Vietnamnet global

05/09/2020 09:06 (GMT+07:00)

VIETNAM'S BUSINESS NEWS HEADLINES SEPTEMBER 5

Steelmakers urge import protection

Many markets use anti-dumping measures for steel products, photo: Le Toan

Amidst the US-China trade tensions, local steelmakers are worried that imported cold-rolled steel products from China could eventually ruin their business and have petitioned the Ministry of Industry and Trade for additional anti-dumping measures to control the influx of Chinese steel.

The Ministry of Industry and Trade (MoIT) last week extended the time of an ongoing investigation to decide whether to apply anti-dumping measures for cold-rolled steel products from China, nearly a year after the investigation started. The investigation was initially requested by local producers such as Posco Vietnam Co., Ltd., China Steel Sumikin Vietnam JSC, and Phu My Flat Steel Ltd.

The MoIT said that the deadline for the investigation of this case would be March 2021 as it needs more time to review and clarify problems caused by the COVID-19 pandemic.

Meanwhile, local steelmakers complained in a petition sent to the MoIT last year that these imported products originating from China have been causing damage to their business and cited that these Chinese steel products have been being sold at prices 4-14 per cent lower than local ones, and 9-19 per cent lower than imports from Japan, Taiwan, and South Korea.

Cold-rolled steel sheets offer a variety of outstanding properties, including easy formability and a smooth, clean surface, and are used in automobiles, appliances, furniture, and many other everyday items.

Anti-dumping measures, such as the requested ones, are nothing new in Vietnam’s steel sector as the country last year decided to extend the validity of anti-dumping duties on cold-rolled stainless steel products originating from China, Indonesia, and Taiwan for an additional five years, starting from last October, following another request by Posco and Inox Hoa Binh JSC, which account for 80 per cent of domestic stainless steel production.

According to the Vietnam Steel Association, it is hard to export cold-rolled stainless steel, as there are many large manufacturers in Southeast Asia and the regional supply exceeds the demand. It is also difficult to export steel to the US and EU markets, which themselves apply anti-dumping policies to steel products.

At first, the MoIT said that if there are no anti-dumping measures and the imports into Vietnam further increase, the domestic industry could hardly survive and develop. Previously, the local stainless steel market only had Posco and a few other small domestic enterprises. The ongoing recovery of the stainless steel industry has attracted many enterprises’ investment in the industry, with healthy competition.

During the investigation and the eventual application of measures, the MoIT already considered an exemption from anti-dumping measures for cold-rolled stainless steel products as input materials that have not been produced domestically ensure the interests of consumers. However, the MoIT also laid down concerns that further anti-dumping measures could create an exclusive position for Posco.

To control the influx of cheaper imports and offer assistance for local steelmakers, a number of markets have slapped anti-dumping obligations on steel from China, such as India, Brazil, Thailand, the European Union, and the United States.

HCM City bank credit grows at3.68 per cent amid Covid woes

Total outstanding loans of credit institutions in HCM City as of August 31 were worth VND2.38 quadrillion (US$102.5 billion), an estimated 3.68 per cent up for the year.

It represented a 0.4 per cent increase from the preceding month, according to the State Bank of Vietnam’s HCM City branch.

The 3.68 per cent growth represents the slowest rate in many years, but the SBV said cash flow is still being pumped into important areas of the economy.

Thus, lending to businesses in export processing zones and industrial parts increased by 12.7 per cent this year to VND180.58 trillion ($4.67 billion) as of July 31.

Banks also lent over VND2.014 trillion for 27 projects related to the city’s investment stimulation programme, and VND617 billion to firms participating in its price stabilisation programme.

Outstanding short-term loans in Vietnamese dong provided to the city’s five priority sectors (agriculture and rural development, production of goods for exports, small- and medium-sized enterprises, supporting industries, and high-tech enterprises) were worth VND176.26 trillion.

In response to the SBV’s Circular No. 01/2020/TT-NHNN that directed credit institutions to restructure loan repayments, waive and reduce the interest and fees and keep debt classification unchanged to support customers affected by COVID-19, credit institutions have supported 240,407 customers with total outstanding loans of VND583.15 trillion.

The SBV organised measures to mitigate difficulties faced by businesses based on feedback from authorities and business groups.

