VIETNAM'S BUSINESS NEWS HEADLINES AUGUST 17

Steel sector seeks entry into EU market

VIETNAM'S BUSINESS NEWS HEADLINES AUGUST 17

Aside from enjoying preferential tariffs brought about by the European-Vietnam Free Trade Agreement (EVFTA), local steel firms have been advised to update their technologies and meet rules on product origin in order to make inroads into the EU market. 

According to the Vietnam Steel Association (VSA), the EU market accounts for a mere 4.2% of total Vietnamese steel exports, while traditional markets such as ASEAN and China still make up a large proportion, representing approximately 55% and 19%, respectively. 

Trinh Khoi Nguyen, VSA vice president, noted that the stringent standards set out by the EU market have forced local steel manufacturers to renovate their production procedures and change their business mindsets to penetrate the demanding European market. 

Nguyen outlined that consumption demand within the EU can’t be considered as large as emerging markets like China or other developing countries, adding that domestic enterprises must compete with strong rivals in the steel sector such as firms from Japan and the Republic of Korea as a way of penetrating the stringent market.

Nguyen Manh Tuan, general director of Hoa Phat Steel Pipe Joint Stock Company JSC, revealed that the company has applied quality control software in accordance to ISO 9001: 2015 in an effort to improve overall product quality whilst expanding into the EU market. 

Experts have therefore underscored the importance of strengthening forecast work with regard to market trends and striving to gain greater insights into technical barriers to trade from EU member states to provide stakeholders with an early warning on getting involved in the production value chain so as to take full advantage of opportunities brought about by the trade pact. 

Nguyen Van Sua, a steel industry expert, pointed out how local firms face hurdles in export activities due to the novel coronavirus pandemic which has disrupted global supply chains and trade flow throughout EU countries since the beginning of the year. Indeed, aside from meeting product origin requirements, domestic businesses must also have clear information about trade remedy lawsuits to minimise the damage when attempting to make inroads into the EU market. 

Pham Quynh Mai, deputy head of the Multilateral Trade Policy Department, said the Ministry of Industry and Trade will be focusing on strengthening the dissemination about different aspects of the EVFTA among relevant stakeholders, improving institutional reform, and enhancing connectivity among relevant ministries and agencies for the effective implementation of the trade agreement in the near future. VOV

Petrolimex plans to sell 13 million treasury stocks

Local oil and gas giant Petrolimex once again issued plans to sell millions of treasury stocks due to the impacts of the COVID-19 lockdown.

Vietnam National Petroleum Group (Petrolimex – HSX: PLX) has just declared putting 13 million treasury stocks on trade, which was approved by Resolution No.218/PLX-NQ-HDQTon August 11, 2020.

If the transaction takes place smoothly, the company will keep 75 million treasury stocks.

Previously on June 16, Petrolimex sold 15 million treasury stocks for VND45,318 ($1.97) each, getting nearly VND680 billion ($29.57 million).

At now, PLX stocks are at VND46,000 ($2). If the deal fetches this price, Petrolimex will collect nearly VND600 billion ($26.1 million).

The 2020 shareholders' meeting approved Petrolimex's business plan with VND122 trillion ($5.3 billion) in total revenue, down 35 per cent on-year. The estimated pre-tax profit in 2020 is VND1.57 trillion ($68.26 million), equaling 28 per cent of last year's profit.

Over the first six months of 2020, Petrolimex saw VND65 trillion ($2.83 billion) in integrated earnings but a negative profit of VND1.2 trillion ($52.17 million). VIR 

Vaccine sales stir big pharma

Amidst lower-than-expected business performance, international pharma giants are betting on COVID-19 vaccine sales, hoping to alter the headwinds from the health crisis to their advantage.

Top global pharmaceutical corporations Sanofi, Roche, GSK, Novartis, and AstraZeneca have announced their first-half business results, with many suffering from the negative impacts of the pandemic, while noting encouragement from COVID-19 vaccine developments. These multinational corporations all have a strong presence and plans to expand in Vietnam.

Sanofi in the second quarter of 2020 generated net sales of €8.207 billion ($9.73 billion), a decrease of 4.9 per cent on-year. Sanofi’s first-half sales were €17.18 billion ($20.3 billion), up 0.9 per cent on-year. Its first-half business earnings per share (EPS) grew 9.2 per cent on-year.

