VIETNAM'S BUSINESS NEWS HEADLINES AUGUST 6

Building socio-economic development norms for 2021

VIETNAM'S BUSINESS NEWS HEADLINES AUGUST 6

PM Nguyen Xuan Phuc has recently issued Directive 31/CT-TTg on building socio-economic development norms and state budget estimates for 2021. 

The Government chief stressed the importance of taking full consideration of the implementation of the socio-economic development plan in 2020, forecasts of domestic, regional, and global economic circumstances, selecting development goals for 2021 in accordance with the ten-year socio-economic development strategy (2021-2030) and the five-year economic development plan (2021-2025). 

Under the Directive, the plan is composed in the context of complicated and unexpected developments across the globe, trade disputes, slower global economic growth, the fourth Industrial Revolution, non- traditional security threats especially climate change and the COVID-19 pandemic, stable socio-economic performance and higher business confidence. 

However, in the 2021-2025 period, the domestic economy would cope with numerous challenges including social issues, aging population, the gap between rich and poor, natural disasters, diseases, climate change, sea water rise,  and saltwater instruction. 

Especially, 2021 would be the first year Viet Nam implements the ten-year economic development strategy (2021-2030) and the five-year socio-economic development plan (2021-2025).

In addition, key preset goals for 2021 included a GDP growth rate of 7%, a growth pace of domestic budget collection of 9-11%; a growth rate of trade revenue collection of 4-6%./. 

Enterprises need to make use of EVFTA

The EU-Vietnam Free Trade Agreement (EVFTA) officially came into effect on August 1. It is the first FTA the EU has signed with a developing country in the Asia-Pacific region. The level of commitment Vietnam has made is the highest of any such agreement it has signed. 

The EU is Vietnam’s third-largest trade partner and second-largest export market. According to research from the Ministry of Planning and Investment, the EVFTA will result in Vietnam’s GDP rising by an average of 3.25 percent by 2023 and 7.72 percent by 2033.

Given the breaking of supply chains by Covid-19, Vietnamese enterprises may struggle to make proper use of the valuable EU market. But, in general, their competitive edge will improve thanks to institutional reforms and an enhanced legal framework.

In the context of the challenges presented by the pandemic, the efforts of the Government, ministries, and agencies in reform will help local businesses stay ahead of their rivals.

To fully tap into the new-generation agreement, Vietnamese businesses need to actively bolster their competitiveness by developing long-term plans, raising production and business capacity, and proactively creating supply chains.

Gojek app debuts in Vietnam

Gojek, the leading on-demand service and payment platform in Southeast Asia, officially debuted its app in Vietnam on August 5.

Customers can access services such as ride-hailing with GoRide, goods delivery with GoSend, and food delivery with GoFood on the Gojek app, on both iOS and Android operating systems.

The platform has over 150,000 driver partners and 80,000 partner restaurants in Hanoi and HCM City.

General Director of Gojek Vietnam Phung Tuan Duc said the app offers a better experience to users with a simpler, cleaner interface and upgraded features.

In early July, GoViet announced the merger of its app and brand name with Gojek in a long-term strategic deal.

Vietnamese users will also be able to use Gojek’s services in Indonesia, Singapore, and Thailand using a single app.

The platform will become available in Thailand within the next few weeks.

Vietnam imports additional 1,000 live pigs from Thailand

A batch of 1,000 live pigs imported from Thailand has now arrived at Bo Y border gate in Kon Tum province following a period of disruption caused by a scarce supply source in the neighbouring country.

Now the livestock can enter the Vietnam, the pigs will be transferred to Dong Hiep quarantine camp in the southern province of Dong Nai in line with current regulations, according to a representative of Thuy Duong Phat Company, one of the Vietnamese businesses eligible to import live pigs from Thailand. 

The company’s representative added that due to the recent scarcity of the supply source in Thailand, the firm had moved to halt importing pigs for a period of several weeks in order to seek fresh suppliers.

At present, the enterprise’s new partner, Wangnamyen Intertrade Limited Partnership of Thailand, has been added to the list of Thai businesses eligible to export pigs to the country.

Due to the new partnership, Thuy Duong Phat Company will now be able to import an additional 1,000 pigs over the next two to three days in order to supply Dong Nai market and neighbouring provinces, therefore contributing to countering escalating pork prices within the domestic market.

Meanwhile, Nguyen Van Thanh, director of Thanh Do Nghe An Co., Ltd based in the central province of Nghe An, said at present the company has imported 7,000 live pigs from Thailand.

The price of domestic live hog is currently hovering between VND84,000 and VND86,000 VND per kilo, while the price of imported pork from Thailand remains at VND85,000 per kilo.

