VIETNAM'S BUSINESS NEWS HEADLINES SEPTEMBER 9

Banks’ profit forecast to drop significantly in H2 2020

 
     

VIETNAM'S BUSINESS NEWS HEADLINES SEPTEMBER 9
Banks' provisions for risky loans will likely increase 48 per cent in H2 2020.— Photo plo.vn

 
The pre-tax profit of the banking system in the second half of this year is estimated to fall 22.1 per cent compared to the same period last year due to an increase in provisions for risky loans in the wake of the COVID-19 pandemic.

According to a recent report on the prospects of the banking industry in H2 2020 by Saigon Securities Incorporation (SSI)’s research division, SSI analysts believed that the rising provision will further reduce profits of banks.

They estimated that banks would promote the provisions for new bad debts and restructured debts. Total operating income of the banking system is projected to decrease 4 per cent while provisions for risky loans will likely increase 48 per cent.

The SSI estimated pre-tax profit of State-owned banks, including Vietcombank, BIDV and VietinBank, could decline 36 per cent, mainly due to the 59 per cent increase in provisions for risky loans in H2 2020.

The rising restructured debts will make the net interest margin (NIM) fall further. The amount of bad debts and restructured loans will sharply increase by the end of the year. Based on the estimates of the State Bank of Viet Nam (SBV), about 23 per cent of the total outstanding loans were adversely hit by the pandemic in the first quarter of this year.

When the pandemic continues, the number of customers encountering cash flow problems will continue to increase. Banks will have to put the loans on restructuring lists or classify them as bad debts. Therefore, the loss of interest income related to restructured loans and bad debts may increase significantly.

The negative effects of the interest rate reduction and exemption will last through H2 2020, longer than H1 of 2020. Therefore, SSI analysts estimated that the NIM would fall by an additional 60 basis points in H2 2020 if the pandemic lasts until the end of this year.

SSI forecast the credit growth in 2020 will be around 7.5-8.5 per cent, lower than the initial credit growth target of 11-14 percent set by the SBV. At the end of July 2020, the total credit growth was 3.75 per cent, compared to the 3.65 per cent in H1. It is half of the credit growth recorded in the same period of 2019 which was about 7.5 per cent.

The credit demand may continue to fall because the country is still facing the pandemic while banks may not lower their credit granting standards. Lending to large corporate customers and corporate bonds may continue to be the main driver for credit growth, while the retail segment will not be as strong as before, the report stated. 

Efforts made to spur Vietnam - China trade ties

China is currently Vietnam’s largest import source and second-largest export market, while Vietnam is its northern neighbour’s eighth-largest trade partner. China is also the first trade partner of Vietnam to surpass the 100 billion USD milestone.

Of the 20 countries and territories importing Vietnamese products, China has been the largest for the last two years, with two-way trade exceeding 100 billion USD.

Vietnam posted a trade deficit of more than 34 billion USD with China last year.

Though China is a major trade partner, the growing deficit over recent years is becoming a source of some alarm.

The Ministry of Industry and Trade has said that to cut the trade deficit and any over-reliance on China, especially amid the COVID-19 pandemic, Vietnam must upgrade its trade mechanisms. The country also needs to identify ways to take part in global value chains at a higher level, thus keeping pace with other developed countries in the region and the world.

Stock market makes smart recovery in August

The resurgence in Covid-19 in late July had a negative impact on the stock markets then, but thanks to the Government’s control of the outbreak along with economic stimulus and increased public investment, the stock market recovered significantly in August.

All indices on the Ho Chi Minh Stock Exchange gained last month.

On the last trading day of the month, the benchmark VN Index closed at 881.65 points, up 10.43 per cent for the month.

The VNAllshare closed 10.81 per cent up at 797.34, and the VN30 was up 11.23 per cent at 823.93.

Some sectors saw even sharper growth: energy (VNENE) was up 24.02 per cent, consumer goods (VNCONS) gained 19.42 per cent and materials (VNMAT) rose by 14.29 per cent.

The average daily trading value and volume were VND5.07 trillion (US$217.4 million) and over 286 million shares, up 11.85 per cent and 5.56 per cent.

Foreign investors ploughed in VND23.78 trillion ($1.02 billion).

The top five stocks they bought were VHM (VND723.57 billion), PLX (VND244.34 billion), PHR (VND144.29 billion), HDB (VND64.04 billion), and STB (VND52.93 billion).

Covered warrants saw an average trading volume of nearly 8.63 million per session and value of VND12.01 billion, increases of 43 per cent and 44 per cent.

HOSE’s market capitalisation was up 11.64 per cent to nearly VND3.12 quadrillion, or equal to around 43.2 per cent of the country’s GDP last year.

As of August 31, there are 381 stocks, three closed-end fund certificates, six ETF certificates, 90 covered warrants and 42 bonds listed on HOSE.

Paper companies see bright prospects as demand increases

An increasing demand for tissue paper amid the COVID-19 pandemic means the future is looking bright for businesses in the paper industry.

According to the Viet Nam Pulp and Paper Association (VPPA), in the first five months of the year, paper production was estimated at 1.85 million tonnes, up 7.8 per cent over the same period last year.

