Vietnamese exports to ASEAN grow at low rate of 5.26%
The nation’s exports to the ASEAN market this year are expected to reach US$23.6 billion, while the average growth rate for the 2016 to 2020 period is predicted to witness a low level of growth at 5.26%, according to the latest report released by the Ministry of Industry and Trade (MoIT).
This comes as total trade turnover between the country and ASEAN member states is estimated to be at US$55.8 billion for this year, accounting for 10.4% of the total Vietnamese import-export turnover, with ASEAN representing the nation’s fifth largest trading partner, the MoIT report states.
Among countries located in Southeast Asia, Thailand and Malaysia are the only two nations who currently have over US$10 billion in total bilateral trade turnover with the Vietnamese market. In addition, five other countries, including Indonesia, Singapore, Cambodia, the Philippines, and Laos, have a total turnover of more than US$1 billion.
With US$23.6 billion of goods exported to the region over the course of the year, the main export products include phones and components, steel of all kinds, computers, electronic products and components, machinery, equipment, tools and spare parts, vehicles and spare parts, garments and textiles, along with rice.
Furthermore, the country’s imports from the ASEAN region this year are anticipated to hit US$32.2 billion, with the average import growth rate during the 2016 to 2020 period poised to record an increase of 5.55%. This growth will largely focus on commodity groups such as fruit and vegetables, confectionery and cereal products, household electrical goods and components, petroleum products, rubber, plastic materials, paper of all kinds, automobiles of all kinds, and auto components and spare parts.
With regard to the balance of trade in goods between the nation and ASEAN, it is anticipated that the country will record a deficit of US$8.6 billion this year.
In 2019, the total Vietnamese import-export turnover with the region reached US$57.3 billion, including US$25.2 billion from exports and US$32.1 billion from imports, making up a 1.1% rise in value compared to 2018. Indeed, the nation’s trade deficit with ASEAN registered at US$6.85 billion, down 1.3% from 2018.
Shrimp exports projected to up 9.8 percent to 3.7 billion USD this year
Vietnam’s shrimp exports are forecast to reach 3.7 billion USD this year, posting an year-on-year increase of 9.8 percent, fuelled by the EU – Vietnam Free Trade Agreement (EVFTA) which facilitated export to the EU markets, according to Vietnam Association of Seafood Exporters and Producers (VASEP).
Accounting for 13.8 percent of the country’s shrimp export value, the EU was the fourth largest shrimp export market of Vietnam, coming after the US, Japan and China.
Despite declines at the start of this year, shrimp exports to the EU saw significant growth in the third quarter, thanks to the impact of the EVFTA which came into effect from the beginning of August, the association said.
In September alone, Vietnam exported shrimp worth 57.6 million USD to the EU, representing a rise of 35.4 percent against September last year.
January-September shrimp exports to the EU totalled more than 371 million USD, up by 2.3 percent.
The association said that in the EU, restaurants and catering services were reopening together with the tourism industry, adding that the EU’s demand for shrimp was expected to increase significantly in the coming months to serve year-end holidays.
The EU was a market with good profit margins and this would be the market that many enterprises would focus on to expand exports in the remaining months of this year, the association said, adding that Vietnam’s shrimp exports to the EU would continue to see considerable increases.
Vietnam’s shrimp exports in September totalled nearly 385 million USD, up by more than 25 percent against the same month last year, the highest growth rate recorded since March, according to VASEP’s statistics.
Besides the EU, exports to other major markets also saw significant increases, such as to the US by 39.6 percent, China by 22.9 percent, the Republic of Korea 3.2 percent, the UK 54.3 percent, Canada 47 percent and Australia 50.7 percent.
Shrimp exports totalled 2.7 billion USD in January – September, a year-on-year increase of 10.5 percent.
The US was the largest shrimp export market of Vietnam, accounting for 24 percent of the country’s shrimp export value. Vietnam exported shrimp worth more than 634.4 million USD to the US in January – September, up by 33 percent over the same period last year.
According to the Ministry of Industry and Trade’s Import-Export Department, Vietnam’s shrimp export would continue to increase in the last months of this year due to the low shrimp supply globally, especially from India.
The department added that Vietnam’s shrimp export also benefited from the EVFTA.
Vietravel Airlines to become country's sixth airline
Prime Minister Nguyen Xuan Phuc has recently agreed to license Vietnam Travel Aviation Company Limited (Vietravel Airlines) for air transport, making it the sixth airline in Vietnam.
The PM assigned the Ministry of Transport (MoT) to clarify the financial capacity of the firm to ensure the minimum capital required for the operation of Vietravel Airlines.
Based on that, the MoT will decide when to issue an air transport business license to Vietravel Airlines.
The move makes Vietravel Airlines the country's sixth airline, after Vietnam Airlines, Vietjet Air, Jetstar, VASCO and Bamboo Airways.
In April, Deputy Prime Minister Trinh Dinh Dung signed a decision approving the investment policy of Vietravel Airlines with a total investment of 700 billion VND (30.2 million USD).
Vietravel Airlines will be based at Phu Bai International Airport in the central province of Thua Thien - Hue.