The high selling prices seen in imported pork from Thailand within the local market can be attributed to the limited number of Thai businesses that are permitted to export pigs to the nation, Thanh revealed.

The prices are expected to drop in the near future as fresh Thai partners get added to the list of firms eligible to export pigs to Vietnam, he noted.

Matsuoka Corporation highlights Vietnam's appeal to Japanese PPE manufacturers

Vietnam is in the crosshairs at dozens of Japanese businesses led by Matsuoka Corporation who are looking to invest hundreds of millions of dollars to produce medical gear and personal protective equipment (PPE) in Vietnam. 

COVID-19 has been the doom of many a production sector. However, some have been put into a favourable position and have been rising to prominence to attract great flows of foreign investment. One of these sectors is medical mask and PPE production, an area where Vietnam is now recognised as a reputable supplier.

Matsuoka Corporation, one of 30 companies that have just received support from the Japanese government to leave China, has decided to move operations to Vietnam.

According to NNA Business News, a representative of Matsuoka Corporation said that the corporation will pour around $28 million into An Nam Matsuoka Garment Co., Ltd., a Vietnamese subsidiary, to set up a new facility to produce protective wear and other items in the coming months.

Matsuoka Corporation established the subsidiary in last November, before the COVID-19 outbreak, as part of the corporation's plan to diversify production locations in Southeast Asia (supplementing existing production in Indonesia, Myanmar, Bangladesh). The new factory of An Nam Matsuoka Garment is based in VSIP Nghe An and is the fourth facility of Matsuoka Corporation in Vietnam, after the ones in Phu Tho, Bac Giang, and Binh Duong provinces.

In the 2018 fiscal year (ending in March 2019), the corporation's revenues from Chinese factories made up 60 per cent of its total overseas income, while Bangladesh and Vietnam contributed 25 and 10 per cent, respectively.

At the end of 2019, company spokesperson Michihiro Fukagawa said that the upcoming factory in Vietnam is expected to decrease the revenue contribution from China to 50 per cent by March 2021. He also highlighted that Vietnam is a major location for garment production for export to Japan and China.

Recently, JETRO announced the list of Japanese businesses which will receive aid to leave China. Most of those specialising in producing protective gear and health products like Able Yamauchi, Showa International, Techno Global, Hashimoto, Nikkiso, and Matsuoka Corporation are choosing Vietnam as their new destination.

According to the General Department of Vietnam Customs, as of June 2020, Vietnam exported 557 million medical masks to the US, the EU, Japan, and South Korea. Catching up with the new trends and the increasing demand of domestic and overseas markets, a lot of local businesses have been purchasing modern machines to make high-quality products, matching the requirements of the US and the EU, and offset a part of their losses from the global health crisis.

Along with its initial success in preventing and controlling the novel coronavirus, Vietnam is emerging as a reputable source of medical equipment, drawing in foreign investors to produce PPE and medical gear.

Long An “wakes up” industrial zones to welcome FDI projects

Long An province is supporting delayed industrial parks to prepare land funds and welcome foreign-invested enterprises shifting production to Vietnam.

Nguyen Anh Viet, deputy director of Long An province’s Department of Planning and Investment, said that according to the industrial zone (IZ) development planning approved by the prime minister, Long An will have 32 IZs with the total area of 11,500 hectares by the end of this year. However, as of now, only 16 IZs are in operation. The remaining registered projects have been delayed in construction or have missed key deadlines. A number of projects have yet to be implemented.

However, in recent months, thanks to the provincial authorities’ support and urging, two projects – Viet Phat and An Nhut Tan – managed to rise from their ashes.

Speaking at the ground-breaking ceremony of Viet Phat IZ, Le Thanh, CEO cum general director of project investor TIZCO JSC, said that it completed land clearance of 1,800ha for the IZ and is willing to meet investors’ demand.

Previously, the construction of An Nhut Tan IZ was kicked off in June 2020. Covering an area of 119ha in Tan Binh commune, Tan Tru district, the project is invested by An Nhut Tan Co., Ltd. with the investment capital of VND1.36 trillion ($59.13 million).

According to the provincial authorities, difficulties in land clearance are the general reason for the project delays.

“The department will continue to co-operate with other agencies and departments to review and classify projects and build specific solutions for each,” Viet said.

In the upcoming time, the department will deal with difficulties for four IZ projects which have missed the launch date, including the 308ha Nam Thuan, 188ha Thu Thua, 524ha Huu Thanh, and 105ha Tan Phu – phase 1.

“We will hold direct meetings with enterprises and investors to help them deal with their difficulties. If there are problems exceeding the department’s competence, we will contact the central authorities,” Viet said.