Paper exports reached 656,900 tonnes, up 97.4 per cent. Paper imports reached 853,100 tonnes, up 7.8 per cent over the same period in 2019. Packaging paper and tissue paper products all grew in terms of production, export and import.

In the tissue paper segment, domestic consumption and export demand surged by 40.2 per cent year-on-year due to the outbreak, offering opportunities for paper businesses with large production capacity.

Paper producer Dong Hai Joint Stock Company of Bentre (DHC) reported positive earnings in Q2 and in the first half of this year.

In the second quarter, the company recorded net revenue of VND649 billion (US$28 million), 2.8 times higher than the same period last year. Post-tax profit was nearly VND79 billion, up 212 per cent compared to the second quarter of 2019.

Over six months, DHC achieved net revenue of VND1.3 trillion, 3 times higher than the same period in 2019. Post-tax profit was VND168 billion, up 3.5 times from 2019.

The company’s Giao Long Paper Factory phase II holds advantages in both scale and production capacity of kraft paper and carton packaging, giving DHC a competitive edge over its competitors.

Besides, with a large market share of the packaging segment for the seafood, garment and pharmaceutical industries, DHC is forecast to continue to achieve strong growth in the last two quarters of the year and beyond as demand rises.

Hapaco Group JSC (HAP) has recently announced investment plans to expand its tissue paper production lines. The new project is expected to improve the company’s business efficiency in the future. The plan has boosted the price of HAP on the stock market, reaching its ceiling prices in the past 12 trading sessions.

Shares in Viet Tri Paper Joint Stock Company (GVT) and Vien Dong Investment Development Trading Corporation (VID) have also increased strongly recently thanks to information on revenue and profit growth, along with planned projects to invest in high capacity paper production.

At its 2020 AGM, GVT approved a plan to invest in new packaging paper production lines. Its leaders targeted to increase the company’s productivity to 150,000 tonnes per year.

In 2019, GVT's post-tax profit increased 91 per cent to reach nearly VND72 billion. In 2020, has GVT set a minimum revenue target of VND1.2 trillion and profit target of VND80 billion, an increase of about 11 per cent for both compared to 2019.

For printing and writing paper production, production growth in the first two quarters of this year decreased compared to the same period in 2019. But according to the Viet Nam Pulp and Paper Association, the demand for printing paper and writing paper would grow again in the third quarter of 2020.

The production and export of books and notebooks will also increase again when pupils and students go back to school after the summer holidays.

This is good news for companies in this segment including Bai Bang Paper Company, Viet Nam Paper Corporation and other member companies. 

Tourism in indigenous villages needs a boost

Pu Luong Nature Reserve in Ba Thuoc district, Thanh Hoa province, is home to rich ethnic minority cultures and breathtaking landscapes, making it ideal for developing tourism. But local tourism services are yet to meet visitors’ needs.

Located inside Pu Luong Nature Reserve, Kho Muong village is surrounded by evergreen forests and is an ideal getaway for those seeking to experience ethnic minority life. Thirteen local households now offer homestay services, each year welcoming 300 tourists on average and earning up to 5,000 USD. But they still encounter numerous difficulties in providing tourism services, in particular a lack of investment in sanitation. 

The same situation applies for eight homestays in Am Hieu village, Co Lung commune, in Ba Thuoc district. Though it welcomes 3,200 tourists each year and every household can earn up to 1,000 USD a month from tourism, they still require training and adequate investment to fully tap into tourism’s potential. 

A brighter picture is seen in Don village, Thanh Lam commune, in Ba Thuoc district, which has 29 beautiful homestays and impressive terraced fields. Roads to the village, however, are still in poor shape, which is hindering tourism development. 

In order to better exploit the tourism potential the locality holds, the People’s Committee of Ba Thuoc district has been zoning tourist attractions, upgrading public infrastructure, and organising training classes for local tourism service providers.

Stock exchange profit up in H1

The Ho Chi Minh Stock Exchange (HoSE)’s pre-tax profits increased 19 per cent year-on-year in the first six months to VND238 billion (US$10.3 million).

There was also a rise in its revenues, which climbed 17 per cent to VND380 billion, according to the exchange’s newly released half-yearly statement.

Transaction charges accounted for 85 per cent of its revenues. The rest was revenue from trading software usage, other commercial operations and services and listing fees.

HoSE is a State-owned enterprise under the Ministry of Finance, operating under the model of one-member limited liability company.

The exchange targets to earn nearly VND810 billion in revenue and VND453 billion in profit. It set out important tasks this year, including renewing the governance and preparing for the merger of two stock exchanges HoSE and HNX, perfecting the system of regulations, processes and professional guidance for the revised Law on Securities taking effect from the beginning of 2021.

HoSE said it would develop the market towards larger size, promoting liquidity while improving the quality of listed businesses.

By the end of June, the bourse had 380 listed shares, three closed-end fund certificates, four ETF certificates, 76 guaranteed warrants and 43 listed bonds.

The total value of the exchange’s market capitalisation reached more than VND2.87 quadrillion, equivalent to 39.81 per cent of Viet Nam’s 2019 GDP. 