During its first year of operations, the carrier will use three Airbus, Boeing, or equivalent aircraft, which will then rise to eight by its fifth year.
It has set a goal of catering to 1 million passengers in its first year, thus creating nearly 600 jobs.
The airline will conduct domestic and overseas flights and contribute to improving the capacity of Vietnam’s air transport and tourism sectors while promoting socio-economic development during global integration./.
Standard Chartered forecasts Vietnam’s 2020 growth at 3 percent
Standard Chartered expects Vietnam’s economy to grow by 3 percent in 2020 and surge to 7.8 percent in 2021. Rising consumption on improving sentiment, and faster manufacturing will drive growth in the last quarter of this year.
The forecast is highlighted in Standard Chartered’s recently published Global Research report entitled “Vietnam – Q3 disruption, but recovery remains intact”.
“Vietnam is one of the few Asian economies to have registered positive growth so far this year, despite the second wave of infections. We expect the fourth quarter growth to increase as domestic activity resumes and sentiment picks up. Improving services growth and infrastructure investment should help Vietnam outperform the rest of Asia. We maintain our positive view on Vietnam’s medium- and long-term economic outlook,” said Chidu Narayanan, economist for Asia, Standard Chartered Bank.
According to the latest macroeconomic report on Vietnam, a likely improvement in external demand in the fourth quarter should support manufacturing growth, forecast at roughly 7.3 percent in full-year 2020. Both exports and imports are expected to increase as a result. Trade is likely to remain in surplus for the rest of 2020 as exports and imports move in tandem.
Construction activity is anticipated to improve in the fourth quarter, supported by increased public infrastructure investment. Private consumption, accounting for nearly 68 percent of GDP, should grow strongly in the fourth quarter on improving domestic sentiment. Private investment, however, is likely to remain subdued on lingering uncertainty about medium-term demand.
Standard Chartered’s economists project newly registered FDI inflows into Vietnam to decline in 2020, but remain strong at close to 13 billion USD. Lingering uncertainty on global demand and depressed investment sentiment are likely to weigh on FDI inflows in the medium term.
While the country stands to benefit from the ongoing relocation of manufacturing amid elevated geopolitical tensions, inflows are likely to be lower than in previous years. Further government measures and a sustained move of low-tech manufacturing should support FDI inflows.
The study also forecasts that the State Bank of Vietnam (SBV) will remain accommodative in the near term to support growth. The central bank cut the policy rate by a further 50bps to a historical low of 4 percent on October 1, in line with Standard Chartered’s forecast from May 2020. The central bank’s 200bps of rate cuts in the year to date and the reopening of the economy should aid further credit growth in the near term./.
Businesses commit to support women’s empowerment principles
Leaders of some top businesses in Vietnam on October 22 signed the commitment to supporting the women’s empowerment principles (WEPs), an initiative of the UN Women and the UN Global Compact.
This was part of the Vietnam Women Entrepreneur Forum 2020 held in Hanoi.
The WEPs consists of seven steps that businesses can carry out to empower women and promote gender equality in the workplace, the market, and the community.
At the event, Chairman of the Vietnam Chamber of Commerce and Industry (VCCI) Vu Tien Loc said amid the COVID-19 pandemic’s strong impact on the global economy, including Vietnam, domestic businesses, especially those owned by women and employing large female workforce, have braved difficulties to substantially contribute to the realisation of the Government’s twin targets of containing the outbreak and boosting socio-economic development.
There are about 200,000 women-owned enterprises in Vietnam at present, accounting for 25 percent of the total. Notably, women run about 30 percent of small- and micro-sized firms and over 50 percent of household businesses.
He noted that the three most important driving forces for the development of an economy in the future is micro-, small- and medium-sized enterprises, women, and the internet. The economy will enjoy breakthroughs if all these three are promoted.
A number of policies have been issued to encourage and support women-owned companies. However, their implementation still faces an array of difficulties, Loc said, pointing out the failure to reach the target of raising the rate of women-owned companies to 35 percent by 2020.
Nguyen Thi Tuyet Minh, President of the VCCI’s Vietnam Women Entrepreneurs Council, said without women’s active, responsible, and creative participation, the economy in general and businesses in particular will lack conditions to promote sustainable development.
According to head of UN Women Office in Vietnam Elisa Fernandez Saenz, half of the world’s population are women, so if an economy doesn’t fully tap into women’s capacity, half of its human resources will be wasted.
She cited the finding by a McKinsey Global Institute study that 12 trillion USD could be added to the global GDP by 2025 by advancing gender equality.
Vietnam has obtained considerable outcomes in promoting gender equality, yet this is still a big challenge to the country. Women-owned businesses are facing many obstacles to engaging in business activities, including limited accessibility to resources and family- and business-based gender bias, she added./.
Ultra-large container ship to dock at Cai Mep int’l terminal this week
Margrethe Maersk, one of the world’s largest container ships, is set to arrive at Cai Mep International Terminal (CMIT) in the southern province of Ba Ria-Vung Tau on October 26.
The 214,121-DWT vessel, operated by the 2M Alliance led by Maersk Line and Mediterranean Shipping Company (MSC), is able to carry over 18,300 twenty-foot equivalent units and stretches nearly 400m in length and 59m in width, according to the Vietnam Maritime Corporation (VIMC).