Similarly, Roche Group appears to have weathered the storm, reporting sales growth of 1 per cent at constant exchange rates (CER) during the period, despite the pandemic negatively affecting sales across the whole business. Accordingly, for the first half of 2020, the group reported CHF29.28 billion ($31.53 billion) in total sales, down 4 per cent (up 1 per cent at CER) on-year.

Roche CEO Severin Schwan said the company was hit hardest in May because of the COVID-19 pandemic and global shutdowns. He noted that hospitals were focused almost entirely on treating patients with the virus, which delayed routine diagnostics.

Notably during this span, Roche’s SARS-CoV-2 antibody test has been a strong contributor to the on-year 3.4 per cent sales growth experienced by the company’s diagnostics division. Sales of the molecular diagnostics division, including the SARS-CoV-2 PCR test, grew 61 per cent, highlighting the importance of tests on the group’s sales.

Elsewhere, the United Kingdom’s largest pharmaceutical company GlaxoSmithKline (GSK) reported a group turnover of £16.714 billion ($21.93 billion) in the six months, up 8 per cent in annual equivalent rate, 8 per cent CER, and flat on a pro-forma basis. On the same basis, the group’s turnover was flat, but up 1 per cent excluding the impact of divestments in vaccines and brands divested or under review in consumer healthcare. Sales performance reflects disruption from COVID-19 primarily in vaccines in the second quarter.

Meanwhile, global science-led biopharmaceutical company AstraZeneca witnessed total revenues rise 14 per cent on-year in the first six months, with strong revenue performance in new medicines (up 45 per cent), oncology (31 per cent), respiratory and immunology (7 per cent), and emerging markets (15 per cent).

AstraZeneca also reported core operating profit rising 23 per cent on-year despite a fall in other operating income (down 13 per cent) and core EPS of $2.01 (up 26 per cent).

Novartis also delivered strong first-half performance. Specifically, due to COVID-19, first-half results are more representative of underlying performance than the second quarter, with sales growth of 6 per cent and core operating income growth of 19 per cent. Sales of the group’s innovative medicines grew 7 per cent and core operating income 16 per cent. Sandoz’ sales grew 1 per cent and core operating income 26 per cent.

“Novartis performed strongly in the first half, despite COVID-19, demonstrating the resilience and agility of our associates and operations,” said Vas Narasimhan, CEO of Novartis. “Our growth drivers and launches continue their strong momentum, with Cosentyx and Entresto increasing market share in the US. We are on track to deliver on our commitment to drive consistent margin expansion and are excited by the progress of our deep mid- to late-stage pipeline to drive long-term growth.”

According to a VIR source, Pfizer Inc. is seeking to work with the governments of many countries on possible COVID-19 vaccine deals, with Vietnam included. Together with Pfizer, other multinationals are betting on SARS-CoV-2 products to turn fortunes around. Roche CEO Schwan said there would be three new tests for the virus launched this year – one antibody test and two multiplex PCR tests. Currently, Roche boasts seven SARS-CoV-2 products.

On a similar note, Emma Walmsley, CEO of GSK said, “We believe that multiple options will be needed to prevent and treat COVID-19 and are working at pace with our partners to develop potential adjuvant vaccines and therapeutics to fight the virus. At the same time, we have made strategic investments in next-generation vaccine and antibody technologies, most recently through our new collaboration with CureVac.”

Globally, a number of COVID-19 vaccine development deals have been signed. The US government last week announced signing a new $1 billion deal for a vaccine that is currently being developed by Johnson & Johnson, guaranteeing 100 million doses. Also last week, Canada signed an agreement for undisclosed financial terms with Pfizer Canada and BioNTech SE for 100 million doses of their experimental vaccine this year and more than one billion in 2021.

Sanofi and its partner GSK also reached a deal of $2.1 billion to supply the US federal government with 100 million doses of its experimental coronavirus vaccine. Two of the world’s leading vaccine manufacturers have also signed a similar deal with the UK, which has agreed to buy 60 million doses for an unspecified sum. VIR

Mekong Delta to expand fruit, seafood production in response to climate change

The Mekong Delta plans an additional 450,000ha under fruit and seafood production by 2030 as part of the Ministry of Agriculture and Rural Development’s effort to shift the region’s farming model toward more sustainable agriculture practices.

The region plans to reduce rice farming areas and expand areas producing fruit and seafood in an effort to respond to climate change.

Rice export turnover is estimated at US$1.9 billion for the first seven months of this year, a year-on year increase of 10.9 per cent. Rice production, however, will be reduced to meet sustainable agriculture and climate-change adaptation by 2030 with a vision to 2045.

