The northern mountainous province of Phu Tho on November 3 presented Vietnam Sunergy Joint Stock Company (VSUN) an investment certificate for a solar panel manufacturing project.

The project, covering 13 hectares in the Cam Khe Industrial Zone, will require US$200 million and employ up to 700 local workers.

Bui Van Quang, chairman of the Phu Tho Province People’s Committee, said the provincial government would create favorable conditions for investors.

Ryu Junsei, chairman of VSUN, said the firm would use cutting-edge technology for the project.

VSUN, a subsidiary of Japanese-based Fuji Solar, has been operating as a solar module solution provider in Vietnam since 2015. The business’s manufacturing base is located in the northern province of Bac Giang.

Hue launches container transport route in Chan May Port

The central province of Thua Thien-Hue has launched a container transport service to and from Chan May Port, helping enterprises reduce transportation costs and time.

The Chan May Port Joint Stock Company said it and some enterprises in the province will operate a domestic container transport route from Chan May Port to transport goods for frit and cristobalite manufacturing companies.

The province will also offer support for shipping lines and export-import businesses to attract them to this port.

Specifically, shipping lines and agents opting for container handling at the Chan May port may be subject to financial support of up to VND210 million for each shipment.

Owners of 20-feet and 40-feet containers will receive VND800,000 per container and VND1.1 million per container handled there, respectively.

Study required to bulk up e-transaction rules

In addition, the existing regulation on data messages “has created a legal basis for the conversion of traditional transactions to an electronic environment based on data messages and the legal value of data messages.”

A data message may be shown in the form of an electronic data interchange, electronic documents, e-mails, telegrams, telegraphs, facsimiles, and other similar forms.

Moreover, the committee has also suggested that lawmakers add more regulations on e-signatures, which have been stipulated in the existing law but fail to meet new requirements on the digital economy and e-business activities.

Under the current law, an e-signature is considered secured if it is verified by a security verifying process agreed upon by transacting parties and satisfies various conditions.

The committee also underlined that when it comes to recognition and usage of foreign e-signature, in the draft amendments, it remains unclear which agency is competent to recognise the legal value of foreign e-signatures.

Vietnam’s Law on E-transactions has been effective since 2006 and is based on the United Nations Commission on International Trade Law for e-commerce.

According to the Ministry of Information and Communications, in recent years, the implementation and application of e-transactions have shown significant development in many sectors that need high levels of international integration, such as banking and e-commerce, but have faced difficulties in other sectors due to a lack of detailed guidance.

PM orders prompt solution to fuel shortage

The Ministry of Industry and Trade is told to expedite drastic measures to handle the current fuel shortage, directing wholesalers to supply sufficient gasoline to the market.

In an official dispatch sent to relevant ministries on November 11, Deputy Prime Minister Le Minh Khai said the Ministry of Industry and Trade must take full responsibility before the Government in managing the petroleum market.

The ministry must deal with businesses that close or suspend their gas stations, or ration gasoline.

Defense Ministry agrees to build specialized airport in Binh Phuoc

The military airfield in Hon Quan District, Binh Phuoc Province, is being considered for conversion to a specialized airport.

The Ministry of National Defense has approved the proposal of the southern province of Binh Phuoc to develop a specialized airport at the location of the former one in Hon Quan District, serving both military and civil purposes.

Hon Quan airport, also known as Tech Nique airport, was constructed by the French for civil use related to the expansion of rubber plantations. The Ministry of National Defense is currently in charge of the area.

The ministry recommended the provincial government work closely with relevant agencies to include the airport development plan in the local socioeconomic strategy, in accordance with Government Decree No. 42 on the operation of specialized airports issued in 2016.

Accordingly, a specialized airport is designed for general aviation purposes or passenger and goods transport, utilizing light and fixed-wing aircraft instead of other public transit forms.

The Ministry of National Defense will collaborate closely with the Ministry of Construction, the Ministry of Transport and provincial governments in determining the airport’s site and construction plan.

Boosting green finance for a low-carbon economy in Vietnam

As Vietnam aims for a low-carbon growth model and carbon neutrality by 2050, the International Finance Corporation (IFC), in partnership with the Swiss State Secretariat for Economic Affairs (SECO), is scaling up its support to the government to promote sustainable finance and spur private sector investment.