Over 98% of enterprises register for e-payment service

As of late August, as many as 777,916 enterprises registered for e-tax payment service, accounting for 98.1%, according to the General Department of Taxation, under the Ministry of Finance.

The authority also said around 787,562 firms have used the e-tax declaration service, making up 99.3%.

About 7,353 firms joined e-tax refund service, accounting for 95.96%, the department added.

From January 1 to August 19, enterprises carried out more than 2.2 million e-tax payment transactions, worth VND406,887 billion and more than US$21.7 million.

A total number of 11,882 among 16,278 received documents were totally resolved, valued more than VND68,209 billion.

Meanwhile, 903,107 e-invoices with verification code have been issued. The total revenues on coded invoices is worth over VND22,955 billion.

As of August 19, the taxation sector has integrated 120 administrative procedures into the National Public Service Portal, reaching 130% of this year's plan.

Tax revenues were estimated at VND752,615 billion, equal to 91.9% of the same period last year.

More support to PPE makers in COVID-19 times

Domestic personal protective equipment (PPE) production is having an unprecedented opportunity to leapfrog in the global supply chain through continuous capital injections from credit institutions. 

PPE producer Garment 10 Corporation (Garco10) recently received a $4.3 million loan from UK-backed Standard Chartered Bank (Vietnam) for PPE production.

Earlier, the British lender also provided $2.7 million to Bac Giang LGG Garment Corporation to feed the latter’s fabric mask production needs.

“The credit package from Standard Chartered helps us expand the production of face masks and other protective gear to keep up with ever-increasing demands in many countries hit hard by the pandemic as well as in the domestic market,” said Luu Tien Chung, CEO of Bac Giang LGG.

A big textile apparel export producer, since the early second quarter, Garco10 had secured high-value export orders from business partners in the EU and the US for medical face mask and protective gear.

In the first seven months of this year, Vietnam exported more than 711 million medical face masks of diverse kinds to global markets, according to figures from the Vietnam General Department of Customs.
As apparel products saw a sharp decline while PPE orders rose sharply, the company has invested in a standard medical face mask production line for long-term export production.

Along with a $52 million deal with a big foreign partner to produce 400 million face masks, the company received an order from a US partner for 20 million fabric face masks and a German partner for two million fabric face masks and six million medical face masks.

“We have invested in a cutting-edge production line to meet EU and US export standards and our face mask production for export will be maintained for the long-term,” said Than Duc Viet, Garco10 CEO.

Experts assumed that Vietnam has enormous potential for PPE production and is facing an unprecedented opportunity to take the lead in the face of the current COVID-19 pandemic.

During the first wave of COVID-19, many Vietnamese companies were considered as alternative suppliers for the US and the EU as other sources were cut short. The US ordered 450,000 sets of Tyvek protective suits which were manufactured by DuPont in Vietnam.

FedEx took charge of transporting the raw materials from a production factory based in Richmond, US to Vietnam for production at a production facility based in the port city of Haiphong.

Prof. Eric Mottet at Quebec University (Montreal) highlighted that the current time provides a big opportunity for Vietnam to get ahead in producing PPE such as face masks, gloves and other medical protective instruments.

Vietnam is currently home to about 200 PPE manufacturers. Amid the burgeoning demand for PPE products across the globe, many businesses have been running at full throttle in the past six months.

Taking advantage of its certifications for meeting US and EU export standards, VRG Khai Hoan JSC – based in the southern province of Binh Duong – currently exports 80 per cent of its products to these two markets while the rest fees the domestic market.

Thanh Cong Textile Garment Investment Trading JSC (TCM) has also seen a sharp jump in revenue and profit, mainly due to the export of face masks made from anti-microbial cloth and medical protective gear.

This year, the company is set to rake in VND3.78 trillion ($164.35 million) in revenue and VND188 billion ($8.17 million) in after-tax profit. In the first half, TCM reported VND1.738 trillion ($75.57 million) and VND115 billion ($5 million) in revenue and after-tax profit, respectively.

However, manufacturers are cautioned to stay alert and not just jump on the bandwagon without careful consideration.

“Unlike conventional garment production, to minimise risks, firms shouldonly make products after receiving orders and only hand them over to customers after getting full payment,” said the director of a renowned garment export firm. 

In the first seven months of this year, Vietnam exported more than 711 million medical face masks of diverse kinds to global markets, according to figures from the Vietnam General Department of Customs.

According to the World Health Organization (WHO), in 2020, the world will need 2.2 billion surgical masks, 1.1 disposable gloves, 13 million protective goggles, and 8.8 million face coverings for COVID-19 prevention.

Macfrut Digital 2020: digital trade show for the entire fruit and vegetable sector

Macfrut, one of the world’s leading annual trade shows for experts and business people in the fruit and vegetable sector, will be held for the first time in the online form from September 8 to 10 due to the COVID-19 pandemic. 

Macfrut Digital is an opportunity for Vietnamese businesses to have meet with hundreds of the world’s leading suppliers of fresh, safe, and quality fruits from Italy and Europe
 
Macfrut Digital, a digital trade show for fruit and vegetable supply chains, will offer business opportunities through the Natlive online platform, aiming to attract buyers from all over the world and open a new international market for this potential sector. Such a creative project has turned Macfrut into the first digital trade show for the world’s fruit and vegetable sector.