Under the plan, by 2030 the delta will have about 1.6 million hectares of rice farming areas, a decrease of 300,000ha. Paddy output will reach 17.3 million tonnes per year, down 6.3 million tonnes.

Unproductive rice fields due to saline intrusion will be shifted to fruit tree production.

By 2030, the delta is expected to have about 650,000ha of fruit growing areas, up 150,000ha. Total area for seafood production in the delta will be 1.3 million hectares, an increase of 300,000ha.

The aim is to increase fruit and seafood exports and produce high-yield and quality fruit varieties resilient to climate change.

Transfer of sustainable farming practices, advanced farming techniques and effective farming models will be promoted to reduce production costs. Investment in fruit processing and preservation technology will also be needed.

In addition, hi-tech fruit processing industrial parks and clusters will be developed in association with specialised fruit growing areas and logistics services.

Products will have to meet traceability requirements and import markets’ strict regulations and standards.

To increase exports to new markets, the agricultural sector will enhance trade promotion activities.

The aquaculture industry will increase the area for shrimp-rice farming, while shrimp and tra fish (pangasius) industries will ensure environmental protection and sustainable development.

The delta, the country's largest rice producer, has faced severe drought and saline intrusion in recent years. In the 2019-20 dry season, severe saltwater intrusion affected more than 58,000ha of rice fields in the delta, causing losses of tens of billions of Vietnamese đồng.

Switching to other crops in response to climate change is necessary for sustainable production in the region. VNS

German newspaper highlights Vietnam as attractive investment destination

German tape manufacturer Tesa plans to build a 55 million EUR (65 million USD) factory in Northern Vietnam in an effort to expand its production as from 2023, according to Germany’s Handelsblatt newspaper.

In an article published on August 13, the newspaper said the coronavirus has shown how companies have to face risks as supply chains rely on each single country.

Therefore, Telsa is not alone in choosing Vietnam. In recent years, the Southeast Asian nation has become a popular option for companies that want to expand their production network in Asia.

The virus is intensifying the trend, according to the article. ASEAN countries, including Vietnam, see themselves in a good position to benefit from the trend.

The article cited an analysis by consultancy firm BCG as saying that Southeast Asia is moving towards the centre of globalisation.

The trade volume between Southeast Asia and Europe as well as the America is expected to increase more than 20 billion USD by the end of 2023. Meanwhile, the movement of goods between Southeast Asia and China is set to expand more than 40 billion USD.

Vietnam, which has a population of around 100 million, is said to have particularly good prospects of taking advantage of the development.

The International Monetary Fund forecast that the country can expect economic growth of almost 3 percent this year, the article said.

The EU-Vietnam Free Trade Agreement (EVFTA) that has become effective since August 1 is a reason that makes Vietnam more attractive to foreign investors.

The article said Marko Walde, Chief Representative of the German Chamber of Industry and Commerce in Vietnam, expressed his belief that Vietnam will not only become more attractive as an investment destination, but will hold great importance in the development of alternative supply chains.

Apart from Europe, Vietnam has joined countries such as Japan, Canada and Mexico in a free trade area with since 2018 through the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The country has also participated in the negotiations of the Regional Comprehensive Economic Partnership (RCEP), including China and Australia. Another free trade agreement with the US is also under discussion.

Vietnam's openness to globalisation has helped the country to lure numerous big corporations.

Apple moved around one third of its production of wireless headphones to Vietnam. Meanwhile, Google and Microsoft have accelerated their plans to relocate part of their hardware production to the country. As for Samsung, Vietnam has been an important production location for years as more than half of its phones are made in factories in the country, the article said. VNA

Vinalines set to operate as JSC from next month

Vietnam National Shipping Lines (Vinalines) will officially begin operations as a joint stock company on September 1 and change its name to the Vietnam Maritime Corporation (VIMC).

The news was announced at its first shareholders’ meeting, on August 13 in Hanoi.

Le Anh Son, Chairman of Vinalines’ Members’ Council, said this is an important step in the corporation’s development, adding that it helps increase resources for VIMC to improve its management system, thus enhancing service quality and increasing competitiveness to ensure sustainable development.

The corporation will continue to focus on the key business lines of seaports, marine transportation, and marine services.

