehensive solutions from all stakeholders in the domestic labour market will be also needed to improve the quality of recruitment and training human resources through skills development and knowledge enhancement for workers in the new situation, he said.
According to ManpowerGroup, one of the leading global workforce solutions companies, digital transformation is among today’s workforce trends.
The Skills Revolution Reboot 2021 research by ManpowerGroup reveals that 38 per cent of companies globally are speeding up their digitisation and automation. Viet Nam is catching up on the trend; 86 per cent of employers are automating plans to maintain or increase their headcount.
"The global workforce is experiencing an ever-changing world of work, which is hastened by the fourth industrial revolution, particularly digital transformation, and COVID-19," Simon Matthews, Regional Manager of ManpowerGroup in Viet Nam, Thailand and the Middle East said.
"Under the impact of the Industrial Revolution 4.0 and the pandemic, employers today take a more important role than ever in providing sustainable employment, and the Human Resources department should consider adopting the people-first approach in their business strategy," he added.
According to a World Bank’s report, the number of new jobs created by digital transformation will be seven times more than the number of jobs lost.
By 2045, an estimated 10 million new jobs (net) will be created, mainly in modern services, and a smaller number of new jobs in the manufacturing sector.
However, this depends on the development of the right skills for the domestic workforce, while the loss of traditional jobs can happen immediately.
Deputy Minister Thanh said there have been many concerns about the digital transformation creating fluctuations in the labour market, especially in countries with low labour productivity and an economy mainly based on supply chain and assembly.
For Viet Nam, the current boom in the application of digital technology, smart devices, and robots to production is posing many challenges to the Vietnamese labour market. The abundant and cheap labour will no longer be a factor in creating competitive advantages and attracting foreign investment, he noted.
"Viet Nam may also be under pressure on job creation and will face an increase in unemployment or underemployment because of its large population but low quality of labour."
Up to 46 million untrained Vietnamese workers will face the risk of not having the opportunity to participate in high-income jobs, being replaced by robot labour and smart technology equipment, Thanh said, adding that the digital transformation is reshaping and transforming skills and roles in demand, highlighting the need for upskilling and workforce retraining.
To adapt the labour market for digital transformation over the years, MOLISA and its units have focused on implementing many solutions, including the application of technology and digitisation in connecting labour supply and demand, strengthening the consulting and job introduction activities of employment service centres across the country, as well as giving priority to improving vocational skills for workers to meet new requirements.
Vu Trong Binh, head of MOLISA’s Department of Employment, said they are also building a five-year strategy for job restructuring by region, industry, quality, employment under new production, and business models.
"It is seen as a difficult task but we hope to receive the support of stakeholders to predict and assess how the employment structure in all aspects will change. Based on this employment restructuring strategy, Viet Nam will determine the training and quality improvement of the workforce," Binh said.
Binh said the digital transformation depends on the needs of enterprises themselves to adapt to the digitalisation trend. He emphasised the importance of building a national digital infrastructure as a basis on which businesses can successfully deploy digital transformation.
Without this digital infrastructure, businesses cannot operate strongly in the digital business environment as they can only deploy digital transformation in their internal organisations and the areas they are involved in, he noted.
In recent years, the Government has made efforts to adopt national-level initiatives and policies, creating a premise for facilitating digital transformation especially in human resources in Viet Nam.
Recently, the Government has issued important resolutions and programmes, such as Resolution No 17 dated March 7, 2019 on several key tasks and solutions to develop e-Government in the period of 2019-20 toward to 2025, and Decision No 749 dated June 3, 2020, of the Prime Minister on "National Digital Transformation Programme to 2025, with orientation to 2030.
These policies and programmes have shown the Government's efforts to build a legal corridor, providing solutions and gathering the strength of the whole political system to help Viet Nam thrive and go further.
In August 2021, Deputy Prime Minister Vu Duc Dam signed a decision approving a programme on training and retraining skills to meet the requirements of the fourth Industrial Revolution.
The programme provides training in new occupations and vocational skills for at least 20 different professions at the college and intermediate educational level, with priority given to information technology, new technology, high technology and future skills that meet the requirements of the fourth Industrial Revolution.
The minimum number of trainees is 120, and the total number of trainees participating in the programme is about 4,800.
It also aims to improve knowledge and skills associated with a job change for at least 300,000 workers affected by the fourth Industrial Revolution with a training time of under one year, helping to identify new industries, training occupations, vocational skills and training models to adapt to the revolution.
Its tasks and solutions are to assess and identify training and retraining needs, develop training and retraining programmes, improve the capacity of teachers and managers of vocational education institutions and teachers in enterprises, and select vocational education institutions and enterprises to order training and retraining.
Amended law to make VN insurance market keep pace with int’l practices
It is time to amend the Law on Insurance Business to help create a safe, transparent, sustainable and efficient insurance market that is close to international practices, National Assembly delegates said.
NA deputies discussed the draft amended law at the second plenary session of the 15th National Assembly (NA) this week.
On the sidelines of the discussion, Vu Trong Kim, a deputy of Nam Dinh Province said the amendment was important, especially in the context that Viet Nam had joined many new-generation free trade agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Viet Nam-European Union Free Trade Agreement (EVFTA).
“The amendment of regulations on insurance business, which was issued 20 years ago, will contribute to improving competitiveness, helping the insurance market become an important capital provision channel for the economy besides the monetary and stock markets,” Kim said.
Notably, he said, the amended law would encourage more investors to participate in the local insurance market as it supplemented regulations on State management of insurance business activities to create a safer legal corridor.
According to the Ministry of Finance, the draft amended law closely follows seven main contents, aiming at increasing autonomy for insurers in business activities. Management agencies will give priority to supervising and promoting transparency and healthy development of the insurance market.
This draft completes regulations on financial management models for businesses, completes insurance contracts, and ensures the principles of equality, transparency and safety.
It also specifically encourages businesses to use and apply information technology to standardise insurance activities and transactions in the market, as well as supplementing regulations on developing and improving the quality of human resources in this field, and regulations on safety assurance, loss prevention and control, insurance fraud prevention, and improvement of dispute settlement.
According to deputy Nguyen Ngoc Bao from Bac Ninh, the amended law needs to pay more attention to agricultural insurance as it is not clarified in the law.
Agricultural insurance regulations should be clearly defined in the amended law to help develop agriculture, forestry and fishery programmes, Bao said.