Most recently, the government approved the investment planning for Truong Hai International Industrial Park. Spanning an area of 162ha in Duc Hue district, the project has been invested by Truong Hai International IP Co., Ltd. with the investment capital of VND1.3 trillion ($56.5 million), VND200 billion ($8.7 million) of which is investor’s equity.

Parkson Retail Asia continues narrowing its business in Vietnam

Suffering strong losses due to its inappropriate retail concept for the Vietnamese setting, Malaysian retail giant Parkson Retail Asia is looking to dispose of its store in the port city of Haiphong.
 
After getting rid of this store, Parkson will have only one store left of the eight it operated at the 2012 peak of its 15-year career in Vietnam.

The unit to be disposed of, Parkson TD Plaza shopping centre in Haiphong city, is to be transferred from Parkson Vietnam – the legal entity of Parkson Retail Asia in Vietnam  – to Thuy Duong Construction & Trading JSC for a cash consideration of $10 million.

Parkson TD Plaza in Haiphong city is to be transferred to Thuy Duong Construction & Trading JSC
The transaction still waits for official approval by Parkson Retail Asia’s shareholders, who will vote at the next irregular meeting.

Thuy Duong Construction & Trading JSC also owns the TD Plaza building where the Parkson TD Plaza shopping centre is located.

After transferring Parkson TD Plaza, Parkson Vietnam will focus on the operation and management of Saigon Tourist Plaza – its last remaining outlet in Vietnam and the first store it opened in Vietnam in 2005.

As a subsidiary of Parkson Holdings Bhd., Parkson Retail Asia was one of the first international retailers to enter Vietnam in 2005. By 2012, Parkson built a network of eight stores in Vietnam's major cities by 2012.

Five of these were directly owned by Parkson, including Parkson Hung Vuong and Parkson Flemington in Ho Chi Minh City; Parkson Long Bien, Parkson Keangnam, and Viet Tower in Hanoi; and Parkson TD Plaza Shopping Centre in Haiphong city.

The remaining three were Saigon Tourist, Paragon, and CT which were leased and managed by Parkson.

However, Parkson's business in Vietnam has been gradually slowing down since 2014 when the retailer started to lose the upper hand to newcomers who built multi-functional trade complexes to better meet the demands of different visitors.

Parkson, meanwhile, targets higher-income buyers with fashion and commodities only.

The retailer was forced to gradually close its stores, starting with the centre at Keangnam Hanoi Landmark in 2015. This was followed by Parkson Paragon in 2016, Parkson Viet Tower in 2017, Parkson Flemington in 2018, and Parkson Cantavil An Phu at the end of 2018.

In order to survive, in April 2019, Parkson renovated its Saigon Tourist Plaza from a “shop and go” to an “all-in-one destination”.

With its fresher facade and transformed retail mindset, this store is now receiving good visitor traffic and has drawn in a steady base of large-scale tenants, including famous fashionista Uniqlo and Muji.

Japan's Showa Aluminum Can inaugrates third plant in Vietnam

Showa Aluminum Can Corporation (SAC), a consolidated subsidiary of Showa Denko (SDK) (Tokyo: 4004), held a ceremony on July 29 to celebrate the completion of its third base in Ba Ria-Vung Tau province to produce aluminium cans.

The Ba Ria-Vung Tau factory is the third production base of Hanacans JSC (Hanacans – a consolidated Vietnamese subsidiary of SAC) and has a production capacity of 1.3 billion can bodies per year. In addition to the construction of the Ba Ria-Vung Tau factory, Hanacans is now installing an additional line to produce can ends at its Bac Ninh factory.

SAC acquired shares in Hanacans in May 2014 and continues to have Hanacans introduce SAC’s leading production technologies and quality control system since then. Hanacans has been successfully increasing the sales of aluminium cans in the northern and central parts of Vietnam.

With the completion of the Ba Ria-Vung Tau factory, Hanacans has established an aluminium can production system with three production bases that covers the northern, central, and southern parts of Vietnam. Now Hanacans has a capacity to produce 3.3 billion can bodies and 3.3 billion can ends per year.

In Vietnam, Showa Denko Group will enhance the value of customer’s experience by making the most of its aluminium can production system that can quickly respond to shifts in market demand and is also expanding its business in Vietnam.

Meeting ambitious divestment targets

Despite the government’s effort to accelerate state capital divestments and state-owned enterprise equitisation in the second half of the year, it remains a question how foreign investors can buy more stakes in these businesses. 

Nguyen Chi Thanh, general director of State Capital Investment Corporation (SCIC), expressed his optimism as in the first six months of this year, around VND700 billion ($30.43 million) of state capital was successfully divested, reaching 54 per cent of the whole year’s target. “Hence, we are quite confident in meeting our divestment goals this year,” Thanh said.