VIMC currently holds capital in 19 subsidiaries and 16 associates and shares in 16 seaport enterprises, and manages and operates more than 13,000 metres of wharves, including at key ports around the country such as Hai Phong Port, Saigon Port, Da Nang Port, and Quy Nhon Port.

It has set a target of transporting 18 million tonnes of goods and shipping 139 million tonnes of commodities via its port network by 2025. Revenue and consolidated profit are to reach 10.77 trillion VND (466.4 million USD) and 1.2 trillion VND (51.9 million USD), respectively. VNA

HCM City prioritises key transport infrastructure projects

The HCM City People’s Committee has approved a policy on carrying out significant projects with city budget funds that address existing difficulties.

The city is also working on a plan to regulate State and city budget collection and spending in the 2021-2030 period and complete a legal framework for public-private partnership (PPP) investment to attract more investors.

The municipal Department of Transport recently submitted to the People’s Committee a plan on transport infrastructure development to 2030, with a budget of around 952.55 trillion VND (41.29 billion USD).

The plan will prioritise the construction of Ring Roads No 2 and No 3 as well as metro lines and flyovers, among other projects.

Director of the HCM City Department of Transport Tran Quang Lam said that in addition to investment capital, project progress must also be carefully considered.

To implement 172 transport infrastructure projects earmarked for 2016-20, the city needs an estimated 323.98 trillion VND.

Funds from the State budget for these projects, however, meet just 27 percent of needs, while PPP investment stands at a mere 13 percent.

Thirty-seven projects, or 21.51 percent of the total, have been completed.

In the last four years the city earmarked 12.48 trillion VND from its budget for 120 projects, while nearly 17 trillion VND was allocated to 13 PPP projects. VNA

High-tech sector to welcome investment wave from RoK

Investors from and localities in the Republic of Korea (RoK) have carried out a host of investment promotion activities in HCM City, Dong Nai, and Binh Duong recently as capital, especially for the high-tech industry, begins shifting to Vietnam.

In an interview with Vietnam Investment Review, Kim Heung Soo, Chairman of the Korean Chamber of Commerce & Industry (KOCHAM) in Vietnam, said RoK investment in the country used to primarily focus on production sectors such as apparel, handbags, and footwear.

Capital has now been steered towards high-tech industries such as electronics, IT, automobiles, construction materials, and services, he explained. In addition to Samsung and LG, leading RoK enterprises such as Hyosung, the SK Group, and Hyundai Motors are also investing in these fields.

Analysts have noted that Vietnam continues to benefit from production chains being moved into the country. RoK giants like Samsung and LG are also building research and development facilities in Vietnam, proving that it is moving up the value chain and attracting more high-quality foreign investment.

Dean Rolfe from audit, tax, and advisory services provider KPMG Vietnam noted that one reason behind capital flowing into Vietnam’s high-tech sector is the diversification of production chains.

The southern province of Dong Nai is among the key destinations of RoK investors. It is currently home to 400 projects from the RoK worth more than 6.6 billion USD, making the country the largest investor among the 43 countries and territories pouring capital into the province.

In neighbouring Binh Duong province, meanwhile, the Investment and Industrial Development Corporation (Becamex IDC) and its RoK partner have proposed an investment in building a 900-ha science and technology industrial park. Becamex IDC said they have prepared the necessary paperwork for the project and identified potential tenants.

The RoK is ranked fifth among the countries and territories investing in Binh Duong, with over 800 projects worth nearly 3.2 billion USD./.VNA

New rule, portal developed for corporate bond market

The Hanoi Stock Exchange (HNX) has issued a new rule to run the corporate bond portal to publicise bond deals and give investors more news about the market.

The rule is applied to all joint-stock and limited-liability companies and all individuals and organisations involved in the corporate bond market, both domestic and international.

The portal has been developed upon Decree 163/2018/ND-CP dated December 4, 2018, to receive companies’ filings on their bond issuance.

Since April 2019, companies have publicised the details of their bond deals on the HNX’s website during the development of the portal.

The content posted on the portal includes pre-issuance information disclosure, disclosure on bond conversion and bond buyback, and issuance reporting to serve investors’ need for information and the Ministry of Finance’s request on statistics and data collection.

Companies have to send information to the HNX to be posted on the portal and they are held accountable for the accuracy, transparency and punctuality of the disclosures.

The HNX assesses the filings in three working days and the regulator can ask companies to change the filings. The disclosures are posted on the portal within five days of the final edition being approved.