With the ship’s call, CMIT will become one of about 20 major ports worldwide capable of receiving vessels of this size, therefore affirming its position on the global navigation map.
The VIMC said the port’s eligibility to handle such huge container ships would benefit Vietnam’s imports and exports as the country has signed several free trade deals such as the EU-Vietnam Free Trade Agreement and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
Vietnam’s goods will be directly shipped to many large markets like Europe and the US without transiting ports in Singapore or Malaysia, helping to save logistics costs and reduce transport time./.
Indonesia’s economy forecast to grow 5 percent in 2021
The Indonesia’s economy may expand 5 percent in 2021, Coordinating Maritime Affairs and Investment Minister Luhut Binsar Pandjaitan said at the forum on development prospect 2021 on October 21.
Luhut called for national solidarity to overcome COVID-19 pandemic so as to achieve the growth.
Meanwhile, Chairman of the Employers’ Association of Indonesia (APINDO) Hariyadi Sukamdani said the country’s economy is forecast to inch up between 2.5 and 5.5 percent next year. However, the expansion depends on the availability of COVID-19 vaccine.
Apindo believed that proper application of health care process at workplace as well as in the community will be a key to recover the economy in the time ahead.
He expected the Indonesian government to speed up disbursement of various social aid and fiscal stimulus packages.
According to the Statistics Indonesia (BPS), Indonesia’s GDP contracted 5.32 percent in the second quarter of 2020, and it is predicted to post a contraction of 2.9 percent in the third quarter./.
Binh Son Refining and Petrochemical JSC reports $7.4 million Q3 profits
Viet Nam’s largest refining and petrochemical firm, Binh Son Refining and Petrochemical JSC (BSR), reported that third-quarter profits reached more than VND171 billion (US$7.37 million).
It sold more than 925,000 tonnes of products, exceeding the quarterly plan by 24.8 per cent, posted total revenue of over VND9 trillion, and contributed more than VND972 billion to the State budget.
The numbers reflect the significant efforts BSR has made amid many difficulties caused by COVID-19, which has impacted the firm in terms of both material supply and product consumption.
It reported total revenue of more than VND31.7 trillion in the first half of this year, down 38 per cent against last year.
A loss of VND4.25 trillion was incurred in the first half after it enjoyed a post-tax profit of VND704 billion in the same period of 2019.
BSR reported revenue of more than VND13.7 trillion in the second quarter alone, down by more than half compared to last year. It also incurred a loss of nearly VND1.9 trillion in the quarter.
It has trimmed its total revenue and post-tax profit targets for 2020 by 21.5 per cent and 59 per cent year-on-year to VND80.7 trillion and VND1.18 trillion, respectively, if crude trades at $60 a barrel on average in the year.
The board will make an adjustment if there is any change in the movement of oil prices and the COVID-19 pandemic.
BSR has filed for listing on the Ha Noi Stock Exchange (HNX), the northern market regulator has said.
It plans to list more than 3.1 billion shares, representing charter capital of VND31 trillion.
BSR currently trades on the Unlisted Public Company Market (UPCoM) with the code BSR. If approved, it will become the largest listed firm by charter capital on HNX.
BSR is a subsidiary of Viet Nam National Oil and Gas Group (PetroVietnam or PVN) and operator of the $3 billion Dung Quat Oil Refinery in the central province of Quang Ngai, the first oil refinery in the country.
It is also expected to develop a plan in which PVN will cut its ownership down from 92.12 per cent.
Ministry of Construction to withdraw all State capital from IDICO
The Ministry of Construction recently approved a plan to divest all State capital at Viet Nam Urban and Industrial Zone Development Investment Corporation (IDICO).
The divestment volume is 108 million shares, equivalent to 36 per cent of IDICO’s charter capital.
The shares will be sold via a public auction at the Ho Chi Minh City Stock Exchange.
The divestment goal in IDICO is to reduce the State ownership rate from 36 per cent to 0 per cent.
The corporation must divest before November 30 and if it does not complete the divestment, it must complete the transfer to the State Capital Investment Corporation before December 31.
The starting price is VND26,930 (more than US$1) per share, meaning VND2.9 trillion is expected to be collected. However, if its reference price in 30 consecutive sessions before the announcement date is higher than VND26,930 per share, then the average 30-day reference price will be used as the starting price.
IDICO was established in 1994 under the Ministry of Construction and is currently investing in research and development of 10 industrial park projects nationwide with an area of 3,270 hectares, mainly in the south. It also operates in power supply, transportation, construction and other sectors.
IDICO has a charter capital of VND3 trillion, is the eighth-largest enterprise with capital on the HNX. It made its initial public offering (IPO) in October 2017 and sold 55.3 million shares.
After that, the corporation put its shares on UPCoM on November 24, 2017, with the reference price on the first trading day of VND23,940 per share. IDICO shares moved to HNX from December 10 at a reference price of VND18,500 per share.
During the equitisation process, IDICO offered to sell shares to two strategic shareholders, SSG Group and Bitexco Group, which both own 65 million shares, making up for 22.5 per cent of charter capital.
