State budget revenue from exports and imports in January reached 30.64 trillion VND (1.25 billion VND), equivalent to 8.2% of the estimate, and up 13.2% year-on-year, the General Department of Vietnam Customs (GDVC) reported on February 6.

Total export-import value in the first month of the year was estimated at 64.22 billion USD, a rise of 5.5% month-on-month, with exports up 6.7% to 33.57 billion USD, and imports up 4.2% to 30.65 billion USD.

The GDVC was assigned by the National Assembly to collect 375 trillion VND for the state coffer this year, with 204 trillion VND expected to come from exports and imports.

The agency said it will continue with the reform of customs policies and procedures, ensure state management and prevent trade fraud, while creating a full legal foundation for the building and implementation of a digital and smart customs model, thus facilitating trade and contributing to meeting growth targets.

Vietnam's goods imports and exports in 2023 fell short of the 700-billion-USD mark achieved in the previous year, estimating at 683 billion USD, down 6.6% year on year, according to the General Statistics Office (GSO).

Specifically, the country's exports went down by 4.4% while imports dropped by 8.9%, attributed to a decline in the global demand.

However, the country achieved a record-breaking trade surplus of 28 billion USD, significantly surpassing the figure of 12.1 billion USD recorded last year.

PM urges logistics connectivity for Vietnamese farm produce

Prime Minister Pham Minh Chinh has recently issued a dispatch aimed at enhancing logistics connectivity to drive the consumption and export of agricultural, forestry and aquatic products, considering it one of the key tasks in agriculture and rural development.  

Under the dispatch, the Ministry of Agriculture and Rural Development (MARD) is entrusted with the critical task of orchestrating collaborative efforts with relevant ministries, agencies and local authorities to promptly submit a scheme on developing logistics services, improving the quality and competitiveness of Vietnamese farm produce until 2030 with a vision to 2050 to the Prime Minister.

It must also partner with localities to review and supplement the zoning of logistics service centres tailored specifically for farm produce, coordinate with the Ministry of Industry and Trade (MIT) to hold training courses on logistics, supply chains in general, and farm produce logistics chains in particular, for State and local management officials, businesses, and cooperatives operating in agriculture sector.

The MARD is also assigned to partner with the MIT and the Ministry of Foreign Affairs to concretise the contents of the Vietnam-China Joint Statement and signed cooperation documents on agricultural cooperation, opening farm produce markets, diversifying traditional distribution channels through wholesale markets, farm produce logistics service centres at border gates, and creating favourable conditions for farm produce trade via official channels through e-commerce platforms.

The MIT is responsible for spearheading the formulation and submission of a national logistics service development strategy for the 2025-2035 period, with a vision to 2045.

It is tasked with collaborating with the MARD to intensify trade promotion activities and help firms build effective agricultural supply chains linked with logistics services for entry into global markets.

Other specific tasks are also assigned to the ministries of planning and investment, finance and transport, centrally-run cities and provinces, the Vietnam Logistics Business Association and agriculture associations.

Vietnamese businesses attend Prodexpo 2024

Vietnamese firms are participating in the 31st International Exhibition for Food, Beverage and Food Raw Materials (Prodexpro 2024), which is being held in Moscow, Russia, from February 5-9.

Among them is Vietfood DV Co. Ltd. which has been the official agent for Vietnam’s Trung Nguyen coffee brand in Russia for five years. It imported about 700 tonnes of coffee for consumption in the Russian market last year, according to Do Van Phuong, the company’s director, elaborating that Trung Nguyen is the brand with the largest consumption in this country.

Pham Van An, director of Foodzone company, which specialises in importing products from Asia to the Russian Federation and Commonwealth of Independent States (CIS) countries, said her company has shipped soft drinks and noodles to Russia for six years, adding that basically, Asian products still have attracted due attention from Russians, especially in the current context that many Russians are traveling to Asia so they are more familiar with Asian cuisine.

Prodexpo, an annual trade fair for the food industry held every February, saw the participation of more than 2,100 companies from 40 countries and territories.
It features foodstuffs from across the globe, from essential food and beverages to exquisite specialties as well as organic, sport and healthy food, halal, kosher, and exotic products.