In the first eight months of the year, the Vietnamese insurance market still recorded positive growth despite the COVID-19 pandemic. By the end of August, total assets in the insurance market were estimated at nearly VND643.6 trillion (US$28.3 billion), up 22.1 per cent year-on-year, with total premium revenue during the period also rising nearly 17 per cent to more than VND133 trillion.
Viet Nam is high potential for insurance services, but the development pace is still low compared to the region and world. The amended Law on Insurance Business is expected to take effect from 2023.
Brit blueprint carves open power potential
The wind farms of the United Kingdom are providing around 10 per cent of the country’s power supply – a respectable figure that Vietnam could also achieve on the back of its natural advantages.
Vietnam is in the process of drafting its next national power development plan, Photo: Shutterstock
However, while the natural prerequisites are a given, several administrative issues need to be urgently resolved.
Reaching a higher share of renewables and particularly wind power requires a balance of interests between the power sector and various other stakeholders, such as organisations and government, argued Huub den Rooijen in February at a bilateral energy dialogue. Rooijen is the director of Energy, Minerals, and Facilities at Crown Estate – the real estate company that manages most of the seabed around the UK nations of England, Wales, and Northern Ireland. “The dialogue between the market players and the government, and the transparency of the power sector, are essential elements,” added Rooijen.
More UK investors are expressing active interest in cooperation and investment in renewable energy projects in Vietnam with great expectations for simple and long-term support mechanisms that simplify the licensing and approval process from the government. Particularly, Vietnam has great potential for offshore wind power due its vast coastline, which is receiving the attention of British investors.
Ian Hatton, president of Enterprize Energy Group, also realised that Vietnam needs its own support mechanism for offshore wind power development. He said that offshore wind power projects are large in scale, and the transmission points reduce the pressure on the grid, which would enable to control the system more easily.
In the draft Power Development Plan VIII (PDP8), offshore wind power is now included with about 2GW by 2030, which will increase to a higher level after that year.
According to the Electricity and Renewable Energy Authority (EREA) under the Ministry of Industry and Trade, there are already 157 offshore wind power projects with a capacity of more than 61,000MW proposed that could be added to the PDP8. Particularly in the south-central province of Binh Thuan, offshore wind power projects require additional planning, but could offer up to 22,000MW.
The Vietnamese government continues to prioritise the development of renewable energy projects with policies such as direct electricity purchase and competitive bidding mechanisms. Hoang Tien Dung, director of the EREA, hopes that the authority will continue to receive support from the British government, especially with regards to offshore wind power – an area in which the UK has had a lot of experience. He added that Vietnam learnt from many countries to develop renewable energies, such as by applying a fixed price model.
“Wind and solar power have developed too quickly in a short time, concentrated in the central and southern regions, making it impossible to build the power grid to release capacity. The high proportion of wind and solar power sources has caused many difficulties in the operation and economic regulation of the power system,” said Dung.
The EREA as of 2020 had 148 projects with a total capacity of 8,600MW. Meanwhile, rooftop solar has more than 105,000 installations, with a total installed capacity of over 9,730MWp. Although the policy has been in place since 2011, and was revised in 2019, there are only 11 wind power projects so far, with an installed capacity of only 511MW.
The UK is currently the world leader in renewable energy, especially wind power and biomass energy. About 30 years ago, the coal industry created a large number of jobs, but now the number of jobs in the renewable energy industry has surpassed that. The UK government has created an attractive environment for the development and trading of renewable energy sources, and continues to encourage further investment in this sector. In 2002, the UK introduced the renewables obligation (RO) mechanism, which requires electricity suppliers to contribute a mandatory percentage of renewable energy in total commercial electricity generation.
Developers that achieve this rate will be granted a certificate. If they do not, they have to pay a buy-out penalty of nearly $50 for every MWh short. This money is put into a buy-out fund and will annually be used to fund certified units.
The formation of an RO market makes renewable energy production more attractive for investment. Producers not only profit from the sale of conventional energy, but are also supported by a buy-out fund and can sell excess certificates. According to the revised white paper on RO published in 2007, the policy will remain in place until 2027.
The UK’s policies on renewable energy development are a valuable experience for countries around the world, especially for those fast industrialisation and high energy demand like Vietnam.
With its current conditions, however, Vietnam is not allowed to use RO mechanisms within its legislation. But in the future, the nation could also apply a similar mechanism to contribute to reducing the budget burden in supporting the development of renewable energy projects.
Meanwhile, Vietnam may also need to increase funding for renewable energy projects. Current funding sources for such projects mainly come from the Asian Development Bank, the World Bank, and the state budget.
By diversifying cooperation with renewable energy development funds, Vietnam could take advantage of capital and investors would need to use this effectively, otherwise it could become a huge debt burden.
The plan to develop the renewable energy sector is an important content in the country’s Resolution No.55-NQ/TW dated 2020 on the orientation of Vietnam’s national energy development strategy till 2030, with a vision towards 2045. The resolution’s overall goal is to ensure an adequate energy supply for socioeconomic development, in parallel with gradually increasing the proportion of clean energy use.
Soc Trang’s export value exceeds 1 billion USD
The Mekong Delta province of Soc Trang, despite COVID-19, recorded 1.05 billion USD worth of exports during January – October, the highest number to date.
The export value represented an annual increase of 14 percent and surpassed the target for 2021 by 5 percent.
Key earners included aquatic products, rice, and apparel, which reeled in 835 million USD, 183 million USD, and 12 million USD, respectively.
Also in the ten months, the province’s industrial production value was estimated at 23.23 trillion VND, meeting 81.51 percent of the yearly plan and up 5.98 percent over the same period in 2020.
The export and production growth was attributable to the provincial Department of Industry and Trade’s efforts to promote production in line with pandemic prevention and control.
Communications campaigns urging firms to boost farm produce distribution in Ho Chi Minh City via the e-commerce platform Sendo.vn and a series of trade promotion activities also contributed to the outcomes./.
Vietnam has room to promote export market of wood pellets
Wood pellets have become an important export of Vietnam with an annual export volume of about 3 million tonnes worth US$350 million. The Republic of Korea (ROK) and Japan are currently two major import markets for Vietnam, accounting for over 90% of Vietnam’s annual export volume of wood pellets.
The formation and development of the wood pellet industry in Vietnam is attributed to the abundant source of materials, generated from by-products of the wood processing industry. Input sources for making wood pellets include sawdust, shavings, twigs and the tops of small diameter plantation timber.
In addition, the production of wood pellets does not require large investment or complicated management technology, creating opportunities for many enterprises to participate in the production stage.
