Foreign firms to gain greater footing in petrol retail market
New policies are in the making to allow foreign firms to gain greater footing in Vietnam's petrol retail market, according to the Ministry of Industry and Trade (MoIT).
Government Decision 83/2014/ND-CP, for the first time, considers giving the green light to domestic petrol retail firms to sell up to 34 percent of their shares to foreign buyers. The sales must also be inspected and approved by the MoIT before taking effect.
In recent years, as domestic firms pushed for equitisation many have become part-owned by foreign firms including the Vietnam National Petroleum Group (Petrolimex) with 8 percent owned by foreign partners, PetroVietnam Oil Corporation (PVOIL) 20 percent and Nghi Son Refinery and Petrochemical 34 percent.
Tran Duy Dong, head of the MoIT's domestic market department, said while the country encouraged foreign firms to invest in the domestic market, the Government must reserve the role of market management, explaining the MoIT must inspect and approve sales of shares by domestic firms.
The 34 percent ceiling posed little threat to national energy security as domestic firms would still control the businesses, said expert Dr Dinh Trong Thinh. Meanwhile, having foreign firms in the petrol market is one of the fastest ways for Vietnam to build a market economy.
Vu Vinh Phu, former deputy director of Hanoi’s Department of Industry and Trade, said the 34 percent ceiling allows firms to attract foreign investments and along with them, modern technologies to improve the quality of products and services while maintaining control of the market.
Phu said there was a need to improve transparency and fairness to encourage foreign firms and the Government must ensure a level playing field for all. He also called for petrol prices to be adjusted more frequently (down to a 10-day cycle or fewer compared to the current 15-day) to better reflect the international market's price movement.
Ministry of Construction eyes building low-cost housing
The Ministry of Construction is completing a draft resolution to encourage the development of low-cost commercial apartments to submit to the Government in the third quarter of this year.
The low-cost commercial apartments would have self-contained designs with an area of less than 70sq.m and selling price of under 857 USD per spq.m, The maximum value of an apartment must not exceed 64 USD (including VAT).
The resolution would provide many preferential policies on land use fees, taxes, construction investment procedures and capital mobilisation mechanisms to create favourable conditions for developers to invest in such projects.
Homebuyers would have more opportunities to buy commercial housing at reasonable prices, helping address people's housing needs.
The country has mobilised more 2.6 billion USD to support estate developers to build social housing projects and lend to people in buying and renting such apartments.
Vietnamese longan make inroads into fastidious markets
The northern province of Hai Duong is expected to ship a batch of 250 tonnes of longan to choosy markets such as Europe, Australia, and Singapore this year.
Nguyen Van Phu in An Mo village, Le Loi commune is now planting longan on an area of over 3,200 sq m, all of which meet VietGap standards. In recent days he has followed a strict process to ensure his longan meet requirements for export to Australia, Singapore, and the US. They are now ready for shipping.
Chi Linh city has 673 ha of growing area specifically for longan, with four codes, equal to 43 ha, having been granted for exports to demanding markets around the globe.
Sample testing for pesticide residue is one of the stringent requirements set out by these demanding markets.
Hai Duong province is home to approximately 2,100 ha of longan trees, with this year’s output set to reach over 10,000 tonnes.
This year it boasts more than 50 ha eligible for export to fastidious markets.
Thai economy worst-hit by COVID-19 in ASEAN+3: AMRO
Thailand's economic growth is likely to fall 7.8 percent, the biggest projected drop in the region, due to the impacts of COVID-19 on the tourism and service sectors, according to the ASEAN+3 Macroeconomic Research Office (AMRO).
AMRO's chief economist Hoe Ee Khor said that ASEANs economic growth could drop from 4.6 percent to minus 2.6 percent due to the impacts of the pandemic.
For ASEAN and its Plus Three partners of China, Japan and the Republic of Korea, the average growth could drop from 4.8 percent last year to 0 percent this year, he added.
Many countries are slipping into recession, depending on their economic structures and how successful they were in containing COVID-19, he said.
However, even with the most successful countries like Thailand, he continued, a negative growth of 7.8 percent is expected because its economy depends on tourism and services, which were hit very badly.
He noted that if ASEAN+3 quickly controlled the outbreak, they could grow by as much as 6 percent next year.
The Thai cabinet recently approved the Finance Ministry's proposal to borrow 1.5 billion USD from the Asian Development Bank (ADB) to stimulate and rehabilitate the economy.