VinFast to recall nearly 6,000 VF5 Plus vehicles to replace switch

Vietnamese electric vehicle (EV) maker VinFast on February 6 announced a recall on 5,912 VF 5 Plus vehicles, which were produced from March to December 2023, for free replacement of a combination switch (left-hand lever on the steering wheel).

The automobile maker found that the head lights on several VF 5 Plus cars turn off inadvertently when drivers push the combination switch for the left turn signal while running at the speed of 50-55 kilometres per hour, with auto-on headlight mode on. This could reduce driver vision and visibility at night.

The problem was with a control circuit board design error from the component supplier, it said.

A sold unit was recorded to suffer this error, however, no incidents have occurred.

From February 19, 2024, customers could take their vehicles to VinFast showrooms and service centres for examination and replacement of the switch.

VinFast delivered 13,513 electric vehicles in Q4/2023, up 35% from the previous quarter, raising the total sold units in the year to nearly 35,000.

As of 30 September 2023, it had 126 showrooms globally for EVs, including VinFast showrooms and dealer showrooms.

Industrial production index climbs 18.3% in January

The index of industrial production (IIP) in January fell 4.4% month on month but still went up 18.3% year on year, reported the General Statistics Office (GSO).

In particular, the processing - manufacturing sector expanded 19.3% from a year earlier, contributing 15.1 percentage points to the overall growth.

Electricity production and distribution surged by 21.6%, contributing 1.9 percentage points; water supply, waste and wastewater management and treatment up 5.7%, 0.1 percentage point; and the mining sector up 7.3%, 1.2 percentage points.

Notably, the January IIP posted year-on-year increases in 60 provinces and cities while declining in just three others, the GSO said, attributing the fast expansion in some localities to sharp rises in the processing - manufacturing sector and the production and distribution of electricity.

Those recording high index rises in the processing - manufacturing sector include Quang Ninh province 157.9%, Bac Giang province 57.7%, Nam Dinh province 56.9%, Vinh Long province 51.2%, Kien Giang province 47.7%, Phu Tho province 39.4%, and Ho Chi Minh City 26.9%.

Though the global economy is still facing numerous difficulties and market demand has yet to recover, the country’s IIP has continued improving thanks to producers’ efforts to seek new orders and prepare goods for the Lunar New Year (Tet) holidays, according to the GSO.

Lao Cai ensures smooth cross-border trade during Tet

Customs officials will be on duty to ensure smooth flow of goods via Lao Cai Border Gate in the northern mountainous province of Lao Cai during Tet (Lunar New Year) holiday, head of the province’s economic zone authority Vuong Quoc Vinh said on February 6.

A report from the provincial Department of Industry and Trade showed that Lao Cai January cross-border trade reached nearly 183 million USD, a year-on-year surge of 39.66%.

The province shipped 62.54 million USD worth of products via the gate, up 30.86% from the same time last year, while spending 38.18 million USD on imports from China, increasing 42.81% yearly.

Deputy head of the Lao Cai Border Gate Customs Office Nguyen Thi Thanh Binh said that trade activities at the gate have been stable from the outset of the year, with customs procedures cleared for more than 300 vehicles per day.

Currently, there are some 600 enterprises registering for trade activities via the border gate, she added.

As Lao Cai eyes 4.5 billion USD in trade via the border gate in 2024, the province has directed competent sectors to enhance innovation and comprehensive digital transformation, helping improve transparency in administrative procedures.

Besides, the province will work to effectively implement the cooperation agreements between Vietnam and China, develop the Lao Cai – Hekou International Border Gate, adjust land and construction planning inside the border gate economic zone, and step up infrastructure development at the border gate, among others.

Ample room for Vietnamese exports to China in 2024

With exports to China recording positive growth last year, there remain plenty of opportunities for Vietnamese products to enter the lucrative market this year, according to insiders.

According to the Ministry of Agriculture and Rural Development, agro-forestry-fisheries exports last year saw a slight decrease by 1.2% to US$53.1 billion compared to 2022.

China, the United States, Japan, the EU, and ASEAN all continued to be the five largest consumers of Vietnamese agricultural products. However, Vietnamese agricultural exports to several key markets all witnessed negative growth, with the exception of China.