Macfrut Digital 2020 has attracted the participation of over 600 professional exhibitors from 30 countries to introduce more than 400 safe and quality product lines in the world.

Like 37 Macfrut events organised before, Macfrut Digital 2020 will be a trade show linking the supply chains of the agricultural cultivation and production sector. This online meeting will be a venue for the vegetable and fruit sector in production, trading, machinery, and planting, packaging, agricultural machines, greenhouses, and irrigation systems, nursery and seeds, fertilisers and bio-stimulants, logistics and storage, as well as bodies and services, among others.

It is noteworthy that fruits account for 66 per cent of the total products displayed by international exhibitors to seek importers and buyers.

According to the organising board, the participation of quite a few exhibitors of fruits from Italy and other countries around the world is a good chance for Vietnamese enterprises, distributors and importers to learn and look for business cooperation in the context that the EU-Vietnam Free Trade Agreement (EVFTA) has been effective since August 1, with many preferential tariffs.

Regarding Italy, which completed negotiations with Vietnam over food hygiene and safety in 2019, the country has started exporting apples to Vietnam. In the near future, the nation will export more fruits such as kiwi, grapes, strawberries, and pears to Vietnam, a market with a population of nearly 100 million people.

On the other hand, through this digital trade show, Vietnamese businesses operating in the field of agro-products and fruits can explore the market and learn of the taste of nearly 500 million people thanks to the preferential tariffs on agro-products imported to the EU under the EVFTA.

According to European experts, the export of Vietnamese agro-products to the EU is of great potential. To date, many Vietnamese companies’ product quality has been proven to meet the demand of the EU as well as the taste of the bloc’s consumers.

Vietnamese agro-products such as cashew, coffee, vegetables, dragon fruit, lychee, coconut, fig, pineapple, avocado, guava, mango and mangosteen are favoured in the EU. Some of Vietnam’s organic products have entered this meticulous market as they have met exclusive criteria for high-quality agro-products like Organic certification, Rainforest Alliance, Fairtrade certification, among others. Farm produce import accounts for 8.4 per cent of the total imports of the EU.

Record number of solar power plants put into operation in Q2

Nearly 90 solar power plants with a total capacity of about 4,000 MWp were put into operation in the second quarter of this year, setting a record so far, the Electricity of Vietnam (EVN) reported.

The country now has 102 operational solar power plants with a combined capacity of 6,314 MWp, mostly in the south central provinces of Ninh Thuan and Binh Thuan, the group said.

EVN said despite difficulties caused by the impact of the COVID-19 pandemic, the group, relevant agencies and localities have made great efforts to complete the power transmission infrastructure in service of 113 solar and wind power projects whose cumulative capacity reaches 5,700 MW.

Renewable energy projects included in the planning scheme have a total capacity of 17,000 MW. Among them, many solar and wind power projects are expected to be put in place soon to benefit from the fee-in-tariffs (FIT) price mechanism.

At the end of August 2020, solar and wind power projects of nearly 23,000 MW had been approved, with solar electricity making up about 11,200 MW.

To facilitate the operation of these projects and improve the capacity of the national power grid, EVN has focused its resources on building and upgrading electricity transmission facilities.

Under the National Energy Development Strategy by 2030, with vision to 2045, Vietnam prioritises wind and solar power and encourage investment in power plants using urban waste, biomass and solid waste in parallel with environmental protection and the circular economy.

 

The proportion of renewable energy would account for 15 to 20 percent of total power output by 2030 and 25 to 30 percent by 2045.

According to the strategy, the country will build a smart and effective power network connected to the region. By 2030, Vietnam will be among three ASEAN countries with the highest access-to-electricity index.

Domestic trade to contribute 13.5 percent of GDP by 2025

Domestic trade is expected to contribute about 13.5 percent of GDP by 2025, according to the Ministry of Industry and Trade (MoIT)'s target to effectively realise the 2021-2025 socio-economic development plan.

The ministry also estimates that the total retail of goods and services will grow 9-9.5 percent annually during the period.

It will effectively conduct State management over markets via appropriate tools and mechanisms and eradicate smuggled, fake, and banned goods and those that violate intellectual property in 90 percent of business establishments in cities and provinces by 2025.

At a meeting reviewing the 2016-2020 socio-economic developmentplan, the MoIT said the domestic market played an important role in goods consumption, contributing to poverty reduction and ensuring social welfare, evidenced by a growth of nearly 9.2 percent in retail and services revenue in the last five years.

Of note, the domestic market contributed 10.5 percent of GDP in 2016 and 11.16 percent in 2019.

Figures show that Vietnamese goods account for 90-96 percent of those available in the domestic retail network and have won popularity among consumers nationwide.

Cambodia plans another int’l border gate with Vietnam

The Cambodian Ministry of Public Works and Transport (MPWT) is seeking to open a new international border gate with Vietnam to facilitate container cross-border traffic between the two countries.