The HNX will report every six months and every year to the Ministry of Finance and the State Securities Commission on the Vietnamese corporate bond market with companies issuing bonds in both domestic and international markets.

Total corporate bond issuances in the first six months of the year were worth 159 trillion VND (6.89 billion USD), up 50 percent year-on-year with banks and real estate companies the biggest issuers. VNA

EU announces three new cooperation programme with ASEAN

The EU Ambassador to ASEAN Igor Driesmans on August 13 announced three new development cooperation projects with ASEAN worth a total amount of 13 million EUR (over 15 million USD).

The announcement of the new projects was made during the virtual opening of the third ASEAN-EU Cooperation and Scholarships Day.

Specifically, 5 million EUR will be provided for a project supporting smart and sustainable urbanisation, another 5 million UER for a scheme on sustainable forest management, and three million EUR for the ASEAN Supreme Audit Institutions.

The EU Ambassador stressed that the announcement of the three projects demonstrates the strong commitment of the EU and ASEAN to enhancing their partnership and cooperation despite the COVID-19 pandemic and global economic uncertainty.  

The EU is ASEAN’s most significant partner in development cooperation, supporting the region with 250 million EUR for regional integration programmes between 2014-2020, in addition to 2 billion EUR in bilateral support to ASEAN member states. VNA

Thai commerce ministry to push for RCEP signing

The Thai Ministry of Commerce will push the country’s Cabinet in October to consider signing the Regional Comprehensive Economic Partnership (RCEP) agreement.

Thai media quoted Director General of the ministry’s Department of Trade Negotiations Auramon Supthaweethum as saying that the vetting of all 20 chapters of the accord has been completed and that it can be signed during the ASEAN Summit in Vietnam in November.

 

After the signing, Thailand will have to undertake a parliamentary process to ratify the deal, which is expected to come into force by mid-2021.

The official noted that her department is educating Thai farmers and business owners on how they can benefit from the agreement.

The Commerce Ministry is also studying plans to set up a fund to compensate parties affected by Thailand’s free trade agreements (FTAs) with foreign countries or free-trade blocs.

The RCEP covers 16 countries – the 10 members of ASEAN plus the six countries that the grouping has FTAs with, namely Australia, China, India, Japan, the Republic of Korea and New Zealand.

However, India has shown that it has yet to be ready to sign the RCEP deal.

Last year, Thailand exported agricultural products worth 25.2 billion USD to the 16 RCEP countries, or 62.2 percent of its total overseas shipments of agricultural products.

In the first five months of 2020, exports in this category to RCEP nations were worth 10.8 billion USD, increasing 2.4 percent year on year. VNA

Export set to hit 340 billion USD in 2025

Vietnam’s export is set to grow 5 percent annually from 2021 to 2025 to reach 340 billion USD in 2025, according to the Ministry of Industry and Trade (MoIT)’s plan on socio-economic development for the five-year period.

The goods export growth of domestic firms is projected at 5 percent, with export to Europe and America expanding from 7-10 percent each year.

Meanwhile, import growth during the period would rise 4.9 percent annually, hitting around 330 billion USD in 2025. The pace of local businesses is expected to stand at 6 percent.

Under the plan, the industrial sector would make up over 35 percent of the national gross product (GDP), while the commercial sector accounts for 13.5 percent in 2025.

The total revenue of retail sales of goods and consumer services is expected to increase 9-9.5 percent each year.

The ministry aims to have 45 percent of small-and medium-sized enterprises to join e-commerce.

To that end, it will step up economic restructuring in combination with growth model reform, while improving productivity, quality, efficiency and competitiveness.

At the same time, the ministry will build infrastructure comprehensively, mobilise more investments and use them effectively, improve the quality and efficiency of the use of human resources, and step up innovations. VNA

Indonesia export-import revenue plummets in July

A Reuters poll announced on August 14 showed that Indonesia’s exports and imports may have plummeted in July, following an improvement a month prior, with global trade still reeling under the fallout from the coronavirus crisis.

The growth pace of exports and imports in the resource-rich country improved in June after many countries eased coronavirus-induced restrictions, although demand was yet to return to pre-pandemic levels.

The median forecast from 14 analysts for exports to fall 16.65 percent on-year in July, compared with the previous month’s 2.28 percent annual expansion - which was the first growth since February.

Indonesia’s imports were estimated to plunge 22.48 percent last month, following June’s 6.36 percent drop, which economists said reflected weak domestic demand.