A representative of its city branch said the banking industry would continue to focus on solutions to overcome difficulties faced by businesses and help their revival based on guidelines issued by the Government, the central bank and the city People's Committee.

Deloitte releases new intensive report on role of CFOs in COVID-19 times

Deloitte has launched a report titled The SEA CFO Agenda that explores the five imperatives that SEA CFOs face in navigating the new normal.

The global COVID-19 pandemic has put the role of the CFO under the spotlight. Given the uncertainty and lack of perfect information, Southeast Asia (SEA) CFOs have found themselves in an unprecedented position to offer strategic counsel to the CEO and provide the financial leadership to drive business strategy amidst this crisis.

In response to the present situation, Deloitte has interviewed CFOs of various industries across SEA in the second quarter of 2020 to launch the report.

Specifically, the report examined some of the new realities that have emerged and the actions that that SEA CFOs are considering – or perhaps should consider – to address their top-of-mind issues along five dimensions: new business models; digital transformation; workforce agility; risk management and cyber resilience; as well as restructuring and mergers and acquisitions (M&A).

As the COVID-19 pandemic evolves, SEA CFOs need to make quick decisions to ensure that they are responding appropriately to the crisis while preparing their organisations and employees for challenges in the longer haul.

Many have found themselves playing increasingly important roles as strategists and catalysts during this crisis, in addition to their traditional roles as operators and stewards.

Before the onset of COVID-19, SEA CFOs had ranked a global economic slowdown and recession, global trade wars, and currency fluctuations as their top three external risks.

In terms of internal risks, the survey found that disruptions in products or markets, inability to execute strategies, and technology implementation were the SEA CFO’s top three concerns.

The report reflects that as SEA CFOs look ahead to the future, they recognise that agility – the ability to respond quickly to market needs with new business models – is key to enabling them to gain a competitive edge.

For most SEA CFOs, investing in product innovation and diversification strategies is crucial to enabling their organisations to capitalise on some of the new, emerging demands.

Whether they are launching new products or selling repurposed inventory, SEA CFOs also highlighted the need to enhance their distribution channels to enable them to deliver on these new value propositions.

The COVID-19 pandemic has made many SEA CFOs acutely aware of its critical importance in ensuring business continuity and driving growth.

There is increasing emphasis on analytical tools as many of them had been tasked with increased reporting activities, including profit-and-loss forecasts and cash flow forecasts, as both C-suites and boards demand frequent updates.

According to the report, CFOs are also placing increasing emphasis on scenario planning during this crisis, leveraging technology tools and predictive analytics when planning for specific scenarios and modelling their impacts on margins.

As the economy begins to resume operations, SEA CFOs recognise that some of the adaptations that they have had to make represent not only temporary arrangements but irreversible and permanent shifts in the way they do business.

With more remote working arrangements in the new normal, SEA CFOs will also find it easier and more practical to rapidly flex their workforce size, composition, and cost by leveraging gig workers and cross-border teams.

In addition to new financial reporting considerations, Deloitte’s study also indicates the need for SEA CFOs to watch out for the emergence of interdependent risks. In a volatile environment, the trigger of a single risk could lead to a series of cascading risks with unknown consequences or impacts.

With more volatility expected in the near future, SEA CFOs have also identified the need to keep a vigilant eye on their internal controls and guard against fraud and cybersecurity risks.

As SEA CFOs look towards the future, a combination of restructuring and M&A strategies should emerge as companies strive to safeguard existing markets, accelerate recovery, and position themselves to capture market leadership.

Given the emergence of new consumer behaviours and increased e-commerce uptake during the pandemic, the consumer sector is one industry that is expected to witness increased M&A activity. This, in turn, could also have spill-over effects on other adjacent industry sectors, such as payment platforms and other fintech players.

Thailand spends 1.4 billion USD on cash handouts to boost domestic consumption

The Thai government plans to spend 45 billion THB (about 1.4 billion USD) on cash handouts to 15 million people affected by the economic fallout caused by COVID-19, which is expected to boost domestic consumption.

Danucha Pichayanan, deputy secretary-general of the Office of the National Economic and Social Development Council, said on September 2 that a meeting of the Centre for the Administration of the Economic Situation Affected by COVID-19, approved the cash handouts as an economic stimulus measure proposed by the Finance Ministry.