Speaking during the recent 20th Cambodia-Japan public-private sector meeting, Secretary of State at this ministry Nou Savath said the MPWT minister plans to lead an inter-ministerial working group to examine another international border gate with Vietnam for container crossing because the pair of Bavet – Moc Bai border gates is getting heavily congested.

Cambodia is considering opening a new border gate, Prey Vor in Cambodia with Binh Hiep in Vietnam, to ease the procedure for both customs and relevant institutions to reduce the container congestion in Bavet, he said.

According to the official, Bavet international border gate used to have between 250 to 300 container trucks crossing a day, but with COVID-19, only 70 go through a day.

He said the minister will also ask the government to prepare the terminal for containers to ease the traffic jam, adding: “We also want to prepare different lines for different goods containers and empty containers and we also have to prepare a line for passengers and small goods as well.”

Bilateral trade between Cambodia and Vietnam dropped 8.1 percent year-on-year to 2.17 billion USD in the first five months of 2020 on the back of the COVID-19 pandemic, according to figures from the Vietnamese Embassy in Phnom Penh.

Indonesia to extend assistance to small businesses

Indonesian Minister of Cooperatives and Small and Medium Enterprises Teten Masduki has said his Government is seeking to expand its business assistance programme to around 3 million more small businesses affected by the COVID-19 outbreak by reallocating funds from other programmes within the government’s stimulus plan.

The ministry plans to increase the initial target of 12 million micro and small businesses to 15 million by mid-December.

Through the assistance programme, eligible small businesses can receive a grant of 2.4 million RP (163 USD) to help them survive the economic impacts of the health crisis.

With the expansion, the Government plans to increase the budget allocation for the programme from 22 trillion RP to 36 trillion RP.a

According to a survey of 1,165 businesses conducted between April and May by the Asian Development Bank (ADB), 91.8 percent of small businesses said they need loans without interest or collateral, and 89.5 percent want cash assistance or grants.

As of September 2, the Government had disbursed 13 trillion RP, or about 61 percent of its initial budget of 22 trillion RP.

Banana tops Lao agriculture exports to China

Banana continues to be a top earner among Laos’s agricultural products exported to China though the Southeast Asian nation’s government stopped granting licences for developing more banana plantations.

Statistics from the Lao Ministry of Industry and Trade show that the nation’s banana export value to China hit 116 million USD in the first seven months of 2020. Last year, the figure reached 185.6 million USD.

In 2020, the Laos – China trade is strongly affected by the COVID-19 pandemic. However, exports of goods, especially banana, are still stable thanks to good negotiation and cooperation between the two countries' officials.

The agricultural development strategy of Laos until 2025 clearly states that banana is one of the key contributors to the country’s export turnover, bringing job opportunities and generating table incomes for local residents, and contributing to the country’s poverty reduction effort.

But some plantations harmed the environment because of a lack of management by the authorities, incomplete land allocation, and lax business registration. For this reason, traders and investors were encouraged to enter into contracts with farmer households to grow the crop.

Power sector seeking ways to grow further

Vietnam is striving for a commercial electricity output of 337.5 billion kWh by 2025 and 478.1 billion kWh by 2030, down 15 billion kWh and nearly 230 billion kWh compared with those in the adjusted Power Planning VII.

The revision was contained in a report from the Ministry of Industry and Trade (MoIT) delivered to the National Assembly Economic Committee’s session on September 7 reviewing the electricity sector and electricity development measures by 2030 to better meet socio-economic development requirements.

The report highlighted that Vietnam’s power output enjoyed a ten-fold increase from 1990 to 2019. As of late 2019, total produced and imported electricity output was 239 billion kWh.

Special attention was paid to building and upgrading power supply infrastructure. All communes and 99.52 percent of households now have access to electricity.

The Government also issued a range of mechanisms and policies adjusting power prices in accordance with the market mechanism, thus facilitating the sector’s financial autonomy.

The report also pointed to 10 major power projects that ought to have been put into operation during 2016-2020 but are proceeding slowly, including Song Hau 1, Thai Binh 2, Long Phu 1, Na Duong 2, and Cam Pha 3.

The MoIT has emphasised that slow progress poses a high risk to power supplies during the 2021-2025 period.

To ensure that supply and demand are balanced, the sector has been advised to seek measures to optimise existing power sources and develop electricity from renewable energies from the beginning of 2021.

Minister of Industry and Trade Tran Tuan Anh said the electricity sector will prioritise developing power sources from renewable energies such as wind and solar power as well as liquefied natural gas (LNG) power, and will continue to increase power imports from Laos, which are to total 3,000 MW by 2025.

Economists optimistic about Singapore’s economic outlook in 2021

Economists of Singapore are more optimistic about the outlook for the country’s economy next year, with a survey showing that they expect growth of 5.5 percent on average in 2021, said the Monetary Authority of Singapore (MAS) on September 7.

Overall, the 28 economists who responded to the MAS survey gave economic growth forecasts of between 4 percent and 5.9 percent for 2021. This is higher than the 4.8 percent growth for the year that they had forecast when last surveyed in June.

While the respondents are more positive about next year, they are slightly more pessimistic about 2020. The economists now expect the economy to contract by 6 percent as a whole this year. In June, they had forecast a 5.8 percent decline for 2020.