The corporation has an annual turnover of nearly VND5 trillion. Profit after tax is quite volatile, reaching VND477 billion last year. Total assets are more than VND14.5 trillion.
HCM City licences 30,000 new businesses in nine months
HCM City has licenced nearly 30,000 new businesses with combined registered capital worth a total of VND667 trillion (US$28.64 billion) as of the beginning of October, according to the municipal Department of Planning and Investment.
The number of newly-established enterprises declined 7.5 per cent compared to the same period last year, though registered capital was up 34.7 per cent year-on-year.
The southern hub lured $3.25 billion in foreign direct investment (FDI) in the first nine months of this year, down 28 per cent from a year prior.
Up to $407.4 million was poured into 719 newly-licensed projects, $283.8 million added into 163 underway projects and $2.56 billion invested in 2,911 share trading deals.
Trade was the leading sector in FDI attraction with more than $751 million, accounting for more than 23 per cent of the total. It was followed by the property sector with $726.8 million and science-technology with $685.5 million.
The department said that in the future, the city will prioritise three investment areas: smart city, highly interactive and innovative urban area in eastern HCM City, and regional and international financial centre construction.
Power consumption rises as economy recovers from pandemic
Power consumption increased significantly in September as the economy started to find its feet after COVID-19 was successfully contained in Viet Nam, according to a recent report by Electricity of Viet Nam (EVN).
The report on nine-month power production and consumption showed that EVN's commercial power output was estimated at 19.93 billion kWh in September, representing a rise of 1.05 per cent against August and 8.41 per cent against the same period last year.
Power for industrial production and construction increased by 7.7 per cent, while electricity for daily consumption was up 13.17 per cent. Power for services and trade was down 10.99 per cent.
The country is undergoing socio-economic recovery after COVID-19 was successfully contained, with no new community transmissions recorded for 50 days.
EVN’s total commercial power output for January-September stood at 162.31 billion kWh, a rise of 3.09 per cent over the same period last year.
From the beginning of this year, EVN produced and imported a total of 185.37 billion kWh, up by 2.68 per cent.
Of the figure, hydroelectricity plants provided 48.38 billion kWN, a drop of 6.93 per cent, gas-fired power plants were at 27.42 billion kWN, falling 16.56 per cent, coal-fired power plants accounted for 97.29 billion kWh, an increase of 10.5 per cent and oil-fired power produced 1.04 billion kWh, up 33 per cent.
Of note, EVN purchased 8.16 billion kWh of renewable power in the first nine months of this year, of which 7.23 billion kWh, or 88.6 percent, was generated by solar power projects.
The nine-month solar power buyback was 2.6 times higher year-on-year.
For rooftop solar power, more than 55,980 projects were put into operation with a total capacity of 1,531 MWp.
In the last quarter of this year, EVN will focus on hastening the progress of power generation projects, including the Thuong Kon Tum hydropower plant and Se San 4 solar power projects.
EVN also plans to start expansions at Hoa Binh hydropower plant and Quang Trach 1 thermoelectricity plant, and build infrastructure for the Dung Quat 1 and 3 gas-fired plants.
EVN has broken ground on 107 power projects this year and put into operation 100 110-500kV transmission lines.
Workshop discusses challenges faced by energy service companies market
There is great potential for the energy service companies market in Viet Nam, a workshop heard in HCM City on Thursday.
Power consumption is forecast to increase sharply in the coming years, spurred by rapid socio-economic development, while supply is inadequate.
Markus Bissel, head of the component energy efficiency, renewable energy and energy efficiency project, EU-Viet Nam Energy Facility, GIZ Vietnam, said: “With still one of the highest energy intensities in Southeast Asia the Vietnamese Government faces many challenges to improve energy efficiency, particularly in the commercial and industrial sectors.
“Even though the Vietnamese Government successfully implemented the Vietnam Energy Efficiency Programme 1 and 2 and is currently implementing No.3 with very ambitious objectives, it is foreseeable that it is getting more and more challenging to meet the increasing energy demand.”
According to Nguyen Dinh Hiep of the Viet Nam Association of Science and Technology for Economical and Efficient Use of Energy, in this context, the economical and efficient use of energy has become compulsory.
“Energy service companies (ESCO) are one way to promote economical and efficient energy use,” he said.
Bissel said ESCO provide services related to energy efficiency and financing of energy efficiency measures.
“The ESCO model world-wide is a driver of investments in energy efficiency measures. And even in Viet Nam, in some specific sectors, the ESCO model is successfully applied.”
Hiep said ESCO would provide a comprehensive energy services package including energy efficiency consulting, planning, construction, installation, operation, maintenance, optimisation, and financial contribution, and apprise customers about investment costs, energy saving results and investment risks.
“By applying the ESCO model, businesses can gain access to green solutions, equipment and technology innovation and achieve efficiency in investment.
“It also helps businesses participate in national and international programmes and projects in the economical and efficient use of energy, contributing to environmental protection and coping with climate change.”
Public lighting, commercial and service buildings, industrial manufacturing, power distribution, and renewable energy are potential areas for ESCO investment, he said.
Statistics show there are more than 200 energy efficiency service suppliers and energy efficiency consulting firms, but the number following the ESCO model is low.