Statistics show farm produce to the Chinese market edged up by 17% to US$12.2 billion compared to 2022, accounting for 23% of the agricultural sector’s total export value. Accordingly, China officially surpassed the US to become the largest consumer of Vietnamese agro-forestry-fishery products.

Most notably, durian exports to China enjoyed impressive growth with US$2.3 billion, accounting for 32% of the overall share of the market.

Ngo Tuong Vy, director of Chanh Thu Fruit Import-Export Company, emphasised that there is ample room for exporting Vietnamese durian to the market as local businesses have not yet secured enough durian products to partners last year.

Cassava is also an agricultural product which had an export turnover of billions of US dollar to the Chinese market last year. Statistics from the General Department of Vietnam Customs indicate that Vietnam raked in US$1.3 billion from exporting cassavas overseas, with China consuming more than 90% of the total.

Furthermore, a number of other agricultural export products to China increased sharply, including rice up by 19.6%, cashew nuts up by 55%, and coffee up by 10.3%.

Along with farm produce, many aquatic businesses also view China as a key market. Specifically, pangasius exports to China decreased by 20% compared to 2022, although this is still the main importer of Vietnamese pangasius.

Despite pangasius exports to China decreasing by 20% compared to 2022, China is the largest consumer of Vietnamese pangasius, said Thu Hang, an expert at the Vietnam Association of Seafood Exporters and Producers (VASEP).

With these positive results recorded last year, industry insiders anticipate bright prospects ahead for more Vietnamese products to make inroads into the market, especially after the recent working trip to China led by Deputy Minister of Agriculture and Rural Development Tran Thanh Nam.

Deputy Minister Nam said that Vietnam and China have completed procedures, opening the door for Vietnamese avocados and passion fruits to enter China.

With these positive signs ahead, Vietnamese fruit and vegetable businesses have set sights on an export target of between US$6 – 6.5 billion this year, of which durian continues to dominate the market with estimated turnover of between US$3 - 3.5 billion.

The Chinese market is therefore expected to account for about 80% of Vietnamese fruit and vegetable export market share this year.

Moreover, there is good news that China will work to create favourable conditions for Vietnamese rock lobster to return to its market, presenting a good opportunity for Vietnam to export the product this year.

Improving business climate - key to retaining Japanese investors

Despite boasting a number of advantages in terms of foreign investment attraction, Vietnam needs to continue to improve its business climate if it is to retain Japanese financiers, according to insiders.

According to data released by the Ministry of Planning and Investment, as of January, Vietnam had attracted 5,280 foreign direct investment (FDI) projects from Japan with a total registered capital of US$74.2 billion, accounting for 13.4% of the number of projects and 15.7% of total foreign investment capital in the Vietnamese market.

With these results, Japan ranked third out of 144 countries and territories with the largest investment projects in the nation to date.

January alone saw the country attract 13 new FDI projects from Japanese enterprises, ranking second among 39 countries and territories investing in the nation.

Most notably, Japanese FDI capital into the Vietnamese market in January made up 12.6% of the country’s total FDI capital, with the amount of capital witnessing a seven-fold rise compared to that of the same period from last year.

This figure indicates that Japanese financiers have strong confidence in the Vietnamese investment environment.

Sharing his opinion with the press recently, Takeo Nakajima, ​chief representative of the Hanoi Office of the Japan External Trade Organization (JETRO Hanoi), said Vietnam's business climate demonstrates bright prospects ahead for future economic growth, noting that Vietnam remains one of the most attractive markets for many Japanese parent companies.

The JETRO representative stated that there are currently more than 2,000 Japanese firms doing business in Vietnam, which makes up the largest proportion among ASEAN member states.

Japanese business representatives assess that the local business environment boasts many comparative advantages, including socio-political stability, abundant and qualified human resources, a significant market size, and potential for further market growth.

At a recent online meeting held with the People's Committee of Thai Binh province , Japan’s Kyushu Promotion Center said that several Japanese companies in the Kyushu region, namely Kamichiku Group, Medmain Joint Stock Company, and Nichibe Shokai Joint Stock Company are keen to seek co-operation opportunities in Thai Binh province.