Under the measure, the government will give 3,000-THB cash handouts to people to buy consumer goods.

They are required to register for the cash and the money will be transferred through the e-wallet, Danucha said.

The Finance Ministry will prepare details of the cash handouts scheme to present to the centre again and the measure is expected to be implemented from next month until the end of the year, he said.

The measure is expected to stimulate cash flow of about 90 billion THB in the economy and boost the economy by 0.25 percent, he added.

Meanwhile, the Centre for the Administration of the Economic Situation Affected by COVID-19 also approved the Labour Ministry's request for 23.47 billion THB to hire new graduates.

The 23.47 billion THB will come from the 400-billion-THB loan borrowed by the Finance Ministry to tackle the economic effects of the pandemic.

The minister said the project was the right solution to the unemployment problem faced by new graduates.

The second part of the project is the "Thailand Job Expo 2020" job fair tentatively scheduled to take place at the end of this month.

Around one million positions in the public and private sectors will be available at the event.

Vietnamese company joins solar power projects in Laos

The Wealth Power Group of Vietnam has joined two other partners in developing solar power projects in Champasak and Sekong provinces of Laos.

The Vientiane Times reported on September 3 that representatives from Wealth Power Group, National Consulting Group Sole Company and Power Company Limited Thepvongsa signed a deal to this effect at a ceremony in Vientiane on September 2.

The solar power project in Sekong will be built on more than 720 ha in Lamam district at a total investment of 332.3 million USD. The power plant will have a design capacity of 500 MW and an annual electricity output of 739 GWh.

The project in Champasak, spreading over 93.1 ha in Khong and Pathoumphone districts, has a design capacity of 80 MW and annual output of 123GWh. It has total investment of 57.3 million USD.

The two plants, when completed, will supply 10 percent of their electricity output for the domestic market and 90 percent will be exported to neighbouring countries, particularly Vietnam and Myanmar.

Bac Ninh attracts 119 FDI projects in January-August

The northern province of Bac Ninh licensed 119 new foreign direct investment (FDI) projects worth 334.8 million USD in the first eight months of 2020, according to the provincial Statistics Office.

To be attractive to both foreign and domestic investors, Bac Ninh focused on improving business climate with giving priority to projects which use less land, less labour; have high investment rate, much budget collection and high technology, the Vietnam Government Portal (VGP) reported.

The province also allowed 1,602 existing FDI projects to increase their capital by 19.64 billion USD.

Of these, 1,331 projects are in manufacturing and processing industry, making up 83 percent; including 1,205 projects from the Republic of Korea, 112 projects from China and 86 projects from Japan.

Together with general preferential mechanisms and policies of the State, the province also proposed some initiatives to encourage investment in industrial zones and boost on-the-spot investment promotion through creating images from big FDI businesses, such as: Samsung, Canon and Foxcon.

In the last 20 years, Bac Ninh province in the Northern Key Economic zone has grown from an agricultural community to a major industrial center with the second-highest per capita income and one of the highest economic growth rates in the country.

Surrounded by major economic centres such as Hanoi and Hai Phong, it has managed to establish itself as one of the major FDI destinations.

Thai exporters urged to make use of FTAs to boost shipments of medical supplies

Thailand’s exporters are being urged to make the best use of existing free trade agreements (FTAs) to boost shipments of medical supplies, particularly for syringes and medical needles, as the COVID-19 pandemic has driven import demand for such products.

Auramon Supthaweethum, director-general of the Trade Negotiations Department, said the outbreak has resulted in rising demand for medical supplies including syringes.

"Once a vaccine is developed, we believe demand will surge further," the Bangkok Post newspaper quoted Auramon as saying.

Thai entrepreneurs should speed up their production to serve higher demand both at home and abroad, she said, adding that higher use of tariff privileges offered under FTAs will enable Thai entrepreneurs to rapidly expand their exports in overseas markets.

According to Auramon, in the first half of 2020, several countries were stocking up on imports of syringes and medical needles. Thailand has relatively high potential for metal syringe production and exports. The country ranks No.1 for syringe production in ASEAN and is No.6 in the world.

Thai producers should take this opportunity to rev up their supply for the domestic and export markets, especially to the 18 countries with which Thailand has FTAs implemented, she said.