Speakers at the workshop agreed that the model is still new in Viet Nam and faces hurdles due to a lack of legal support, mechanisms and financial support for implementation of energy-efficient projects and unavailability of manpower.
Besides, customers’ distrust, risks in undertaking energy efficiency projects and businesses’ greater focus on boosting sales than reducing costs through energy savings are other obstacles to ESCO activities, they said.
The workshop heard about lessons learnt in other ESCO markets such as the US and China and the experiences in Viet Nam from foreign experts and representatives of local companies.
Hiep said to boost ESCO activities, improving the institution and legal framework for it, developing a sustainable financial mechanism, and creating linkages between ESCO enterprises and credit institutions are imperative.
Toby Couture, director of E3 Analytics, said in-depth skill training is critical.
The Government could lead by example and invest in ESCO and energy efficient services, but ensuring legal issues of energy performance contracts was important, he said.
Financial support including loan guarantees and favourable tax treatment could be a catalyst for the growth of the market, he added.
Organised by the EU-Viet Nam Energy Facility project and the Ministry of Industry and Trade, the workshop titled ESCO, a future business model for Viet Nam sought to share experiences in developing the ESCO model in Viet Nam and raise awareness of government management agencies so that an appropriate policy framework could be adopted in future.
FTAs offer fresh impetus to fulfill export target of US$300 billion
Local businesses have been advised to boost their internal strengths and take full advantage of opportunities presented by newly-signed free trade agreements (FTAs) in order to successfully meet the export target of US$300 billion for this year, according to insiders.
Despite complicated developments relating to the novel coronavirus (COVID-19) pandemic hitting production and business activities, Vietnamese exports during the opening nine months of the year have maintained positive growth.
According to figures compiled by the Ministry of Industry and Trade (MoIT), the export turnover increased by 4.2% to US$202.86 billion against the same period from last year.
In total, 30 export items recorded a turnover reaching more than US$1 billion, whilst five commodities in the processing and manufacturing industries grossed over US$10 billion.
Most notably, the export growth of the domestic economic sector enjoyed a boost of 20.2%, therefore exceeding that of foreign invested enterprises, while trade surplus hit a record high of approximately US$17 billion.
There were a number of positive signs recorded in export activities during August and September as a result of the enforcement of the EU-Vietnam Free Trade Agreement (EVFTA), with export growth witnessing an increase of 1.7% over the corresponding period from last year.
Furthermore, more than 20,000 sets of certificates of origin (C/O) have been issued for export shipments, with their value at over US$900 million to 27 EU member countries.
Economist Nguyen Tri Hieu emphasized that Vietnamese success in containing the novel coronavirus (COVID-19) pandemic, coupled with the implementation of 13 FTAs with several countries, have provided impetus for export growth. This is largely due to a number of key export items in the agriculture, seafood, textile, footwear, and electronics fields enjoying substantial tariff reductions.
According to experts, slow export growth globally caused by the negative impact of COVID-19 is anticipated to provide an opportunity for Vietnamese goods to make further inroads into the international market thanks to tax incentives.
With regard to seizing upon opportunities of the EVFTA, Nguyen Dinh Tung, general director of Vina T&T Group, said that the company has built growing areas consisting of 300 hectares specifically for fruit, all of which has been certified to GlobalGAP standards.
This has helped the company’s fruit products, such as dragon fruit, longans, mangoes, grapefruit, and rambutan, to penetrate the EU market, along with other markets with high standards.
Moreover, Vina T&T Group also has plans to export herbs, chilis, eggplants, and lemon to the EU in order to meet huge demand within the market. Indeed, the company is aiming to fulfill the export target of more than US$7.7 million to the fastidious market, representing a year-on-year increase of 20%.
Phan Van Chinh, director of the Import-Export Department under the MoIT, advised local businesses to improve their product quality, ensure food hygiene standards, and meet rules of origin requirements set by EU importers.
Local firms have also been urged to devise a long-term vision and map out a coherent business strategy for each specific product in each market segment, while also gaining insights into the consumer tastes in a bid to boost exports to the stringent market.
As a means of meeting the export target of US$300 billion for this year, the MoIT has developed a trade promotion scheme for the 2020- 2025 period.
This plan will see the ministry select a number of products that have potential for development in markets that have signed FTAs with the country, while also supporting enterprises to venture into fresh markets and seek customers through trade online exchange platforms.
Top 500 most profitable enterprises in Vietnam this year unveiled
Vietnam Report JSC and online newswire VietNamNet co-hosted a ceremony on October 22 in Hanoi in order to unveil the Top 500 most profitable enterprises in Vietnam (Profit500), along with the leading 10 most reputable companies in the food, beverage, retail, and packaging sectors for this year.
Among the Top 10 most profitable enterprises this year were Vietnam Oil and Gas Group, Samsung Electronics Vietnam Thai Nguyen Co, Ltd, the Military Industry-Telecoms Group (Viettel), the Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank) and Honda Vietnam.
They were joined by Vingroup, PV Gas Vietnam, the Bank for Agriculture and Rural Development of Vietnam (BIDV), and Vietnam Dairy Products Joint Stock Company (Vinamilk).