According to the economists, the top risk to Singapore’s growth outlook is a further deterioration of the COVID-19 situation.

The escalation of tensions between the US and China was also identified as a risk, they noted, along with a slower-than-expected global economic recovery.

Domestic trade to contribute 13.5 percent of GDP by 2025

Domestic trade is expected to contribute about 13.5 percent of GDP by 2025, according to the Ministry of Industry and Trade (MoIT)'s target to effectively realise the 2021-2025 socio-economic development plan.

The ministry also estimates that the total retail of goods and services will grow 9-9.5 percent annually during the period.

It will effectively conduct State management over markets via appropriate tools and mechanisms and eradicate smuggled, fake, and banned goods and those that violate intellectual property in 90 percent of business establishments in cities and provinces by 2025.

At a meeting reviewing the 2016-2020 socio-economic developmentplan, the MoIT said the domestic market played an important role in goods consumption, contributing to poverty reduction and ensuring social welfare, evidenced by a growth of nearly 9.2 percent in retail and services revenue in the last five years.

Of note, the domestic market contributed 10.5 percent of GDP in 2016 and 11.16 percent in 2019.

Figures show that Vietnamese goods account for 90-96 percent of those available in the domestic retail network and have won popularity among consumers nationwide.

Vietsovpetro’s oil and gas production surpasses target

The Vietnam-Russia oil and gas joint venture Vietsovpetro has announced that oil and gas exploitation reached 2.1 million tonnes in the first eight months of this year, 7.3 percent higher than the target.

With oil priced at more than 40 USD per barrel, Vietsovpetro said it will not face any pressure regarding capital for production.

Superstructure blocks of the BK-21 oil rig were launched on the first day of September.

BK-21 rig is an uninhabited wellhead platform located near the MSP6 and MSP7 fixed platforms in the Bach Ho field. Products exploited from BK21 will be transported to MSP6 by underground pipelines. The base of the oil rig was successfully launched in May.

Manufacturing, installing, commissioning, and putting the BK-21 platform into operation is an important milestone in increasing oil and gas production and ensuring the completion of Vietsovpetro’s production plan in 2020.

PM approves programme to boost productivity

Prime Minister Nguyen Xuan Phuc has approved a national programme on supporting enterprises to improve productivity and the quality of products and commodities in the next 10 years.

The programme aims to support businesses to adopt standards, technical regulations, advanced management systems and tools to enhance productivity and quality of products and commodities, contributing to increasing the national total factor productivity (TFP) and competitiveness of the economy.

It sets specific objectives for two periods, namely in 2021-25, 65 percent of the national standard system will be harmonised with international and regional standards, while there will be capacity building and training for about 600 specialists and consultant staff on productivity and quality at ministries, agencies, localities and businesses.

In 2026-30, the harmonisation rate of the national standard system with international and regional standards will be about 70-75 percent; while the number of specialists being trained and certified will increase to 1,000, of which about 200 experts will be certified with regional and international qualifications.

In the next 10 years, the number of enterprises supported with solutions to improve productivity and quality is expected to increase by 10-15 percent per year, of which the number of certificates for ISO 9001 quality management system and ISO 14001 environmental management system granted to businesses will increase at least 10 percent compared to the 2011-20 programme.

At least 100 enterprises will be instructed to apply solutions synchronously to improve productivity and quality.

To achieve these goals, the programme sets out tasks and solutions, focusing on enhancing mechanisms and policies to boost productivity and quality, researching and proposing solutions on science, technology and innovation to improve national productivity and the productivity of each industry, province and enterprise in the economic restructuring process.

As these matters are key to the country’s sustainable development and raising the competitiveness of local enterprises, communication and information diffusion about productivity and quality improvement solutions will be strengthened.

In addition, the programme will help enterprises employ new advanced solutions and quality and productivity management systems fit for specific industries, helping businesses apply systems of traceability, adopt good agricultural practices (GAP) and invest in organic farming and green productivity.

The last programme (Programme 712) supported more than 5,000 businesses to adopt many solutions and systems to improve productivity and quality such as ISO 9000, ISO 14000, SA 8000 (global standards for managing human rights in the workplace), Good Manufacturing Practice (GMP) and Hazard Analysis and Critical Control Points (HACCP).

The Ministry of Science and Technology is responsible for implementing the programme./

Over 7,000 C/O issued for exports to EU in August

More than 7,200 EUR.1 certificates of origin (C/O) were issued in August for goods exports to the EU worth US$227 million since the EU-Vietnam Free Trade Agreement (EVFTA) took effect last month, according to the Ministry of Industry and Trade (MoIT).

The certified goods were mostly footwear, seafood, plastics, coffee, garments, handbags, suitcases, vegetables, and rattan products.

Major importers are Belgium, Germany, the Netherlands and France, who have seaports and serve as logistics hubs in the EU.

The representative of the MOIT’s Import-Export Department said Viet Nam has advantages in production and export of agricultural, forestry and aquatic products, while the EU has a large demand for these items that have accounted for 8.4 per cent of total annual import value. This shows great potential in export growth from Viet Nam to the EU.

