The Ministry of Industry and Trade (MoIT) has taken responsibility for the plans and will coordinate with the relevant agencies to orchestrate the execution of the proposal, it was announced by Ba Ria-Vung Tau People's Committee on April 16.

Nine diesel generators with a combined capacity of almost 12MW currently supply the district of Con Dao with electricity, in addition to a number of rooftop solar power initiatives on the islands.

On March 22, the MoIT sent Deputy Prime Minister Tran Hong Ha a second report on the electricity consumption forecast and power supply plan for Con Dao. The report, based on a review of the local power consumption demand, stated the district will require more than 90MW by 2035 and more than 114MW by 2045.

Electricity of Vietnam (EVN) has suggested different options for Con Dao, including an on-site diesel power source and an equivalent current electricity supply. Offshore wind power can also integrate renewable energy sources with grid power via an undersea cable route.

EVN has proposed supplying electricity to Con Dao via a 110 kV submarine conduit across the ocean, as this is the most feasible option. This is considered the most economically and financially sensible option and satisfies several objectives.

The total investment for the project is estimated to exceed $210 million, with a completion date in 2025.

Two new Red River hydropower projects planned

The Ministry of Construction (MoC) has ordered the dossiers of the proposed Thai Nien and Bao Ha hydropower projects to be assessed and investigated further.
 
In a document dated April 14, the MoC responded to the Ministry of Industry and Trade (MoIT) regarding the inclusion of two more hydropower projects on the Red River in Lao Cai province. Both the Thai Nien and Bao Ha hydroelectric projects will each have a capacity of 75MW, with four units apiece.

To assure accordance with regulations, the MoC stated that a comprehensive appraisal of the related hydropower project hierarchy for the two projects is essential. It will also be necessary to conduct a further assessment of the lake, the dam, and related works, to satisfy the technical requirements and ensure the safety of those living downstream.

In addition, the MoC is to evaluate the design for the project's connection to the regional power grid, the selection of operations manager, and the project's investment and construction plans.

"Additional planning documents should be reviewed and updated, particularly the ecological impact evaluation and the maintenance and governance of water resources for irrigation in the lower Red River area," the MoC stated.

The contents proposed in the additional planning dossier should be researched and designed on the basis of geological and hydrogeological survey data that will provide sufficient basis for ensuring the safety of reservoirs and dams. According to regulations, the design plan for hydropower reservoirs and structures must also be certified by the relevant agencies.

For the suggested 75MW capacity of the projects, the MoC believes this should be based on the technical specifications of the construction area's power system. The MoIT is responsible for evaluating the project's additional planning documents to ensure legality and ensuring that the approved Power Development Plan contains the proper targets and requirements.

According to additional planning documents incorporated in a document dated March 6, the Thai Nien and Bao Ha hydropower projects are part of the same hydropower cascade.

During the evaluation of hydropower project planning, the MoIT consulted the ministries of Natural Resources and Environment; Agriculture and Rural Development; Transport, Planning and Investment; and Culture, Sports, and Tourism, among others.

Progress outlined in new PAPI evaluation

Localities in the Red River Delta, north-central, and central coast regions are making successful efforts to improve governance and public administration performance, according to the latest official evaluations.

The 2022 Provincial Governance and Public Administration Performance Index (PAPI) report was released on April 12 by the United Nations Development Programme, and highlighted public optimism contrasted with the concerns of the COVID-19 pandemic era.

The report provides an important check on government performance two years into its term, and also reveals changing public sentiment in the fight against corruption amid high expectations and evolving aspirations.

The three provinces of Thua Thien-Hue, Binh Duong, and Thanh Hoa are still in the top five alongside Quang Ninh and Ninh Thuan.

Quang Ninh was the top locality in the country, with the highest scores in terms of transparency, vertical accountability, public administrative procedures, and e-governance. There are eight PAPI criteria in total.

According to PAPI researcher Dang Hoang Giang, Quang Ninh has worked to ensure locals are the beneficiaries of new policies, including the planning of projects, compensation for seized land, and local votes for local people. The province has also consulted people and the business community on how to improve socioeconomic development.

On March 11, after the prime minister approved the long-term master plan for Quang Ninh’s Halong city, the province organised an online conference to connect communes and districts with key information on public policy.

Meanwhile, Thanh Hoa oversaw new and innovative models and solutions, applying sound and effective measures in administrative reform. It also focused on improving the quality of public employees, reforming state administrative agencies, building e-government, and improving public services.