Vietnam’s source of raw materials for wood pellet production are also located near seaports which is convenient for transport and exportation. These are the advantages for the wood pellet industry’s expansion in the past and its growth for the future.
According to experts of the Vietnam Timber and Forest Products Association (VIFOREST), ROK and Japan are the two largest importing markets of Vietnamese wood pellets. The ROK market has a larger scale than the Japanese market. However, the level of stability in the Japanese market is much higher. The average export price to the Japanese market is currently about US$20-30 per tonnes, higher than that of the ROK market.
According to the Vietnam Administration of Forestry, Vietnam currently has about 80 factories producing wood pellets. However, the investigation of information for Forest Trends shows that the number of enterprises directly involved in the production and export of wood pellets can mount to hundreds of enterprises.
The Southeast region, which is the hub of the wood processing facilities, is home to the largest number of wood pellet facilities in the country, thanks to the abundant supply of by-products from wood factories.
The industry still has room for expansion thanks to the increasing demand for wood pellets to Japan in the future. According to exporters for the Japanese market, the volume of wood pellets are expected to expand by three times in 2024 and 2025.
If Vietnam's production capacity is kept at the current level, the supply and demand for these items will balance within the next 2-3 years. The Vietnamese wood pellet industry also has the potential to increase the proportion of Forest Stewardship Council (FSC) certified products, which can be achieved through the cooperation between wood producers and forest growers to generate certified wood sources.
Despite the rapid growth speed, the wood pellet production and export industry currently reveals a number of limitations. The input of raw materials has yet to be strictly controlled in terms of quality and legal aspects. Some processing facilities use mixed materials, affecting the production quality. The supply of input materials with sustainable forest management certificates (FSC) is still modest while demand for certified products continues to increase.
Therefore, the strict control over the quality of input materials and access to modern technology to create high quality products with reasonable prices are of the utmost importance for enterprises producing wood pellets for export.
Measures devised to combat smuggling and trade fraud
According to the report of the National Steering Committee Against Smuggling, Trade Frauds and Counterfeiting Goods (National Steering Committee 389), in the past nine months, functional forces nationwide have detected and handled more than 100,000 cases of violations, contributing and adding nearly VND7.5 trillion (over US$329.2 million) to the State budget, as well as prosecuted 1,615 cases with 2,148 subjects.
The above results are attributable to the increasingly close coordination between functional forces such as police, customs, market management, border guards, thereby ensuring prompt detection and the handling of several serious violations.
However, smuggling, trade fraud and counterfeit goods are assessed as still being very complicated in some key routes, areas and fields. Especially, in the context of the COVID-19 pandemic, this situation is even more complicated. Functional forces have continuously discovered a series of violations within the production and trading of food, cosmetics and agricultural materials that were expired or of unknown origin; counterfeit goods, equipment and medical supplies related to epidemic prevention and control in large quantities.
At the recent meeting of the National Steering Committee 389, Permanent Deputy Prime Minister and Head of the Steering Committee Pham Binh Minh underscored that the fight against smuggling, trade fraud and counterfeit goods in some localities hasn’t been closely directed and implemented, the functional forces haven’t done well in managing these areas and subjects.
Therefore, in order to properly control and repel smuggling, commercial fraud and counterfeit goods as the country is returning to a new normal, safely adapting to the pandemic while restoring economic development, it is necessary to continue and uphold the role and responsibility of the people, especially in detecting and strictly handling violations.
From now until the end of the year is the peak time for smuggling, trade fraud and counterfeit goods. Functional forces should continue to strengthen the inspection, control and handling of all goods, especially those of unknown origin, goods of poor quality, counterfeit goods, smuggled goods and most importantly goods related to people’s health.
In addition, it is also necessary to promote the application of technology in the prevention and combat of e-commerce fraud; and suceed in collecting information and forecasting market conditions to build inspection and control plans that are similar to the actual situations.
More attention should be paid to key groups of products and the related violations in order to contribute to stabilising the market, and ensuring the interests of consumers.
Top 50 prestigious public companies in 2021 announced
The top 50 public companies (VIX50) and Top 10 prestigious companies in the banking-insurance-technology industry in 2021 were announced by the Vietnam Report and online newspaper VietNamNet, under the Ministry of Information and Communications, in Hanoi, on October 21.
Prominent in the list are Vinhomes JSC, Hoa Phat Group JSC, Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank), Military Commercial Joint Stock Bank and Vietnam Dairy Products Joint Stock Company (Vinamilk).
The list honours public firms that have tried their best to overcome the difficulties caused by the COVID-19 pandemic, seizing new opportunities and achieving remarkable achievements in providing products and services to customers.
The selection was based on assessing the prestige and operational efficiency of the firms through investors, experts and market, as well as their communications prestige.
According to Vu Dang Vinh, general director of the Vietnam Report, over the past two years, the world in general and Vietnam, in particular, have faced difficulties and challenges due to the COVID-19. The pandemic has affected most businesses, but there are still some that are growing strongly.
This shows that the role of building a strong reputation for any business is one of the key factors, opening up prosperous and stable development and acting as a solid foundation for the business in the hearts of customers, especially in the context of a new type of globalisation in the post-COVID-19 era, he said.
Vietnamese agricultural businesses lure workers back to work
Vietnam is adapting to COVID-19 in a safe and flexible manner, which provides an opportunity for enterprises to revive their business activities. But many agricultural firms are facing a shortage of workers, which could affect their growth targets.
The shortage is most serious in the sectors of seafood, fruit, and timber as they require large workforces to harvest and process products for the domestic market and for export. It is no easy task to call former employees back to work or recruit new workers.
Soc Trang Seafood Chairman Tran Van Pham said the total workforce of his company is nearly 4,000 but currently only 1,000 are working due to the impact of COVID-19, which has forced many to return to their hometowns.
The company received quite a lot of shrimp export orders for the end of 2021 and early 2022 but had to cancel owing to labour shortages, leaving the company unsure if it will be able to retain its partners or not.
Other agricultural enterprises are facing the same situation. On the one hand, they want to boost production to capitalise on the growth opportunities in the fourth quarter and accelerate the fulfilment of signed orders to offset the losses after months of operating under capacity. On the other hand, they are unable to operate at maximum capacity due to the shortage of workers.
The fourth wave of COVID-19 has presented significant challenges to enterprises in realising the growth targets for 2021. Therefore, enterprises are making every effort to retain workers so that they can restore production to the highest level possible.