For instance, the Trung An High-tech Agriculture Joint Stock Company exported the first batch of 3,000 tonnes of rice to Germany with zero tax rate. Of which, the price was $1,000 per tonne of ST20 rice and $600 per tonne of Jasmine rice, $200 higher than before.

In the first half of August this year, shrimp export value to the EU reached $29.4 million, a strong growth of 26 per cent compared to the same period in 2019. The export value for the whole of August was estimated to increase by 20 per cent year on year.

Truong Dinh Hoe, General Secretary of the Viet Nam Association of Seafood Exporters and Producers (VASEP), forecasted shrimp exports to the EU will continuously increase until year-end. The preferential tax for Vietnamese shrimp would be an important factor for EU importers to promote shrimp imports from this country.

To enter the EU market, the local businesses must have certification of origin and meet food safety requirements, Hoe said. In addition, they need to pay attention to the agreement’s commitments on increasing the environmental requirements related to fishing to avoid difficulties in seafood export, reported the Nguoi lao dong (Labourers) newspaper.

The fisheries industry also needs to quickly remove bottlenecks in the supply chain of materials and varieties for production and market development of businesses.

A better understanding of commitments in the EVFTA is one of the important factors for local businesses, said Luong Hoang Thai, director of the MoIT’s Multilateral Trade Policy Department.

He said businesses need to apply science and technology to improve their competitiveness and create supply chains with cooperatives and farmers.

Economic expert Le Dang Doanh said to expand market shares in the EU, Viet Nam must urgently remove the yellow card for seafood products to open more export opportunities to this market for local enterprises. Enterprises need to study market information and consumer demand in the EU.

According to the ministry, the trade pact, which came into force on August 1, would help Viet Nam diversify its export markets as well as export products. A wide range of Vietnamese goods have benefited from tariff reductions, such as farm produce, seafood, footwear, and electronic products.

Therefore, the MoIT will continue to support local companies, ensuring exporters know how to take full advantage of the EVFTA and have a thorough understanding of C/O. It will also work closely with EU partners to address difficulties while implementing the trade pact in a timely manner.

Besides that, the ministry is developing a trade promotion plan for the 2020-25 period to contribute to Viet Nam’s sustainable export development in the context of implementing the EVFTA and other free trade agreements.

HCM City seeks ways to increase exports

The HCM City Department of Industry and Trade has unveiled a project to promote exports over the next five years.

‘Developing Exports in HCMC until 2025, with a Vision to 2030’ forecasts opportunities for and challenges to exports, identifies the most competitive export sectors and products and propose solutions and strategies for developing exports.

It will take growth quality as the foundation to shift to exports of services and intangible goods such as software and digital content, encourage links between the country's various regions to increase exports to markets with which Viet Nam has free trade agreements, improve the competitiveness of export items by capitalising on the city’s comparative advantages, join global value chains, and increase links between businesses.

Firms should speed up digital transformation to expand exports amid rising cross-border e-commerce, the Ministry of Industry and Trade said.

Dang Hoang Hai, director of the ministry’s Viet Nam e-Commerce and Digital Economy Agency, said together with opportunities from new-generation free trade agreements, the trend of shifting from traditional to digital-based business models is becoming common.

Digital transformation is an effective solution for firms to expand their export markets and create a flexible and efficient export model, he said.

A number of Vietnamese firms are now setting up business-to-business and business-to-consumer e-commerce business models, he added.

On a global scale, cross-border e-commerce is developing rapidly and has become a major trend in trade in recent years.

The project will also develop logistics, replan sea and river ports in the city and their infrastructure, improve transport links between HCM City and other production areas so that the city becomes a logistics and export services hub.

It will develop human resources, reform public services and employ IT to create an integrated and shared import-export database for businesses’ use.

The city will concentrate on the eight following solutions to increase its exports over the next decade:

Improve the technical level of the mechanical industry to enable a shift up the value chain with higher chances of diversification while boosting the growth of supporting industries to raise the rate of domestic production.

Improve the ability to export software and digital content related to finance and tourism.

Promote research and development activities, foster the growth of supporting industries to raise the rate of domestic production while attracting investment in hi-tech projects to support electrical – electronic products and launch the ‘Saigon Innovation Network’ at the Saigon Hi-tech Park.

Improve the competitiveness of conventional labour-intensive export groups, develop the local market for feedstock and raw materials for manufacturing and value-added services.

Strengthen the strategy for logistics growth in the city.

Increase the performance of investment and trade promotion tasks for typical export products in the globalisation era.

Continue to reform administrative procedures to ensure more transparency and reduce the processing time and cost, and adopt solutions for reducing the time it takes for both documents and goods at customs by half.

Co-operate with research units and educational institutions to train quality human resources.

Exports by companies based in the city in the first eight months of the year were worth US$28.4 billion, a 4 per cent increase year-on-year, according to the Department of Industry and Trade.  

Source: VNA/VNN/VNS/VIR/VOV/SGT/NDO/Dtinews

 
 

Other News

.
Vietnam to increase imports of coal and gas
Vietnam to increase imports of coal and gas
BUSINESSicon  14/10/2020 

The latest data from the ministry sent to the National Assembly shows that Viet Nam is transitioning from an energy exporter to a net importer.