The province has enhanced the online settlement of administrative procedures, saving cost and time for residents and organisations. There has also been a transparent reduction in red tape.

The report shows six of the top performers are in the Red River Delta, north-central, and central coast, and the 14 poorest are in the Central Highlands, Mekong River Delta, the northern midlands, and in mountainous regions.

Interestingly, the gap between the lowest and the highest possible provincial scores was narrower than in 2021.

Compared to 2021, 33 cities and provinces performed significantly better in local level participation, 18 in transparency in local decision-making, and 30 in e-governance. However, 29 localities performed significantly worse in environmental governance, 18 in controlling corruption in the public sector, and 18 in public service delivery.

Along with public consultation on governance and public administration performance, the report also shows the top concerns of Vietnamese citizens by raising open-ended questions. The key concerns are poverty, economic growth, jobs, road quality, and corruption.

Another researcher for the report, Dr. Paul Schuler, said, “Each year, the PAPI survey asked citizens to assess the issue of greatest concern they think the national government should prioritise in the coming year. In 2022, more than 22 per cent said poverty reduction was their top concern, followed by economic growth, then jobs and employment. Road infrastructure emerged as the fourth issue of greatest concern, followed by corruption.”

With a record 16,117 respondents randomly selected from all Vietnamese cities and provinces, PAPI is in a unique position to deliver invaluable insights into government performance at all levels two years into its 2021-2026 term.

Japanese investors weigh up options

Although Japanese manufacturers may be planning to cut production abroad over the next few years, some groups are being encouraged to increase focus on the Global South to increase security and take advantage of new business environments.

Under the Japanese Cabinet Office’s annual corporate behaviour survey published in March, over 10 per cent of Japanese businesses participating expect to reduce the proportion of production outside of Japan in the next five years. This is the highest level since the annual survey began in 1987.

The percentage of Japanese companies planning to expand production abroad also plummeted in the past 10 years, down 23 points.

The annual survey, which captures corporations’ outlook of the economy and business demand, also contains information such as break-even exchange rates and overseas production ratios to research the corporation’s activities. In total, 982 public companies participated in the latest survey.

The survey noted that while overseas outsourcing has enjoyed great success as Japanese manufacturers seek to reduce costs or move production closer to customers, global uncertainties mean many of them are prioritising more resilient networks. The US-China tensions are also a risk that Japanese businesses closely monitor when making decisions about production abroad.

Some Japanese investors are looking for opportunities closer to home. This fiscal year, Daikin Industries will restructure its supply chain to ensure that it can continue to manufacture air conditioners even if it loses access to Chinese components, either manufacturing them in Japan or sourcing them from several sites in regions such as Southeast Asia.

Last year, the Japan Trade Promotion Organization revealed that 60 per cent of Japanese enterprises in Vietnam have plans to expand business within the next two years, and over 53 per cent said the prospect of business profits in 2023 will have improved.

At the Vietnam Business Forum earlier this year, deputy secretary general of the Organisation for Economic Co-operation and Development Yoshiki Takeuchi remarked that over the past two decades, Vietnam’s degree of integration in global value chains has expanded exponentially, as evidenced by participation in regional and bilateral free trade agreements.

Accumulated to March, Japan had 5,050 valid investment projects with the total registered capital of more than $69 billion, ranking third among all countries and territories investing in Vietnam, according to the Ministry of Planning and Investment.

Firms less optimistic on Q1 performance

The business picture for many firms across the board has been less inspiring in the first quarter this year, with many incurring reduced revenue and profit figures.

A day before its 2023 AGM, Bank for Investment and Development of Vietnam Securities JSC (BSC) released its Q1 business results, showing a 17 per cent hike in profits.

Earlier, BSC set forth ambitious business targets for 2023, with a full-year pre-tax profit of $24.56 million, which was up 3.8-fold on-year and set a record since its establishment.

In Q1, the company generated $5.28 million in pre-tax profits, equal to 22 per cent of its full-year target.

However, looking carefully at BSC’s income structure, earnings from brokerage services – that have made up the largest part of the company’s revenue structure for many years – have dropped by a half compared to one year ago.

Its profits have mostly resulted from margin loans and higher earnings from other financial assets.

BSC is one of the first securities firms to release their Q1 financial statement, and one of only a few eyeing positive profit growth during the period.