Each of the recognized businesses have proved to be both effective and sustainable in the face of challenges brought about by the novel coronavirus (COVID-19) pandemic, while also maintaining a firm foothold in their sectors, therefore serving as pillars for the future development of the Vietnamese economy.
In this year's Profit500 rankings, a number of industries continued to record high numbers of businesses. Most notably, construction and real estate made up 23.9%, finance comprised of 11.6%, food and beverages with 10.9%, and electricity with 6.3%.
The event also saw Vietnam Report publish a bilingual report titled "Vietnam Earnings Insight 2020", with a focus placed on restructuring and recovering growth momentum as the nation moves into the new normal period following the successful containment of COVID-19.
The report details how the Vietnamese economy recorded a growth rate of 2.12% during the opening nine months of the year, the lowest level compared to the same period throughout the 2011 to 2020.
Despite this, the report outlines how amid challenges brought about by COVID-19, securing a positive growth rate can be considered a strong achievement for the local economy.
Furthermore, there is also information regarding the challenges faced by Vietnamese businesses within the report, as domestic firms battle to maintain production and business activities, in addition to ensuring social safety regulations while developing a suitable operating system in line with market trends.
Minh Phu to appeal against CBP’s decision on shrimp anti-dumping duty
Minh Phu Seafood Corporation on October 22 decried a decision of the U.S. Customs and Border Protection Department (CBP) to impose anti-dumping tariffs on its frozen shrimp for export to the United States.
A representative of Minh Phu told VietnamPlus that the firm would appeal against the decision.
Based on the Enforce and Protect Act (EAPA), CBP on October 13 concluded that frozen shrimp exported by Minh Phu to the United States market was subject to duties in line with regulations on anti-dumping tax on India’s shrimp.
Earlier, Minh Phu did not provide sufficient documents and evidence as required by CBP to prove the firm did not use shrimp originating from India while shipping its products to the United States.
As such, CBP concluded that Minh Phu violated the regulation on anti-dumping duty levied on India’s shrimp and decided that Minh Phu’s shrimp exported to the United States from Vietnam will be subject to anti-dumping tariffs after CBP conducted a probe.
Le Van Quang, chairman of Minh Phu Seafood Corporation, said that CBP’s decision had shocked the firm as after being informed of the investigation by the department, Minh Phu had closely cooperated with the U.S. agency.
Besides, the firm clearly clarified the way it separates batches of Indian shrimp from Vietnamese shrimp while processing shrimp products to ensure that only shrimp originating from Vietnam is exported to the United States.
Although Minh Phu proactively cooperated with CBP and invited the U.S. department to Vietnam for an investigation, CBP did not launch an on-site inspection, leading to its incorrect conclusion over Minh Phu’s origin traceability of material and export shrimp.
Instead, CBP set up its assessment standards on the grouping method and affirmed that Minh Phu should have applied this method for the origin traceability of material shrimp.
In addition, CBP disapproved of the traceability management method Minh Phu has been using for over four years, Quang said.
As Minh Phu failed to follow CBP’s method, the department concluded that the firm violated EAPA based on “available disadvantages."
Minh Phu’s separation and traceability methods were approved by the U.S. National Oceanic and Atmospheric Administration, he noted.
In late July 2019, Minh Phu stopped importing material shrimp from India, as the material source in the country was sufficient for Minh Phu’s production and processing activities.
As CBP’s decision is illogical, Minh Phu will appeal against it, Quang stated.
The consideration for a letter of appeal is set to last 60 days since the date of receiving the appeal letter, according to Quang. If the appeal fails to bring good results as expected, the firm will go on to file an appeal in the International Commercial Court.
On January 14, CBP announced that it would begin an investigation into the evasion of anti-dumping tax on India’s shrimp and into whether Mseafood, a U.S.-based subsidiary of Minh Phu, evaded anti-dumping tax.
Exports to EU need long-term vision
Exporters are taking advantage of incentives from the EU-Vietnam Free Trade Agreement (EVFTA). However, there remain many issues to be addressed to boost sustainable exports to the EU.
Positive outcomes recognised
As one of the products benefiting most from the EVFTA, seafood export turnover saw positive growth in the two months since implementing the agreement. General Secretary of the Vietnam Association of Seafood Exporters and Producers (VASEP) Truong Dinh Hoe said that orders for Vietnamese shrimp increased by 10-15% over the same period last year and the demand for the product is expected to rise compared to the previous year.
Notably, the agreement is expected to bring about more benefits in the long term as importers have shown their interest in goods with a tariff reduction schedule from three to five years to develop strategies for market penetration in the long term after the tax reduction schedule is over.
Enterprises have also paid greater attention to international certification issues in order to meet EU standards and make better use of the opportunities emanating from this agreement in the near future.
Seafood is one of the items that has taken advantage of the incentives created by the EVFTA. Vice President and General Secretary of the Vietnam Association of Small and Medium Enterprises, To Hoai Nam, said that in the two months since coming into force, the EVFTA has brought about many positive results for export enterprises, especially agricultural enterprises, as a series of products such as rice, coffee, and fruit have seen export boosts to this market.