In the first six months of 2020, Thailand exported medical needles and syringes worth 200 million USD, up 10.6 percent from the same period last year. Major export markets were Japan, the US, France, Germany and China.

Shipments to countries with which Thailand has FTAs totalled 86.3 million USD, accounting for 43 percent of Thailand's total needle and syringe exports.

New circular helps perfect financial products and stock market: expert

The State Securities Commission’s draft circular to replace an older one on the guidelines for securities trading is in line with modern trends, perfecting financial products and their diversities, adjusting trading time to suit the needs of domestic and foreign investors, said an expert.

“Both individual and institutional investors are looking forward to the approval and issuance of this circular,” according to Phan Dung Khanh, director of investment consultancy department at Maybank Kim Eng Securities Co Ltd.

“This is definitely positive news for Vietnam’s stock market as the move is expected to propel the local stock market to emerging market (EM) status,” Khanh told the Vietnam News Agency.

Under the draft circular, investors are allowed to perform short sale transactions, which, according to Khanh, is a good step helping investors diversify their short trading strategies.

The draft said short sale transactions with collateral (secured short sales) were transactions for borrowed securities in the securities borrowing and lending (SBL) system of the Vietnam Securities Depository. The seller is then obliged to buy back the securities to repay the loan. The short sale will be executed based on the securities loan transaction contract on the securities loan and lending system at the Vietnam Securities Depository.

A secured short sale transaction must include collateral, borrowing/lending interest rate, loan term, extension, collateral disposal when the investor does not make payment of securities, settling method when a dispute arises, potential risks and losses, and the costs.

Khanh said the State Securities Commission and securities companies should build a proper legal framework, a list of stocks eligible for short sale transactions and a standardised clearing system to avoid systemic risks.

They should also effectively upgrade infrastructure systems, prepare private contracts with customers and improve the instruction of new product information, he said.

Under the draft, a person aged from 15 years old to under 18 years old, who has not lost or limited their civil act capacity, is entitled to open a securities account provided that the consent of the legal representative is obtained.

Commenting on this regulation, Khanh said that the popularisation of securities and knowledge for investors, including those aged 15 and over, is necessary.

“People from 15 years old are able to access securities investment channel and can have correct assessment on this attractive investment channel and capital mobilisation. We can apply the regulation to the underlying stock market or some kind of high quality bonds,” he said.

“However, some complex or advanced financial products such as futures contracts or option contracts may not be applicable to young investors,” he said.

According to lawyer Nguyen Thanh Ha, Chairman of SBLAW Law Firm, the stock market is a potentially risky investment channel that requires knowledge and experience, thus its may be difficult for individuals aged 15 years to 18 to properly participate in transactions by themselves.

“Besides, most securities companies currently stipulate the minimum age for opening a securities account is 18 years old,” Ha said.

Salt industry development plan for 2021-2030 approved

Deputy Prime Minister Trinh Dinh Dung has approved a plan on developing the salt industry for 2021 – 2030.

Accordingly, by 2025, the total salt production area will be maintained at 14,500 hectares for turning out 1.5 million tonnes of salt per year.

In the period, investment is earmarked for building infrastructure and purchasing manufacturing – processing machines following market demand. Priority will be given to making quality salt products serving domestic demand.

Capital will be poured into the development of industrial production infrastructure for making table salt in the central provinces of Khanh Hoa, Ninh Thuan and Binh Thuan. Meanwhile, traditional salt production will see infrastructure and irrigation systems at salt fields upgraded.

By 2030, the total salt production area will be 14,244 hectares with annual yield reaching 2 million tonnes, meeting domestic demand.

The plan highlights research and assistance related to the building of pilot models combining salt production and tourism activities in salt fields such as Thuy Hai in Thai Binh province and Bach Long in Nam Dinh province in the north, as well as Ho Do and Ky Ha – Ky Anh in Ha Tinh and Sa Huynh in Quang Ngai in the central region.

Trade promotion and brand building for salt exports are also part of the plan.

Singapore maintains Asia-Pacific’s top spot on global innovation

For the seventh consecutive year, Singapore has retained the top spot as Asia-Pacific's most innovative nation in the latest Global Innovation Index.

It has also maintained its eighth position in global rankings.

The annual index - released by the World Intellectual Property Organisation, Cornell University and Insead - ranks 131 economies according to their capacity for, and success in, innovation.