According to Deputy Director of Chanh Thu Fruit Export-Import Company Ngo Tuong Vu, currently 80% of the company’s 300 employees are back to work. They have been inoculated with at least one dose, with some already being fully vaccinated.
To keep these workers, the company has given the highest priority to ensuring their safety since the start of the outbreak. Chanh Thu also maintains income at the best level for workers so that they can feel assured when working here. When the outbreak occurred, the company did not attach too much importance to growth, instead placing emphasis on sustaining production so as to recover later.
In fact, the difficulty in retaining workers is enormous as it lies not only in safety measures and income sustainability but also the psychological factor, which many companies have said is the underlying reason behind workers’ reluctance to return to work. If there is no remedy for such a problem in the post-COVID period, it will be difficult to get them back.
General Director of Vinamit Nguyen Lam Vien shared that after the past outbreak, the company paid more attention to the mentalities of workers in order to promptly deal with their concerns, making them feel peace of mind at the company.
In the face of complex shifts in the labour market, the General Statistics Office has recommended some solutions to address the difficulties. Specifically, local authorities should establish official information channels to update enterprises and workers on local economic development strategies, worker support and attraction policies, testing, vaccination, and epidemic control plans so that enterprises can formulate appropriate recovery and development plans.
For its part, the Ministry of Agriculture and Rural Development has underlined the importance of prioritising vaccination for workers in the agriculture, forestry and seafood sectors to prevent the spread of COVID-19 and establish the basis for workers to soon return to work.
Enterprises also need to demonstrate their role at this time more clearly by introducing solutions on income and stabilising the psychology of workers as well as making commitments to provide certain support during the pandemic period such as the costs of travel, housing, medical care and essential goods.
Over 93% of enterprises in Dong Nai resume operations
More than 93% of enterprises based at industrial parks in Dong Nai Province, an industrial centre in southern Vietnam, have resumed their operations, according to a local official.
Specifically, 1,595 out of 1,713 enterprises in 31 industrial parks are now operational again, with the number of active workers estimated at 520,000, accounting for 85% of the total workforce.
Many have recorded 100% of their labour force back to work, such as Promax Textile, Vietnam Center Power Tech, Olympus Vietnam, Vietnam Nok, Harada Industries Vietnam and Mabuchi Motor Vietnam.
Enterprises are quickly restoring their production to fulfil year-end orders, which are regarded as their “life buoys” after more than three months of being seriously affected by COVID-19.
There remain 118 enterprises with nearly 95,000 workers which have yet to resume their operations.
The management board of industrial parks in Dong Nai are working hard to handle the procedures so that such enterprises can soon restore their activities while ensuring safety against coronavirus.
According to the provincial employment service centre, enterprises in Dong Nai need to recruit an additional 40,000 workers from now until the end of 2021.
Investors tend to choose reliable real estate projects
According a survey made by DKRA Vietnam Joint Stock Company (DKRA Vietnam), the housing market in Southern provinces saw a marked decline in the third quarter of this year. Enterprises in HCMC and neighboring provinces recently offered two projects selling 118 land plots but only 28 pieces were bought.
General Director of Van Phuc Land Nguyen Thi Thanh Huong said that her company has actively implemented a flexible working arrangement, and adjusted investment and business plans to cope with the new situation during the pandemic.
Van Phuc has focused on designing, completing construction documents and legislative procedures, preparing building projects and promoting products. The company has also offered financial support measures to assist customers. When the pandemic has been basically controlled, Van Phuc plans to present its projects featuring luxurious lakeside homes and 300 apartments.
Chairman of the DKRA Vietnam Pham Lam noted that the real estate market will be bustling with the resumption of many housing companies with a lot of attractive promotional programs. The leading markets, including HCMC and adjacent provinces of Binh Duong, Dong Nai and Ba Ria-Vung Tau will be more optimistic than others because they have the busiest real estate investment and trading activities associated with the southern key economic region.
Chairwoman of the Housing Development and Trading Joint Stock Company (HDTC Land) Dinh Ngoc Chau Huong stressed that customers will only choose projects and products with a high level of safety of construction progress, clear legality and profitability in coming time.
Many businesses have applied technology in approaching customers and presenting new products during the social distancing period. Besides, they have set up ways to stay connected to their customers through this pandemic and keep business going through it, such as offering direct contact with “Covid green card” holders, promoting online contact, online payment via bank transfer, submitting documents online.
Mr. Bui Binh Minh, a real estate investor said that he can not transact two apartments of the Celadon project in Tan Phu District that he bought few months before the Covid-19 outbreak because of the current poor housing market liquidity. The deterioration of the ability to buy and sell housing units has now created a financial pressure for investors.
Most of real estate businesses have carefully launched assessments of real estate liquidity. They put expectation on clients who really need a house for staying. Investors are still cautiously in real estate investment and wait till after the lunar New Year 2022, a business said.
Listed companies struggle to stay afloat
Listed companies are pinning their hopes on a speedy recovery in the fourth quarter of the year, having had a hard time staying afloat under the severe negative impact of the fourth wave of the Covid-19 pandemic.
The month of September was considered very severe for investors due to the negative impact of the Covid-19 pandemic on the entire economy, with GDP shrinking by 6.17% in the third quarter. This is the first time Vietnam has experienced a negative GDP growth since 2000. Business activities of listed companies (LCs) also came to a halt when the supply chain was disrupted because of strict social distancing regulations enforced by the Government in the national effort to contain the spread of the disease.
Added to this, investors panicked upon news from China about Evergrande and its debt bomb fall, causing a chain reaction in the real estate sector and affecting other financial sectors as well. This resulted in changes in the global stock market and influenced the Vietnamese market too. Investors dumped banking shares because of their concern about the risk of an increase in bad debts soon after the pandemic.
The fact that the real estate sectors and banking sectors were the two key areas at the stock market that reduced their shares, was the main cause of a considerable decrease in the cash flow in the stock market. Statistics show that the average liquidity in each session on HoSE through order matching transactions in September alone reached VND 19,400 bn, a 10.7% fall compared to August.
Most notably, the liquidity of the VN30 group slumped by 26% while the group of small shares rose by 16% over the previous month. The average liquidity of the entire market was VND 26,521 bn per session, a 7.9% slide over August, while the average order value fell 9.5% to VND 24,352 bn.
The negative GDP growth during the social distancing phase in Vietnam lasted until the end of September, and created a huge psychological effect on foreign investors (FIs). Statistics indicate that FIs in September sold VND8,400 bn worth of shares through order matching transactions on HoSE.