Tran Duc Anh, head of Macro and Strategy of KB Securities, noted there are two major factors determining the success of state-owned enterprise (SOE) divestment: the effort of the government and the market conditions.

“For the first factor, the government is highly determined in accelerating the process since 2020 is the last year for local authorities to wrap up the equitisation schedule of the 2016-2020 period. Besides that, several bailouts such as stimulus packages and tax relief measures were enacted by local authorities to push the economy out of woes from the COVID-19 pandemic which has brought about a huge budget deficit,” Anh told VIR.

He also mentioned previous successful deals were like “a blast from the past” in an amply liquid, bullish market, and upbeat business performance, coupled with large overseas capital inflows.

However, given that the current market sentiment remains highly volatile and uncertain, these favourable conditions are unlikely to occur, thus hampering investors’ appetite who want to reap the fruits from SOEs. As a result, the divestment target has low chances to be completed.

Vietnam National Petroleum Group (Petrolimex) has been stuck for years in its divestment ambition of moving from 76 to 51 per cent. On the other hand, the firm is still in discussion with ENEOS Corporation, formerly known as JXTG Nippon Oil & Energy Corporation – the Japanese petroleum giant – on selling an additional 15 per cent stake in treasury shares to lift the strategic investor’s current 8 per cent shareholdings.

Other market watchdogs believe SOE divestment can still be the catalyst for the latter half of this year with attention being placed on large corporations such as Sabeco, Viglacera, and FPT.

Andy Ho, managing director and chief investment officer at VinaCapital, stated that foreign investors prefer to buy stocks that have high liquidity, and in which a large proportion of the company’s outstanding stocks are already in the hands of other investors.

For that reason, those people do not like it when a company like PetroVietnam Gas has been equitised with only a tiny proportion of the company’s shares being sold to private sector investors (just 4 per cent in the case of PetroVietnam).

“We have long been proponents that the government should sell a far greater proportion of its ownership stakes in companies that have already been equitised – it should be a fairly simple endeavour compared to undertaking equitisation of new companies,” said Ho.

In the case of an overseas investor wanting to buy shares in one of those companies, they must purchase from another foreigner at a price which will typically be 7-15 per cent above the prevailing listed price. This creates a problem in that the new foreign investor then suffers a 7-15 per cent mark-to-market loss on the investment because there is no way of verifying the foreign premium that the investor paid to purchase the stock.

“The solution to this problem would be for Vietnam to implement a “foreign board” on which transactions between foreign investors are recognised. Thailand’s stock market implemented such a scheme in order to facilitate foreign inflows into the stock market while essentially maintaining foreign ownership limits of publicly traded companies with some success. Vietnam’s stock market could simply follow Thailand’s precedent, as well as garner the necessary technical insights from Thailand to implement such a scheme,” said Ho.

According to Seck Yee Chung, partner at Baker McKenzie, in addition to pricing, the important factors include access to information and opportunity to carry out an appropriate level of diligence, the percentage of shares being offered, and whether there is a role in management.

Strategic buyers would be interested to know about the financial health of the companies, the assets it has in place, and the liabilities linked to it. Future plans and to what extent more shares might be available, and if there are foreign ownership limitations, would also be important considerations.

“Whilst the Vietnamese economy has various long-standing fundamentals that remain attractive, it clearly does not operate in isolation and the growth potential would also be significantly influenced by global markets and how these are managing the pandemic,” Chung told VIR. “In the meantime, it would be compelling if best efforts are made to enhance the investor-readiness of these companies.”

A total of 120 enterprises will be divested by the representative agencies of the state capital. They are companies under ministries and provincial people’s committees, including Vietnam Machinery Installation (UPCoM: LLM), Vietnam Pharmaceutical (UPCoM: DVN), and Hanel (UPCoM: HNE).

Four enterprises will be transferred to State Capital Investment Corporation (SCIC) for divestment by December 31 if the divestment by the representative agency is not completed before November 30.

Another 14 enterprises will be transferred to SCIC before August 31 to accelerate the divestment process, including VINAINCON (UPCoM: VVN), Sabeco (HSX: SAB), and Song Da (UPCoM: SJG).

Separate divestment plans for 18 enterprises include Vietnam National Petroleum (HSX: PLX), Vietnam Airline (HSX: HVN), and Viglacera (HSX: VGC), among others.

Finally, 69 enterprises will suspend divestment until the end of this year in order to review and build rearrangement and divestment plans for 2021-2025.

Kien Giang sees surge in tourist arrivals in July

The Mekong Delta province of Kien Giang welcomed nearly 1 million visitors in July, a surge of 75.3 percent compared to the previous month.

