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Nguyen Anh Phong, Deputy Director of the Institute of Policy and Strategy for Agriculture and Rural Development, pointed out that Vietnam is a big exporter of agricultural products, but the majority of its agricultural production is of small scale and scattered, making it hard for purchasing farm produce in bulk. Besides, the long and narrow shape of the territory leads to high demand for logistics services to gather, preserve, and transit farm produce in main production zones.
The trend of large-scaled agricultural production and the increasing diversity of products have also boosted demand for logistics services in the agro-forestry-fishery sector, he noted, highlighting improvements in logistics infrastructure in recent years such as roads built to link with rural areas and ports, markets upgraded, and such services as transport, preservation, storage, classification, and packaging diversified.
However, Phong added, agricultural value chains in Vietnam are still facing many logistics problems, including high expenses, infrastructure development unable to keep up with real demand, and limited service supplying capacity. In particular, logistics expenses currently account for 12% of the production costs for aquatic products, 23% of that for wood products, 29% of fruits and vegetables’, and 30% of rice’s. The expenses in Vietnam are respectively 6%, 12%, and 300% higher than those of Thailand, Malaysia, and Singapore.
Besides, transport infrastructure has not met farm produce transport demand, agro-forestry-aquatic products have still been transported mainly by road, logistics centres have not been connected with one another, most logistics businesses are small and have not been connected in chains, and the logistics system for cross-border trade has yet to develop on par with its potential and real demand, he said.
To turn logistics into an impetus for agricultural development, it is necessary to form a comprehensive and effective logistics service system to help raise the quality, added value, and competitiveness of Vietnamese farm produce. Therefore, it is critical to build and implement a plan on the work by 2030 to tackle existing bottlenecks and facilitate agro-forestry-aquatic product exports, he continued.
Tran Chi Dung, head of the technology and innovation division of the Vietnam Logistics Business Association, suggested implementing three projects: establishing a cross-border land logistics chain for agro-forestry-aquatic products that connects Vietnam, Laos, Cambodia, and China; forming a logistics infrastructure chain that is combined with e-commerce and multimodal transport; and setting up an air logistics chain linking the ASEAN and Chinese markets
He held that Vietnam has seven economic regions with different production and infrastructure conditions as well as different demand for market connection. The design and building of regional logistics centres require thorough consideration and assessment to ensure projects are effective and meet development demand in the long term.
An Giang to build logistics centre at Tinh Bien International Border Gate
The Mekong Delta province of An Giang has recently proposed to the Ministry of Planning and Investment to consider supporting the local authorities in building a logistics centre at the Tinh Bien International Border Gate in Tinh Bien town, according to Vice Chairman of the provincial People’s Committee Le Van Phuoc.
Covering an area of 25.1 ha, the project is estimated to have total investment of 239 billion VND (over 9.8 million USD) sourced from the State budget. It will be implemented from 2024 to 2027.
Phuoc said that the project aims to fully tap the advantages for the development of logistics, trade, and services at the border gate; promote the role of international border gates in connecting the Mekong Delta region and Cambodia's Phnom Penh capital city.
It is also expected to intensify trade connection; and facilitate import and export activities, tourism and services, and border economic development, thus creating a motivation for the locality’s socio-economic development.
The Tinh Bien International Border Gate holds a crucial position in both economic development and national security as it serves as a goods transit point between the southern provinces of Vietnam and Cambodia. The annual average imports and exports turnover through the border gate reaches hundreds of millions of US dollars and gradually increases through years, hitting 628.78 million USD in 2022, accounting for nearly 24% of the border import-export turnover of the locality.
The early establishment of a logistics centre at the Tinh Bien International Border Gate is needed for sustainable border economic development in An Giang following the province's socio-economic and trade development direction, and border economic cooperation between Vietnam and Cambodia, Phuoc stressed.
Sharing a 100km-long borderline with Kandal and Takeo provinces of Cambodia, An Giang is deemed to possess competitive advantages in import–export activities between the two countries through border gate pairs. The locality also serves as a gate for domestic goods to access other ASEAN countries.
Gold prices forecast to continue rising in short term
Experts have predicted that gold prices, which reached a record high last week, may continue to rise in the short term, but the upward trend would be hard to sustain in the medium and long term.
Selling prices are high due to several factors in the domestic market, including VND/USD exchange rate, the global rising trend in gold prices, and seasonal such as the end-of-year consumption cycle, the wedding season, and God of Wealth Day (the 10th day of a lunar year).
With these psychological factors, experts believe that gold prices will grow further in the short term. However, the current rising pace would not continue in the medium and long term because the price difference between domestic and global gold has reached 15 million VND (619.32 USD) per tael.
Earlier, gold prices experienced a flourishing week, setting a new record of 77.4 million VND per tael in the trading session on December 22.
Although the price quickly dropped from the peak, it still stayed at a high level. At the final session last week, buying prices were listed at 75.7 million VND per tael and the selling prices at between 76.9 million VND and 77 million VND per tael in Hanoi.
My Khanh Tourism Village in Can Tho recognised as four-star OCOP product
My Khanh Tourism Village in Phong Dien district received a decision from the People’s Committee of Mekong Delta Can Tho city recognising it as a four-star “One Commune, One Product” (OCOP) product, on December 23.
Le Van Sang, Director of My Khanh Tourism Village, said the recognition will contribute to preserving and promoting unique cultural and artistic values of the Southwest region, and serve as a premise for the village to upgrade its tourism products, thus promoting rural economic development in the direction of rural and community-based tourism model.
The recognition is expected to further promote tourism potential of Can Tho and the Mekong Delta region in general to domestic and international visitors, he said.
Established in 1996, My Khanh tourist village is seen as an attractive and typical tourist destination of Can Tho. Covering an area of 30ha, the village provides numerous entertainment, leisure and relaxation activities.
The destination serves thousands of tourists every year, earning great revenues for the municipal tourism sector, he said.
Not only attracting tourists, My Khanh Tourist Village in particular and tourist destinations in Phong Dien in general have focused on promoting local OCOP products and specialties to tourists, contributing to preserving and promoting cultural values and traditional cuisine of the Mekong Delta region, Sang added.
On the occasion, a site for introducing and selling OCOP products was launched in the village.
Meanwhile, a trade fair featuring 50 pavilions which kicked off in the village on the same day is introducing specialties and OCOP products of the Mekong Delta region. The event will last until January 1, 2024.
According to Vice Chairman of the municipal People’s Committee Nguyen Ngoc He, Can Tho has so far had 148 products recognised as three- and four-star OCOP products.
The “One Commune, One Product” programme has importantly contributed to implementing the national target programme on new-style rural area building in the locality, and improving the material and spiritual life of residents in rural areas.
Central bank promotes consumer lending
The State Bank of Vietnam (SBV) has requested credit institutions and branches of foreign banks to boost consumer lending as part of efforts to prevent loan sharks who have targeted vulnerable people.