A new MoU between the parties with the State Securities Commission of Vietnam (SSC), signed on November 11, will support government efforts to leverage the capital market to tackle climate change through green and sustainable finance.

With IFC’s assistance, SSC will promote the adoption of environmental, social, and governance (ESG) standards and practices and enforce requirements among market players.

This will help strengthen the sustainable finance framework, encouraging innovative financial products such as green bonds, transition bonds, and sustainability-linked bonds to attract international investors looking for sustainable assets.

Pham Hong Son, vice chairman of the SSC emphasised, “Promoting green and sustainable finance is a long-term priority for the SSC. The IFC’s continued efforts to encourage the adoption of ESG standards and practices among public companies will help scale up green finance, creating a sustainable capital market in Vietnam.”

These efforts are part of a new initiative between IFC and SECO – the integrated ESG programme – to help regulators, investors, companies, and partners in Vietnam manage ESG risks and bottlenecks by promoting effective decision-making and risk management.

Werner Gruber, head of the Swiss Cooperation Office in Vietnam assessed, "Strengthening ESG capacity is critical to achieving the climate commitments and the Sustainable Development Goals. Failure to consider ESG risks can lead to poor and unsustainable investment decisions. Our work with the IFC aims to improve ESG standards and practices in Vietnam to guide financial flows towards sustainable investments for a more inclusive and sustainable economic development.”

Kim-See Lim, IFC regional director for East Asia and Pacific noted, “Greening the capital markets with a focus on improved ESG standards is a priority as Vietnam aims to unlock private investment to achieve its twin goals of becoming a high-income and carbon-neutral economy by 2050. The IFC is excited to deepen its partnership with SSC and SECO to help spur a conducive environment for private sector climate investment, which is vital for supporting sustainable and resilient growth in Vietnam.”

Amendments to Law on Petroleum can go some way to help attract funds

Vietnam wants to introduce mechanisms and policies to attract more investment in oil exploration and production activities on the back of the amended Law on Petroleum, with experts, businesses, and legislators pointing out several core issues.

The currently amended Law on Petroleum is one of the bills considered by the National Assembly (NA) at its fourth session, which opened on October 20. Phan Duc Hieu, standing member of the National Assembly Economic Committee – the agency in charge of verifying the revised law – said that compared with the original draft, the incentive mechanism has been supplemented, and it was possible to compete in attracting investment.

Nevertheless, the latest draft also stipulates figure-based preferential policies applicable to oil and gas blocks and fields implemented through oil and gas contracts. These contracts are entitled to investment incentives such as a corporate income tax rate of 32 per cent, and a crude oil export tax rate of 10 per cent, among others.

Another point in the current draft that has received much attention from regulators, experts, and businesses is that the language used in oil and gas contracts is still Vietnamese. Although it was explained by Clause 2 of the law that Vietnam is willing to use two languages when signing contracts with foreign partners, experts, lawyers, and businesses still believe that the provisions regarding the language are not appropriate.

Nguyen Minh, head of the Legal and Commercial Department at Eni Vietnam, told local media that foreign investors want to have two languages when signing contracts. “Foreign investors are afraid to enter a petroleum contract that used only the Vietnamese language before, and was later translated into English,” Minh said.

Globally, it has become practice to use two languages in such contracts, allowing foreign investors to easily engage in a deal. On the contrary, if there is no English in the first place, it could present a new barrier in attracting foreign investment into the industry.

When it comes to other investment incentives, many analysts believe that it is necessary to focus on avoiding legal conflicts. However, to ensure the rights and obligations, there should be more regulations on transitioning investment incentives, argue some. This means that ongoing projects will enjoy incentives according to provisions of the new law if they are higher.

If incentives are lower than the amended law, the projects would continue to be applied according to the old regulations. In addition, when the policy changes, investors have the right to choose and apply new and more preferential policies. These recommendations, according to domestic analysts, are based on the provisions of the country’s Law on Investment.