Making Vietnam more lucrative to Japanese investors

Tadahiro Kinoshita, chairman of the Japan Chamber of Commerce and Industry in Vietnam (JCCI), pointed out several factors which make Vietnam attractive to Japanese investors, including an improved business climate, the active participation of free trade agreements, and advantages in terms of young talent, especially in the digital field.

Furthermore, Vietnam's political stability is an important factor for foreign investors' sustainable business operations.

A recent survey conducted by JETRO indicates that although the Vietnamese investment environment is considered to be attractive to Japanese firms, the number of Japanese businesses operating in Vietnam which made a profit last year stood at 54.3%, representing 6.6 points lower than the ASEAN average level.

This is attributable to a decrease in domestic and foreign demand, a rise in labour cost and raw material procurement costs, as well as fierce competition with other regional peers.

To create an advantage in attracting FDI moving forward, Minister of Planning and Investment Nguyen Chi Dung emphasized that top priority should be given to further improve the local investment environment.

In line with this, Vietnam will continue to make amendments to policies of FDI attraction in accordance with global investment trends, with a specific focus on industries that can contribute to the green economy, energy transition, and digital transformation, as well as reforming administrative procedures moving forward.

Vinfast to introduce right-hand drive EV models to Indonesian market

Vietnamese electric vehicle (EV) maker VinFast will introduce right-hand drive EV models to the international market for the first time as part of its upcoming participation at the Indonesia International Motor Show (IIMS) 2024 slated for February 15 – 25.

In a press release on February 7, the company said the move shows its strong dedication to making EVs accessible to everyone.

"VinFast is delighted to formally launch its brand in the Indonesian market at IIMS 2024. We aim to provide local customers with more eco-friendly transportation offerings, along with a commitment to accompany them throughout the electric vehicle ownership journey. We look forward to inspiring the market to explore the limitless potential of a modern and sustainable mobility future," Tran Quoc Huy, VinFast Indonesia CEO, said as quoted by the release.

With a population of 250 million people, Indonesia is the largest economy in Southeast Asia and one of the largest automotive markets in the region. It represents the next key market for the company and a strategic link in its global electric vehicle supply chain. VinFast previously announced an investment in the construction of a manufacturing plant in the country with an annual capacity of up to 50,000 EVs.

Vietnam South Korea's third-largest trading partner in 2023

Vietnam continued to be the third-largest trading partner of South Korea last year, despite the slowdown in imports and exports to the Southeast Asian country.
 
According to data released by the Korea International Trade Association (KITA) on February 5, the trade turnover between Vietnam and South Korea reached $79.43 billion last year. Among them, exports from South Korea to Vietnam contracted 12.3 per cent to $53.49 billion. Meanwhile, imports from Vietnam also shrank 2.9 per cent year over year to $25.94 billion.

Vietnam has overtaken Japan for two years in a row in 2023 to maintain the position as South Korea's third-largest trading partner.

The decline in trade with and exports to Vietnam was attributed to shrinking chip exports. South Korea saw its semiconductor shipments to Vietnam drop by 21.6 per cent on-year to $12.73 billion in 2023.

A decrease was also observed in four other exports: flat panels and sensors, petroleum products, wireless communications equipment, and synthetic resins, according to KITA.

Trade between South Korea and Vietnam was $500 million in 1992, when the two countries set up their formal diplomatic relations. After South Korea and Vietnam inked a free trade agreement in 2014, the volume of bilateral trade increased even further. As a result, Vietnam became South Korea's eighth-largest trading partner that year, but its ranking surged to fourth place a year later.

In 2022, bilateral trade between the two countries reached $87.7 billion, a 175-fold increase. Vietnam surpassed Japan and became South Korea's third-largest trading partner in 2022.

Digiworld increases stake in Vietmoney

Digiworld Corporation (DGW) held an online meeting with investors on February 1 to provide results from 2023 and discuss the firm's prospects for 2024.
 
In the fourth quarter of last year, DGW reported VND4.85 trillion ($205 million) in net revenue, an increase of 19 per cent on-year. The increase was mainly due to the growth in the mobile phone and office equipment segments.