In its document, the central bank said that the move aims at carrying out the Prime Minister’s dispatch on enhancing measures to prevent and handle “black credit” activities.
Accordingly, credit institutions and foreign banks’ branches are ordered to proactively balance capital resources, and diversify credit products, making them suitable with different groups of customers.
Besides, the central bank said that it is necessary to bolster digital transformation, step up the application of science and technology to shorten the time of the settlement of loan applications, and simplify lending procedures for customers.
Along with accessing the national population database to check and authenticate customer information to ensure effective and safe lending, the financial institutions are asked to promote communications work to raise public awareness of the lending activities, credit offerings, and measures to get access to the products.
Wood processing industry to see slow export growth in 2024
The wood industry market shows some signs of recovery, yet 2024 still poses some potential difficulties for the industry.
Growth is expected to slow by about 10 – 12% compared to the last quarters of 2023.
Do Xuan Lap, chairman of the Vietnam Timber and Forest Products Association (VIFOREST), gave the forecast at a recent seminar on sustainable development and challenges for the wood industry held by VIFOREST, along with various associations and member organisations, and Forest Trends in Hanoi.
This year is challenging for Vietnam's wood industry. Consumer demand in main export markets such as the US and the EU has dropped sharply, leading to a decline in orders. Many businesses have had to reduce production, and some businesses even had to stop production.
Therefore, according to him, Vietnam’s exports of wood and wooden furniture will reach only about 13.5 billion USD in 2023, down 15.5% year on year.
Nguyen Chanh Phuong, vice chairman and general secretary of the Handicraft and Wood Industry Association of HCM City (HAWA) also said that the businesses have had recovery in export orders to have enough jobs for workers. Some of them have started to purchase raw materials and prepare for production to meet demand in next year's peak season.
He said the recovery of the wood industry being sustainable or not, will depend on the fair season in March-April 2024.
Vietnam's wood product processors must adapt to overcome existing difficulties, including new regulations in key export markets, according to VIFOREST.
Currently, global markets have not shown many signs of a quick recovery in purchasing power for wood products, especially the US market which has often ordered over 50% of Vietnam's export wood products.
Most wood processing enterprises in Vietnam have received orders again, but they are still facing many difficulties and are operating at moderate production levels.
The world situation is still too uncertain, so the domestic wood processing industry's prospects for recovery and growth in 2024 will be very challenging, insiders said.
For niche markets, the wood processing enterprises certainly will not ignore opportunities to enter those markets, including strict markets, they said, adding this will minimise risks in export.
Shrimp exports to China continue to drop in December
Vietnamese shrimp exports are anticipated to experience a downward trajectory in December amid the product facing competitive pressure from regional rivals' cheap source, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).
VASEP’s statistics indicate that Vietnamese shrimp export turnover to China and Hong Kong (China) during the 11-month period dropped by 8% to US$569 million compared with the same period from last year.
The nation’s shrimp export turnover to the market continued to fall by 24% to US$52 million in November.
Industry insiders pointed out that the demand for imported Vietnamese shrimp in the Chinese and Hong Kong (China) markets has largely depended on economic growth and inventory in these countries, and cheap supply sources.
Currently, China is the main target market of several shrimp exporters such as Ecuador and India due to their supply source of cheap raw shrimp, thereby leading to Vietnamese shrimp being under pressure to compete on price.
As a result of this, although China's demand for shrimp imports is still increasing strongly, Vietnamese shrimp exports to this market in December are predicted to decrease against the same period from last year.
However, China remains a potential market for Vietnamese shrimp products as their shrimp consumption is even more than the US and Europe.
This year, the northern neighbour is estimated to import one million tonnes of shrimp, mainly for processing and domestic consumption.
Vietnam imports nearly 3,416 CBU cars in mid-December
Vietnam spent approximately US$86.786 million on importing 3,416 completely built unit (CBU) cars in mid-December, according to statistics released by the General Department of Vietnam Customs.
Among the vehicles imported in the first half of this month, nine-seat cars took the lead with 2,954 units worth a total of US$55.25 million.
As of December 15, the country has imported a total of 114,708 CBU cars worth US$2.74 billion, marking a decline of 48,000 units and US$900 million against the same period from last year.
In the first 11 months of the year regional countries such as Thailand, Indonesia, and China were the biggest car suppliers to the nation. Specifically, Thailand took the lead with 50,144 units, equivalent to over US$1.07 billion.
The second position went to Indonesia with 40,474 units worth over US$574 million, while China was the third largest car supplier to the Vietnamese market during the reviewed period with 9,843 units valued at over US$360.27 million.
Most notably, the country imported 100,461 vehicles from the three markets, accounting for more than 90% of the total number of imported CBU cars of the entire nation.
HCM City takes measures to accelerate state budget revenue collection
HCM City is implementing measures to speed up the collection of taxes and other revenue items to achieve its 2024 target after falling short this year.
Speaking at a recent meeting Lê Duy Minh, director of the city Department of Finance, said: “The city is unlikely to meet its revenue target for 2023.”
The country’s largest city is facing challenges in achieving its target due to difficulties faced by businesses and its own support policies.
In addition, revenues from personal income tax, which used to be a strength, have experienced a sharp decline.
For 2023 revenues are estimated at VNĐ439.3 trillion (US$17.9 billion), or 93.5 per cent of the VNĐ470 trillion target and down 8.5 per cent from 2022.
The decline in all components of budget revenues, including domestic revenues (down 4.7 per cent), crude oil revenues (15.8 per cent) and imports and exports (15.3 per cent), contributed to the shortfall.
Experts also attributed the shortfall to the unpredictable global economic situation, leading to reduced consumer demand, incomplete supply chain recovery and sustained inflation.
Its revenues last year were more than VNĐ471.5 trillion, 122 per cent above the target and 23.6 per cent up from the previous year.
For 2024 the target is VNĐ483 trillion.
Phan Văn Mãi, chairman of the People’s Committee, called the target “very challenging.” To achieve it, the city would focus on collecting tax arrears and speeding up collection of value-added tax that were deferred until December.
But it plans to continue supporting businesses in 2024, focusing on tax and land rent waivers and reductions.
The finance department is also co-ordinating with relevant agencies to quickly exploit the special mechanisms outlined in a National Assembly resolution and enhance revenues from land.
But its focus is on managing taxes on e-commerce, seen as a promising but barely tapped revenue source in the near future.
Besides, the city has set an economic growth target of 7.5-8 per cent for 2024.
Despite the evident challenges that lie ahead, it has set several ambitious socio-economic targets, including increasing tourism revenues, attracting a larger number of foreign visitors and upgrading its IT infrastructure.
It also plans to create new jobs, increase housing availability, provide all public services online, and achieve a high level of satisfaction with them.