The result pushed the total number of tourists in the first seven months of this year to 3.42 million, representing a fall of 37 percent year on year, and fulfilling only 36.6 percent of the yearly target.

According to Deputy Director of the provincial Department of Tourism Bui Quoc Thai, Phu Quoc island was the major attraction to tourists in July. The island served over 706,000 visitors in the month and 2.24 million in the first seven months of 2020, down 25.4 percent over the same period last year.

Amidst the complicated developments of the COVID-19 pandemic, the Department of Tourism has asked all staff to avoid visiting Da Nang city and localities with infection cases.

The department requested accommodation facilities in the province to strictly apply preventive measures against the pandemic following guidelines of the Health Ministry, especially those in health declarations.

Local travel firms have been asked to cancel all tours to pandemic-hit localities, while entertainment centres and tourist destinations have been equipped with hand sanitizer.

Tran Chi Dung, director of the department, said that in the coming time, the province will continue to launch tourism promotion programmes in parallel with the implementation of preventive measures, thus ensuring safety for tourists.

At the same time, Kien Giang will support pandemic-affected firms, while speeding up tourism recovery in Phu Quoc island. It will work on the development of Ha Tien-Phu Quoc-Nam Du-Rach Gia tour, forming a western sea tourism route.

Indonesia to set up travel corridors with China, UAE

Indonesia is aiming to set up travel corridors with China and the United Arab Emirates (UAE) to help recover business activities which are seriously affected by the COVID-19 pandemic.

During a virtual meeting, Indonesian Foreign Minister Retno Marsudi and her Chinese counterpart Wang Yi discussed a cooperation agreement to establish a travel corridor, which is hoped to be finalised soon.

Essential travel activities in accordance with health protocols are expected to boost safe and effective economic activities between the two countries.

 

Earlier, Indonesia and the UAE have agreed to establish a temporary safe travel corridor to facilitate travel between the two countries for essential business and commercial, diplomatic, and official purposes. This agreement is part of both countries’ efforts to contain COVID-19 and accelerate the economic recovery.

The UAE is currently the country’s largest Middle Eastern investor, after pledging to pour around 6.8 billion USD into several projects during Jokowi’s two-day trip to Abu Dhabi in January.

In addition to China and the UAE, Indonesia is negotiating to sign travel link agreements with the Republic of Korea and the entire Southeast Asian region.

Meanwhile, in Singapore, the government announced on August 3 that all incoming travellers who serve their stay-home notices outside of dedicated facilities will have to wear an electronic monitoring device to ensure compliance with the order from 11:59pm on August 10.

The new requirement applies to returning Singaporeans and permanent residents, long-term pass holders, work pass holders and their dependants. Those aged 12 and below will be exempted from this requirement. Students residing in hostels in educational institutions are excluded too, as they would be under close observation. 

Hanoi ensures supply of essential goods

Deputy Minister of Industry and Trade Do Thang Hai recently worked with some supermarket systems in Hanoi on ensuring the supply of essential goods and preventing the COVID-19 pandemic.

At the August 2 meeting, representatives of Co.opmart and Big C supermarkets said that the number of customers coming to their supermarkets has increased in recent days.

The supply of goods at their supermarkets still met demand, said the representatives.

They said that the buying demand might increase when the disease developed, so these businesses have actively increased the stock of goods by two or three times.

At the same time, supermarkets also strictly implemented measures to prevent and control the pandemic for employees, customers and suppliers.

In addition, businesses also increased home deliveries.

Tran Thi Phuong Lan, deputy director of the Hanoi Department of Industry and Trade, said that as soon as there were instructions from the Ministry of Industry and Trade and local authorities on the prevention and control of COVID-19, Hanoi had sent three official letters to commercial and industrial enterprises and people's committees of districts and towns in the area.

They required commercial enterprises to proactively revise their stockpile plans, supply goods and actively serve the needs of the people in the area.

Speaking at the meeting, Hai said that the recent infections in the community showed the complicated nature of the pandemic.

In this context, it is necessary to implement the Government's directive on pandemic prevention and strengthen measures to ensure the supply of essential goods, he said.

VIETNAM'S BUSINESS NEWS HEADLINES AUGUST 6

EVFTA expected to contribute to EU recovery after coronavirus crisis

The EU-Vietnam Free Trade Agreement (EVFTA) strengthens EU economic links with Southeast Asia and will potentially contribute to its recovery after the coronavirus crisis, moderndiplomacy.eu quoted an EU official as saying in a story published on August 3.

The EVFTA, which took effect on August 1, will not only ultimately scrap duties on 99 percent of all goods traded between the two sides but also make it easier for European companies to do business in Vietnam, according to the site. They will now be able to invest and pitch for government contracts with equal chances to their local competitors, it said.