The borrowing scheme is part of the government's plan to issue a royal decree to borrow 1 trillion baht (32 billion USD) to revive the virus-hit economy.
Public debt of Laos predicted to increase amid COVID-19
The public debt of Laos may increase to as much as 65 to 68 percent of its gross domestic product (GDP) in 2020 following a sharp fall in national revenue collection alongside an increase in loans due to the COVID-19 pandemic, Vientiane Times reported.
Revenue collection by Laos in 2020 will decrease by about 6.32 trillion kip (696 million USD), Finance Minister and Lao Deputy Prime Minister Somdy Douangdy said at the recent ninth session of the eight National Assembly.
The value of exports during the first six months of 2020 were at a low level of around 2.6 billion USD, a decreased of 5.1 percent compared to the same period of 2019, according to an assessment by an agency of the Ministry of Industry and Commerce.
Important sectors, especially processing industries and construction, showed a decreasing trend. This included falls in cement, gold and copper production.
The exports of several products, such as clothes, cassava, bananas, coffee, wood pulp, paper and electronic equipment, are expected to be heavily impacted.
Investments are expected to decrease. The value of approved investments through the concession system in the first five months of 2020 was only 151 million USD, as against 2.38 billion USD for the same period of 2019.
The tourism sector too is expected to be further impacted during the last six months of the year, as the number of tourist arrivals in Laos in the first six months was only 887,447, a decrease of 60 percent compared to the same period of 2019.
Vietnam gains ground over China in apparel exports to US
Vietnam’s market share in US apparel imports is now equal to that of China, which was the largest supplier of products for fashion companies in the US just seven months ago.
Vietnam is now on par with China in terms of apparel exports to the US in the first six months of 2020, South China Morning Post (SCMP) reported.
SCMP cited data from the US Department of Commerce that US apparel imports from China, by value, dropped from almost 30% in 2019 to 20% during the period, while Vietnam improved its market share from 16% to China’s level over the same period.
Seven months ago, China was still the largest supplier of products for fashion companies in the US but its significant advantage over Vietnam has since evaporated because of the coronavirus and the decoupling tensions between the world’s two biggest economies, according to SCMP.
The erosion of the Chinese position in the US fashion supply chain partially reflects growing tensions, as American fashion firms are forced to reduce their exposure to Chinese suppliers in response to the trade war, the coronavirus pandemic and deteriorating bilateral relations.
A survey by the US Fashion Industry Association, which polled 25 executives from leading fashion companies in the second quarter, found that while most imported from a mixture of countries, including China and Vietnam, 29% said they sourced more from Vietnam than China this year, up from 25% last year.
“Should US-China trade tensions continue to escalate, it is likely that US fashion companies will substantially cut their China sourcing further, even if it is not a preferred choice economically,” Sheng Lu, associate professor of fashion and apparel studies at the University of Delaware, was quoted by SCMP as saying.
The worsening ties between the US and China has also accelerated the move already underway by Chinese manufacturers and exporters to shift some productions out of China to nearby countries to take advantage of lower labour costs and avoid American import tariffs. However, the shift has been slowed this year due to travel restrictions caused by the pandemic.
“Foreign investments have truly played a critical role in helping Vietnam develop and expand its garment production capacity,” added Lu from the University of Delaware.
Over the past three decades, foreign direct investment flowing into Vietnam’s textile and garment industry totaled US$19.5 billion, with South Korea being the top source, followed by Taiwan, Hong Kong and China, according to the Ministry of Planning and Investment in Vietnam.
HCM City supports tourism businesses in face of COVID-19
Authorities of the southern metropolis of Ho Chi Minh City are continuously taking preventive measures to ensure safety for tourists while supporting travel businesses to overcome difficulties and devising policies to promote tourism for the post-pandemic period.
As the disease broke out again in Da Nang in July, many enterprises in HCM City have delayed or cancelled their tourism programmes in the central coastal city.
Bui Ta Hoang Vu, Director of the municipal Department of Tourism, said the department will continue assessing losses caused by the pandemic and propose solutions to the municipal People’s Committee to deal with setbacks and maintain operation for enterprises.
The department is studying scenarios to resume the tourism industry after the pandemic is brought under control and to continue investment so as to improve the quality of tourism products and services, he added.
According to the municipal Department of Health, more than 36,000 people returning from Da Nang have made health declarations. However, airlines’ statistics show that 140,000 people were on flights from Da Nang to HCM City in July and this keeps the risk of COVID-19 infections in the community high.