But economic recovery will continue to be elusive next year due to a global recession, experts warn.
The Vietnamese property, stock and bond markets will not recover next year, and businesses lack export orders due to weak global demand, they point out.
The city People’s Council recently passed a number of key socio-economic resolutions aimed at addressing the challenges and driving growth in 2024.
Coffee supply in a severe shortage, prices forecast to continue increasing in 2024
The prices of Vietnamese coffee are forecast to continue to increase next year due to severe supply shortage, according to the Vietnam Coffee Cocoa Association (Vicofa).
Domestic prices on Monday temporarily moved sideways after a series of increases last week to record levels. Never has Việt Nam experienced such a shortage of coffee.
Coffee prices were around VNĐ67,200 – 68,000 per kilogram in Tây Nguyên (Central Highlands) Lâm Đồng, Đắk Lắk and Đắk Nông, about VNĐ900 -1,000 per kg higher than last week and VNĐ8,000 than early December.
According to Mercantile Exchange of Việt Nam, for the week ending Sunday, coffee prices increased by 1.85 per cent for Arabica and 0.42 per cent for Robusta.
Farmers are delaying their sales with expectations of higher prices.
Despite being good news to farmers, high coffee prices push export enterprises into a lot of difficulty in collecting enough coffee for their signed contracts.
Đỗ Hà Nam, Vicofa’s Deputy President, said that unpredictable coffee price fluctuations caused difficulties in exporting. In the 2022-23 crops, several domestic exporters could not deliver in time because of rising prices, partly as an impact of hoarding. “During the past three decades, never have we thought that Việt Nam could be in a shortage of coffee,” Nam said.
The association has estimated that the coffee shortage of signed contracts is around 80,000 – 150,000 tonnes, waiting for the coming harvest season to be fulfilled.
Việt Nam exported more than 120,000 tonnes of coffee in November, half of which was to make up for the shortage of orders of the previous harvest crop, he said.
Coffee prices are forecast to be around VNĐ60,000 – 70,000 per kg in the coming months and are expected to decrease when Indonesia and Brazil start new coffee harvest seasons in April and May.
In the new crop, the asking prices of green coffee reached VNĐ60,000 per kg for delivery in December 2023 and January 2024 – an unprecedented price recorded at the beginning of harvest season due to high purchasing demand from export enterprises who are worried that there would be no coffee to buy from April or May next year. In 2023, coffee was out of stock from June.
According to Vicofa the European markets are the largest market for Vietnamese coffee, which consume around 40-50 per cent of the country’s exports and still have good demand for coffee.
“There will be tension in coffee supply sources. Việt Nam’s green coffee prices will continue to increase in 2024 and is poised for a record export revenue of $5 billion,” Nam said. This, however, causes a problem – enterprises are hoarding, which will bring significant risks.
A report about the coffee market by the US Department of Agriculture (USDA) issued last week showed that the global coffee inventory was estimated at 26.5 million 60-kg bags, 16.7 per cent lower than the previous estimate and the lowest inventory level in the past 12 years.
USDA forecasts that world coffee production for 2023-24 will reach 171.4 million bags, 6.9 million bags higher than the previous crop.
Việt Nam production is forecast to add 300,000 bags to reach 27.5 million. The cultivated area is forecasted to remain unchanged, with nearly 95 per cent of total output remaining as Robusta. However, with lower total supplies due to last year’s stock drawdown, bean exports are forecast to decline by 2.4 million bags to 23 million, according to the USDA’s report.
In the context of tense supply, Nam said that Việt Nam was focusing on solutions to promote the sustainable development of the coffee industry, including ensuring origin traceability and meeting the EU’s regulations on deforestation.
Bank bad debts forecast to remain under great pressure in 2024
Though the asset quality of banks in Việt Nam will be temporarily under control until the end of 2023, experts said more attention should be paid to the issue in 2024 as bad debts are rising.
The experts made the recommendation because, while existing bad debts have not been resolved yet, new bad debts are estimated to surge when Circular 02/2023/TT-NHNN on debt restructuring and debt repayment postponement expires in June 2024.
According to statistics, most banks are facing rapidly increasing bad debt. Total bad debt at the end of the third quarter of 2023 of banks increased by 61 per cent compared to the end of the previous quarter to VNĐ196.75 trillion. If including bad debts sold to the Việt Nam Asset Management Company (VAMC), the bad debt ratio of the entire banking system was 6.16 per cent.
Nguyễn Mạnh Thuật from Southeast Asia Law Firm said it was necessary to reduce the bad debt rising pressure for banks in the near future.
The most important thing was to monitor cash flow to ensure it was used for the right purpose. In addition to having collateral assets, it was necessary to control the purpose of the loan to ensure capital safety, Thuật suggested.
Banks say about 70 per cent of assets, which are mortgaged at banks for loans, currently are real estate. The ratio at some banks is even up to 80-90 per cent. Therefore, real estate is often the asset that banks put up for sale the most to recover bad debts. However, the handling of bad debt is facing difficulties because the real estate market is frozen.
Nguyễn Hưng, General Director of TPBank, said the sale of mortgaged assets had been very difficult in recent times. It was tough for banks to sell many collaterals that were large-value real estate.
Dr Trần Dục Thức from HCM City University warned that provisions for risky debts were still increasing. It meant, despite support, banks' bad debts were still increasing. It showed the economy was facing difficulties.
According to Thức, many people predict that bad debt will increase in early 2024 when corporate bonds come to maturity. The sale of assets is facing difficulty so firms do not have money to pay bonds and bank loans. If banks do not consider an extension for existing debts, the debts will be transferred to a worse debt group.
Economist Nguyễn Minh Phong believes that bad debts will still be under great pressure in 2024 as the debts are continuously increasing and create an overall quite large bad debt amount.
According to the Governor of the State Bank of Việt Nam, Nguyễn Thị Hồng, the SBV will consider a proposal to extend Circular 02/2023/TT-NHNN on debt restructuring and debt repayment postponement until June 2025 to both give banks more time to deal with bad debts and support firms in accessing capital.
Hanoi commits to bold 2024 agenda prioritising economic revival, infrastructure advancement
Hà Nội sets forth an ambitious agenda centred on economic revival, infrastructure advancement, and pioneering growth for the year 2024. Despite confronting challenges, the Capital city’s administration reveals a sweeping plan designed to establish Hà Nội as a modernised industrial hub.
In 2023, Hà Nội faced formidable challenges, with 4 out of 23 targets predicted to miss the mark: Gross Regional Domestic Product (GRDP) expected to grow by 6.11 per cent (against a 7.0 per cent plan); Realised investment capital's estimated increase at 9.0 per cent (below the 10.5 per cent target); Export turnover growth rate forecast at 1.0 per cent (compared to the 6.0 per cent plan); and industrial clusters' wastewater treatment meeting standards at 95 per cent (falling short of the 100 per cent goal).