Southeast Asia’s largest economy had likely booked a 680 million USD surplus last month, lower than the June figure of 1.27 billion USD. VNA

Thailand creates new economic centre to recover COVID-19-hit economy

The Thai cabinet on August 13 agreed to establish a centre to address the economic situation heavily battered by the COVID-19 outbreak.

The economic situation administration centre, tasked with working in the same way as the Center for COVID-19 Situation Administration (CCSA), will be chaired by Prime Minister Prayut Chan-o-cha. The secretary-general of the National Economic and Social Development Council (NESDC) will be the center's secretary.

The centre's main focus is to promote Thailand's economic rehabilitation from the pandemic crisis. It will take charge of proposing solutions to tackle economic problems and supervise the government's economic rehabilitation efforts.

The centre will comprise 22 committees with representation from all economic ministers, the interior and labor ministries, the Bank of Thailand's (BoT) governor and the heads of three large private-sector organisations.

Prime Minister Prayut said that the COVID-19 pandemic has taken an enormous toll on all sectors. It not only ripped off income to exports and tourism, but also led to a slump in domestic employment and business activities generated by the small and medium-sized enterprises, said Prayut.

Exports and tourism have been the two major contributors to Thailand's economy. Foreign visitors to Thailand this year were predicted to plunge to only 2 to 3 million from 40 million in the previous year.

The BoT forecast that Thailand's second-quarter economic contraction could reach a record of 13 percent year-on-year after business activities were halted by lockdown measures during the period.

The anticipated decline would mark the lowest year-on-year growth since a 12.5 percent contraction in the second quarter of 1998 in the wake of the 1997 Asian financial crisis.

Thailand's economy in the first quarter shrank for the first time since 2014, by 1.8 percent year-on-year and 2.2 percent quarter-to-quarter on a seasonally adjusted basis, as the pandemic cut off tourist arrivals and shuttered business activities. VNA

Russia remains potential market for Vietnamese farm produce

With a wide and diverse retail sector, Russia has been considered a promising market for agro-forestry-fishery products of Vietnam.

Statistics showed that in 2019, Russia spent over 5 billion USD on importing fresh fruits, along with 1.3-1.5 billion USD on processed vegetable, fruits and nuts, more than 2 billion USD on meat, over 2.4 billion USD on fisheries products.

Many Vietnamese products are Russians’ favourite, especially wooden furniture and farm produce. The market also has high demand for tropical vegetables and fruit.

In the first two months of 2020, Vietnam earned 8.2 million USD from exporting vegetables and fruit to Russia, up 246.1 percent year on year, including 6.7 million USD of processed products, a rise of 293.5 percent over the same period last year.

At the same time, Vietnam is Russia’s top supplier of coffee in 2019, with 154.3 million USD, making up 24.5 percent of the country’s total spending on the product.

According to the General Department of Vietnam Customs, in the first two months of 2020, export revenue of Vietnam’s afro-forestry-fisheries products to Russia reached 68.5 million USD, up 0.3 percent year on year, with sharp a rise seen in exports of vegetables, fruit, rice, and peppercorn.

Deputy Minister of Agriculture and Rural Development Phung Duc Tien advised businesses to focus more on the Russian market to make full use of the market potential and the sound strategic partnership between the two countries.

He said that the ministry has directed relevant agencies to guide and support enterprises in administrative procedures in line with requirements of importers.

However, he pointed out that exports to Russia only account for about 1.6 percent of Vietnam’ total exports of agricultural products. He noted that although many Vietnamese products meet requirements of the Russian market, but they face barriers in export procedures.

Specifically, Vietnamese products have been charged with high tax rate in the market, and high logistics cost has also impacted competitiveness of the products. Technical barriers, currency exchange and low level of products’ processing have also been obstacles of Vietnam.

Experts held that in order to increase exports to Russia, Vietnam should promote the processing industry. Meanwhile, State agencies and businesses should work more closely together, with more support from the State in policy.

They advised businesses to stay active in giving proposals and voicing their needs to State agencies. VOV

Chinese firm invests 2.6 billion USD in lithium battery production in Indonesia

Contemporary Amperex Technology (CATL) of China poured around 38.59 trillion IDR (2.6 billion USD) in the development of the electric vehicle battery industry of Indonesia, according to Indonesian Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Panjaitan.

The investment is poured into the construction of the largest lithium battery factory in Indonesia.

Foreign direct investment into the Southeast Asian nation continued to grow amid the COVID-19 pandemic, Luhut added.