So far, HCM City has recorded a total of 71 COVID-19 cases, including 62 recoveries, according to the Ministry of Health.
Malaysia promotes cheap sales to spur economic growth
The Malaysian government has allowed traders to hold unlimited cheap sales in a bid to fuel consumer spending, thereby boosting the country's economy amid the COVID-19 pandemic.
According to the New Straits Times, traders in Malaysia were previously allowed to organise cheap sales four times a year, thrice stipulated by the government and another period and date chosen by business operators.
The government’s new initiative now enables them to hold unlimited cheap sales without quotas.
Professor Dr Yeah Kim Leng from the Sunway University Business School of Economics said such a move could spur growth and improve the country's economy, noting that the normalisation of consumer spending is crucial to the country's sustained economic recovery.
It is especially important during the current COVID-19-induced downturn in reviving the domestic economy, especially in the affected industries such as hospitality, restaurant, food, retail and tourism that sustain the livelihood of a large number of employees and small businesses, according to him.
Echoing Yeah, Bank Islam chief economist Dr Mohd Afzanizam Abdul Rashid said consumer spending had always been the major driver for growth, which accounted for more than 50 percent of the Malaysian economy, and its boom could be seen from May when restrictions were relaxed and the economy was reopened.
The government's move to allow cheap sales should help to steer consumer spending more steadily, he added.
Like many other countries, the Malaysian economy has been hit hard by the COVID-19 pandemic. Over the past months, the country’s government has issued several stimulus packages to help the domestic economy weather difficulties.
Cambodia speeds up formation of state property management bill
Cambodia’s draft law on state property management, which was reviewed by the country’s National Assembly at the request of the government, has been handed over to an expert committee for further study.
The Khmer Times reported that the Cambodian Council of Ministers adopted the draft law, which contains 12 chapters and 90 articles, at its meeting chaired by Prime Minister Hun Sen on July 3.
A statement from the Council of Ministers said that the bill is based on Article 58 of the 1993 Cambodian Constitution.
This article states that state property includes land, underground, mountains, seas, seabed, undersea, under-seabed, beach, air spaces, islands, rivers, creek, lakes, tributaries, forests, natural resources, economic and cultural centres, national defence bases and other buildings are designated as state-owned and managed by Cambodian law.
The National Assembly permanent committee noted in a statement that the draft law is designed to strengthen the legal framework, institutional structure and enhance the institutional capacity in managing state assets.
It includes identifying types of state asset sources, strengthening legal systems, managing property and inventory of state property, transfer of asset tenure, development, use of state property, inspection and audit, incentives and penalties for violations of the law regarding such, the statement added.
Executive director of Transparency International Cambodia Pech Pisey said the formation of the law on state property is a positive move because Cambodia has yet to have such specific laws covering the matter.
Vietnam’s rice exports to Africa continue to rise
Vietnam’s rice exports to Africa rose sharply in the first six months of 2020 and are expected to continue surging in the remainder of the year and in 2021, according to Vietnamese Trade Counsellor in Algeria Hoang Duc Nhuan.
Africa is one of the biggest rice importers in the world. Each year, the region imports about 12-13 million tonnes of rice. In 2019, Vietnam shipped rice worth nearly 630 million USD to 35 out of the total 55 African countries, including major markets such as Cote d’Ivoire, Ghana, Senegal, Mozambique, Cameroon, Gabon, Tanzania, and Egypt.
Notably in January-June, Vietnam exported 41,150 tonnes of rice with turnover of 14.58 million USD, up 28.5 times in volume and 19.5 times in value.
The Vietnamese Trade Office in Algeria, which is also in charge of Mali, Niger, Senegal and Gambia, has been updating adjustments in their trade policies and rice import regulations to promptly inform to the Ministry of Industry and Trade as well as introduce businesses opportunities for Vietnamese enterprises.
Besides rice, Vietnam could boost exports of other farm produce such as coffee, pepper, cashew nut, fruit and vegetable, confectionery, cereal and aquatic products, as well as industrial products such as garment-textile, footwear, computers, electronic products and spare parts.
Vice versa, Vietnam could continue purchasing raw materials with reasonable prices from the markets to serve the processing and producing sectors at home.
From mid-July to early August 2020, Mali, Niger and Senegal have re-opened some air and land routes after controlling the COVID-19 pandemic. This would help resume trade and investment exchanges with other countries, including Vietnam.