One example of an oil project that struggles with the current legal basis is PetroVietnam Exploration Production Corporation (PVEP), which has only signed two contracts in the Mekong Delta basin in the last five years, as Le Dac Hoa, PVEP’s Block 01-02 project manager, said at a seminar in September.

The contract for Block 01-02, operated by Petronas Carigali Vietnam Ltd., expired in 2017. As the representative, PetroVietnam received oil and gas assets and operations after the contract’s expiration. Then, PetroVietnam and PVEP signed a temporary lease agreement to operate oil and gas operations at Block 01-02, and PVEP has taken control of these activities since 2017.

Fuel suppliers told to tap reserves to quench thirst

Minister of Industry and Trade Nguyen Hong Dien has ordered state-run wholesalers to tap their commercial fuel reserves to meet the demand and mitigate the ongoing fuel shortage.

To meet the rising fuel demand, the Vietnam National Petroleum Group, Petrolimex, is tasked with supplying 2,145,000 cubic meters of fuel in the fourth quarter, averaging 715,000 cubic meters per month.

The group already sold 879,000 cubic meters of gasoline in October. Petrolimex plans to supply 1,156,000 cubic meters of fuel this month, exceeding the target by 40%, and 1,000,000 cubic meters next month.

Only 61% of the fuel wholesalers, mainly state-owned ones, have fulfilled the year’s targets so far.

Le Manh Hung, general director of Vietnam Oil and Gas Group, said the fuel shortage would continue this month due to OPEC’s and Russia’s oil output cuts.

Fruit exports to bring home over 5 bln USD by 2025

Vietnam targets exporting fruits worth over 5 billion USD by 2025 and roughly 6.5 billion USD by 2030, according to a project recently approved by the Vietnamese Ministry of Agriculture and Rural Development (MARD).

Accordingly, 14 types of key fruit trees have been chosen for intense cultivation. These include dragon fruit, mango, banana, lychee, longan fruit, orange, pomelo, pineapple, rambutan, durian, jackfruit, passion fruit, avocado and custard apple.

By 2025, the total fruit farming area nationwide will reach 1.2 million ha with an output of 14 million tonnes. Of which, the 14 kinds of fruits will be grown on 960,000 ha with an output of around 11-12 million tonnes.

By 2030, the country will have 1.3 million ha for fruit cultivation which will yield more than 16 million tonnes. There will be 1 million ha for growing the above fruits with some 13-14 million tonnes.

The MARD assigned the Plant Protection Department to work with localities to control fruit diseases, and instruct growers to build farming area codes. This helps to provide trace origin codes for products, making it easier to expand exports. This is especially important for markets in Japan, the US, Canada, the Republic of Korea, Russia, ASEAN, EU, Middle East and North Africa, apart from the traditional market of China.

The General Department of Customs reported that in eight months of this year, dragon fruit was the top currency earner among other fruits with nearly 463 million USD, followed by banana with 237 million USD and durian 158 million USD.

Dung Quat Oil Refinery reports VND13 trillion profit after 9 months

Binh Son Refining and Petrochemical JSc (BSR) that owns Dung Quat Oil Refinery made a profit after tax of VND12,899 billion, more than 3 times higher than the same period in 2021.

The company earned revenue of VND126,720 billion, up 90% over the same period last year, BSR said in its financial report for the third quarter.

Its total sales volume reached more than 5 million tonnes of products of all kinds, meeting 106% of the nine-month plan and 78% of the yearly plan.

The past 10 months saw the company sell nearly 6.6 million m3 of petroleum, an increase of more than 450,000 m3 compared to its commitment. Inventories of Dung Quat Oil Refinery are often maintained at low levels.

As of November 5, the oil refinery increased its operation capacity to 112% to help ease pressure on domestic petroleum supply.

Dung Quat Oil Refinery has a refining capacity of 148,000 barrels per day (6.5 million tonnes crude oil annually) and can process 67 types of crude oil from various parts of the world. Its major products include Mogas A92/A95 and E5/10, jet fuels, kerosene, diesel, fuel oil, and liquefied petroleum gas.

Vietnam seeks investment, trade opportunities in Israel
 
A Vietnamese business delegation made a trip to Israel on November 3-4 during which they attended a Vietnam-Israel conference on production and trade cooperation in Tel Aviv.