The City People's Committee acknowledges sustained economic growth amid adversity but at a lower level than the previous period, attributed to the enduring impact of the COVID-19 pandemic. Factors include a decline in domestic and foreign consumer demand, reduced export-import turnover, enterprises grappling with difficulties, and the industrial, construction, and service sectors failing to meet their targets.
While social investment capital increased by 9.0 per cent, it fell short of the 10.5 per cent target, primarily due to the domestic and world economic decline. Subjectively, challenges stem from a stagnant investment and business environment, evident in downgraded PCI and PAPI (Provincial Competitiveness Index and Public Administration Performance Index) scores, and asynchronous infrastructure development, especially incomplete industrial zones hindering investment attraction.
Credit institutions' loan balance rose slightly but did not meet the set target, coupled with unexpected shortfalls in the 2 per cent interest rate support policy from the state budget. Subjective issues on the business side include complexities for multi-industry businesses, difficulties in separating supported costs, limited financial capacity for small and micro-scale enterprises, absence of viable business plans, lack of financial transparency, insufficient collateral, and post-COVID business challenges.
Complications persist in mechanisms, policies and administration at all government levels, affecting production and business support. The survey reveals challenges for small and medium-sized enterprises in accessing the State's loan support package, with 79.44 per cent citing the inability to borrow capital without collateral, 58.72 per cent facing unfavourable credit conditions, and 58.63 per cent finding loan procedures overly complicated.
Public investment capital disbursement reached 60.8 per cent, exceeding the same period in 2022 but falling short of the target due to prolonged difficulties, including issues in site clearance, determination of land origin and valuation, and inadequate investment preparation, causing adjustments to projects.
Specific challenges in 2023 include project-related issues such as raw material price fluctuations, supply chain disruptions, problems in ODA-funded projects, and slow approval of investment and policy adjustments. The slow completion of investment procedures, especially in monument-related projects, affects revenue from land use rights auctions.
Management challenges encompass delays in urban development and environmental protection projects, lagging behind schedules due to simultaneous planning at national, regional and provincial levels. Limited awareness of the importance and requirements of Capital Planning adds to the implementation challenges.
Task implementation lags in projects like online traffic maps, the elevated section of the Nhổn - Hà Nội Railway Station, renovation of old apartment buildings and environmental protection initiatives. Subjective factors include a lack of decisive leadership, limited official capacity, and ineffective inter-departmental coordination.
Hà Minh Hải, Vice Chairman of Hà Nội People's Committee, emphasised that Hà Nội continued to be a focal point for attention from the Politburo, the National Assembly, the Government, and central ministries, departments and branches. Long-term development documents for the Capital would be issued to guide resource exploitation and implementation.
Several projects from the Medium-term Public Investment Plan (2021-2025) had been expedited, addressing long-standing bottlenecks, particularly off-budget capital projects using land. An improved investment and business environment would serve as a catalyst for recovery and socio-economic development.
In 2024, Hà Nội aims to sustain growth while controlling inflation, ensuring economic balance, according to the official. The city will foster positive changes by implementing breakthroughs, restructuring the economy, fostering innovation, and enhancing productivity, quality, efficiency, competitiveness and intrinsic capacity.
Administrative reform, digital transformation, and streamlined organisational structures are pivotal.
Focus areas include enhancing the investment and business environment, removing bottlenecks, promoting production, improving rankings in various indices, and fostering comprehensive development in culture, education and health.
The 2024 Socio-Economic Development Plan targets key indicators such as a 6.5-7.0 per cent increase in GRDP, GRDP per person of about VNĐ160-162 million, realised investment capital growth of 10.5-11.5 per cent, and a 4-5 per cent rise in export turnover. To achieve these goals, the City People's Committee remains committed to key tasks and solutions, striving for growth, inflation control and overall economic balance.
Additionally, Hà Nội focuses on the effective implementation of central monetary and fiscal policies, deploying policies on interest rates and credit to support businesses and priority areas. The city deployed a credit package of VNĐ120 trillion for various projects and an additional VNĐ900 billion through the Hà Nội Bank for Social Policies Branch to enhance the social security system.
Nguyễn Ánh Dương, director of Hà Nội Trade, Tourism and Investment Promotion Centre, stressed the importance of trade promotion and market expansion.
The Centre is dedicated to fostering trade promotion, expanding export markets, and bolstering the effectiveness of promotional activities, according to Dương. This strategic focus is crucial in creating an environment where businesses can showcase and endorse their products, establishing partnerships for collaboration and export opportunities.
The City People's Committee is resolutely dedicated to supporting businesses through the provision of market information, facilitating registration processes, ensuring brand protection, and encouraging the adoption of quality management systems adhering to international standards. Additionally, efforts are underway to boost production orders for export, with a targeted increase in export turnover by 4-5 per cent.
The city is also actively addressing challenges and expediting the progress of commercial infrastructure projects within the region. The city invites investments in key projects, including an international agricultural wholesale market in Yên Thượng Commune (Gia Lâm District), a general agricultural wholesale market in Mê Linh District, and an outlet project.
Simultaneously, the city is reinforcing its network of markets, shopping centres, supermarkets and convenience stores. The goal is to develop one or two additional shopping centres, up to ten supermarkets, and over 70 convenience stores by 2024. Plans include the inauguration of 10 markets and the commencement of construction for five new markets.
Moreover, research initiatives are underway to establish shopping areas catering to the affluent both domestically and internationally. This encompasses the development of a chain of convenience stores (with attendants), automatic transaction stores, and a vending machine system.
The city is committed to establishing a comprehensive infrastructure system for tourist destinations. This includes the creation of innovative experiential tourism products linked to heritage sites, monuments, and craft villages. Emphasising waterways, the city plans to implement river tourism that connects attractions along the Red River and Đuống River areas. Additionally, a professional community tourism model will be operationalised.
Furthermore, the city aims to develop 2-3 high-quality agricultural tourism models in Thường Tín, Sơn Tây, Ba Vì, and Sóc Sơn districts. As part of this initiative, the city will introduce one or two additional walking street areas coupled with culinary streets and themed cultural performances. The overarching goal is to attract 4.5 million international tourists by 2024, with approximately 3.2 million opting for extended stays.
Additionally, the city targets welcoming 21 million domestic tourists, fostering a vibrant and thriving tourism sector.
Intensifying efforts in the promotion and attraction of investments, Hà Nội prioritises projects that incorporate cutting-edge technology and adhere to environmentally sustainable practices, particularly focusing on the semiconductor industry.
In the upcoming year, the city is dedicated to drawing the participation of 20-25 businesses, aiming to have around 30-35 products recognised as key industrial products of the city. Additionally, the goal is to establish and expand to up to 15 industrial clusters. Simultaneously, the city will finalise a comprehensive set of evaluation criteria and guidelines for establishing and advancing the Creative Design Centre model. By 2025, the objective is for each district and town to boast at least one Creative Design Centre, dedicated to the introduction, promotion and sale of OCOP products, and craft villages with a strong connection to tourism.