The ranking is based on 80 indicators, including mobile application creation and the ease of starting a business.

Globally, Singapore topped the list for innovation inputs - as measured by indicators such as the quality of human capital and research, political stability as well as market sophistication.

However, it fell behind to 15th place for innovation outputs, which take into consideration the quantity of patents and intellectual property receipts produced, as well as creative outputs such as trademarks, national feature films and online content creation.

Garment sector poised to grasp EVFTA opportunities for higher exports

As a means of compensating for a drop in export orders due to the impact of the COVID-19 epidemic, several local textile and garment businesses are striving to seize upon opportunities brought about by the EU-Vietnam Free Trade Agreement (EVFTA).

Vietnam raked in US$19.2 billion from exporting garments and textiles during the opening eight months of the year, representing a year-on-year decline of 11.6%, according to the Vietnam Textile and Apparel Association.

According to the HCM City Association of Garment Textile Embroidery and Knitting, the number of export orders in the southern city witnessed a sharp fall of approximately 25% in April, and over 30% in May, with figures predicted to continue falling during the second half of the year.

At present, the entire sector’s inventory rate remains high at up to 118.7%, with roughly 20% of textile enterprises being forced to suspend their operations, while the remaining businesses have to lay off a large number of workers and restructure their production activities.

Furthermore, the complicated nature of the COVID-19 epidemic has exerted a range of negative impacts on the sector’s export markets, with global purchasing power in general plummeting, while a series of well-known fashion brands such as Brook Brother, New York & Co, and JCPenny have declared bankruptcy.

Currently, local textile and apparel firms must reach a total of US$7 billion in export orders in order to achieve the export turnover target of last year, with the EVFTA being considered the best opportunity in which local firms can fulfill their goals.

To take full advantage of the trade pact, local businesses have to take into consideration key factors such as prices, fast delivery, and tax incentives presented by the EVFTA in order to compete with strong rivals from Bangladesh and Turkey.

With regard to rapid delivery requirements, aside from improving logistic capacity, there should be improvements in simplifying administrative procedures and reducing the clearance time faced by export businesses.

Moreover, the domestic textile and garment sector must be proactive to use import materials from countries that have signed FTAs with the nation and the EU, therefore making use of preferential tariffs due to flexible rules of origin stated within the EVFTA.

The industry has therefore been advised to shift to supply high-tech garment and textile products, including protective clothing, sports, and medical equipment.

The Import-Export Department under the Ministry of Industry and Trade said that between August 1 and August 31, authorised organisations have granted over 7,200 sets of C/O form EUR.1 with a total turnover reaching US$277 million to 28 EU member states.

Major items granted C/O form EUR.1 consist of footwear, seafood, plastics, coffee, textiles, bags, suitcases, vegetables, rattan, and bamboo products while the import markets mainly serve as the EU’s transit hubs, including Belgium, Germany, the Netherlands, and France.

Most notably, many shipments have arrived in the EU market and received customs clearance while simultaneously enjoying preferential tariffs.

Rice exports enjoy vigorous growth during eight-month period

Vietnam grossed US$2.2 billion from rice exports during the eight-month period, representing an increase of 10.4% in comparison to the same period last year, despite the negative impact of the novel coronavirus (COVID-19) epidemic.

According to the Vietnam Food Association, the price of Vietnamese export rice has experienced an upward trajectory in recent times, with the export price of 5% broken rice in August hitting a record high, even outstripping that of Thailand.

Most notably, over the past three decades, this marks the first time that the country has surpassed Thailand in rice exports, with each tonne of 5% broken rice being priced US$20 higher than the Thai product in the world market.

Earlier this year, Thailand's 5% broken rice was being sold at between US$50 and US$60 per tonne higher than that the Vietnamese product.

Despite this, Vietnamese 5% broken rice by mid-August was being traded at between US$493 and US$ 497 per tonne, while the price of the same item from Thailand hovered between US$473 and US$477 per tonne.

Elsewhere, export rice prices from Pakistan and India were at US$427 and US$382 per tonne, respectively.

Aside from 5% broken rice, several Vietnamese rice varieties have also witnessed strong export prices, with DT8 and 5451 rice being traded at US$570 and US$550 per tonne, respectively.