It is not only securities firms that have been directly affected by stock market volatility, many in the manufacturing sector also saw a plunge in their business results due to shrinking consumer demand. Based on the AGM documents from a range of securities firms, many have reported declining revenue and profit figures in Q1.

Accordingly, this year Vietcap Securities JSC (VCSC) aims to achieve $43.4 million in pre-tax profits, down 5.6 per cent compared to 2022 when the company only realised less than 70 per cent of its profit target.

VCSC’s CEO, however, unveiled that the company only raked in less than $4.34 million in profit in Q1, and the possibility of reaching its set target looks slim.

Similarly, leaders at VietDragon Securities estimated that the company’s pre-tax profits shed 40 per cent in Q1 to $3.39 million.

Several other securities firms like KIS Vietnam and NH Vietnam also witnessed a 40 per cent drop in their Q1 profits.

In the first quarter this year, the average transaction value for each session approximated just $491.3 million, down more than half compared to the same period in 2022.

It is not only securities firms that have been directly affected by stock market volatility, many in the manufacturing sector also saw a plunge in their business results due to shrinking consumer demand.

Vicostone saw its revenue slide by 39 per cent in Q1, and earnings of this quartz manufacturer also sank by 20 per cent in 2022. Vicostone is not only the industry’s top exporter, but is also caving a spot among the three largest suppliers of quality quartz-based engineered stone globally.

Vicasa-Vnsteel JSC saw an on-year drop of 40 per cent in its Q1 net profits despite a remarkable rebound in its accrued profit margin compared to the previous quarters.

Doan Van Hieu Em, in charge of operations of The Gioi Di Dong and Dien May Xanh store chains at Mobile World Investment Corporation (MWG) – Vietnam’s No.1 retailer – noted that the handset and electronics market was in the doldrums both domestically and globally.

Listing outlook looks poor

The plans of many firms to list have been slowing down due to unfavourable market and business conditions, and several firms have even made a U-turn on their decision.

In early April, two businesses decided on taking back their listing procedures submitted to Ho Chi Minh City stock exchange (HSX).

Accordingly, Phu Hung Securities JSC took back procedures for listing 150 million shares it had submitted to HSX in November 2022 after the stock market turned unfavourable for stock listing and shareholder interests.

Meanwhile, Ton Dong A JSC took back procedures for listing nearly 115 million shares it had submitted in April 2022.

The company argued that headwinds in both domestic and global markets had badly affected the whole industrial sector, leaving the company unable to meet listing requirements as last year Ton Dong A incurred losses reaching $12 million.

In addition, Sacom Land JSC (SamLand) has revoked its listing plan on HSX, arguing that the plan now not suites to the company’s development in the upcoming period.

In fact, SamLand incurred $2.68 million losses in 2022, meanwhile it counted over $259,000 profit in 2021.

According to the company’s prospectus for its 2023 AGM, slated for April 21, SamLand estimates nearly $695,600 in losses this year.

Earlier, in early March the southern bourse (HSX) announced plans to stop considering listing procedures of An Giang Agriculture and Foods Import Export JSC as the company didn’t submit revised listing procedures upon HSX’s requirements.

A slew of other firms have submitted their listing procedures for quite a long time now, but until present, there are almost no movements from these firms towards finalising procedures

Some examples are Thanh Cong Securities JSC, which submitted procedures in March 2022 seeking to over 100 million shares, Quy Nhon Port JSC which submitted procedures in April 2022 seeking to list 40.4 million shares, and VCP Power and Construction JSC, which submitted procedures in June 2022, striving to list 83.79 million shares.

One of the targets for firms to go on the bourse is their expectations to be able to raise capital more comfortably to feed production and business needs.

The stock market, however, has exhibited less positive movement in the past year, with declining scores and liquidity.

In the first quarter this year, the average transaction value per each session just approximated $491.3 million, down more than half compared to a similar period in 2022.

Export potentials to Japan, South Korea yet to be utilized

Vietnamese enterprises view Japan and South Korea as two traditional and potential export markets, but their share of exports to these markets remains relatively low.

This was discussed by over 150 business representatives from industry associations during the "Promoting trade relations between Vietnam and the Japanese and Korean Markets in the new situation" seminar, organized by the Ho Chi Minh City Center for International Integration Support in conjunction with the HCMC Investment and Trade Promotion Center on April 19.