Thailand devises three scenarios for tourism recovery
The Tourism Authority of Thailand (TAT) has envisioned three scenarios for the recovery pace of the country’s tourism next year, with the worst case being a contraction of revenue from international visitors to 296 billion THB (about 9.5 billion USD).
Local media quoted TAT Governor Yuthasak Supasorn as saying that the worst-case scenario, in which the country only allows international commercial flights to resume in the last quarter of 2021 amid a prolonged pandemic and global economic downturn, will see Thailand welcome just 6.14 million foreign tourists, mostly from Asia.
The worst-case scenario for the domestic market is a nationwide lockdown that forces economic growth to plunge 8 percent year-on-year, resulting in 68.4 million trips for the full year, generating 380 billion THB.
If there is a partial lockdown and an economic contraction of 3 percent, the number of domestic trips is estimated at 76.2 million, contributing 458 billion THB to the country.
The base case is for tourism to start a recovery path by the third quarter, with Thailand initially welcoming tourists from short-haul markets. At that time, tourists from Europe should gradually return during the summer break in July and August 2021, before fully rebounding by the end of the year.
Thailand will receive 12.5 million international travellers and 618 billion THB in revenue in the base-case scenario.
If the country reports zero local infections, while GDP growth is at 5 percent and the consumer confidence index falls 3 percent, there will be 84.92 million domestic trips with 491 billion THB in spending.
In the best-case scenario, total tourism revenue will reach 1.52 trillion THB, with Thailand recovering at the fastest pace in the second quarter.
Yuthasak said the agency estimates 20.5 million tourists coming from Asia and Europe during the summer break, which will generate 977 billion THB. Local travellers will take 89.2 million trips with 548 billion THB in spending if there are appropriate benefits to stimulate the market.
In the first six months of 2020, the number of foreign visitors to this country stood at 6.69 million, a year-on-year decline of 66 percent. The TAT predicted that foreign arrivals this year may plunge to 7 million, compared to the record of 39.8 million in 2019, if Thailand remains closed for international travellers in the fourth quarter of 2020.
Thailand cuts chicken production as global demand drops
Thai chicken exports rose less than expected in the first half of this year due to COVID-19, according to the Thai Broiler Processing Exporters Association (TBPEA).
Thailand exported 470,000 tonnes of chicken in the first six months of 2020, representing a year-on-year rise of 2 percent, with export value of 54 billion baht (about 1.73 billion USD), up 1 billion baht.
The local media recently cited TBPEA manager Kukrit Arepagorn as saying the pandemic has caused Thailand’s two main markets, the European Union (EU) and Japan, to cut chicken imports.
Chicken exports to the EU dropped by 10 percent as the COVID-19 situation there is not yet resolved, he said, adding that Thailand expects to export 280,000 tonnes of chicken to the EU this year, down from 330,000 tonnes last year.
Meanwhile, chicken exports to Japan only rose by 2 percent because the virus outbreak had hit tourism and forced the country to postpone the Tokyo Olympic Games, reducing demand.
However, Kukrit said exports to China and Singapore had increased by 100,000 tonnes and 20,000 tonnes respectively in the six-month period.
Thailand adjusts rice strategy to improve competitiveness
Thai Deputy Prime Minister and Commerce Minister Jurin Laksanawisit has pledged to speed up adjustment of the country’s rice strategy as quickly as possible as the industry is facing an array of challenges, including a strong baht and rising production costs.
Local media quoted the official as saying after presiding over a recent Thai hom mali fragrant rice fair that rice exports have fared poorly since the beginning of last year because of foreign exchange swings and the ascendant baht, making Thai rice more expensive than competing grains.
The country’s Ministry of Commerce is pursuing a rice strategy to improve competitiveness, covering all systems including marketing, cultivation and R&D of new rice varieties, Jurin said, noting that it is also working to find ways to reduce production costs for farmers to make Thai rice more affordable.
He added it is promoting seven rice products and seed development as part of a marketing-led production strategy for 2020-24 recently announced by the ministry.
Jurin said the ministry will work closely with the Thai Rice Exporters Association to seek new trade partners to expand the export market, as Thai rice remains in strong demand globally given its quality.
The ministry has also ordered commercial ambassadors in various countries to accelerate seeking new markets and promote Thai rice to reach more consumers in overseas markets.
The official confirmed that the strong baht and the coronavirus pandemic are the main obstacles for rice exports this year.