“The utilisation of the EVFTA has greatly contributed to helping Vietnam maintain its position as one of the few countries who enjoyed export growth in the first half of 2020 despite the disruption of the global trade”, Nam said.
According to the Ministry of Industry and Trade (MOIT), as of mid-October, two and a half months since the implementation of the EVFTA, about 23,800 sets of certificates of origin (C/O) of the EUR.1 form were granted to Vietnamese products worth a total US$963 million and allowing them to export to 28 EU countries.
Compared with other FTAs such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the FTA between ASEAN and Hong Kong (China), the FTA between Vietnam and Cuba, and others, the number of C/Os under the EVFTA is much larger, demonstrating that businesses have effectively utilised the agreement. Of which, the value of footwear products applying for C/Os was about US$391 million, the value of aquatic products reached US$183.4 million, the value of plastic and plastic products was posted at US$49.1 million and the value of textiles and garments reached more than US$27 million.
Items that have applied for C/O of EUR.1 form with a high usage rate of 50 - 80% include seafood and footwear. The preferential tariff rates for these items under the EVFTA are lower than those in the Generalised Scheme of Preferences (GSP) and the standards of origin of EVFTA are looser or equivalent to the GSP.
Special attention to rules of origin
According to experts, the results thus far are only the first step. Because the EU is a large market with strict requirements, in the long run, Vietnamese enterprises who wish to participate in and access this market must meet certain standards and criteria prescribed by the market. This is a challenge, but it will boost the sustainable development of enterprises in the international trade playground.
The MOIT noted that in order to enjoy preferential tariffs, Vietnamese enterprises need to meet the rules of origin of the EVFTA as tariff preferences and rules of origin are parallel and inseparable.
To promptly support Vietnamese enterprises to take advantage of opportunities from the first days of the implementation of the agreement, the MOIT issued Circular No. 11/2020/TT-BCT on June 15, 2020 on the rules of origin in the EVFTA to serve as a legal basis to guide attention to them in Vietnam. The Circular took effect from the date the EVFTA came into force.
Truong Dinh Hoe said that one of the important issues in implementing the EVFTA is the certification of origin to enjoy preferential tariffs. Therefore, the first thing that businesses need to pay due attention to is building a transparent and scientific traceability system to meet the requirements related to certification of origin.
Therefore, the issue of traceability, chain linkage, and quality management in the supply chain system should be given maximum attention.
To Hoai Nam added that the EU is the most demanding market in the world, especially regarding rules of origin, so, if enterprises want to make use of the agreement effectively, they must not hurry but instead carefully research the market, thoroughly prepare resources, and produce high quality goods. In addition, with the impacts of the COVID-19 pandemic, the EU now has even stricter regulations on imported goods.
Amid this difficult situation as well as the issue of the limited resources of enterprises, the Government, ministries and sectors need to devise breakthrough policies and mechanisms to create a favourable environment to encourage entrepreneurship and creative business, especially supporting industries.
To develop supporting industries, it is necessary to no longer only rely on the previous advantage of cheap labour and enterprises must instead focus on new standards to meet the requirements of the development trends of the market. One such focus is to promote innovation based on science and technology.
However, the Vietnamese business community remains weak in scientific research for business initiatives and product development. “Therefore, to remove this barrier, it will be necessary to create conditions for enterprises to access scientific research projects to apply in production and business while also promoting the value of research projects - a great resource,” To Hoai Nam suggested.
PetroVietnam named most profitable firm in Vietnam
The top 500 profitable businesses (Profit500) and the 10 most prestigious firms in the food, beverage, retail, and packaging sectors in Vietnam in 2020 were announced at a ceremony in Hanoi on October 22.
The Vietnam Oil and Gas Group (PetroVietnam) topped the Profit500 list, which was compiled by the Vietnam Report JSC and online newspaper VietNamNet under the Ministry of Information and Communications.
It was followed by the Samsung Electronics Thai Nguyen Co. Ltd, the Military Industry and Telecom Group (Viettel), the Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank), Honda Vietnam, the Vingroup JSC, the PetroVietnam Gas Joint Stock Corporation, the Vietnam Bank for Agriculture and Rural Development (Agribank), the Vietnam Technological and Commercial Joint Stock Bank (Techcombank), and the Vietnam Dairy Products JSC (Vinamilk).
Those winning a reputation award in the food industry included Vinamilk, the CP Vietnam Livestock JSC, the Masan Group, the VISSAN JSC, the FrieslandCampina Vietnam JSC, and the Mondelez Kinh Do Vietnam JSC.
Pham Anh Tuan, a representative from VietNamNet, said this year was the first time a global economic crisis has been triggered by a pandemic and the term “new normal” introduced when it comes to socio-economic recovery efforts and the resumption of businesses’ operations.
In that context, “profit” alone is not enough for enterprises, it must be “sustainable profit” based on internal strengths, adaptability to the market, and brand reputation, Tuan said.
Enterprises honoured are those with efficient and sustainable production and business activities, as well as high profitability amid a number of challenges caused by the pandemic-triggered crisis, Tuan said, adding that they also possess a firm foothold in their industries and are capable of becoming pillars of Vietnam’s future economic development./.