By contrast, the laptop and tablet segment decreased by 10 per cent due to a decline in demand after the back-to-school season and consumers facing economic challenges. Increasing costs pushed DGW's net profit to just VND90 billion ($3.8 million), down 42 per cent on-year.

DGW reported VND18.8 trillion ($76.7 million) in net revenue and more than VND363 billion ($15.3 million) in net profit for the whole of last year, down 15 and 47 per cent respectively compared to 2022, and equivalent to 94 and 91 per cent of the annual plan put forth at the previous AGM.

Agricultural sector reports trade surplus for January

The total export turnover of agro-forestry-fishery products was $5.14 billion in January, up almost 80 per cent on-year; meanwhile, the import turnover was $3.72 billion, leaving a trade surplus of $1.43 billion, a more than 4.5-fold increase compared to the same period last year.

The strong export turnover was thanks to the contribution of several product groups, such as forestry products with almost $1.5 billion (an increase of 72.5 per cent); seafood with $730 million (an increase of almost 61 per cent); agricultural products with over $2.7 billion (an increase of around 94 per cent); livestock showing $36 million (up 3.5 per cent); and input materials bringing in $177 million (an increase of just under 43 per cent).

The export value of agro-forestry-fishery products to all markets increased, with exports to the Americas totalling $1.18 billion (up almost 94 per cent); Africa with $104 million (up over 185 per cent); Europe with $532 million (up 38 per cent); and the rest of Asia accounting for $2.52 billion (up 86 per cent). Exports to China accounted for 23 per cent of the total, the US was just under 22 per cent, while Japan took in 7.4 per cent.

The Ministry of Agriculture and Rural Development (MARD) set the target to reach a total export turnover of $54-55 billion in 2024. The GDP growth rate of the entire industry is expected to increase by 3.2–4 per cent, and the stable forest coverage rate is at 42 per cent.

Deputy Minister Tien shared that in 2023, although there were still many challenges, the agricultural sector had also achieved positive results. With direction and drastic action from the ministry's leaders to affiliated units, the agricultural sector has asserted its position as a 'pillar' of the economy.

Public-private focus picks up steam for greener agriculture

Task forces led by businesses are determined to build a public-private partnership model to build a high-quality and low-carbon agricultural sector.

At a plenary meeting on green transformation and innovation in agriculture last week, held by the Ministry of Agriculture and Rural Development (MARD) and the Partnership For Sustainable Agriculture In Vietnam (PSAV), several representatives of task forces under the PSAV shared their plans and successful models in applying innovation and promoting green and low-emission agriculture development and their contribution to this process.

Many well-known foreign-invested agricultural firms are involved in the task force on public-private partnerships (PPPs), such as Pepsico Vietnam, which is the task force’s main representative in terms of fruit and vegetables.

In 2023, Pepsico Vietnam helped to develop the agricultural products’ value chain and increase the capacity for farmers growing potatoes. Pepsico and other groups like Syngenta apply technology in the form of weather monitors, drones, or electronic farmer handbooks, as well as precision irrigation systems and automatic fertilisation to ensure soil health and disease management.

As a result, potato capacity has tripled compared to previous years, with an average of 23-26 tonnes per hectare. The cost for pesticides reduced by around $90 per ha, and water used to mix medicine was reduced by 10 times, equalling a reduction of nearly 3,800 cubic metres of water per hectare.

Elsewhere, Bayer Vietnam is the representative of the task force on rice. In September 2023, in collaboration with the National Agricultural Extension Centre, Bayer opened Southeast Asia’s first ForwardFarm in the Mekong Delta city of Can Tho.

Its initiative in Vietnam supports sustainability in agriculture across three areas: care for crops with tailored solutions for farmers via the Much More Rice integrated programme; care for the planet with stewardship to protect health, safety, and the environment; and care for partnerships with value chain partners to bring holistic solutions to farmers.

Le Thi Minh Nghia, deputy director general of the MARD’s Agricultural Economy Department said, “Mobilising capital sources in both public and private partners is important because the demand for capital for agricultural development is still very high, which is quite far from the supply ability of credit institutions.”