During the seminar, Mr. Do Quoc Hung, Deputy Director of the Asia-Africa Market Department, shared that the Japanese market has a scale of $4.1 trillion, with an import demand of around $900 billion, but Vietnamese imports account for only 2.7 percent. Meanwhile, the South Korean market is valued at $1.73 trillion, with an import demand of around $731 billion, but imports from Vietnam only account for 3.3 percent.

Mr. Do Quoc Hung highlighted that textiles, footwear, agricultural, and aquatic products are the most promising products for export to these two markets. Vietnamese goods currently benefit from the tariff reduction roadmaps applied by these two countries. For instance, products such as durian, pepper, corn, coffee, and seafood (shrimp, squid, and octopus) are entitled to a zero percent export tax for the Japanese market, while for the Korean market, textile, footwear, fishmeal, fish cakes, and handicraft products are also subject to a zero percent export tax. Meanwhile, the same products from other countries in the region face tax rates ranging from 14 percent-36 percent.

On the other hand, many businesses are facing difficulties due to technical barriers in the Korean and Japanese markets. For instance, Korea has issued a list of approximately 300 pesticides allowed to use. The statistics indicate that Vietnam's export shipments, which violate technical barriers in these two markets, are on the rise. There were 106 cases in 2020, 135 in 2021, and 149 in 2022. The primary violations include goods containing harmful content exceeding the permitted level, unidentified additives being detected, and failure to comply with food safety conditions.

In response to these barriers, Mr. Do Quoc Hung stated that the Ministry of Industry and Trade is currently collaborating with the governments of other countries to recognize the list of pesticides in use in Vietnam and add the list of available export goods from Vietnam. Additionally, businesses must realize that there is no easy market, and producing according to the standards is the only way forward.

According to Mr. Keigo Yoshida, Senior Director in charge of the Product Department at Aeon Topvalu Vietnam Co., Ltd., Vietnamese enterprises need to understand the unique characteristics of the Japanese market in order to successfully enter it. This market constantly evolves and demands businesses to continuously improve and innovate their products. More importantly, while the price competition is extremely fierce, maintaining high product quality is paramount.

Similarly, Mr. Choi Kyu Chul, Vice President of the Korean Chamber of Industry and Trade in HCMC, emphasized the importance of Vietnamese industries to develop in an environmentally friendly direction to ensure that their goods meet the required standards for importation into Korea.

Experts warn of lack of supply and capital in realty and banking

At yesterday’s seminar "Unblocking real estate - Promoting growth" in Hanoi, real estate and banking experts said that the biggest bottleneck of the market presently is the lack of supply and capital.

According to experts in the realty and banking sectors, the market demand was only 20 percent - 30 percent compared with the same period last year in most segments.

The seminar participants also warned that credit growth, including capital inflows into the real estate market, had dropped sharply and showed no sign of recovery when it only reached 1.6 percent in the first quarter. In addition, bond maturity pressure is still very great, the total value of individual corporate bonds maturing in 2023 is estimated at VND235,000 billion, and about VND100,000 billion of real estate businesses’ bonds will come due.

In particular, the stagnation of the real estate market recently had the greatest impact on legal problems, accounting for 70 percent of the difficulties of projects. According to the Ministry of Construction’s information, about 400 projects in Hanoi and Ho Chi Minh City have been facing problems in project implementation procedures while the Vietnam Real Estate Association announced that in fact, this number is about 1,000 projects. These bottlenecks have lasted for many years but have not been resolved, the association said.

Experts commented that four new policies that directly or indirectly affect the real estate market were issued in the past month. Specifically, they are the Government’s Resolution No. 33/NQ-CP on a number of solutions to remove and promote the real estate market; the Decree 08/2023/ND-CP on offering and trading corporate bonds; the Prime Minister’s Decision No. 338/QD-TTg on approval of the project to build at least 1 million social housing in the 2021-2030 period; the Decree No. 10/2023 amending and supplementing a number of articles of decrees guiding the Land Law.

Regarding solutions for the real estate market in the coming time, economist Can Van Luc, a member of the National Monetary and Financial Policy Advisory Council, said that, first of all, management agencies should necessarily implement the newly issued policies to remove difficulties for the market as soon as possible.

In addition, management agencies need to continue to improve institutions to ensure synchronization and consistency among relevant laws. Moreover, responsible agencies should have clearer regulations in the grouping of real estate segments to have appropriate credit, capital and financial policies, said Mr. Luc.