First stage of Nghi Son steel rolling mill inaugurated
The first stage of Nghi Son steel rolling mill was inaugurated at Nghi Son economic zone in the central province of Thanh Hoa on October 23.
The work is also to celebrate the 19th Congress of the provincial Party Organisation for the 2020-2025 tenure.
During the first stage, the mill has an annual capacity of 1 million tonnes of steel billets, using technology provided by Daniely Group – the world’s leading firm major in metallurgy and steel manufacturing based in Italy.
Speaking at the event, Vice Chairman of the provincial People’s Committee Nguyen Van Thi said the project, invested by the Nghi Son Iron and Steel JSC, has a total investment of 4 trillion VND alone.
From the second quarter this year, the mill will officially go into commercial operation, supplying steel billets and rolled steel meeting Vietnamese and Japanese standards to the market.
The project is expected to generate nearly 2,000 jobs and contribute about 1 trillion VND (43.7 million USD) to the provincial budget./.
Sumitomo chooses five Japanese partners to build Hanoi smart city
Japanese trading house Sumitomo Corp. has taken on five partners for its smart city project in Hanoi, taking advantage of their infrastructure, technology, and other know-how for development efforts kicking off in fiscal 2021, according to Nikkei Asia Review.
The partners are information technology giant NEC, Topco Power Grid- the electricity transmission unit of Tokyo Electric Power Co. Holdings, NTT Communications, Mitsubishi Heavy Industries Engineering, and advertising Hakuhodo.
A consortium to discuss specifics has been launched, with plans to set up an operating company in the second half of that year.
Under the envisioned plans, Tepco Power Grid and Mitsubishi Heavy Industries Engineering will build infrastructure for the stable supply of electricity and balancing supply and demand. NTT Communications and NEC are expected to handle the internet of things and such security technologies as facial recognition, while Hakuhodo will likely develop services for residents.
Sumitomo is developing about 270 hectares in the Dong Anh district, about 20 minutes by car from the centre of Hanoi, with local developer BRG Group. Roughly 7,000 condominium units will be built in the first phase, slated to begin in fiscal 2021. The work, which will also include office and commercial buildings, is expected to take 10 to 15 years.
The roughly 450 billion JPY (4.29 billion USD) undertaking will be the largest smart-city project led by a Japanese company in Southeast Asia. Sumitomo and BRG, which have the rights to operate the city for 50 years, will also look for partners and investors to help with operations./.
Vietnam, New Zealand seek to enhance bilateral trade
The seventh meeting of the Joint Trade and Economic Commission (JTEC) between Vietnam and New Zealand was held online on October 23, co-chaired by Deputy Minister of Industry and Trade Tran Quoc Khanh and New Zealand’s Deputy Secretary Trade and Economic Vangelis Vitalis.
The meeting is part of the important cooperation mechanisms to discuss and bolster the two countries’ trade and economic cooperation.
Participants reviewed the recent cooperation in the fields of trade, investment, agriculture, education and training, tourism, aviation, and employment.
They spoke highly of the efforts and close collaboration in the implementation of agreements in economy and trade reached between high-ranking leaders of the two countries.
The two sides also consented to continue enhancing cooperation in those endeavours, as well as in multilateral trade talks, farm produce trade, clean industry, and farm produce supply chain development.
In his remarks, Khanh underlined that both Vietnam and New Zealand are dynamic economies and have rolled out reform measures to make use of their advantages and potential for further integration into the global economy.
Notably, the two countries hold huge potential for strengthening cooperation in trade, industry, and investment, and need to exert more effort in bringing bilateral relations on par with the strategic partnership, elevated in July.
Regarding the impact of COVID-19, delegates agreed to foster bilateral and regional cooperation for economic recovery. They also pledged to ensure that economic and trade cooperation frameworks to which Vietnam and New Zealand are signatories aim at the further expansion of two-way trade.
In addition, they discussed prioritised products of each side, particularly lime and pomelo from Vietnam and strawberries and pumpkin from New Zealand, to facilitate bilateral trade.
The countries will regularly update regulations and standards on quality, hygiene, and food safety for agro-forestry-fishery exports and share experience in trade promotions, brand building, post-harvest technologies, and agro-fishery processing.
They also agreed to continue to join hands and support each other at cooperation mechanisms and frameworks, notably the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, the Regional Comprehensive Economic Partnership, the ASEAN-Australia-New Zealand Free Trade Agreement, and Asia-Pacific Economic Cooperation.
Of particular note, delegates affirmed that the sustainable development of the Mekong sub-region plays an essential role in the realisation of the ASEAN Community Vision.
Vietnam called on New Zealand to partner with countries in the Mekong sub-region in disaster management, water-food-energy security, climate-smart agriculture, public health, and human resources.
Data from the Asia-Africa Market Department at the Ministry of Industry and Trade show that Vietnam is the 14th largest trade partner and 15th largest importer of New Zealand, ranking fifth in ASEAN.
Vietnam-New Zealand trade has enjoyed average growth of 14.2 percent annually since the establishment of the comprehensive partnership in 2009, reaching 1.1 billion USD last year.
Two-way trade totalled 1.4 billion USD in the first half of this year, up 15 percent against the 2016 figure./.