In addition, Vietnam’s medium-term public investment plan for 2021-2025 regulated that particular public resources will not be allocated for each segment in agriculture, Nghia added. “There will be the integration of the central budget, budget development, commercial loans, and foreign-invested capital in collaboration with the public and private mobilised capital,” Nghia said.

MARD Minister Le Minh Hoan said, “Like many other countries which are affected seriously by climate change, Vietnam has been proactive in implementing new policies to promote the transformation process in the direction of low emissions and green development. At the same time, Vietnam also takes action to increase competitiveness in the international market.”

Along with the participation of state management agencies and the private sector, there has been support from international organisations to promote the PPP model.

Grow Asia was established by the World Economic Forum in 2015 as a joint venture between the business community and the Ministers of Agriculture of ASEAN. In 2020, Grow Asia became an official entity of ASEAN. For the last decade, it has worked closely with the PSAV to build strong PPPs and multi-stakeholder mechanisms for food systems transformation in Vietnam.

Grow Asia has convened more than 44 working groups through its network of country chapters that are now reaching nearly three million smallholder farmers and rural businesses with commercial solutions. To ensure that the work of its country chapters can go deeper and further, Grow Asia has launched four blended impact funds: GrowVentures, GrowHer, GrowRight, and GrowBeyond.

Thanks to catalytic funding from the South Korean government, Grow Asia is planning to launch its first innovation challenge under the GrowVentures fund to identify the most promising and scalable technologies and digital solutions that will support the implementation of a low carbon rice project.

According to the Agricultural Economy Department, the capital from the state budget currently focuses on irrigation (nearly 80 per cent), fisheries (10 per cent), forestry (6 per cent), and other agriculture (3 per cent). Agribank is Vietnam’s top bank established to do business in rural and agricultural development. The lender currently uses less than 70 per cent of the economy’s outstanding debt and 63 per cent of its total outstanding loans and investments for agriculture or rural areas.

ASEAN manufacturing sector sees slight improvement

There are some new and slight improvement across the ASEAN manufacturing sector in January, according to S&P Global Ratings, with the headline ASEAN manufacturing PMI rising from 49.7 in December to 50.3. Manufacturers continued to be optimistic about the 12-month output outlook. Growth was recorded across four of the seven ASEAN members.
 
The purchasing manager’s index (PMI) data by S&P Global Ratings revealed a renewed, but slight, improvement in the manufacturing sector in the ASEAN region at the start of the year.

The PMI rose from 49.7 in December to 50.3 in January, crossing the neutral 50 threshold for the first time in five months - the threshold to confirm the manufacturing industry expands if the index is higher than 50 and narrows if it falls below 50.

Output rose at the quickest pace since last August. The upturn was supported by firms working through backlogs, which fell for the seventh successive month, as new orders declined again.

The latest decline in sales was the weakest recorded in the current five-month sequence of decline, S&P Global Ratings noted in a release. In terms of prices, inflationary pressures intensified, with both input prices and output charges rising at the strongest rates in ten months.

Demand weakness was particularly notable across export markets, and this led overall new orders to decline for the fifth straight month. The rate of contraction was the softest seen over this period and only marginal.

Maryam Baluch, an economist at S&P Global Market Intelligence said, "In the future, manufacturers will not be able to maintain output growth amid demand shortages. The PMI could fall below 50 if new orders continue to decline, signalling many obstacles in the global economy and stagnant demand from foreign markets."

At the national level, growth was recorded across four of the seven ASEAN constituents, with Indonesia leading the upturn by a notable margin. Meanwhile, the most marked deterioration in conditions was seen in Myanmar.

Trade-dependent economies such as Thailand and Malaysia will continue to see production indexes decline, while consumption-based economies such as Indonesia and the Philippines will continue to grow.

Although Malaysia's January PMI increased to the highest level in the past 16 months, it is still in the decline zone. Thailand is also in a similar situation when the number of new orders and backlog of work decreased sharply.

In Vietnam, companies were concerned about business conditions but also hoped that demand and customer numbers would improve. Vietnam's PMI recorded growth again in early 2024 with the threshold above 50 thanks to the increasing new orders and output.

Looking ahead, ASEAN manufacturers continue to express strong optimism when assessing the 12-month outlook for output. The overall level of positive sentiment remained below the historical average, however, despite rising from December.

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