Under the new agreement, the economic benefits go hand in hand with guarantees of respect for labour rights, environment protection and the Paris Agreement on climate, through strong, legally binding and enforceable provisions on sustainable development.

“The European economy needs now every opportunity to restore its strength after the crisis triggered by the coronavirus,” the site quoted President of the European Commission Ursula von der Leyen as saying.

“Trade agreements, such as the one becoming effective with Vietnam today, offer our companies a chance to access new emerging markets and create jobs for Europeans. I strongly believe this agreement will also become an opportunity for people of Vietnam to enjoy a more prosperous economy and witness a positive change and stronger rights as workers and citizens in their home country.”

“Vietnam is now part of a club of 77 countries doing trade with the EU under bilaterally agreed preferential conditions,” EU Commissioner for Trade Phil Hogan commented.

“The agreement strengthens EU economic links with the dynamic region of Southeast Asia and has an important economic potential that will contribute to the recovery after the coronavirus crisis.”

“It also shows how trade policy can be a force for good. Vietnam has already made a lot of effort to improve its labour rights record thanks to our trade talks and, I trust, will continue its most needed reforms,” he noted.

According to moderndipmacy.eu, the EVFTA is the most comprehensive trade agreement the EU has concluded with a developing country. It takes fully into account Vietnam’s development needs by giving Vietnam a longer, 10-year period to eliminate its duties on EU imports.

However, many important EU export products, such as pharmaceuticals, chemicals or machinery already enjoy duty free import conditions as of entry into force. Agri-food products like beef or olive oil will face no tariffs in three years, while dairy, fruit and vegetables in maximum five years.

Comprehensive provisions on sanitary and phytosanitary cooperation will allow for improving market access for EU firms via more transparent and quick procedures.

At the same time, the trade agreement expresses a strong commitment of both sides to environment and social rights. It sets high standards of labour, environmental and consumer protection and ensures that there is no “race to the bottom” to promote trade or attract investment.

Under the agreement, the two parties have committed to ratify and implement the eight fundamental Conventions of International Labour Organization (ILO), and respect, promote and effectively implement the principles of the ILO concerning fundamental rights at work.

They also agreed to implement the Paris Agreement, as well as other international environmental agreements, and act in favour of the conservation and sustainable management of wildlife, biodiversity, forestry and fisheries.

Vietnam has already made progress on these commitments by ratifying in June 2019 ILO Convention 98 on collective bargaining and in June 2020 ILO Convention 105 on forced labour. It also adopted a revised Labour Code in November last year and confirmed that it would ratify the one remaining fundamental ILO Convention on forced labour by 2023.

The trade agreement also includes an institutional and legal link to the EU-Vietnam Partnership and Cooperation Agreement, allowing appropriate action in the case of serious breaches of human rights.

Vietnam is the EU’s second largest trading partner in ASEAN after Singapore, with trade in goods worth 45.5 billion EUR in 2019 and trade in services of some 4 billion EUR in 2018.

The EU’s main exports to Vietnam are high-tech products, including electrical machinery and equipment, aircraft, vehicles, and pharmaceutical products. Vietnam mainly ships to the EU electronic products, footwear, textiles and clothing, as well as coffee, rice, seafood, and furniture.

The EVFTA is the second trade agreement the EU has concluded with an ASEAN member state, following the deal with Singapore.

Indonesia records lowest inflation rate in two decades

Indonesia’s inflation rate in July dropped to the lowest level since 2000 as the COVID-19 pandemic ravages people’s purchasing power, according to Statistics Indonesia’s (BPS).

The country’s consumer price index (CPI) was up by 1.54 percent year-on-year in July, below Bank Indonesia’s (BI) target range of between 2 and 4 percent. It was also lower than June’s inflation rate of 1.96 percent.

Meanwhile, the core inflation rate stood at 2.07 percent, as government-administered prices were up 0.70 percent and volatile prices only rose by 0.35 percent year-on-year.

BPS head Suhariyanto said the core inflation was still weak and the Government still has to work hard to boost people’s purchasing power.

The Southeast Asian country gradually restarted economic activities in July to accelerate the recovery of its economy, which has been badly hit by the pandemic.

The Indonesian government has also earmarked 695.2 trillion Rp (about 47.2 billion USD) for stimulus measures to strengthen the country’s health care response and boost the economy amid the ongoing health crisis.

However, it predicted the country’s gross domestic product (GDP) to have contracted by 3.8 percent in the second quarter and possibly shrinking further in the third, which would mark Indonesia’s first recession since the 1998 financial crisis.