He noted that the investment in electric vehicle batteries is a result of the Indonesian government's efforts to encourage manufacturing in Indonesia.

However, foreign investment sometimes faces protest from locals due to the concern that jobs might be lost to foreign workers.

The minister explained that the presence of foreign workers in these projects is only for knowledge transfer and it is actually beneficial for job creation in the future.

On the other hand, Luhut said that foreign workers are important to help Indonesia enter the world’s supply chain with downstream industries, given that until now Indonesia has not been able to meet the workers’ need for these sectors. VNA

Construction of Vietnam-Thailand wind power plant underway

Construction of the V1-2 wind power plant - a joint venture between the Truong Thanh Vietnam Group and the Thai-based Sermsang Power Corporation Public Company Limited - kicked off in the Mekong Delta province of Tra Vinh on August 14.

Covering about 1,220 ha in Duyen Hai town’s Truong Long Hoa commune, the 48 MWp facility consists of 12 wind turbines. Costing in excess of 2.23 trillion VND (96 million USD), it is expected to generate 162.97 million kWh of electricity each year.

It will also create dozens of new jobs once operational and contribute between 45 and 50 billion VND to the local budget annually.

Under wind power planning for Tra Vinh to 2020 and vision to 2030, which was approved by the Ministry of Industry and Trade (MoIT) in 2015, the province’s total capacity can reach about 1,608 MW. Local authorities have accepted five projects to date, which together are capable of generating 270 MW.

The provincial People’ Committee has made a proposal to include 17 more wind power projects, with total capacity of 2,400 MW, in the revised national electric power planning VII. VNS

Early warning system on trade defence to be built

The Ministry of Industry and Trade has just issued an action programme to implement an early warning system on trade defence.

The early warning system on trade remedies will help improve the efficiency of international economic integration, and assist investigative agencies in investigating and handling trade defence cases at home and abroad and resolving disputes at the WTO.

It will also proactively prevent and respond to foreign trade defence lawsuits, towards sustainable export and ensure the goal of protecting domestic production.

Along with that, ministries, branches, localities, commodity associations, overseas Vietnamese representative agencies and the business community have strengthened their coordination to grasp the situation and regularly update policy adjustments of the country’s major trading partners.

In addition, the Ministry of Industry and Trade will strengthen monitoring of compliance with international regulations in bilateral and multilateral trade agreements of domestic enterprises operating in fields which are at risk of being investigated and applied trade measures; study, review and complete domestic and international policies and laws related to trade remedies.

In particular, the ministry will promote international cooperation in the field of trade defence in the direction of protecting the legitimate interests of Vietnamese enterprises in production, trading and import-export activities. VOV

Local rice exporters seek ways to enter EU

Vietnam’s rice exports to the EU remain modest, at about 20,000 tonnes in volume and 10.7 million USD in value in 2019, accounting for a small proportion of the bloc’s annual average rice consumption of 2.5 million tonnes in the 2016-2020 period.

Tran Thanh Hai, Vice Director of the Import-Export Department at the Ministry of Industry and Trade (MoIT), said the absence of a tariff-free quota from the EU lies behind the situation, as it has cut the competitiveness of Vietnamese rice.

The EU-Vietnam Free Trade Agreement has opened the door for Vietnam, he went on, as it nominates a tariff-free quota of 80,000 tonnes each year.

The quota, however, is not allocated to Vietnamese exporters but to EU importers. Meanwhile, under the agreement, fragrant rice must be certified by Vietnam, which means additional administrative procedures.

MoIT said that applications from importers for rice to be sent to the EU will be submitted to authorised agencies of member countries within the first seven days of each month, excluding December. Applications for the first day of each year will be submitted in the last seven days of November in the previous year.

Meanwhile, exporters must show authenticity certificates for rice before sending shipments to the EU.

The Ministry of Agriculture and Rural Development is currently working with MoIT on drafting documents guiding procedures for registering for certificates. Businesses are advised to prepare certificates of origin for customs clearance procedures.

Hai said that as soon as the EU announces its quota allocation, the ministry will inform businesses via its website and the media. Businesses can access the website of the EU at http://ec.europa.eu or contact their partners to remain updated, he added. VNA

Malaysian economy shrinks most in more than two decades

Malaysia’s economy has contracted the most since the Asian financial crisis more than two decades ago, due to impacts of global trade crisis and tough measures taken to prevent the spread of the COVID-19.