Thanh Hoá strives to attract investment into Nghi Sơn EZ, IPs
The central province of Thanh Hoá has been making efforts to attract investment capital into Nghi Sơn Economic Zone (EZ) and industrial parks (IPs) as investment activities face many difficulties due to the economic recession, according to the management board of Nghi Sơn EZ and IPs.
Top priority has been given to fostering investment promotion activities and facilitating the implementation of existing projects, creating motivation to lure investment in the future, the board said.
The board said it has thus far this year received 27 delegations of foreign and domestic businesses coming to the province to seek investment opportunities. During their trips, these investors have been provided with updated information about planning, investment attraction fields, and mechanisms and policies.
At the same time, the board has also supported investors in completing necessary legal procedures and speeding up site clearance compensation to soon implement their projects such as VAS Steel Factory No 2; Đại Dương reinforced concrete structure manufacturing factory; Long Sơn container port and Billion Rise textile and dyeing plant.
Attention has also been paid to improving the investment and business environment, simplifying administrative procedures to create favourable conditions for businesses to access equal and transparent opportunities, according to the board.
Thanks to those efforts, Nghi Sơn EZ and IPs have lured 21 investment projects this year. Of the total, 15 are domestically-financed projects valued at over VNĐ10.8 trillion (US$450 million), and six are foreign-invested projects capitalised at $49 million.
Projects include the Nghi Sơn GLOBAL factory worth VNĐ860 billion and Nghi Sơn high-tech mechanical factory valued at VNĐ502 billion. The investors have been fulfilling legal procedures to start their projects.
Earlier in June, the provincial People's Commitee and Sumitomo Corporation signed a memorandum of understanding (MOU) to explore investment opportunities in constructing industrial zones in the west of Thanh Hóa city, along with the establishment of logistics and urban centres.
The key investment project aims to create a top-notch industrial park that will attract investors with modern technology while creating numerous job opportunities and contributing to the province’s socio-economic development.
The project is scheduled to be implemented in the 2024-25 period, with a total capital outlay of approximately $300-400 million. The industrial park project will cover an estimated area of 650ha, while the logistics and urban centre surrounding it will occupy approximately 168.5ha.
Cinnamon industry urged to take advantage of FTAs to increase exports
Enterprises in the cinnamon sector should take advantage of opportunities brought by free trade agreements (FTAs) to increase exports, a conference heard last week in the central province of Quảng Nam.
Speaking at the event, Deputy Director of Quảng Nam Department of Industry and Trade Hường Văn Minh said that Quảng Nam cinnamon had been a well-known spice and had created major income for ethnic groups for many years.
The Ministry of Science and Technology's Intellectual Property Office of Việt Nam issued a geographical indication certificate for Trà My cinnamon in 2011 and cinnamon bark products in 2015. Cinnamon products have created a major source of income for people in cinnamon-growing areas. and cinnamon trees had become the most important tree in the economic development of Quảng Nam’s Trà My District.
However, the gloomy global market and the decreasing quality of Trà My cinnamon products had resulted in shrinking consumption, and local people had to narrow many cinnamon areas to grow other types of trees, Minh told the conference.
Minh said most cinnamon and cinnamon bark products were purchased by traders and exported through the Chinese market. Local enterprises failed to export these products directly to foreign countries.
He added that scattered growing areas, unstable sources of raw materials and the firms' insufficient investment in building processing facilities and researching and developing product quality remained problematic.
A firm representative in Quảng Nam said cinnamon growers in the province had encountered many difficulties, typically inadequate human resources. The firms' insufficient financial capacities had also caused challenges for them in expanding production facilities, improving the output and product quality. So, they failed to meet the demand of domestic and international markets.
In addition, products from cinnamon trees were mainly in raw form, so the consumption market had not expanded and prices were unstable. On the other hand, businesses did not clearly understand the regulations, standards and procedures to promote the export of cinnamon products to overseas countries, especially ones that Việt Nam has inked FTAs with, the representative said.
Meanwhile, Phạm Minh Sỹ, a representative of Trà My Minh Phúc Cinnamon Cooperative in Bắc Trà My District, said his cooperative was considered a start-up model which had established a circular production chain, applied new science and technology to enhance the cinnamon brand. However, his unit had yet to take advantage of the FTAs to foster exports as it only provided the products for the domestic market.
For his part, Deputy director of the Ministry of Industry and Trade's Multilateral Trade Policy Department Ngô Chung Khanh emphasised the importance of seeking new trade partners and customers, building an ecosystem for the industry which could connect central agencies, localities, associations, main export companies, consulting companies and farmers.
More practical measures to support businesses were needed. For example, there should be a separate support programme for taking advantage of FTAs, accessing credit sources and accelerating trade promotion, he said, adding that providing the businesses with updated market information and policies should also be included.
At the same time, businesses needed to research information and policies of FTA markets and then draw up suitable strategies to penetrate these markets. They should also optimise costs and production capacities through connections with other businesses and pay attention to building their brands.
Nguyễn Thùy Linh from the Ministry of Agriculture and Rural Development suggested businesses develop a promotion strategy associated with specific characteristics, connecting supply, demand and distribution, and developing niche markets. They should make more efforts to connect and export products to countries with high demand for cinnamon products to increase the value of cinnamon trees, Linh said.
By the end of this year, the total cinnamon growing area in Quảng Nam Province would reach about 12,000ha. Local firms are producing more than 50 products from cinnamon, such as cinnamon oil, spice powder, dishwashing liquid, floor cleaner, antiseptic, massage oil, and soap. These products are favoured by many customers in Japan and China.
Ministry proposes supports for building materials
The Ministry of Construction has proposed reductions of taxes and interest rates together with measures to promote the use of building materials in the context that the industry, especially cement, has had the most difficult year in a decade.
Normally, the peak season for construction takes place from September to December when the construction material market is the most vibrant. However, it is different this year as demand for building materials such as iron, steel, brick and cement is low.
Looking at the cement industry, Lương Đức Long, General Secretary of the Việt Nam Cement Association, said that now is the most difficult time for the industry since its foundation more than a decade ago.
The pressure is coming from slumping sales in the domestic market coupled with rising product costs due to increasing prices of energy, coal and electricity.
With the modest annual growth in cement sales of 1.6 per cent per year, the industry faces an over productivity, Long said.
Another difficulty is that the export tax on clinker was raised from 5 per cent to 10 per cent this year.
Sharing the same viewpoint, Nguyễn Quang Hiệp, Deputy Director of the Building Materials Department under the Ministry of Construction, said that cement production dropped by 12 per cent in January – November and sales fell by 16 per cent compared to the same period last year.