The Thai Rice Exporters Association recently lowered its export forecast for 2020 to 6.5 million tonnes, the lowest in 20 years, from an earlier forecast of 7.5 million due to a host of headwinds./.
Indonesia to expand social aid, incentives for businesses
The Indonesian Government is planning to expand its social aid programme and incentives for micro, small and medium enterprises (MSMEs) in an effort to boost consumer spending and revive the economy in the second half of this year.
Finance Minister Sri Mulyani Indrawati said during a recent online press conference that the government will reallocate around 70.8 trillion Rp (4.85 billion USD) from existing ineffective stimulus packages to fund the social aid expansion and new incentives.
She noted the social aid program period will be extended to December to cushion the impact of the COVID-19 pandemic.
Under the plan, the government will allocate 4.6 trillion Rp to increase the amount of rice for the 10 million recipients of the Family Hope Program to 15 kilograms per month. It will also disburse 500,000 Rp to 10 million Staple Food Card recipients this month.
The Indonesian Government is also preparing aid for workers with salaries lower than 5 million Rp per month and allocating an estimated budget of 31.2 trillion Rp for such aid.
The aid, in the form of direct cash transfers, will be focused on 13.8 million workers registered on the Workers Social Security Agency database who are not civil servants or State-owned enterprises (SOEs) employees, according to SOEs Minister Erick Thohir.
Finance Minister Sri Mulyani also said the government will offer electricity and tax incentives for businesses and industries as well as productive aid for ultra-micro and micro businesses to support the supply side and help businesses to reduce their production costs.
It will also disburse aid to 12 million MSMEs with a total budget of 30 trillion Rp, she said, noting that the aid is meant for productive use and not in the form of loans.
Indonesia’s gross domestic product (GDP) shrunk 5.32 percent year-on-year in the second quarter as all components, except for net exports, fell annually as a result of the pandemic.
HCM City firms find ways to cope with Covid-19
Many companies in HCM City have adjusted working hours during the Covid-19 outbreak.
Firms in Vietnam and in HCM City, in particular, have reported continued difficulties following the new Covid-19 outbreak. In order to maintain business and protect their employees, they had to strictly implement preventive measures.
In the past seven months, over 200 employees at Hoang Anh Printing House have mostly worked from home and only need to go to the workplace twice or three times a week. This has resulted in a 30% decline in productivity.
The printing house's director Hoang An said, "Since the start of the first outbreak and after social distancing period, we have always asked employees to wear face masks and wash hands and we also adjusted the work schedules. Some people then told me that I could relax the rules a bit but I think that everyone's health is still the first priority."
Duong Hai Dao from Qui Phuc Company said they had carried out many awareness-raising activities about the outbreak and often disinfect the workplace. All of the employees were asked to wear face masks and wash their hands regularly. At the cafeteria, employees were asked to sit apart.
"We have set up a quick-response team to detect any abnormal issues and carried out suitable actions. We are prepared to deal with problems and to ensure operations," Dao said. "We put up banners and slogans to remind everyone about the on-going outbreak."
Tran Viet Anh, director of Nam Thai Son Company, agreed that awareness must be maintained. After the second wave broke out, all of their employees who had been to Danang were asked to self-isolate. They already have experience so everything went smoothly.
According to Anh, the employees understand the situation and take precautions themselves. That was why it was easy to apply changes.
"If we have to transfer goods to provinces and cities with outbreaks, we often brought the goods to a transit zones and warehouses that are safe and far from central areas. Our transportation system hasn't been disrupted," he said.
HCM City industrial production falls sharply
HCM City’s index of industrial production for the first seven months of the year declined by 5.5 per cent year-on-year due to the impact of the COVID-19 pandemic, according to its Department of Industry and Trade.
Metal production, wood and bamboo and wooden products, machinery and equipment, pre-fabricated metal products, and beverages saw declines.
Many of Viet Nam’s trading and investment partners have their borders closed, and so businesses have to scale down production, the department said.
Local businesses also explained that industrial production has been facing pressure from imports.
To avoid negative growth in industrial production during the rest of the year, breakthrough solutions and policies to enable businesses to stabilise and expand production and develop markets are needed, Nguyen Phuong Dong, the department’s deputy director, said.
The city’s overland exports rose by 5.8 per cent to US$24.7 billion in the seven months, but shipments to markets with which Viet Nam has free trade agreements decreased.
For instance, exports to Europe were worth only $2.74 billion, a year-on-year fall of 7 per cent.