As part of the national trade promotion programme in 2022, the event was co-hosted by the Vietnamese Embassy in Israel’s Vietnam Trade Office and the Federation of Israeli Chambers of Commerce (FICC), aiming to support Vietnamese firms in technological transfer and export to Israel.

Deputy Director of the Vietnamese Ministry of Industry and Trade’s Trade Promotion Agency Le Hoang Tai said Vietnam and Israel are negotiating a free trade agreement with 11 rounds of talks held since March 2016. When it is signed, more bilateral trade and investment opportunities will be opened up.

Israel is now the fifth largest trade partner of Vietnam in West Asia. In the first nine months of this year, two-way trade between the two countries surpassed US$1.6 billion.

Trade Counsellor at the Vietnamese Embassy Le Thai Hoa described Israel as a promising market for Vietnamese exports, especially processed products with high added value like food and consumer goods. Vietnam mainly exports mobile phones and spare parts, aquatic products, cashew nuts, coffee, footwear, pepper and apparel to Israel while importing computers, circuit boards and electronic components, machinery and fertilizers.

Nearly 200 enterprises join Northern Delta int’l agricultural fair

Approximately 200 domestic and foreign enterprises are showcasing products across 300 booths at the 2022 Northern Delta International Agricultural Fair that opened in Thai Binh province on November 4.

The fair introduced a range of quality products such as machinery and equipment, plant varieties, animal breeds, processed goods, and craft products.

Taking place alongside trading activities at the fair, organisers will also hold a trade promotion exhibition and a display of typical ornaments from provinces throughout the north.

Agricultural workshops are scheduled to be held as part of the fair, which will run until November 10.

Addressing the opening ceremony, Nguyen Quang Hung, vice chairman of the Thai Binh administration, noted the fair offers a chance to northern delta provinces to promote their economic potential.

It will also offer farmers, enterprises, and administrators opportunities to cooperate in shaping development of the agricultural and rural economy, he stressed. The fair also aims to boost trade promotion and call for further investment in the Northern Delta region.

Meat imports not expected to increase significantly

Vietnam’s import of meat and related products is not expected to increase dramatically later this year due to an abundant domestic supply that basically meets demand, according to the Ministry of Industry and Trade’s Department of Import-Export Management.

Data compiled by the General Department of Vietnam Customs indicates that Vietnam imported 191,580 tonnes of meat and meat products worth US$417.75 million in the third quarter of the year, up 4.4% in volume and 24.4% in value compared to the same period last year.

India, the United States, Brazil, the Republic of Korea, and Russia were among the largest exporters of meat and meat products to Vietnam in the reviewed period. Of these, India took the lead with 37,350 tonnes valued at US$125.84 million, up 164.9% in volume and 180.7% in value on-year.

Most notably, the import of pork continued to decline due to falling demand, while that of beef, poultry, and buffalo meat continued to rise. 

Vietnam imported 31,760 tonnes of pork worth US$67.07 million in the third quarter, a drop of 24.4% in volume and 30.6% in value year on year.

Hanoi to honor most-popular Vietnamese products and services

Hanoi will hold an award ceremony for 213 Vietnamese products and services most appreciated by consumers on November 11 at Trinh Cong Son pedestrian street in Tay Ho District.

Products from 150 enterprises in 18 categories will be voted by consumers at the event to be held by the Hanoi Steering Committee titled the "Vietnamese prioritize the use of Vietnamese products", according to Acting Director of the Hanoi Department of Industry and Trade Tran Thi Phuong Lan.

She said this year, local companies have carefully prepared the products and services to participate in the voting, ensuring the criteria and quality, and improving the designs to achieve a high ranking in the contest.

Two months after its launch, the number of companies participating in the program was 225, while the number of submitted products and services was 295.

From July to September, the program attracted nearly 210,000 online votes via binhchonhangviet.com.vn, a year-on-year of rise 56.9%, and more than 120,000 direct votes in residential areas and commercial centers, a rise of 4% against 2021.

The "Vietnamese prioritize the use of Vietnamese products" campaign is part of efforts to promote consumption of domestic brands amid fierce competition.  