According to local rice exporters, this increase in rice export price can be attributed to improvements made in the overall quality of Vietnamese rice.

Boasting market advantages, coupled with the global rising demand for rice due to the COVID-19 pandemic, there appear to be bright prospects ahead for local export businesses to increase their rice export volume and price moving forward.

In addition, the entry into force of the EU-Vietnam Free Trade Agreement (EVFTA) on August 1 has also served to help some major businesses increase their export price of some rice varieties in a number of demanding markets.

A notable example can be seen in the Trung An High-Tech Agriculture Joint Stock Company in Can Tho city which has signed a contract to ship 3,000 tonne of rice, including ST20 and jasmine rice, to three German clients.

Furthermore, the export price of ST20 rice and jasmine rice to the EU stands at over US$1,000 and US$600 per tonne, respectively, compared to the prices of US$800 and US$520 per tonne before the trade deal came into force.

According to experts, tax reductions due to the EVFTA and the bustling rice market has ultimately pushed up the rice export price in the world market.

Arisaig Asia Consumer Fund to soon divest from Vinamilk

Foreseeing the saturation of the local dairy market, Singapore-based Arisaig Asia Consumer Fund has decided to divest its entire capital from Vinamilk (HSX: VNM) after more than a decade of investment.

Arisaig Asia Consumer Fund's decision has shocked the Vietnamese securities market because the fund reported an annual profit rate of 20 per cent from the local dairy giant during the past 11 years. As of the end of last year, Arisaig Asia Consumer Fund held 28.8 million VNM stocks worth more than VND3.3 trillion ($143.5 million).

Through observing consumption trends in China – a market with many similarities to the local market – in recent years, the investment fund reassessed its expectations for the growth of the Vietnamese dairy sector. It showed that the market with a 100-million population is getting closer to the saturation point.

The fund stated that although Vinamilk has performed well in diminishing threats stemming from competitors such as Abbott, Coca-Cola, and Danone, its strategic alterations are not enough to recover the snail-paced growth in the liquid milk and formula milk for babies categories.

The market has seen signs of saturation for a few years now. According to a report by AC Nielsen, milk consumption in 2019’s second quarter grew by 2.1-3.9 per cent, a slight rally against the downturn in the previous six quarters (since the fourth quarter of 2017).

Moreover, increasing expenses for material supply have been a burden for local dairy producers. According to Global Dairy Trade, the price of skimmed milk powder spiked by 30 per cent and full cream milk powder by 4 per cent against the year prior. To maintain the profit margin, Vinamilk, TH True Milk, and Dutch Lady all raised prices by 1-5 per cent.

Assessing prospects for 2020, SSI forecast the local dairy sector would keep growing at a single-digit rate. Currently, spending on fast-moving consumer goods has slowed down because the essential needs are met. As a result, consumers will increase expenses on higher demands and non-essential items.

Vietnam’s production decreases in August

The Vietnam Manufacturing Purchasing Managers' Index (PMI) fell to 45.7 in August from 47.6 in July as the effects of COVID-19 led to a deterioration of business conditions in the country’s manufacturing sector, the latest survey by IHS Markit released this week showed.

This represented a second successive deterioration in the health of the manufacturing sector after a return to growth had been signalled in June. Although marked, the latest decline in business conditions was much less severe than that seen during the worst of the COVID-19 related downturn in April.

According to the survey, respondents indicated that the effects of the COVID-19 pandemic led to declines in both output and new orders. New business decreased at a solid pace amid reports of weak customer demand. Data also pointed to a sharp reduction in new export orders, and one that was faster than that seen for total new business.

The latest reduction in manufacturing output was the eighth in the past nine months, and faster than that seen in July. All three broad sectors posted drops, with the rate of contraction sharpest among intermediate goods producers.

“Declining new orders led to further reductions in both backlogs of work and employment amid a lack of pressure on operating capacity. The rate of depletion in outstanding business was sharp, while firms scaled back their staffing levels to an extent only exceeded during the worst of the recent downturn in April,” the survey stated.

A faster reduction in purchasing activity was also recorded amid lower new orders and production requirements. That said, the fall in input buying was still much weaker than April's record. The scaling back of inventories also continued, with stocks of both purchases and finished goods decreasing in August. Some respondents indicated that finished products had been dispatched to customers as soon as they were ready to avoid a build-up of inventories.