China remained the largest market at over $6 billion, a 44.7 per cent rise, followed by the US and Japan.
Domestic demand has reduced significantly.
The city’s total retail sales of goods and services in the period were only VND718.1 trillion ($30.8 billion), down 3.8 per cent year-on-year. Sectors that saw strong declines were accommodation and dining services (down 45.1 per cent) and tourism (74.9 per cent).
The manufacturing industry’s inventory index rose by 5.5 per cent, with sectors having high inventories including electrical equipment manufacturing (68.3 per cent), chemicals and pharmaceuticals (50.3 per cent) and metal production (43 per cent).
In the current context, to maintain production and regain growth momentum, businesses need to take advantage of opportunities in both the domestic and export markets, according to experts.
In the domestic market, businesses must focus on improving product quality, being more innovative in developing their products and building their brand names, they said.
In export markets, enterprises need to effectively exploit advantages brought by free trade agreements (FTAs), including the EVFTA, which has taken effect since the beginning this month, to boost exports; and to capitalise on opportunities brought by FTAs, they must be ready to meet requirements such as rule of origin and intellectual property regulations, they added.
Dozens of tonnes of Vietnamese longan enter Australia over past few weeks
Tonnes of Vietnamese longans have been exported to Australia and distributed in the states of South Australia and Western Australia over the past few weeks.
The most recent shipments saw 7.5 tonnes of longans from the Mekong Delta provinces arrive in Australia on August 6 and a nine-tonne batch departing from the northern province of Hai Duong on August 8.
The fruit will be showcased at a promotional event, titled Nhan Viet Nam minh (Vietnamese longans), to be held by the Vietnam Trade Office in Australia.
Both batches were imported by 4 Ways Fresh – a Australia-based agribusiness founded in 1993.
According to 4 Ways Fresh CEO Ly Hoang Duy, Vietnamese fresh longans have made a good impression with local consumers. Vietnamese longans are sold at lower prices compared to those grown in Australia, Duy said, adding that though the longans are small, they have special flavours and very sweet.
Since the beginning of 2020, 4 Ways Fresh has imported about 30 tonnes of longans from Viet Nam, mostly from suppliers in the Mekong Delta. After the shipment from Hai Duong, the company plans to raise the weekly import to 10 tonnes to meet increasing demand.
The event “Vietnamese longans” will last until the harvest season ends in Viet Nam, according to head of the Viet Nam Trade Office in Australia Nguyen Phu Hoa. It will include promotional activities on social networks, he added.
In 2019, longan became the fourth Vietnamese fruit to gain permission to enter Australian market after lychee, mango and dragon fruit.
Pyn Elite Fund becomes CMC Group’s big shareholder
The Finland-based Pyn Elite Fund has announced it will buy 61,750 shares of CMC Group (CMG) to bring its ownership at the group to 5.08 per cent (equivalent to 5.08 million shares), according to the Ho Chi Minh Stock Exchange (HOSE).
According to the group’s financial report in April to June 2020, its net income rose by 5 per cent from the same period last year to VND1.05 trillion while its after-tax profit was double to VND43 billion.
CMC said the high growth was contributed by solution and technology business (67 per cent year-on-year increase of profit). Its global business started to report profit with a hike of 126 per cent from the same period last year.
CMC is one of the biggest IT and telecom groups in Viet Nam. Established in 1993, CMC operates in three main sectors including technology and solution, global business and telecommunications.
KDF reaches 94 per cent of annual pre-tax profit target
Kido Foods (KDF), the frozen foods subsidiary of KIDO Group, on Friday said it had reached a growth of 20 per cent in pre-tax profit to VND44 billion (US$189 million) in July.
Despite the COVID-19 outbreak, the company’s pre-tax profit within the first seven months exceeded that of the whole year of 2019, reaching 94 per cent of the growth target set for 2020.
KDF’s net revenue in July was VND158 billion ($6.8 million), down by 8 per cent over the same month last year. Net revenue in the first seven months reached VND832 billion ($35.8 million), down by 11 per cent year-on-year.
In the latest report, KDF said the COVID-19 pandemic greatly affected companies operating in the conditional business industry and significantly reduced income and purchasing power of consumers.
When the epidemic broke out again in Viet Nam, the companies continued to be affected by the Government’s anti-epidemic responses, such as cancellation of festivals and closures of tourist areas, restaurants, schools and others.