The cash flow from foreign ETF was also rather negative when FTSE and VNM ETF witnessed net withdrawals of US$57.4 mn and $1 mn, respectively. Similarly, Fubon ETF also made a net withdrawal of $6.8 m. For domestic ETFs, FUEVFVND had $47.6 mn withdrawn as E1VFVN30 made a net withdrawal of $7.6 mn.
Together with a negative GDP growth, third quarter sales of LCs are expected to be gloomy. Take the real estate sector for example, it usually has low sales in the third quarter. Worse still, the prolonged social distancing caused delayed sale and slowed construction activities in key areas like Ho Chi Minh City, Dong Nai, Binh Duong and Long An provinces, seriously affecting the handover plan and profit recording for the future. However, the sales of real estate LCs have not been negative, but rather saw a significant growth compared with the industrial real estate sector.
The most impressive results of the third quarter sales came from the steel sector, because of large volumes of exports of galvanized sheet metal to foreign countries like Europe and America and steel billets to China. What is special is the rise in steel prices in such markets that has helped ensure profit margins. Similarly, an enormous increase in oil and rubber prices in the international market has raised hopes for LCs in these two areas. The biggest profits must have been enjoyed by sectors benefiting from the pandemic such as retailers of consumer goods, technology and healthcare products.
The month of October, with focus on the third quarter financial statements, is the time for the market to measure the negative effects of the Covid-19 pandemic on business activities of all LCs. The fact that the VN Index has been shook violently by around 1,400 points in recent sessions proves that the market has been accumulating resources for a new rise in the final two months of the year.
This expectation has been based on the recovery of LCs in the fourth quarter, as social distancing regulations have been gradually relaxed since the first week of October. The estimation has come from the actual situation of the stock market in September when VN Index, though facing many challenges, was able to keep its balance partly due to the cash flow from individual investors and the self-trading division of securities companies. Statistics show that the self-trading divisions of the securities companies made net purchases of VND 1,418 bn in September.
A representative from Bao Viet Securities Joint Stock Company (BVSC) said that the reopening of the economy in the fourth quarter has been a positive element for facilitating the production and business activities of LCs. A large economic stimulus package is expected to satisfy investors, drive the market growth and push the rise in prices of shares that could benefit from this stimulus.
In addition to further public investments, the management agencies will introduce more policies in order to take advantage of private investments. Further implementation of public investments will enable LCs in construction and raw materials to attract investor attention and interest. It could be a great choice for the industrial real estate sector in the fourth quarter because this group does not benefit from increased public investments, but it may also enjoy inflow of FDI capital after a long period of strict social distancing over the last few months.
EPS at LCs is predicted to grow by 21% on HoSE in 2022. With a similar optimistic view, BVSC believes that low interest rates, the interest of domestic individual investors, and the hopes pinned on the largest ever economic stimulus package, will all play a pivotal role in determining the market trends in the fourth quarter. VN Index is very likely to gain large number of points in the fourth quarter and end the year 2021 with around 1,400 to 1,450 points.
Trung Luong – My Thuan Expressway expected to open to traffic at Lunar New Year
Deputy Minister of Transport Le Dinh Tho on October 25 led a delegation to check the construction progress of the Trung Luong - My Thuan Expressway project which is expected to open to traffic at Lunar New Year.
According to the report of Trung Luong - My Thuan BOT Joint Stock Company, up to now, the construction of road base has been completed for 44 kilometers out of 45 kilometers; 39 kilometers out of 45 kilometers have been completed with asphalt treated base; the surface of 37 kilometers out of 45 kilometers have been covered. In construction package XL-10, the remaining 280 meters are expected to be unloaded on November 15 after the observation meets the requirements for technical settlement.
“Currently, the project is in the crunch time to be on schedule. There are only about 10 kilometers that need to finish the surface. From now to November, the construction units will complete the asphalt surface of this remaining part of the road and construct the traffic safety system, road signs, and communications. The company strives to complete the project by the end of this year to serve the travel demand during the Lunar New Year," said Mr. Nguyen Tan Dong, General Director of Trung Luong - My Thuan BOT Joint Stock Company.
One of the current obstacles is that up to now, the toll collection scheme of the HCMC - Trung Luong Expressway has not been approved by the Government, and the time for toll collection has not been determined yet.
Therefore, when the Trung Luong - My Thuan project is completed at the end of this year, it will be hard to come into operation because it has not been connected to the toll collection system of the HCMC - Trung Luong Expressway to collect tolls.
In related news, the Ministry of Transport (MoT), on October 25, organized two delegations to inspect passenger transport in some provinces across the country. The results show that Covid-19 prevention measures have been implemented strictly and following regulations at many bus stations. However, the number of vehicles and passengers remains small.
In Hanoi, only four provinces have agreed to resume inter-provincial passenger transport. From October 13 to now, there have been nearly 100 bus trips, transporting about 3,500 passengers. In Hai Duong Province, eight provinces and cities have agreed to resume passenger transport with 23 active vehicles. The province also proposed to reopen only passenger transport from the Central northwards and continue to suspend passenger transport from the Southern ones.
Thus, up to now, many inter-provincial transport routes have not been able to operate due to the lack of consensus from the convective provinces. Many transport businesses have suggested the Ministry of Transport consider no need for consensus for localities that have returned to normalcy. And the Departments of Transport can decide to reopen passenger transport by themselves and notify the destination department.
Experts suggest reducing taxes to stabilize gasoline prices
Domestic retail prices of petrol and oil products were allowed to adjust to the new selling price, with an increase of more than VND1,400 per liter for gasoline and more than VND1,000 per liter for oil as of 4 p.m. on October 26. As the global oil prices have risen to the highest level in the past seven years, while the Fuel Price Stabilization Fund has almost been exhausted, the most feasible solution is to reduce taxes to share difficulties with consumers and businesses.
Assoc. Prof.-Dr. Ngo Tri Long, former Deputy Director of the Institute for Price and Market Research under the Ministry of Finance, said that the sharp increase in gasoline prices would have great impacts on the costs of direct production and consumption industries, such as transportation, offshore fishing, and agriculture. At the same time, it would affect the price level, leading to the risk of inflation. In the current context, there are two ways to lower or stabilize gasoline prices. Amid the context that the Fuel Price Stabilization Fund is relatively exhausted because it has continuously spent for many months, reducing tax is the sole feasible solution.