He added that there should be guidelines to allow the establishment of specialized real estate financial institutions such as housing savings funds, social housing development funds, real estate investment trusts, real estate refinancing agencies housing mortgages, securitization of real estate in the long run as well as have an appropriate real estate tax schedule while promoting cashless payments with real estate transactions.

Economist Le Xuan Nghia, a member of the National Monetary and Financial Policy Advisory Council, suggested that during the process of restructuring the real estate market, it is crucial to prioritize bank credit capital for the housing recovery and development of affordable social housing creating a most decisive segment restructuring.

On the side of state management, local authorities should review land planning for the construction of affordable social housing to decisively resolve procedural issues for projects such as compensation payment, clearance, land use right tax valuation and bidding so that the projects can begin quickly.

Carbon credit market shows promising benefits

Many Vietnamese businesses hope that the carbon credit market can be established soon in the nation to satisfy regulations of strict EU markets and increase revenues from trading these credits.

CEO of Forest Trends – Vietnam Dr. To Xuan Phuc informed in a recent talk with domestic wood product exporters that businesses in the field are subject to greenhouse effect assessment. According to Decision No.01/2022/QD-TTg by the Prime Minister on sectors, establishments with greenhouse gas emissions subject to greenhouse gas inventory, the six fields having their enterprises checked for greenhouse gas consist of energy, traffic, construction, industry, agro-forestry, and waste treatment.

The conditions that lead to greenhouse gas inventory are as follows:

_Having annual greenhouse gas emissions of over 3,000 tonnes of CO2

_Having a total electricity consumption equal to over 1,000 tonnes of oil per year.

As such, it is estimated that around 2,000 domestic businesses are subject to greenhouse gas inventory twice a year to identify exactly the carbon amount. “If this volume exceeds the limit, enterprises have to either apply technologies to reduce that or buy an equivalent quantity of carbon credits to compensate”, stated Dr. Phuc.

Dr. Ha Huy Tuan from Chu Van An University (in Hung Yen Province) informed that on January 1, 2023, the EU issued the Carbon Border Adjustment Mechanism (CBAM) to be in effect as of January 1, 2023. Accordingly, any businesses outside the EU when selling merchandise to EU countries have to purchase carbon credits equal to those bought by an EU company to cover the emissions embedded in their products. If the importers have already paid for these credits in their home country, they just need to offset the difference or pay no money at all when the fee there is lower or the same as the one in the EU, respectively.

Obviously, CBAM requirements offer a great chance for several domestic businesses, especially in the fields of forest growing, environmentally friendly rice growing, to sell their carbon credits. Statistics of the Natural Resources and Environment Ministry reveal that Vietnamese enterprises have already sold 4 million carbon credits with the value of nearly VND15 trillion (US$638 million), albeit only under the form of conversion to credits for safe production of businesses frequently exporting goods.

The Natural Resources and Environment Ministry reported that until November 2022, Vietnam had 276 green operation projects, creating 29.4 million carbon credits, and 32 gold-standard projects releasing over 5.7 million credits internationally, along with 1.3 million credits from 27 approved projects.

Even though many enterprises have adopted green production to earn carbon credits, but mostly to satisfy requests to sell goods to EU markets. With the commitment for Net Zero Carbon Emissions by 2050 of Vietnam, the country is going to carry out greenhouse gas inventory to increase the awareness of businesses about the global environment. It is expected that this year, there will be an additional 2,000 companies taking part in this Net Zero program.

After the inventory process, related businesses must report its plan on reducing greenhouse gas emissions to functional agencies, which will become a foundation for the latter to assess and then issue carbon credits for the former. Therefore, in 2023, several organizations and communities volunteer to take greenhouse gas inventory for their green production lines.

Shrimp industry to face challenges due to global economic downturn

Vietnamese shrimp exports are anticipated to undergo a series of challenges caused by the global inflation and economic downturn this year, leading to a decline in consumption demand in major markets, according to details given by the Vietnam Association of Seafood Exporters and Producers (VASEP).      

Furthermore, Vietnamese shrimp exporters must directly compete with rivals such as Ecuador and India in terms of price, experts said, noting that the import demand is expected to recover from the second quarter with lower prices compared to 2022.

The VASEP’s statistics indicate that Vietnamese shrimp exports during the opening three months of the year suffered an annual decline of 37% to US$600 million.

In fact, shrimp exports to major markets in March witnessed a downward trajectory. Notably, exports to Japan and the Republic of Korea decreased by around 20%, while exports to the United States, the EU, and China dropped by some 40%.