Vietnam Airlines applying stricter pandemic prevention measures: official

Vietnam Airlines commits to continue and add various measures against COVID-19 under stricter and new standards in face of the complicated development of the pandemic, a representative of the national flag carrier said on August 3, calling on passengers to join the effort.

To make it easy for passengers, the airline has built a website at ww.vietnamairlines.com for them to learn of provisions by authorities and the carrier on the measures, under which they need to fill in medical declaration forms at http://tokhaiyte.vn or on the app "Vietnam Health Declaration" before their departure.

Besides, passengers will have their body temperature taken before boarding and wear a face mask all along the fight. Vietnam Airlines will refuse services to those passengers who show suspected signs of COVID-19.

The representative added that the current standards and procedures will not be simplified and in order to reduce contacts, the airline encourages passengers to use online service for check-in.

VIETNAM'S BUSINESS NEWS HEADLINES AUGUST 6

Over 2.5 billion USD in G-bonds sold in July

Through 21 Government bond auctions on the Hanoi Stock Exchange (HNX) in July, the State Treasury raised more than 58.67 trillion VND (over 2.5 billion USD), up 80 percent against June.

Some 78.7 percent of the G-bonds offered were sold.

Annual interest rates were down 0.08-0.21 percent compared to June, with the highest fall seen in five-year bonds.

On the secondary G-bond market, trading volumes averaged more than 10.25 trillion VND per session, up 25 percent month-on-month. The value of G-bonds traded via repurchasing agreements (repos) accounted for 32.5 percent of the total market value.

Meanwhile, total outright purchases of 1.4 billion G-bonds were worth over 159 trillion VND, up 39 percent against June.

Foreign investors made outright purchases of more than 4.3 trillion VND and outright sales of over 4.27 trillion VND. They did not make any repos transactions.

Total listed G-bonds were valued at more than 1.21 quadrillion VND as of July 31.

Thailand’s Q2 contraction poised to hit 13 percent

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, said the Bank of Thailand (BoT).

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, said Don Nakornthab, senior director of the bank’s economic and policy department.

Overall economic activities shrank significantly in the second quarter as a result of coronavirus containment measures in Thailand and around the world, he said.

External demand contracted sharply both in the tourism sector affected by international travel restriction measures and in merchandise exports hit by weakening demand among trading partners.

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.

Thailand completely lifted the lockdown on all businesses and activities on July 1 but extended the emergency decree for another month until August 31.

Five economic indicators, including exports and imports (excluding gold), domestic consumption, private investment and the manufacturing index showed improvements in June, he said.

In the event of better economic data in the second quarter with a slower pace of contraction than the existing forecast, the central bank could revise up the country’s 2020 GDP prediction to an improved contraction, Don said.

Thailand's economy is predicted to shrink by 8.1 percent this year, mainly due to the COVID-19 outbreak, according to the central bank.

The National Economic and Development Council (NEDC) will report Thailand's second-quarter and first-half economic data on August 17.

Plenty of room for development of leisure properties in Van Don: Experts

Located in Bai Tu Long Bay and adjacent to world heritage site Ha Long Bay in the northeastern province of Quang Ninh, the Van Don Economic Zone possesses significant advantages to develop the local and national leisure real estate sector.

Van Don is set to become a multi-sector marine economic zone by 2040, which lays a legal foundation enabling the district to grow stronger, faster, and more sustainably, said lawyer Truong Thanh Duc from the Vietnam International Arbitration Centre.

There is plenty of room for the expansion of leisure and vacation properties in economic zones like Van Don, according to Dr Le Xuan Nghia, director of the Institute of Business Research and Development and member of the National Monetary and Financial Advisory Group.

Van Don has caught the eye of many strategic investors as its future has been compared to Singapore, he said, and the area is vital in boosting overall development in Quang Ninh.

Most of the country’s major developers, such as VinGroup, the CEO Group, the Sun Group, the FLC Group, and HD Mon, have staked out a presence in Van Don, pouring in millions of VND to give the area a facelift.

One highlight is the 358-ha Sonasea Van Don Harbour City luxury complex, being developed by the CEO Group in Ha Long commune at a cost of 5 trillion VND (214 million USD).

The complex stretches along some 2.2 km of beachfront and features a harbour, a shopping mall, a waterpark, an entertainment centre, shophouses, a 1,000-room hotel, condotels, and beach villas, offering international-standard services to both domestic and foreign vacationers.

Earlier this year, the Government approved a master plan to develop Van Don into a multi-sector maritime economic zone and a hi-end industrial zone with casinos and resorts by 2040, with it also serving as an international gateway with competitive products and modern urban areas.