Hiệp attributed the fall in cement demand to the frozen real estate market which pushed many enterprises into difficulty. In addition, the construction of public-invested projects is also stagnant.
A recent report by the Ministry of Construction pointed out that the domestic real estate market has plummeted, and the slow implementation of public-invested projects and global economic instability has affected the sale of building materials at home and abroad.
Some cement factories are forced to temporarily halt production as inventories remain high.
In order to support the building material industry to overcome the difficult time, the construction ministry proposed the use of cement in infrastructure projects to be increased.
Specifically, the Ministry of Transport should ask investors to use reinforced concrete viaducts for highway projects which are being designed, especially in areas of weak soil and lacking road base materials such as the Mekong River Delta.
Localities should increase the use of cement in road construction.
In addition, the policy of reducing value added tax by 2 percentage points should be extended.
The ministry also proposed policies be raised to encourage deep processing and promote exports.
The construction ministry urged the Ministry of Industry and Trade to launch anti-dumping investigations on several products which see significant increases in imports.
Producers should actively improve their competitiveness, diversify products and renovate production technologies and expand export markets, the ministry said.
According to Hiệp, greater attention must be paid to developing the urban infrastructure system, transport infrastructure and drainage systems, as well as removing difficulties for the housing market.
The export tax on clinker should be kept at 5 per cent instead of 10 per cent for at least the next two years, he said.
Hà Nội enhances intellectual property progamme to increase product value
Hà Nội has employed numerous specific methods to create awareness about enhancing the application of intellectual property (IP) to protect the interests of owners.
Intellectual property (IP) activities have been booming in Hà Nội lately, and these developments have significantly contributed to the progress of innovation, science, and technology as well as the socioeconomic growth of the city. This is an important premise for realising the Intellectual Property Development Program until 2030.
Speaking at the opening exhibition of intellectual property development results in Hà Nội on December 12, Nguyễn Anh Tuấn, Deputy Director of the Hà Nội Department of Science and Technology, said that Hà Nội was one of the leading cities in establishing IP rights. By the end of the second quarter of this year, the number of industrial property registration applications was 4,335, accounting for 34.3 per cent of the country. Of these, there were 96 patent applications, 48 utility solution applications, 155 industrial design applications, and 4,036 trademark applications.
The city's programme has brought about a positive impact by raising awareness and interest among businesses in protecting their intellectual property for agricultural products. This has led to improved management and commercial exploitation of products. The programme also supports stable manufacturers and helps people increase competitiveness and income.
For instance, Đông Cao red grapefruit (Tràng Việt commune, Mê Linh), is one of the agricultural products under the IP development programme of the Hà Nội People's Committee, with a traceability stamp and collective brand logo. The management and brand development capacity of Đông Cao Agricultural Cooperative has improved, while the government and consumers are raising awareness of building brand value for local vegetables, thus affirming their position in the market.
Lương Văn Phương, Director of Đông Cao Red Grapefruit Cooperative, said that since participating in this programme, Đồng Cao red grapefruits have been available in many convenience stores and supermarket chains across the country.
“Collective trademark registration has helped establish the product as a reputable brand, contributing to increased value, providing opportunities for organisations and individuals, and building trust with customers,” he affirmed.
Hà Nội has actively deployed and implemented the intellectual property development programme in the area. The Department of Science and Technology in Hà Nội works closely with the People's Committees of towns and districts to evaluate and choose products that meet the city's requirements for ownership protection, such as collective marks, certification marks, and geographical indications.
Hà Nội's intellectual property development programme aims to train 50 per cent of local businesses and support 40 per cent of key products and services associated with the One Commune One Product programme (OCOP) to register for IP protection by 2025. The programme also aims to control the origin and quality of these products after they have been protected
Tuấn Anh suggested coordinating new and creative innovations to increase agricultural product quality and quantity. He also aimed to conduct research results that are protected by IP rights and support businesses to promote the use of IP tools in production and business activities.
Besides that, strengthen the management of resources and urban culture to exploit the potential of strong products, while prioritising the registration of intellectual property rights for goods with high export potential.
However, building a product brand is challenging, and maintaining and developing it is even more difficult. It requires businesses to establish and properly implement regulations for managing brand usage, raise awareness and responsibility among producers, and create solidarity in production and business. It's also important to strengthen the introduction and promotion of IP products through mass media, thus gaining wider recognition.
Surimi and fishmeal products bring high export turnover
Representatives of firms gathered to discuss how to improve the value and quality of surimi and fishmeal products which bring high export turnover.
The Vietnam Association of Seafood Exporters and Producers (VASEP) today organized a conference on surimi and fishmeal industry and the establishment of the VASEP Surimi and Fish Meal Business Club with the aim of coordinating and combining the activities of its members so that people can help each other improve the value and quality of products.
According to VASEP, surimi (Fish Paste) and fishmeal are groups of typical industries that create the circular economic chain of seafood. This industry group has contributed significantly to the country's fisheries and livestock economy.
The production and export of finely ground fish meat have been growing strongly because it is considered a popular seafood product thanks to its cost-effectiveness and is used as an important ingredient in a number of dishes, especially in Asian cuisine. In addition, consumers favor surimi because of its high nutritional value and suitable shelf life.
In the past 5 years, each year Vietnam earned US$300 million- US$420 million from exported surimi products, including marine fish surimi and pangasius surimi, accounting for 4 percent-5 percent of Vietnam's total seafood export turnover. Among hundreds of frozen, processed, fresh, live, dried seafood products, surimi is a segment having enormous potential for further development.
Fishmeal is the primary protein source in aquafeeds, and concurrently it is an important position in the specific animal feed manufacturing industry aquaculture industry and conventionally used as a livestock feed supplement.
In recent years, aquaculture has been increasing in both farming areas and output. Vietnam annually produces about 540,000 tons of fishmeal including fishmeal produced from marine fish and fishmeal produced from pangasius by-products and 200,000-280,000 tons of them are exported.
Furthermore, in the first 10 months of 2023, Vietnam exported $108 million of fishmeal of all kinds and imported about $89 million. It is estimated that this year, Vietnam's fishmeal export turnover will be $120 million-$130 million and imports will be about $100 million-$110 million. Besides, Vietnam also imports about 140,000 tons per year of fishmeal with high protein content.
Real estate market: Projects revived at exorbitant prices
Towards the end of the year, numerous real estate projects in HCMC and nearby provinces are being revitalized after a long period of inactivity.
Construction of a residential project in Binh Tan District, HCMC, is currently being accelerated by the developer.
Nevertheless, individuals with a genuine housing demand and an average income continue to face difficulties in acquiring a residence, primarily because of the exorbitant prices of apartments.