“As a company directly affected by the external environment, KDF has always been proactive, closely monitoring the market situation. KDF has proactively implemented many measures to boost sales such as shifting the distribution channel, flexibly bringing products closer to consumers, and relocating food cabinets. Grasping the rapidly increasing consumption trend in modern channels such as minimarts, supermarkets and others, KDF continues to promote sales from these channels,” it said.
A sharp decline in income has negatively affected consumer demand and purchasing power. KDF has been analysing, reviewing and optimising its product portfolio. In the meantime, KDF has also been upgrading cabinets drastically, focusing on relocating cabinets to high-performing points, it added.
In the second quarter, the company launched two new ice cream products, namely Celano black sugar bubble milk and Merio strawberry, which were well received by consumers. The company's goal is not only to provide ice cream products to Vietnamese consumers but also to expand to the international market.
In addition, the company continues to closely monitor the market situation and COVID-19 developments to have prompt and timely responses. It is focusing on enhancing distribution channels, bringing products closer to consumers, and launching marketing and promotion campaigns to boost purchasing power.
Mead Johnson Nutrition Vietnam and Shopee team up for Super Brand Day
Mead Johnson Nutrition Vietnam and e-commerce platform Shopee will work together on selling Enfagrow A+ milk formula products during the Super Brand Day from August 9 to 11.
The online promotion event will provide Shopee customers with greater value such as exclusive deals and promotions, exciting vouchers and gifts with purchases, ensuring mums can continue giving the best to their little Adventure-Ready Heroes.
Products on Shopee Mall come with 7-days free returns, 100 per cent authenticity and free shipping.
“As a global leader in health and hygiene, we are committed to helping the local community grow up safe and healthy. We are honoured to partner with Shopee and tap into their extensive user base to reach a wide audience of parents and help them fortify their children’s development with expert nutrition,” said Soren Bech, General Manager at Mead Johnson Nutrition Vietnam.
“By merging Mead Johnson’s strong portfolio of children’s products and our wealth of insights on online shoppers’ behaviour and preferences, we co-created this campaign to better serve our users. The satisfaction of our users remains our top priority and this partnership builds on our continued effort in ensuring consumer demand for important and essentials items are met,” said Vu Thanh Quynh, Communications Manager at Shopee.
As Viet Nam adjusts to the new normal, it is important for children to develop smarter and stronger immune systems to keep them protected, especially as they start embarking on adventures outside their home.
Vietnam outlook ‘one of the brightest’ in Asia, UBS economist
Despite COVID-19 challenges, Vietnam is one of the brightest spots in Asia and its economy is likely to rebound soon, Edward Teather, ASEAN economist at UBS Research told CNBC recently.
In its “Squawk Box Asia” show, Edward Teather noted Vietnam has begun to bear the brunt of the pandemic, but “the outlook is looking one of the brightest in the region.”
“Retail sales, imports (and) industrial production were all actually up on the year in the month of June, which is better than you can say for most economies in the region,” he analysed.
According to the economist, while many economies contracted in the second quarter of 2020 compared to the same period last year, Vietnam’s gross domestic product grew slightly at an estimated 0.36%.
To support his argument, Teather pointed out Vietnam had succeeded in containing the first coronavirus outbreak though it shared a border with China, where the virus outbreak was first reported.
In addition, the enforcement of the European Union – Vietnam Free Trade Agreement (EVFTA) is expected to boost inflows of foreign direct investment into Vietnam.
The ongoing COVID-19 pandemic has caused foreign direct investment levels to grind to a halt, but Teather believed there is “plenty of activity” in the pipeline, and those investments could pick up in 2021 as border restrictions are eased.
Another advantage for Vietnam is that it is emerging as an alternative manufacturing hub for companies that want to shift production out of China due to tensions between Beijing and Washington that have resulted in rising tariffs.
The expert also said the Government’s incentive policies would also help boost the economy, and the central bank signaled to get credit growth up over 10%.
“Vietnam is growing and is well-positioned to continue to take global market share in terms of exports going forward, so pretty bright prospects in a relative sense in the region,” Teather concluded.
HCM City puts solutions in place to implement EVFTA
Since the European Commission first gave approval for the Europe-Vietnam Free Trade Agreement (EVFTA) in October, 2018, Ho Chi Minh City has been active in implementing a range of solutions aimed at helping firms seize the opportunities of this agreement.
The remarks by Duong Anh Duc, Vice Chairman of the HCM City People's Committee came during a recent teleconference detailing the implementation of the EVFTA.