Japan remains the largest importer of Vietnamese shrimp, accounting for 17.6% of the overall figure. In the first quarter of this year, shrimp exports to this market dropped by 29% to more than US$105 million on-year.

The demand for shrimp imports from the Japanese market this year is expected to remain stable thanks to low inflation and better profit margins.

Meanwhile, Vietnamese shrimp exports to the US during the reviewed period declined by 46% to more than US$104 million on-year due to high inflation, a reduction in purchasing power, and high inventories from 2022.

According to data from the US Department of Agriculture, the US imported 6,322 tonnes of shrimp products worth US$66 million from the Vietnamese market during the two-month period, representing a fall of 44% in volume and 49% in value on-year. The average import price dropp by US$1 per kilo on-year from US$11.4 per kilo to US$10.4 per kilo.

Elsewhere, shrimp exports to the EU market during the first quarter of this year plunged by 44% to US$89 million on-year. Industry insiders pointed out that shrimp exports to the EU are anticipated to slow down due to the impact of the Russia-Ukraine conflict.

Furthermore, the local shrimp industry will continue to encounter difficulties in terms of the supply source of raw materials and disease control, while the ratio of shrimp farming areas in line with the Good Agricultural Practices (GAP) and organic standards remain low.

IFC helps boost climate resilience of buildings in Vietnam

The International Finance Corporation (IFC) has developed Building Resilience Index (BRI) to help local developers improve the resilience of buildings in Viet Nam.

As Viet Nam aims to shift to a low-carbon and sustainable economy, the IFC is helping Viet Nam to make buildings and cities more climate resilient, promoting a safe and healthy environment for residents while mitigating the social and financial impacts of natural hazards.

As a web-based hazard mapping and resilience assessment framework, the BRI evaluates location-specific climate-related risks for real estate projects and the resilience measures which have been implemented.

This innovation makes it easy for developers, locators, homebuyers, and other stakeholders to assess, improve, and disclose the resilience of buildings.

Viet Nam is among the countries most vulnerable to climate change, having lost about US$10 billion in 2020 (3.2 percent of its GDP) to climate impacts.

Low lying and exposed to natural hazards, about 300 coastal urban areas—providing livelihoods for a growing and rapidly urbanizing population—especially bear the brunt.

With support from the Australian Government, the BRI program in Viet Nam has identified and integrated the country's hazard maps into the BRI app. It will select three pilot projects spanning the residential, office, retail, educational, and hospitality sectors to assess and build resilience.

VN Medipharm Expo 2023 returns to Hanoi
 
As many as 350 domestic and foreign enterprises will join the 30th Vietnam International Medical and Pharmaceutical Exhibition (Medi-pharm Expo 2023), slated to be held in Hà Nội from May 10-13. 

These exhibitors are from 30 countries and territories including the US, Germany, Netherlands, India, Belgium, Taiwan (China), South Korea, Hong Kong, Israel, Russia, Malaysia, Japan, New Zealand and mainland China.

They will showcase advanced equipment and technologies in the healthcare and pharmaceutical sectors in over 500 booths, the event's organisers announced at the press conference in the capital city on Wednesday. 

A conference discussing new policies in medical equipment management will be held on the sidelines of the expo. 

Other seminars on maxillofacial and maxillofacial aesthetics and new advances in the treatment of immunopathology, diabetes, cardiovascular and neurological diseases, and online B2B business matching, will also be included. 

Vietnam Medical Import Export JSC and Vietnam Advertisement and Fair Exhibition JSC will organise the upcoming event at the Hà Nội International Exhibition Centre.

Khanh Hoa to build $43 million social housing complex

Early this month, Khanh Hoa People's Committee approved the revised investment policy and the investor for the Hung Phu II social housing project in Nha Trang. The project will cover a total land area of almost 6,900 square metres.

The procedures for granting a construction permit are set to be completed by the first quarter of 2024, and the housing complex should be in use by March 1, 2025. The project's funding must be secured without relying on the state budget.

Khanh Hoa People's Committee also requires the project developer – the privately held Nguyen Hanh Construction Investment Design Consultant Co., Ltd. – to strictly adhere to the provisions of the laws on investment, planning, land, environment, construction, and fire prevention and fighting, among others.

The project’s duration is 50 years, starting from the date Khanh Hoa People's Committee issued the project’s investment policy.