According to Assoc. Prof.-Dr. Dinh Trong Thinh of the Academy of Finance, in the current structure of petrol price, taxes and fees account for more than 40 percent. Petrol has to carry four types of taxes, including import tax, value-added tax, excise tax, and environmental protection tax, not including corporate tax, which is carried by businesses. Of these, the environmental protection tax for each liter of gasoline is fixed at VND3,000-VND4,000 per liter, borne by consumers. If these taxes are cut along with the flexible and effective management of the Fuel Price Stabilization Fund, the rising momentum of fuel prices will be controlled.
Mr. Tran Duy Dong, Director of the Domestic Markets Department under the Ministry of Industry and Trade (MoIT), said that besides flexibly using the Fuel Price Stabilization Fund, the MoIT would report to the Government and propose some solutions. Specifically, it would suggest the Prime Minister direct the Ministry of Finance to reduce taxes and fees, including import-export tax, excise tax, and especially, environmental protection tax. To prevent the risk of fuel traders taking advantage of increasing gasoline prices, on the afternoon of October 26, the MoIT said it would coordinate with relevant agencies to inspect and supervise the responsibility of ensuring the supply of petrol and oil to the market of fuel traders and strictly handle violations if any.
Explaining the reason why the world oil prices had constantly escalated, Ms. Le Viet Nga, Deputy Director of the Domestic Markets Department, said that many economies were gradually recovering after controlling the Covid-19 pandemic, so the demand for travel and production highly increased. The high global oil price is an important factor affecting the domestic petrol price and is forecasted to be unlikely to decline in the coming time.
Assoc. Prof.-Dr. Ngo Tri Long said that many people forecast that oil prices could increase to US$100 per barrel. "In my opinion, oil prices will not be able to reach $100," he said and cited that “the recent increase in oil prices is triggered by the recovery of the global economy, but this recovery is brief. The pandemic may recur and develop complicatedly in many countries. More importantly, too high world oil prices will lead to a contraction in production and a slump in demand. The Organization of the Petroleum Exporting Countries (OPEC) certainly does not want that.”
Previously, assessing the average increase in gasoline prices in the first nine months of this year, Mr. Nguyen Bich Lam, former General Director of the General Statistics Office, said that the increase in petrol prices not only inflated the cost prices of goods and services but also directly enlarged the Consumer Price Index (CPI), affecting people's income and spending. A 10-percent increase in gasoline price causes the CPI to climb by 0.36 percentage points and decrease the GDP by about 0.5 percent. This reduction has a significant impact on economic growth. Spending on petrol accounts for 1.5 percent of total household final consumption expenditure, so when gasoline prices surge, people will restructure and cut a part of their spending, curtailing the economy's aggregate demand.
Localities cautious over tourism reopening
After months in lockdown, several provinces and cities nationwide have resumed tourism activities and reopened for visitors under strict safety guidelines.
Many travel agents in the central coastal province of Khanh Hoa have received domestic tourists who had “Covid green card” or “Covid yellow card” since October 16. Nha Trang City’s attractions, such as Ponagar Tower, Hon Chong Promontory, public beaches, hotels and Vinpearl Resort have also reopened.
Executive director of Champa Island Nha Trang Resort Hotel and Spa, Vo Thi Phuong Nha said that the resort must ensure the implementation of Covid-19 prevention and control rules and safety standards for room, restaurant and environment. The facility has received a small number of visitors for over ten days but the hotel staff is very happy and eager for the reopening of tourism sector.
Three 3-5 star hotels and resorts in Phan Thiet City, Binh Thuan Province have also welcomed the first delegations of tourists in recent days. At first, the province will focus on receiving domestic visitors and expects to greet international tourists in the first quarter of 2022, said Chairman of the Binh Thuan Province Tourism Association Nguyen Van Khoa.
Ba Ria-Vung Tau Province has slightly lifted some Covid-19 restrictions on trans-provincial travelling and on swimming at public beaches since October 16. Service facilities in areas at the Covid-19 alert level 1 and 2 have been allowed to re-operate at 100 percent capacity. In the locations at the Covid-19 alert level 3, indoor and outdoor gatherings of more than 25 people have been banned while accommodation and food services have been permitted to operate not exceed 50 percent capacity.
Mr. Nguyen Van Hau, an owner of a 40-room hotel in Vung Tau City said that accommodation units are required to build the disease prevention and control plan approved by district-level authorities. The provincial Department of Tourism has issued a document on asking hotels and resorts not to receive travelers from affected areas, such as HCMC, Dong Nai, Binh Duong and Long An.
Most of localities cautiously launched disease prevention and control rules, including receiving at least one dose of the Covid-19 vaccine around 14 days after vaccination, displaying certificate of recovery from Covid-19 within six months, children who have not got vaccinated must have negative test result for Covid-19, collecting samples of all arrivals for Covid-19 testing, employees who directly contact with customers have to be fully vaccinated while others must get at least one dose of the Covid-19 vaccine.
Director of the Department of Tourism of Khanh Hoa Province said that tourist businesses have to build prevention and control plan of Covid-19 and take responsibility for managing their employees and visitors. The department has coordinated with functional units to build pandemic response plan for tourists infected with the virus.
On October 26, the Department of Tourism of Kien Giang Province announced that the province will begin welcoming local tourists starting on November 1 and carry out a pilot plan on receiving travelers coming from the areas at the Covid-19 alert level 1 and 2.
Chairman of the provincial People’s Committee Lam Minh Thanh approved an experimental program on receiving international visitors having vaccine passport to Phu Quoc Island and charter flights to the island from November 20, welcoming 3,000-5,000 travelers per month via charter flights to the limited destinations in the province from December 20-March 20, 2022, receiving 5,000-10,000 people per month from March 20-June 20, 2022.
Seminar seeks to boost Vietnam’s farm produce export to EU
The Ministry of Agriculture and Rural Development, Ministry of Foreign Affairs and Ministry of Industry and Trade co-organised a seminar on promoting the export of Vietnamese fruits and vegetables to the European Union (EU) both online and offline.
Speaking at the event, Deputy Foreign Minister Nguyen Minh Vu said the export of farm produce to the EU is beginning to gain benefits from the EU-Vietnam Free Trade Agreement (EVFTA).
As there remains room to further boost exports, he asked ambassadors and Vietnamese representative agencies in the EU to continue working closely with ministries, agencies and localities on the issue.
Vietnamese ambassadors and commercial counsellors to Belgium, Germany, Czech Republic, Austria, the Netherlands and Italy and several EU nations informed the EU’s latest regulations and market demand, opportunities and challenges to Vietnam when exporting to these markets.