The EU can be considered an important trading partner and a traditional export market, making up the third largest export partner, and the second biggest importer, for the southern metropolis.
Over the past three decades, the EU, excluding the UK, has been behind 909 licensed and certified projects throughout Ho Chi Minh City, totaling capital of US$3.17 billion. Most notably during the first half of the year, 54 European projects received newly-granted investment certificates, whilst the first seven months of the year saw the southern city’s export turnover stand at an estimated US$2.7 billion with import turnover at US$1.5 billion.
Furthermore, Ho Chi Minh’s major exports to the EU market include leather and footwear, garments and textiles, and agricultural products, whilst imports are largely made up of modern production machinery and equipment. In terms of import and export structure, products of the two sides face no direct competition, indeed, they can be considered complementary to each other.
Due to the EVFTA’s strong commitments to opening markets and abolishing nearly 100% of import duties through EVFTA tariffs, the nation’s participation in the trade deal will open a wide door for goods from Ho Chi Minh City to gain entry into the EU, a market made up of over 500 million people.
Moreover, Ho Chi Minh City has been always active in organising a range of propaganda seminars as a means of facilitating the EVFTA implementation process of local businesses. Indeed, these events help them to fully grasp the main contents of the trade deal, with a specific emphasis placed on the rules of origin, a key factor to enjoying preferential tax rates from the agreement, Duc added.
Teleconference to boost Vietnam- Bulgaria trading ties
An upcoming online trade conference to discuss Vietnamese and Bulgarian consumer goods is expected to offer an ideal platform for enterprises to boost linkages whilst seeking greater business opportunities.
The teleconference, set to take place from September 10 to September 11, is to be co-hosted by the Vietnam Trade Promotion Agency under the Ministry of Industry and Trade in collaboration with the Embassy of Bulgaria in Vietnam.
The event is designed to help local firms introduce their products and seek potential partners in Bulgaria. In addition, it will also boost trade exchanges with both the Bulgarian and EU markets while gaining greater insights into consumer tastes in order to better select suitable products for export to the Bulgarian market.
Furthermore, local enterprises will have the opportunity to seek high-quality goods from Bulgaria at competitive prices across multiple fields, such as cosmetics, pharmaceuticals, animal feed, sunflower oil, and consumer goods.
Most notably, the implementation of the EU-Vietnam Free Trade Agreement (EVFTA) on August 1 is anticipated to offer preferential tariffs for products from both sides.
Bulgaria can be considered a gateway for Vietnamese exports to other European markets, largely due to its favourable geographical position.
The Eastern European nation also possesses numerous economic zones with developed infrastructure, which offers tax incentives and the lowest costs throughout the EU.
Featuring two deep-water ports and six commercial airports, Bulgaria has plenty of strengths in terms of logistic services, with convenient routes available for goods to be transported to other EU countries, a factor which is widely expected to facilitate greater investment and more exports to other EU countries for Vietnamese firms.
At present, two-way trade turnover remains low despite numerous advantages. According to statistics compiled by the General Department of Vietnam Customs, the total import-export turnover between the two nations reached US$59.14 million during the first half of the year.
Of the figure, Vietnamese exports to Bulgaria hit US$28.53 million, while its imports stood at US$30.62 million.
PM commits further support to Samsung Vietnam
The Vietnamese Government, ministries, agencies and localities will continue providing all possible support for Korean businesses and corporations, including Samsung, to continue doing business successfully in Vietnam, said Prime Minister Nguyen Xuan Phuc.
During a reception in Hanoi on August 11 for Samsung Vietnam General Director Choi Joo Ho, PM Phuc lauded the group for launching the construction of a large research and development centre in Hanoi.
He was delighted to know that despite COVID-19, Samsung Vietnam has still ensured production and trade and maintained its export targets. PM suggested Samsung Vietnam continue its COVID-19 prevention and control measures in order to ensure stable production.
The PM proposed that Samsung continue doing long-term business in Vietnam, helping to turn Vietnam into its production hub, develop supporting industries and train high-quality workforce in the country.
Choi, for his part, thanked the Vietnamese Government, the PM, ministries, agencies and localities for their support to Samsung over the past years.
Having presented the company's long-term business plan in Vietnam, he expressed his wish to continue receiving further support and pledged to ensure production, business and export targets, thus helping the Vietnamese Government achieve the dual goal of preventing and controlling COVID-19, and recovering the economy.