In light of the investment certificate issued by the Khanh Hoa Department of Planning and Investment, the Hung Phu II social housing project will have a total investment value that surpasses $43.4 million, leveraging the investor’s equity, commercial loans, and other legitimate capital sources.

The project’s duration is 50 years, starting from the date Khanh Hoa People's Committee issued the project’s investment policy.

Appetite increasing for mega-deals in insurance

Foreign and domestic investors in Vietnam’s insurance sector are gaining momentum with new agreements, despite global volatility.

On March 22, PYN Elite Fund, an investment fund from Finland, announced the purchase of 500,000 shares of Military Insurance Corporation (MIC), increasing its ownership stake from 4.99 to 5.29 per cent. Following this transaction, PYN became the second-largest shareholder in MIC, with Military Bank retaining the majority of shares.

The previous month, DB Insurance officially acquired a 75 per cent ownership stake in Vietnam National Aviation Insurance Corporation (VNI), following the transfer of shares from a group of shareholders consisting of 19 individual investors and one institutional investor.

VNI was one of the top 10 enterprises in the non-life insurance market in 2022, ranking second in terms of revenue for compulsory auto civil liability insurance and third for motor vehicle insurance collection.

Hanwha Group, one of South Korea’s largest corporations, is also expanding its footprint in Asia. On March 29, Hanwha Life Indonesia and Hanwha General completed the acquisition of a 62.6 per cent stake in Lippo General Insurance, a subsidiary of Lippo Group, an Indonesian conglomerate.

Despite profits of Vietnam’s non-life insurance sector declining last year, foreign groups still find the sector appealing. Moreover, given the low level of insurance penetration in the country and the fast pace of digital transformation, investors interested in Vietnam’s non-life insurance sector can see much potential.

According to SSI Research, premium growth in the non-life insurance sector in 2023 is projected to be lower than in 2022 by around 10 per cent, while operating expenses are projected to rise, primarily due to high losses caused by inflation.

DSC Securities noted that the potential of car insurance would be substantial in 2023 due to surging demand from the middle class and the Ministry of Transport’s directive to restrict motorcycle numbers.

In another development, with PVI Insurance’s credit rating upgraded from B++ to A- by AM Best, the insurer now has the foundation to facilitate business beyond Vietnam. The new rating enhances PVI Insurance’s credibility with partners and customers in its ability to fulfill insurance obligations.

In a recent investor meeting, HDI Global SE, the largest shareholder of PVI, reaffirmed its commitment to support and create better conditions for the insurer to strongly expand beyond Vietnam.

Merger and acquisition activities have become more prevalent among Vietnamese companies, as insurance businesses are expected to add more synergy for financial groups.

Elsewhere, in its latest proposal, AAA Insurance plans to put a major emphasis this year on digital transformation to bring seamless services for customers, expanding its nationwide network to capture a larger portion of the market, and upgrading customer support.

The firm expects to increase original premium revenue to over VND500 billion ($21.3 million) in 2023.

AAA Insurance is the initial step contributing to Bamboo Capital Group’s financial ecosystem, which may comprise banking and fintech services.

Last year, VPBank raised its ownership ratio in non-life insurer OPES Insurance to 98 per cent, showing its ambition to take advantage of VPBank’s ecosystem.

In Q4/2022, Tasco, a local transport infrastructure developer, acquired Groupama Vietnam General Insurance Company from its French owner for an undisclosed sum, and changed the brand to Tasco Insurance.

The market is also anticipating developments in State Capital Investment Corporation’s divestment roadmap for Bao Minh Insurance. The structure of the company has undergone significant changes in recent years, and observers predict that with the new movements in the market, competition in the motor insurance segment will increase.

HCM City to host first export expo

The administration of HCMC will hold the first export expo to facilitate trading opportunities for local businesses and manufacturers.

The event is expected to support companies to make the most of the free trade agreements which Vietnam has signed, focusing on improving operations and pursuing sustainable development.

As planned, the expo will be held annually in May, with the first scheduled from May 25 to 28 at the Saigon Exhibition and Convention Center in District 7.

The effort demonstrated the city’s commitment to supporting the business community in the face of global economic headwinds, said Bui Ta Hoang Vu, director of the HCMC Department of Industry and Trade.

There will be some 250 booths of manufacturers and exporters in the key industries in HCMC, such as agricultural processing, textile, garment and leather, furniture and electronics production.

In collaboration with the Vietnam Trade Promotion Agency under the Ministry of Trade and Industry, the organizer will support enterprises joining the expo with 50% of the participation fees.