According data released by the country’s central bank on August 14, Malaysia’s gross domestic product shrank 17.1 percent in the second quarter compared to a year earlier, its worst showing since the fourth quarter of 1998. That compared to the median forecast of a 10.9 percent contraction in a Bloomberg survey.

The restrictions, which included businesses being shut down and people confined to their homes, “resulted in demand and supply shocks,” with border control measures globally hitting tourism arrivals, the central bank added.

Wan Suhaimi Saidi, an economist at Kenanga Investment Bank, warned that the trade-dependent economy was “heading into a recession since there is no sign of a full recovery in demand and business activity.”

He said he expects a full-year contraction of between 4 percent and 6 percent, more than the central bank’s estimate of 3.5-5.5 percent.

However, Nor Shamsiah Mohamad Yunus, head of the central Bank Negara Malaysia, said the economy was poised for a recovery in the current quarter as virus-related restrictions are eased.

“We are likely to see a trough in the second quarter. The economy is poised for a recovery in the second half and rebound further in 2021,” he said at a virtual news conference. “I am cautiously optimistic the worst is behind us.”

Bank Negara said the second-quarter decline “reflected the unprecedented impact of the stringent containment measures to control the Covid-19 pandemic globally and domestically” imposed from mid-March to early June.

The country has so far recorded over 9,000 COVID-19 cases, including 125 deaths. VNA

Ba Ria-Vung Tau uses origin traceability stamps on agricultural products

More agricultural products in the southern province of Bà Rịa-Vũng Tàu now have traceability stamps which improve information transparency and product value.  

The Bầu Mây Tourism Agriculture Trade Co-operative in Xuyên Mộc District’s Hòa Hiệp Commune began growing 15ha of pepper under global good agricultural practices (GobalGAP) standards in 2015 and received GobalGAP certification for the pepper area three years later.

With GobalGAP-quality pepper, Bầu Mây has developed traceability stamps for its pepper and pepper products to boost sales at home and abroad.

Last year the co-operative exported more than 100 tonnes of pepper and pepper products at a price between VNĐ250,000 - VNĐ15 million (US$10.7 - 640) a kilogramme to many markets such as the EU, Japan, South Korea and China.

Lâm Ngọc Nhâm, director of Bầu Mây, said the cultivation of pepper under GlobalGAP standards and traceability stamps have improved the competitiveness of the co-operative’s pepper products in domestic and foreign markets.

The pepper products with the stamps have easier access to supermarkets and export markets, he said.

Bầu Mây now grows more than 30ha of pepper and produces about 200 tonnes of pepper and pepper products a year.

The Sông Xoài Green Skin and Pink Flesh Grapefruit Co-operative in Phú Mỹ Town’s Sông Xoài Commune has used traceability stamps for its green skin and pink flesh grapefruits since 2018.

The co-operative produces about 2,900 tonnes of green skin and pink flesh grapefruits a year, including 30 per cent of them with traceability stamps and planted under organic standards.

The co-operative’s grapefruits with traceability stamps sell for 50 per cent higher than the market price.

Hồ Văn Kiệt, director of Sông Xoài, said the co-operative’s grapefruits with traceability stamps are planted under safe standards and have high quality.

Farmers, co-operatives and companies in the province use traceability stamps for other agricultural products like banana, dragon fruit and vegetables planted under VietGAP and GlobalGAP standards.

However, the number of agricultural products with traceability stamps is still small, according to local authorities.

Last year, the province’s People’s Committee launched a project to manage an origin tracing system that aims to create close linkages among production processes, manage product quality, and foster the consumer habit of using products with traceability stamps.

The project also aims to raise the awareness of producers about information transparency.

Trịnh Đức Toàn, deputy head of the province’s Agro - Forestry - Fishery Management Sub-department, said to implement the project effectively, the sub-department in co-operation with relevant agencies has advocated origin tracing activities and provided training courses on technologies used for tracing origin to related stakeholders this year.  

The sub-department will implement origin tracing on selected agricultural products on a pilot basis this year, he said.

The province has created zones for four specialty agricultural products. They are 1,200ha of longan, 1,000ha of soursop, 500ha of green skin and pink flesh grapefruit and 300ha of dragon fruit.  

The four specialty agricultural products will be given support to build brand names and origin traceability to improve their value in the domestic market and for export.

At least 20 per cent of companies in production, trading and services will have an origin traceability system by 2025, under the province's plan. VNS

 
 

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