Embracing development of hospitality and real estate in Vietnam

At Vietnam’s largest hospitality and real estate conference titled Meet the Experts 2022 on November 10, analysts and businesses exchanged crucial information and openly discussed the evolution of and barriers to the country’s real estate and hospitality markets.

On November 10, Savills Hotels cooperated with the WeHub community to hold Vietnam’s largest hospitality and real estate conference entitled Meet the Experts 2022. With the theme of Embracing long-term development, the conference saw the presence of more than 20 leading speakers, including senior industry players and decision-makers.

In the first ten months of the year, domestic tourism rebounded well with 91.8 million domestic travellers, exceeding the 85 million that were seen in 2019. However, the return of international guests was underwhelming with only 2.3 million arrivals over the same timeframe, equal to only 16 per cent of the performance in 2019. Russia and China are key source markets, and political and pandemic-related disruptions mean these guests have not returned.

Vietnam’s real estate and hospitality market is currently going through tremendous changes and short-term challenges. Looking forward, there are calls for industry upgrades to meet the growing demand for quality products. At the conference, more than 20 leading speakers discussed the current market situation with a focus on long-term plans for enduring and sustainable growth.

Mauro Gasparotti, director of Savills Hotels Asia-Pacific and host of the Meet The Experts conference said, “The hospitality industry is transitioning. We will witness short-term difficulties but this will deliver long-term improvements, especially in transparency, the quality of products, and management. The recovery for coastal resorts has been slower than anticipated because of the weak international demand.”

However, Mauro pointed out that several luxury and boutique resorts have performed well, which shows that high-quality management and products pay off, especially in moments of market weakness.

He added that several hotels in Ho Chi Minh City and Hanoi have made a full recovery with encouraging results from business travellers, long-term guests, and MICE (meetings, incentives, conferences, and exhibitions) groups.

During the discussion sessions, representatives from Perceptions Hospitality, BIM Group, Booking.com, The Ascott Ltd., Fusion Hotel Group, Archipelago, VinHMS, and Cityland Education Vietnam shared the outlook for the hospitality market in 2023 and the potential challenges for near-term growth.

Director of Savills Hanoi Matthew Powell commented, “Vietnam's market for branded residences is continuing to expand, especially the urban and resort segments, which have very strong potential. There is live interest for brands to enter the new market and look for new locations to grow their portfolios. The same goes for developers, who are also looking to explore this sector”.

The conference also stressed the associated risks of poorly planned projects. The failure to hand over projects on time or with the expected financial commitments has impacted the appetite for the second home market.

Banks offer high rates to attract demand savings

With the ratio of current account, savings account (CASA) having dropped sharply in the last nine months, many banks have raised interest rates for demand savings and deposits to attract more cash since the State Bank of Vietnam (SBV) recently hiked key interest rates.

The CASA ratio is important to banks as the higher it is, the more opportunities they will have to increase their profit margin and competitiveness.

Eighteen of 27 banks that have announced their financial reports has a lower CASA ratio, including those taking the lead in attracting demand deposits such as Techcombank.

Till the end of the third quarter this year, Techcombank maintained its CASA ratio at 46.5%, the highest in the banking system despite a slight decline against the previous quarter.

LienVietPostBank, BacABank, MB and VPBank also have a CASA ratio fall by 3-3.8 percentage points. KienLongBank’s CASA ratio plunged to 9.2% from 15.5%, the lowest in the banking sector.

The sharp decrease of demand deposits is attributed to the steep deposit interest rate spike.

To cope with the situation, several banks have revised up interest rates to maintain a CASA ratio high enough to keep them competitive.

Previously, the interest rate for demand deposits was capped at 0.1-0.2% per annum. It has now risen to 1% per year at several banks such as Kienlongbank, BacABank, NamABank, NCB, MSB, SCB, Techcombank and VPbank.

Other banks such as OCB, BaoVietBank, PVcomBank, TPBank and Agribank have also adjusted up annual interest rates for demand deposits to 0.5% to 0.9%. The banks that offer the lowest interest rates for demand deposits at 0.1-0.2% include Vietcombank, VietinBank and BIDV.