Local products and services on display will be available for sale during the event, with some 8,000 attendees expected.

Unlocking potential of offshore wind energy through marine spatial planning

The Norwegian Embassy in Hanoi and the United Nations Development Programme (UNDP), in collaboration with the National Assembly's Committee on Science, Technology and Environment, organized a workshop entitled "Vietnam's Marine Spatial Planning and Offshore Wind Energy" on April 20.      

At the workshop, international experiences were shared, and next steps for marine spatial planning (MSP) and offshore wind power development in Vietnam were discussed. Experts from Norway and UK, among others, shared valuable insights and recommendations on sustainable ocean planning, zoning, offshore wind energy, and assessment of and qualification criteria for sea areas for offshore wind.

The workshop highlighted the crucial role of MSP, which will identify feasible sites for offshore wind energy projects, in the growth of the blue economy by catalyzing innovative technologies, responding to climate change impacts and fostering the energy transition.  

Vietnam is at a relatively early stage in the process of formulating both its coastal zone planning and sustainable management of resources document, and its MSP document.

According to Dr. Ta Dinh Thi, Deputy Chair of the National Assembly’s Committee on Science, Technology and Environment, “Developing renewable energy is a major policy for the Party, the National Assembly, and the Government of Vietnam, for whom offshore wind power is identified as one of the breakthrough solutions for energy transformation and national energy security. It is also closely related to marine spatial planning, especially for identifying potential marine areas and suitable zoning for offshore wind power development."

Ms. Ramla Khalidi, UNDP Resident Representative in Vietnam, highlighted that "The  marine spatial planning is essential for unlocking the tremendous potential of offshore wind power development for Vietnam, contributing to the achievement of the Sustainable Development Goals and climate change commitments made at COP26, including achieving net zero emissions by 2050."

The flagship publication "Blue Economy Scenarios for Vietnam," a comprehensive report released by UNDP and the Vietnam Administration of Seas and Islands (VASI) under the Ministry of Natural Resources and Environment in May 2022, examines the potential behind sustainably developing Viet Nam’s marine economy.

It concluded that if a blue scenario is applied, it is estimated that the GDP of Vietnam’s marine economic sectors will be 34% (or US$23.5 billion) higher; and GNI per capita in these sectors almost 78% (or US$7,100) higher compared to the business-as-usual scenario in 2030.

"As a long-standing partner of Vietnam, we are proud to support this workshop.  Norway is committed to combating climate change and to develop sustainable ocean economy.  As a leading ocean nation with prominent marine industries, we see that emerging industries like offshore wind power have a vital role to play” said H.E. Ms. Hilde Solbakken, Norwegian Ambassador to Vietnam.

In attendance were key stakeholders in the area of MSP in Vietnam, including VASI, the Electricity and Renewable Energy Authority, Petro Vietnam, GIZ, the World Bank and the Norway-based energy company Equinor, along with representatives from embassies, provincial authorities, international organizations and experts, and the private sector.

Petrol prices expected to go down on April 21 adjustment

Retail petrol prices in Vietnam is forecast to decrease from April 21 following falling prices in the world market.
 
It is expected that the petrol prices may drop by 320-450 VND per liter, and oil prices by 100-400 VND per liter.
 
At the latest price adjustment on April 11 by the Ministry of Finance and the Ministry of Industry and Trade, the price of E5 RON 92 petrol was revised up by 1,090 VND (0.046 USD) per liter, to 23,170 VND per liter; RON 95 petrol by 1,120 VND per liter, to 24,240 VND per liter, and diesel oil by 710 VND per liter to 20,140 VND per liter.
 
In the world market, crude oil prices have plunged in recent sessions as investors are concerned about the possibility of interest rate hikes by the US Federal Reserve (Fed) as well as the precarious outlook of the global economy.

From the beginning of this year, the petrol prices have undergone 10 adjustments, with six times up, three times down, and once unchanged.
 
Regarding the cost of petrol and oil trading, the Government Office said that it has received an urgent request from several petrol and oil retailers dated March 10 to Prime Minister Pham Minh Chinh. They proposed to refund profits and business expenses to enterprises and amend/supplement two decrees on petrol and oil trading.

Deputy Prime Minister Le Minh Khai assigned the Ministry of Industry and Trade and the Ministry of Finance to review the proposal and give written responses to the enterprises, ensuring the legality and benefits of relevant parties.

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