They said the EU is paying more attention to importing organic fruits and vegetables meeting food safety and ethical standards.
The Vietnamese exporters proposed relevant ministries and agencies regularly update information about regulations, demand, costs and consumers’ taste in the EU, build a national marketing strategy for several goods of strength, and consider the possibility of establishing associations of farm produce exporters to the EU.
Concluding the event, Minister of Agriculture and Rural Development Le Minh Hoan pointed out three biggest barriers to the export of Vietnamese farm produce, including climate change, market fluctuations and changes in consumption trend.
According to him, the Vietnamese agriculture sector should build its trademark based on transparency, responsibility and sustainability as the world is switching to green production and consumption.
He also took the occasion to call on firms to establish alliances and associations to popularise national farm produce trademarks./.
ABBANK offers more than 114 million shares to existing shareholders
An Binh Commercial Joint Stock Bank (code: ABB) has received approval for its proposed public offering of 114.26 million shares to existing shareholders at VND10,000 per share at the rate of 20 per cent in the fourth quarter of 2021.
The bank expects to collect more than VND1.14 trillion (US$50.07 million) from the issuance (plus shares under an ESOP scheme), and will use the money to meet capital adequacy ratios and use it to supplement working capital, upgrade its information technology system and strengthen its digitisation platform.
The bank is in the process of applying to the State Securities Commission for issuance of nearly 11.43 millions shares equivalent to 2 per cent of its charter capital for employees under an ESOP scheme.
After completing the issuance to existing shareholders and employees, it plans to issue bonus shares at a rate of 35 per cent by capitalising undistributed profits and the reserve fund of nearly VND2.44 trillion.
They will take its charter capital to nearly VND10 billion ($439.26 million).
ABBANK is also preparing to change its listing from UPCoM to one of the country’s two exchanges in Ha Noi and HCM City in the near future.
VN-Index gains over 31 points, setting new record high
Shares settled higher on Wednesday as the return of investors' risk appetite pushed the general sentiment on the market. Foreign investments also came back with a net buy volume of more than VND1 trillion (US$44.8 million).
The benchmark VN-Index on the Ho Chi Minh Stock Exchange (HoSE) rose to the highest level since 2000, when the market was established, and broke over the key level of 1,400 points.
It surged 31.30 points, or 2.26 per cent, to 1,423.02 points. The index rose more than 18 points this morning.
The market's breadth was positive, with the liquidity rising sharply. The total trading value on the stock market was over VND30.4 trillion, up 29.7 per cent compared to yesterday. Of which, the trading value on HoSE jumped 28 per cent to VND25 trillion.
The index's strong rally was boosted by gains in many large-cap stocks across all sectors on rising risk appetite. The 30 biggest stocks VN30-Index climbed 33.84 points, or 2.28 per cent, to 1,516.46 points, with all stocks witnessing gains in the afternoon session.
Data compiled by vietstock.vn showed that PetroVietnam Gas (GAS) was the biggest gainer yesterday, with the shares hitting the maximum daily gain of 7 per cent.
Other big stocks supporting the market were in real estate, manufacturing and bank stocks, including Vingroup (VIC), Vinhomes, (VHM), Masan Group (MSN), Vietcombank (VCB), and Hoa Phat Group (HPG). These stocks all posted gains of more than 2 per cent.
On the Ha Noi Stock Exchange (HNX), the HNX-Index also inched higher on large-cap stocks. It ended yesterday's trade at 404.37 points, up 6.56 points, or 1.65 per cent.
During the session, over 152.3 million shares were traded on the northern bourse, worth VND4.1 trillion.
Meanwhile, foreign investors were net buyer on the market, with a total value of VND973.39 billion. Of which, they net bought a value of VND1.02 trillion on HoSE, but net sold a value of VND47.39 billion on HNX.
Vietnam remains attractive investment destination: Report
Vietnam is still seen as an attractive destination and the problems of 2021 do not mean that foreign investors will turn away, according to a recent report by Singapore Institute of International Affairs (SIIA).
Singapore – Vietnam is still seen as an attractive destination and the problems of 2021 do not mean that foreign investors will turn away, according to a recent report by Singapore Institute of International Affairs (SIIA).
Entitled “From Crisis to Endemic: Stumbling or Pressing Ahead?” the report examined the economies of Indonesia, Vietnam, Malaysia, and Thailand, which together account for over 70 percent of overall ASEAN gross domestic product (GDP).
In 2020, Vietnam was held up as a model for its ability to curb the initial COVID-19 outbreak, with discipline and social support for strong measures, resulting in low, near-zero numbers, it said. However, this has changed in 2021, when the country has experienced a surge of cases since 27 April, driven by the Delta variant, and the situation could not return to the previous low levels of infection.
The extensive lockdowns to prevent the spread of the coronavirus have disrupted not only local consumption but also impacting the manufacturing and supply chain activities to export markets. The pandemic impacts were especially felt by manufacturers of garments and electronics, noted the report.
At the macro-level, however, the Vietnamese economy showed considerable resilience. Even amidst the 2021 pandemic situation, trade numbers have remained strong with Vietnam’s total trade value of goods up 33.5 percent year-on-year in the first five months of 2021. This is supported by strong economic recoveries in major markets, especially the US and China, according to the report.
The report said challenges and impacts experienced by businesses operations and supply chains in 2021 could impact the future. Nevertheless, economists forecast Vietnam should still attract some 30 billion USD in foreign direct investment (FDI) this year, or a 2 percent rise, year on year.
At a conference to announce the reports, experts held that the investment environment of Vietnam in the long term is prominent compared to other ASEAN major economies thanks to the political stability. Vietnamese attraction also comes from the country’s special policies to facilitate production and technology development, they said.
Timing right for ambitious electric vehicle takeover
Electric vehicles are seemingly an irreversible trend in the automobile industry, and are expected to grow strongly across the world. With that, manufacturers in Vietnam are setting out ambitions to take their chances in the market – but inferior battery infrastructure and a lack of mechanisms to encourage consumers and support businesses will be urgently required first.
Vingroup, the largest private conglomerate in Vietnam, is set to build a $387 million battery cell factory for its electric vehicle (EV) unit VinFast in the central province of Ha Tinh. The new battery plant, with an annual full capacity of 5 gigawatt-hours (GWh), will be constructed on a 12.6-hectare plot, according to provincial authorities.