In Binh Duong Province, Phu Dong Real Estate Joint Stock Company (Phu Dong Group) recently held a groundbreaking ceremony and unveiled the Phu Dong SkyOne apartment project. Positioned along Provincial Road 743C in Di An City, the project covers 5,615 square meters with a total investment of VND1.1 trillion. It comprises two towers, each standing 30 floors tall, and one basement level, offering a total of 780 apartments.
After two years of hiatus due to financial constraints and legal obstacles, Danh Khoi Group has resumed work on the Astral City development in Thuan An City, Binh Duong Province. This project, covering an area of 3.73 hectares, consists of a multi-story residential and commercial complex comprising eight towers, each towering 40 stories high, and housing nearly 5,000 apartments. The total investment for this endeavor is valued at VND8.28 trillion.
Khang Dien Investment and Trading House Limited in HCMC has received the green light from the Department of Construction to sell more than 1,000 upcoming apartments in The Privia project located in Binh Tan District. Furthermore, Gamuda Land recently marked the commencement of the Eaton Park project in mid-December. Situated in An Phu Ward, Thu Duc City, this development was acquired by Gamuda Land from Tam Luc Company and aims to create a sizable community of approximately 2,000 apartments.
Despite the initiation or resumption of many apartment projects towards the end of the year, it is evident that the selling prices remain steep, surpassing the financial means of most laborers. For instance, the Phu Dong SkyOne apartment project has established a price range of VND32-35 million per square meter. Similarly, in the Astral City project, the market prices are projected to be around VND42-45 million per square meter by Danh Khoi Group.
Khang Dien recently started sales for The Privia project in November 2023, with prices hovering around VND50 million per square meter (excluding VAT). On the other hand, the Eaton Park project, invested by Gamuda Land, has not yet been officially announced, but real estate agencies indicate that the average selling price for apartments will fall within the range of US$6,000-US$7,000 per square meter (equivalent to VND146-170 million per square meter).
According to economic experts, at the current price levels, it is extremely challenging for individuals with low incomes, and even those with relatively average incomes, to access the housing market. For instance, consider the situation of Nguyen Thu Huyen and her husband, office employees residing in Linh Dong Ward, Thu Duc City, with two children, are actively researching projects in HCMC to purchase an apartment. However, with a total monthly income of nearly VND30 million combined with savings accumulated over the years, they have not been able to find a suitable apartment.
"Given the current circumstances, I assumed that apartment prices would be more reasonable; however, most apartments in residential projects are priced at VND40 million per square meter and above. It seems I'll have to put aside the dream of buying an apartment," shared Huyen.
Likewise, Tran Van Tu, originally from Thua Thien Hue, has been establishing himself in HCMC since 2015. Currently, the monthly income of his household is around VND25 million, and they have VND500 million in savings. With the desire for a stable residence, Tu and his wife have been exploring apartment projects in suburban districts such as Binh Tan, 12, and Binh Chanh. However, the selling prices for apartments consistently range from VND40 million to VND60 million per square meter.
"After an extensive search, we ultimately made the decision to buy a 2-bedroom apartment in Di An City, Binh Duong Province, bordering HCMC, at a rate of VND35 million per square meter. Although the price is not easy to bear, and the location is far from our workplace, my wife and I are striving to secure a place to live and gradually repay the debt," stated Tu.
According to the analysis of several real estate experts, the primary cost components of commercial housing projects include land acquisition costs, construction costs, financial expenses, and management expenses.
Of which, land costs constitute approximately 15 percent of the total cost for condominium projects, around 30 percent for townhouse projects, and about 20 percent for villa projects. Meanwhile, construction costs represent about 50 percent of the total cost for condominium projects, roughly 30 percent for townhouse projects, and approximately 20 percent for villa projects.
Currently, construction costs are on the rise due to increases in material and labor expenses. For instance, the cost of constructing a floor in condominiums has surged to VND12-13 million per square meter, compared to the previous range of VND7-8 million per square meter. Financial costs, encompassing credit interest and repayment of other capital sources, usually constitute approximately 10 percent of the total cost, while management costs account for around 5 percent of the total cost.
"All the mentioned costs are calculated under normal market conditions for commercial housing projects completed smoothly within a 3-year timeframe. If there are delays due to legal complications, as has been the case in recent years, the total investment costs surge significantly. Moreover, there are other 'unspecified costs.' However, regardless of the nature of these costs, all expenses are factored into the selling price that customers must bear," analyzed a real estate expert.
To cut costs, considering the outlined cost structure, numerous experts and real estate businesses argue that the fundamental issue is the need for administrative procedure reform in investment. Efficient procedures will decrease loan interest costs, management fees, and many other unidentified expenses. While some remaining costs can be lowered, the impact may not be substantial, as most are considered 'fixed' expenses like construction and land transfer fees.
According to Mr. Pham Duc Toan, CEO of EZ Property Investment and Development Joint Stock Company (EZ Property), to reduce home prices, the Government needs to establish a housing investment fund, specifically focusing on social housing and homes for low-income individuals. By introducing a significant supply of affordable housing to the market, it is expected that housing prices will be more effectively controlled than they currently are.
The HCMC Real Estate Association (HOREA) has recently recommended a modification in the method of collecting fees for land use in commercial housing projects. They propose a shift to a tax levied on the 'act of converting land use from agricultural or non-agricultural land to residential land,' with a suggested tax rate ranging from 15 percent to 20 percent of the listed land price to contribute to the reduction of prices in the commercial housing sector.
The HOREA proposes streamlining the administrative procedures to gradually reduce unspecified costs during the implementation of commercial housing construction projects, thereby contributing to lowering housing prices.
World Bank cancels US$10 million funding for project in Khanh Hoa
The World Bank has written to the chairman of Khanh Hoa Province announcing its cancellation of US$10 million in funding for sustainable environment projects in the south-central province.
Two construction works of the second component of the Coastal Cities Sustainable Environment Project in Nha Trang City (CCSEP Nha Trang) are subject to funding cancellation. These are the embankment and a road along the Cai River, and river embankment north of the Cai River and Chu Dong Tu Street near Ponagar Cham Tower. The total investment of these two works exceeds VND250 billion, equivalent to over US$10 million.
In a letter sent to Khanh Hoa Province, Carolyn Turk, WB country director for Vietnam, East Asia and Pacific region, said that the freezing of the second component and excluding it from CCSEP Nha Trang should be made to avoid any confusion caused by activities relating to the second component, as part of the project funded by the World Bank.
The World Bank noted that 50 out of 60 households affected by the project have handed over land for implementation of the second component, but they are not compensated per the agreed policies of the project. These 50 households need to receive extra payments as costs of compensation and support for resettlement, added the World Bank.
The WB also said that the remaining 10 households that refused to relocate should receive more attention from the province.
The CCSEP Nha Trang project receives funding of around US$72 million from the World Bank, in accordance with two loan agreements with the Vietnamese Government.