Coastal developers prepare for good upcoming times
Coastal developers prepare for good upcoming times
BUSINESSicon  14/10/2020 

In anticipation for the world eventually opening back up for travellers, developers are exploring the high potential of Vietnam’s world-renowned coastal urban areas.

Tra fish swimming back to local market
Tra fish swimming back to local market
BUSINESSicon  14/10/2020 

Turning away from the uphill battle in exports due to COVID-19, tra fish producers have set an eye on the domestic market.

Investors find VN ports, logistics attractive
Investors find VN ports, logistics attractive
BUSINESSicon  13/10/2020 

With its annual growth of 12-14 per cent, the logistics sector, especially seaports, is becoming attractive to both domestic and foreign investors,...

Vietnam continues reform as part of EVFTA deal
Vietnam continues reform as part of EVFTA deal
BUSINESSicon  13/10/2020 

Viet Nam is continuing its institutional reform commitments made in the historic EVFTA in an aim to boost exports of agricultural products and...

VN to set new regulations for overseas investment
VN to set new regulations for overseas investment
BUSINESSicon  13/10/2020 

Individuals will no longer be allowed to invest in real estate abroad if a new draft decree issued by the Ministry of Planning and Investment is approved.

Tax cut welcome but not enough: businesses
Tax cut welcome but not enough: businesses
BUSINESSicon  13/10/2020 

The Government's 30% corporate income tax cut was a step in the right direction but it could have been more inclusive by offering support to small businesses that were in desperate need of cash due to the difficulties caused by the COVID-19 pandemic.

Vietnam expects to welcome more investors next year
Vietnam expects to welcome more investors next year
BUSINESSicon  13/10/2020 

Vietnam is still regarded by investors as an attractive destination thanks to its stable politics and macro economy, favourable geographical location, and advantages in land and human resources.

Long Thanh Airport project awaits disbursement of funds
Long Thanh Airport project awaits disbursement of funds
FEATUREicon  13/10/2020 

The government’s report to the National Assembly on the implementation of the Long Thanh International Airport project on October 9 shows that little has been done over the last five years.

HCM City tightens licensing of condotels, resort villas
HCM City tightens licensing of condotels, resort villas
BUSINESSicon  14/10/2020 

Local authorities have been asked to carefully consider the granting of new licenses to projects with condotels, following many problems that have been discovered.

Experts unhappy with cement exports, but industry says unavoidable
Experts unhappy with cement exports, but industry says unavoidable
BUSINESSicon  12/10/2020 

In the first eight months of the year, cement companies exported more than 23.5 million tonnes of cement and clinker, an increase of 13.7 per cent year-on-year.

Half of local businesses use IFRS
Half of local businesses use IFRS
BUSINESSicon  12/10/2020 

More than half of companies in Vietnam have been adopting international financial reporting standards to meet investors’ expectations and improve their corporate governance, a survey showed.

Party Resolution boosts marine economy and defence
Party Resolution boosts marine economy and defence
BUSINESSicon  12/10/2020 

The sustainable development of the marine economy in association with the consolidation of defence and security is among the important sections of a resolution from the Communist Party of Vietnam

Japanese enterprises want to expand supply chains in Vietnam
Japanese enterprises want to expand supply chains in Vietnam
BUSINESSicon  12/10/2020 

About 15 out of 30 Japanese firms with overseas production bases say they want to expand and diversify their supply sources in Vietnam, according to a survey by the Japan External Trade Organization (JETRO).

The last quarter’s momentum
The last quarter’s momentum
BUSINESSicon  11/10/2020 

If the Covid-19 pandemic will continue to be well put under control as it is now, Vietnam’s GDP growth in the fourth quarter is likely to be higher than the first three quarters.

Positive outlook ahead for economic growth in 2020
Positive outlook ahead for economic growth in 2020
BUSINESSicon  11/10/2020 

There remains plenty of room to accelerate economic growth moving into the fourth quarter of the year, with domestic consumption and investment set to be the key drivers for Vietnam’s growth during the remainder of the year, according to insiders.

Vietnam to develop livestock sector
Vietnam to develop livestock sector
BUSINESSicon  11/10/2020 

PM Nguyen Xuan Phuc has approved a plan to develop the livestock sector for the 2021-2030 period with a view to 2045.

72% of EU businesses plan to expand in Viet Nam
72% of EU businesses plan to expand in Viet Nam
BUSINESSicon  11/10/2020 

A majority of European businesses in Viet Nam expect to increase their operations in the country, the sixth Business Sentiment Survey of the EU-ASEAN Business Council released on Thursday shows.

VN eyes boosting processed meat industry
VN eyes boosting processed meat industry
BUSINESSicon  11/10/2020 

The husbandry industry is hoped to become a modern economic sector industrialised in all stages from production, processing, preservation and...

Vietnam vows to develop eco-friendly chemical industry
Vietnam vows to develop eco-friendly chemical industry
BUSINESSicon  10/10/2020 

Nguyen Van Thanh, director general of the Vietnam Chemical Agency, speaks about some of the strengths and weaknesses in the 2007 Law on Chemicals.

 
 
 
Leave your comment on an article

OR QUICK LOGIN