The plant is expected to start production with an annual capacity of 3GWh after hardware and software are put in place by the third quarter of 2022, and is expected to be operating at full capacity by 2025.
The move is just the latest in a series of bold actions for VinFast, which unveiled its EVs in 2019 with a view to bringing low-cost Made-in-Vietnam green vehicles to the wider world.
According to VinFast, it will officially launch two smart EV models globally in March next year. These are being called breakthrough electric SUVs with impressive exterior designs and top-of-the-range convenience, meeting the highest international safety standards. Both models will feature advanced driver assistance and infotainment systems developed by VinFast and its partners.
“The fact that European and North American governments have announced roadmaps to ban internal combustion engine cars and switch to electric vehicles is a perfect opportunity for VinFast to conquer the global market,” stated Thai Thi Thanh Hai, CEO of VinFast Global. “We are confident that VinFast will be positively welcomed around the world thanks to high quality, a flexible and innovative sales policy, and high-class aftersales services.”
In terms of personnel, as well as a core of Vietnamese senior managers, VinFast has also recruited automotive and business experts from leading carmakers like Tesla, BMW, Porsche, Toyota, and Nissan. Together, they have developed the organisation and expanded partner networks to prepare for market entry.
VinFast this year officially kickstarted its branches in the United States, Canada, France, Germany, and the Netherlands in preparation for launch in those markets, moving closer towards the goal of becoming a global smart electric car company.
In terms of infrastructure, the manufacturer has also completed more than a quarter of the potential 2,000 charging stations in the plan of phase 1 in Vietnam’s 63 cities and provinces. It still hopes to complete the charging station target by the end of this year.
Other car companies operating in Vietnam boast EV products and have plans to develop additional charging stations, with Central Power Corporation also successfully producing EV charging stations.
However, Pham Thi Thuy Duong, director of the Centre for Charging Stations at VinFast, said that VinFast’s charging station is fully compliant with international standards, and can theoretically charge all compatible vehicles.
“In the first phase, we just tested the safety of VinFast cars, so we only temporarily provided VinFast cars. In the future, when other car models enter the market, I hope that many others will invest in charging stations and can share them,” she explained, while insisting that Vietnam has a golden opportunity to develop the EV industry as the country has a lot of potential for developing clean energy sources like wind and solar power.
Currently, sales of two-wheeled electric vehicles in Vietnam have hit about 500,000 units per year with an annual growth rate of around 30 per cent. The market was mainly imported previously, but the number of locally-assembled two-wheeled EVs has increased sharply from the end of 2018 with the participation of VinFast. Although the market in Vietnam is only in its infancy, there is still a lot of potential in the development of EVs, according to the Ministry of Industry and Trade (MoIT).
Nevertheless, currently some of the largest car and motorbike manufacturers in Vietnam, such as Honda, are remaining cautious in introducing electric products to the market due to the lack of charger systems and incentives.
“EVs have specific characteristics in terms of charging stations, while currently the infrastructure is not sufficient,” explained a representative of Honda Vietnam. “In terms of production, Vietnam’s battery and electric motorcycle manufacturers have not met the world’s standards, leading to high prices and difficult access for consumers. Additionally, in terms of recovery and disposal, there is currently no maximum support.”
Deputy Minister of Transport Le Dinh Tho has admitted that EVs are considered one solution to save energy and reduce air pollution, with many countries launching plans to convert fossil fuel vehicles into the era of green, electric, and even self-driving cars.
“Vietnam currently has one million electric motorbikes and thousands of electric cars will be handed over by the end of this year,” Tho said. “Meanwhile, a number of enterprises that manufacture and import cars and motorcycles in Vietnam have started testing, manufacturing, and launching environmentally-friendly vehicles such as hybrids and electric motorcycles.”
Tho added that with a population of nearly 100 million people, the number of EVs is still very limited. Therefore, it is necessary to raise the issue of state management through sets of standards and regulations and to develop management regulations, mechanisms, and policies to develop EVs.
Pham Tuan Anh, deputy director of the Industry Agency under the MoIT, said that there are many factors affecting the development of the industry in Vietnam right now, with the top barriers being low average incomes and the lack of preferential policies.
“The development of the EV industry needs to integrate and utilise the existing capacity of automobile manufacturers. This development must be consistent with current transport infrastructure plans and infrastructure for EVs such as electric charging stations,” he added.
In order to develop EVs, the MoIT has proposed to the Ministry of Finance (MoF) that it is necessary to attract more foreign-invested projects and investors with taxes, fees, and environmental policies. “At the same time, Vietnam must build supporting industries to serve such projects that can invest in producing EVs,” Tuan Anh said.
Meanwhile, the Vietnam Automobile Manufacturers Association (VAMA) proposed that the government encourages consumer demand by granting a special consumption tax for the development of EVs in order to make the nation’s goals a reality. It has requested that the government reduce registration rates for hybrid electric cars by 50 per cent, plug-in hybrid EVs by 70 per cent, and battery-powered EVs by 100 per cent. Moreover, financial assistance for parking fees and environmental levies is required, and charging station infrastructure installation must fulfil certain specifications, according to VAMA.
Vietnam’s automobile industry aims to produce around one million cars of all types between 2021 and 2030, with internal combustion engines remaining the most popular. Electric car development will accelerate between 2030 and 2040, with a production capacity of 3.5 million vehicles available, while the local automobile industry will have stable growth from 2040 to 2050, after which it will become saturated with a production capacity of about 4-4.5 million vehicles.
In terms of the environment, Truong Ba Tuan, deputy director of the MoF’s Tax Policy Department, said that the country shall implement appropriate tax policies to encourage the production and use of environmentally-friendly vehicles in order to meet emission reduction targets.
“Policies promoting production of eco-friendly cars and EVs in the country should be consistent with promoting the overall development of the automobile industry,” Tuan said. “It is especially important to align the promotion of them with the policy of developing other strategic car lines identified in the long-term development orientation. An appropriate transition from the production of automobiles powered by fossil fuels is required.”
In 2007, when researching and developing a proposal to amend the excise tax policy, the integration of environmental protection objectives into the Law on Special Consumption Tax was set out for the first time. Through the current adjustments, the excise tax rate for electric cars is deemed quite low, ranging from 1-15 per cent depending on the number of seats. The difference for cars powered by fossil fuels ranges from 10-150 per cent depending on the number of seats and capacity.
Source: VNA/VNS/VOV/VIR/SGT/SGGP/Nhan Dan
Vietnam remains attractive investment destination: Report