Van Ninh-Cam Lo Expry project faces further delay in handover of cleared land
The deadline was set for the handover of all cleared land by late June this year, the handover has yet to be completed for the Van Ninh-Cam Lo Expressway project in Quang Tri Province.
By December 23, Quang Tri Province has completed site clearance compensations for 27 km out of the total 32.5 km, reaching nearly 83%. Among those, the project investor received 23.1 km of the cleared land, accounting for 71%.
The relocation of 351 households affected by the project, including 88 households in Vinh Linh, 132 in Gio Linh and 131 in Cam Lo districts, remains at a low pace, according to the Ho Chi Minh Road Management Board, the project’s investor.
Only 28 out of the total households in these localities have been relocated, so far. Additionally, nine resettlement areas under construction have had 30% to 95% of their work volume completed.
The delays in construction of resettlement areas are attributed to a lack of soil for filling, challenges in site clearance, land use purpose conversion and other procedures.
Work began early this year on the 66-km Van Ninh-Cam Lo component, part of the eastern North-South Expressway project. The section running through Vinh Linh, Gio Linh and Cam Lo districts in Quang Tri Province is over 32.5 km long.
PM urges strengthening of credit growth management
Prime Minister Pham Minh Chinh has written to three government ministers telling them to strengthen credit growth management in a way that helps fuel economic growth.
The PM sent Official Dispatch 1403/CD-TTg yesterday, December 22, to the Governor of the State Bank of Vietnam, the Minister of Public Security, and the Inspector General of the Government to deal with the credit growth management matter, particularly irregularities.
Official Dispatch 1403 follows Official Dispatch No. 1224/CD-TTg issued on November 26, 2023 by the PM regarding the monetary policy management in the final months of 2023, and the Government Office’s Announcement No. 527/TB-VPCP on December 18 this year informing the conclusions made by the PM at a conference on resolving problems with lending to production and business.
The latest dispatch orders the State Bank of Vietnam (SBV), the central bank, to urgently implement the tasks assigned in Official Dispatch No. 1224 and Announcement No. 527 to cope with issues such as favoritism, group interests, malpractices and corruption in credit growth management.
The Governor of the SBV is tasked with intensifying inspections, checks, controls and monitoring of the use of assigned credit growth quotas by credit institutions, and ensuring that loans will go to priority areas like consumption, export and investment.
The SBV must ward off improper lending, especially to leaders, executives and related individuals of credit institutions and businesses in their ecosystem, and shadow businesses at lower-than-normal interest rates.
The central bank must work closely with the Ministry of Finance and relevant agencies to strictly handle improper advice and introduction of customers for investment in or purchase of corporate bonds, and for buying insurance at credit institutions.
The Government Inspectorate must work with the central bank and relevant agencies to urgently carry out the tasks assigned in Document No. 9444/VPCP-V.I issued on December 1 this year by the Government Office regarding inspection of the management of credit growth.
The Ministry of Public Security must coordinate with relevant agencies to strictly handle organizations and individuals that violate laws on corporate bond issuance, credit growth, allocation of credit growth quotas, and brokerage, consulting and sale of insurance at commercial banks.
Timber exports seen declining 15.5% this year
Vietnam’s timber industry is expected to see a 15.5% year-on-year drop in exports, totaling US$13.5 billion, according to the Vietnam Timber and Forest Product Association (Viforest).
During a conference held on December 21 in Hanoi, various stakeholders, including VIFOREST, convened to discuss the sustainable development and pressing issues facing the timber industry.
Do Xuan Lap, chairman of Viforest, said the plunge in demand had resulted in a sharp fall in orders, compelling many businesses in the country to scale down production and, in some cases, cease operations.
The industry is grappling with other challenges as major foreign markets have tightened regulations regarding the legality and sustainability of timber products.
The EU Deforestation Regulation (EUDR), adopted in June, mandates that products entering its market must meet legal compliance and forest preservation standards.
Both domestic and export markets are increasingly prioritizing low carbon emissions across the supply chain to achieve net-zero goals, making high-carbon products less competitive.
Vietnam’s timber sector also faces challenges related to imported timber. Annually, the country imports 1.5 to 2 million cubic meters of round and sawn timber from tropical countries, accounting for 30-40% of the total imported raw timber. This not only negatively impacts the industry’s reputation but also eliminates opportunities to utilize low-risk imported timber and locally grown timber from millions of farmers.
To Xuan Phuc, managing director of the Forest Policy, Trade, and Finance Initiative at Forest Trends, said that 77% of total timber exports to the EU fall under wood products (HS 9401 and HS 9403), while the remaining 23% belong to the wood and raw material group (HS 44).
From January to November, timber and wood product exports to the EU declined by 32%, primarily due to the stringent provisions of the EUDR.
European buyers within the EU are increasingly embracing voluntary sustainable production and consumption standards for wood products, such as those with Forest Stewardship Council certification.
The Vietnam-EU Voluntary Partnership Agreement on Forest Law Enforcement, Governance, and Trade (VPA/FLEGT) commits Vietnam to ensuring the legality of all wood products exported to the EU.
Vietnam is actively working on domestic legislation and building a system to guarantee the legality of its timber, encompassing both domestic and export supply chains. According to Phuc, FLEGT-certified wood broadly meets the EUDR’s legal requirements.
Despite signs of market recovery, Lap anticipates challenges in 2024, with the sector’s growth expected to decelerate to 10-12%.
France backs Vietnam’s green finance drive
France will stand firmly behind Vietnam in advancing fair energy transition practices, helping to steer the nation toward a sustainable and environmentally responsible future, said French Ambassador to Vietnam Olivier Brochet.
He was speaking during a meeting with Vietnam’s Minister of Finance Ho Duc Phoc yesterday, December 12.
Ambassador Brochet affirmed the enduring 50-year relationship between France and Vietnam, foreseeing a continued effort to strengthen their strategic partnership.
Both nations aim to enhance collaboration in administrative matters and adapt to global challenges posed by energy transition, setting an example for international cooperation.
Brochet highlighted France’s stance within the G7 and G20, underlining the responsibility of developed nations to financially support their developing counterparts in economic development and climate change adaptation.
Since establishing diplomatic ties in 1973 and elevating to a strategic partnership a decade ago, Vietnam and France have witnessed substantial progress in political, economic, and cultural cooperation. The implementation of the EU-Vietnam Free Trade Agreement has further opened avenues for positive developments in bilateral trade.
France’s support extends beyond diplomatic relations, with Ambassador Brochet acknowledging the significant financial backing in key sectors such as energy, telecommunications, water supply, healthcare, transportation, meteorology, remote sensing and agriculture.
Regarding the financial aspects of sustainable development, Phoc said the agreement between his ministry and the French Development Agency in Paris in July would enhance Vietnam’s capacity to formulate green financial policies.
Source: VNA/SGT/VNS/VOV/Dtinews/SGGP/VGP/Hanoitimes
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