Green startups - New wave in Vietnam

With climate change and environmental pollution challenging all of humankind, the search for technological solutions and green business models is becoming a pressing issue for many countries, including Vietnam. Though green startups are quite new in the country, many consumers are spending larger sums on green products.

Bamboo is quite cheap when sold as a raw material, but a bamboo bicycle can sell as an innovative product and fetch a price more than a hundred-fold the cost.

These electric motorbikes are the product of a Vietnamese startup. The price is between a half and a third cheaper than a petrol-powered motorbike. This one can also carry more cargo and is much more economical than a petrol counterpart. There are also savings of up to 50% on maintenance costs and 25% on fuel costs.

Feasible and environmentally-friendly, green startups have attracted millions of USD from investors in fields, such as new materials, apparel, agriculture, and manufacturing.

According to figures from Nielsen on Vietnamese consumers in 2020, 80% are willing to pay more for products with a commitment to “green” and “clean”. Many analysts believe that changing consumption habits are both an opportunity and a challenge for startups in the production of green, environmentally-friendly products.

UNIQLO opens two new stores in Hanoi

UNIQLO has opened two new stores, UNIQLO Vincom Royal City and UNIQLO Vincom Tran Duy Hung, in Hanoi this week.

The quick launch of two new stores is part of UNIQLO's brand recognition strategy in Vietnam, through a plan to boost operations by launching three new stores in a row in Hanoi this autumn and winter.

With the launch of two new stores, UNIQLO has increased the number of retail stores in Vietnam to 15, and the reach of the online store UNIQLO.com, after nearly three years in the country.

Osamu Ikezoe, General Director of UNIQLO Vietnam, said the simultaneous opening of the two stores would contribute to bringing the LifeWear philosophy to more and more customers in potential new development areas of the capital of Hanoi.

DFC signs 200-million-USD loan for SeABank

The US International Development Finance Corporation (DFC) and the Southeast Asia Commercial Joint Stock Bank (SeABank) officially signed a loan agreement worth 200 million USD.

This project is expected to have a development impact by providing loans to SMEs, with a section dedicated to women-owned SMEs, projects related to energy saving and retail customers, including individual business households.

SeABank is the only financial institution in Vietnam to receive funding from DFC.

With the support from DFC, it will help SeABank improve its financial capacity to better implement the proposed projects, focus on the credit gap and solve the gap between the financial needs of the market and the existing source of money in the economy.

In addition, the bank is committed to complying with international standards and continuously improving its policies on management and environment to help address climate issues.

Rubber export to face difficulties toward year-end

Difficulties for Vietnam's rubber export remain in the fourth quarter as the US dollar has entered a bullish cycle as a haven against inflation, said the Ministry of Industry and Trade’s Department of Import-Export Management.

According to experts, latex prices tend to go down when the US dollar is appreciating. Moreover, prolonged heavy rains in the peak harvest time this year also impacted latex output.

The department quoted data from the General Departments of Customs as saying that Vietnam exported 609,170 tonnes of rubber worth 930.86 million USD in the third quarter, up 6% in volume but down 1.8% in value on an annual basis due to falling prices.

China remained the biggest importer of Vietnamese rubber with 453,060 tonnes valued at 669.14 million USD, up 10.4% in volume and 0.5% in value year-on-year. It accounted for 70.2% of Vietnam’s total rubber export value.

India came second with 42,040 tonnes worth 69.64 million USD, marking an annual increase of 25.1% in volume and 18.3% in value.

Goods throughput at sea ports up 3% in 10 months

Vietnam's sea ports handled over 600 million tons of goods in the first 10 months of this year, up 3% annually, and fulfilling 84% of the yearly target, according to the Vietnam Marine Administration.

In the third quarter of this year, many seaport enterprises recorded profits despite difficulties caused by socio-economic fluctuations.

The Port of Hai Phong handled the largest cargo throughput in the North, logged nearly 9 million USD in consolidated pre-tax profit in the three months, up 20% against last year.

Meanwhile, the Da Nang Port, the largest container seaport in the central region, recorded its profit after corporate income tax reaching over 2.4 million USD, up over 12 percent over the same period last year.

Source: VNA/SGT/VNS/VOV/Dtinews/SGGP/VGP/Hanoitimes