The economic zone will be transformed into a smart, modern and green coastal urban area as well an economic and cultural hub in the region.

Its population is to increase to 140,000-200,000 by 2030 and 300,000-500,000 by 2040.

Quang Ninh is zoning off Van Don as a high-quality administrative-economic special zone and has adopted a long-term, sweeping vision.

The island district boasts diverse topographic conditions, with forests, seas, limestone karsts and caves, and mountains. Its forest ecosystem is home to 1,028 species of animals while its marine ecosystem boasts 881 species, including 102 that are named in the Vietnam and world Red Books (of endangered species).

It is also home to some of the most beautiful beaches in the Gulf of Tonkin, such as Quan Lan, Minh Chau, Ngoc Vung, and Bai Dai.

Looking out to Bai Tu Long Bay, Quan Lan Beach is blessed with smooth white sands, transparent blue seas, fresh air, and peace and tranquillity. It’s ideal for those seeking to get away from the pressure of the city. Its lush pineapples make the beach even more memorable.

Meanwhile, Bai Dai (Long Beach) is an untamed treasure of Van Don, appealing to visitors with its wild, poetic beauty rarely found in beach destinations. Its long, white sands join underwater worlds visible through crystal-clear waters. From Bai Dai, one can look out towards picturesque Bai Tu Long Bay. Sporting activities are varied, such as kayaking, water motorcycling, tennis, and volleyball.

Minh Chau Beach is also an ideal spot for travel enthusiasts. Thousands of holidaymakers flock here every year to enjoy a vacation. Couples in particular favour the spot, where truly amazing wedding photos can be shot. The beach is 230 km from Hanoi and 15 km from Quan Lan Beach. A unique feature is its pristine white sand, which is so soft and comfortable to walk on.

Petrolimex fulfilling its role in energy supply

The Vietnam National Petroleum Group (Petrolimex) has met the majority of the goals set for the 2015-2020 period, paying nearly 188 trillion VND (about 8.036 billion USD) to the State budget while exhibiting strong performance in ensuring energy security, meeting demand for petroleum, and contributing to social welfare activities.

Over the past five years, the group has maintained a key role in petroleum trading, doing its part in meeting energy needs for socio-economic development as well as national security and defence.

Sales grew 6.9 percent each year on average over the last five years, while revenue grew 8.1 percent, assets 5.4 percent, and pre-tax profit 11 percent.

Petrolimex is one of the largest contributors to the State budget in the country, forwarding more than 37.6 trillion VND each year. The company employs 26,000 workers, whose incomes rise 8 percent each year.

Along with petroleum, the company has posted success in other fields of endeavour, which make up 45-50 percent of its total profits.

In the 2017-2020 period, Petrolimex was among the 50 best listed companies in Vietnam each year.

It has ensured the security of nearly 60 percent of national petroleum reserves.

As a State-owned enterprise with a key role to play in the domestic petroleum market and with a network of petrol stations spanning all the 63 cities and provinces throughout the country, Petrolimex has long been providing all types of fuel in service of national security and meeting demand among the population, even in particularly difficult periods. The company currently has a network of nearly 2,600 petrol stations and more than 2,500 franchise establishments.

Meanwhile, it goes to significant effort every single year to transport petroleum to mountainous areas where no other companies have petrol stations, earning only a modest profit from doing so.

Regarding social welfare activities, it has come together with localities around the country to explore the needs of the vulnerable in society and to design suitable support activities and programmes for them.

The company has to date focused on sustainable activities such as improving the living conditions of the needy, boosting the quality of health care and education, and taking care of policy beneficiaries and the less-fortunate in general.

Petrolimex and its member companies set aside more than 300 billion VND to be spent on social welfare activities around the country in the 2015-2020 period.

For example, over the last 10 years its staff have raised nearly 80 billion VND in cash and gifts for the needy in Dong Van district in the northern mountainous province of Ha Giang, to help them escape from poverty and near-poverty, contributing to ensuring social welfare in the province and the region more broadly.

The company has also become an official and active member of the National Fund for Vietnamese Children, the Vu A Dinh Scholarships, and the Fund for the Poor run by the Vietnam Fatherland Front Central Committee. Each and every year, representatives from Petrolimex have visited and presented gifts to war invalids and others who rendered their services to the country and now live in nursing centres.

Of particular note, immediately after COVID-19 was first found in Vietnam, the company donated more than 14.1 billion VND to support prevention and control efforts.

To ensure it continues to perform its role as the leading energy company in Vietnam, Petrolimex will maintain its focus on meeting all of its business targets while completing all of its social welfare activities at the same time.

For the 2020-2025 period, the Party Organisation at Petrolimex will strive to continue to enhance its leadership capacity.

 
 

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