Input prices increased for the third month running in August, albeit at only a slight pace that was slower than the series average. A scarcity of materials due to the COVID-19 pandemic was the principal cause of the rise in input costs, according to respondents. Similarly, the impact of the pandemic was central to another lengthening of suppliers' delivery times.

Manufacturers responded to weak demand conditions by lowering their output prices again midway through the third quarter of the year. Selling prices have now decreased in each of the past seven months, with the latest fall the fastest since May.

Concerns around the ongoing effects of COVID-19 on demand led to a drop in confidence among manufacturers regarding the 12-month outlook for production. Firms still predicted, on balance, that output will rise over the coming year, linked to hopes that the pandemic will be brought under control. That said, optimism was among the weakest since the series began in April 2012.

“With the data moving in the wrong direction at present, the latest PMI data for Vietnam highlight the ongoing effects of COVID-19 on the manufacturing sector and the challenges faced in trying to overcome them. Customer demand remained weak, with firms scaling back production accordingly. The picture around employment was particularly worrying, with jobs lost at the second-fastest pace in nine-and-a-half years of data collection,” Andrew Harker, Economics Director at IHS Markit, said.

However, he noted: "Firms will be hoping that the virus can be brought back under control so that the recovery that got underway in June can get back on track."

Multi-million USD project helps manage flooding, water resources in Vinh Phuc

A project on water and flood management in the northern province of Vinh Phuc has had a significant role to play given the locality has been facing major inundation for many years, especially during the wet season.

This is the first project of this kind in the country to be implemented with World Bank concessional loans totalling 150 million USD. The project has total budget of 220 million USD

Statistics show that the province faces floods once every two and a half years on average during 2006-2013. The Phan River basin, which covers two thirds of the province’s area and is home to 80 percent of the province’s population, is frequently hit by rising water levels.

Losses from floods initially estimated at about 150 million USD in the 2006-2013, with 30 percent of which were in agricultural production.

With support from international organisations such as the Japan International Cooperation Agency (JICA) and the Asian Development Bank (ADB), the province has invested in a range of projects to improve the Phan River’s drainage capacity.

However, existing drainage infrastructure in the province is stretched beyond capacity when heavy rains strike, hence the urgent need for a flood control project.

Under the master urban plan for Vinh Phuc to 2030 and vision to 2050, the project’s target area will be a first-grade urban centre in the future, with greenery and a large water surface area.

The province has decided to address the challenges posed by flooding and water pollution for its long-term sustainable development, and is focusing on improving agricultural production in the entire basin, ensuring safety in rural areas, Vinh Yen city, and economic development zones, and improving the investment environment to attract FDI.

The project management board has instructed contractors and supervisory consulting units to mobilise all forces and take advantage of favourable weather conditions to accelerate construction progress and complete items as committed.

As of August, 80 percent of work in a bidding package to upgrade infrastructure along the rivers of Cau Bon, Ba Hanh, and Tranh in Binh Xuyen district and the construction of two bridges (CW02 package) had been completed.

According to the province’s board on the management and use of foreign loans, once completed, the CW02 package will help enhance flood drainage capacity, lower water levels in the rivers, and prevent flooding from the Tam Dao area from flowing into the centre of Vinh Yen city.

It will also facilitate the operation of pumping station in Nguyet Duc commune, Yen Lac district, helping ensure water drainage for the communes of Huong Son, Thien Ke, Tam Hop, and Son Loi, as well as Huong Canh town in Binh Xuyen district and the wards of Nam Viem, Tien Chau, and Cao Minh in Phuc Yen city, with a total area of more than 31,000 ha.

Director of the province’s board on the management and use of foreign loans, Ho Hoang Phuc, said the project has contributed to controlling floods in the central area of the province, preventing quality degradation of surface water, protecting the ecological environment of existing rivers, and creating sustainable development and a favourable environment to attract investors to Vinh Phuc.

It has also served as a premise for Vinh Phuc to become a new urban area with strong development in tourism services, contributing to improving landscapes and living environments in areas surrounding Hanoi.

Once completed, the project is expected to improve the quality of life of local people, contributing to protecting technical infrastructure and increasing the use coefficient of agricultural land and agricultural production value in the locality.