VIETNAM BUSINESS NEWS JANUARY 19
Vietnam targets ecological, sustainable agriculture
Vietnam is striving to become a transparent, responsible and sustainable producer and supplier of food and foodstuff under a draft strategy on agricultural and rural development for 2021-2030 with a vision towards 2050.
The strategy, which was sketched out by the Ministry of Agriculture and Rural Development (MARD), targets ecological and sustainable agriculture.
Vietnam’s commitments at the United Nations Food Systems Summit and the 26th United Nations Climate Change Conference of the Parties (COP26) have been integrated into the strategy.
The agricultural sector is facing challenges presented by the rapid industrialisation and urbanisation, intensive and extensive international integration, the Fourth Industrial Revolution, natural disasters, diseases, climate change, and great changes in consumption markets.
Dragon fruit business seek to penetrate deep into Indian market
Dragon fruit businesses of Binh Thuan, Long An and Tien Giang are due to attend an online conference jointly hosted by the Vietnamese Embassy in India and the Ministry of Industry and Trade to promote the export of this fruit to India.
According to the Vietnamese Embassy, India mainly imports dragon fruit from Vietnam, Thailand, Malaysia and Sri Lanka of which its imports from Vietnam account for 80% of the total amount.
In the 2019-2020 crop, Vietnam’s dragon fruit output shipped to India almost doubled at more than 11,750 tonnes with a turnover of US$9.86 million. However, in the 2020-2021 crop, its dragon fruit export turnover to the market decreased by about 25%.
HCM City's exports see slight increase
The export turnover of local enterprises based in Ho Chi Minh City grew by just 1%, with the major export markets experiencing a decline in turnover due to the COVID-19 pandemic last year, according to figures given by Ho Chi Minh City’s Department of Industry and Trade.
This information was released at a seminar held on January 18 with the aim of removing hurdles faced by import-export enterprises to facilitate greater trade amid the complicated nature of the COVID-19 pandemic.
Le Huynh Minh Tu, deputy director of the Ho Chi Minh City Department of Industry and Trade, revealed that the southern city has exerted great efforts in support of enterprises as they strive to restore production activities and promote exports.
He added that local firms earned an export turnover of US$44.9 billion last year, marking a rise of 1% compared to 2020, with the southern metropolis’ major export markets experiencing a decline in exports, including such markets as China, down 8.7%, the United States, down 2.3%, Japan down 14.7%, and the EU down 0.8%.
Da Nang to welcome 110 international airlines
The travel event Routes Asia 2022 is set to be held in the central city of Da Nang in June and is expected to welcome 500 participants from 110 international airlines and 30 travel agencies.
Tran Phuoc Son, vice chairman of Da Nang People's Committee, said on January 18 that the Department of Tourism and IPP Travel Retail has been selected to host the occasion. As such they will co-operate alongside relevant agencies in order to thoroughly prepare for Routes Asia 2022.
By hosting the event, Da Nang continues to affirm its position as both Asia's leading event and festival destination, whilst also showcasing itself as a hub for aviation and tourism development in Vietnam and throughout the region as a whole.
Logistic development aims to promote trade facilitation
Developing logistics in order to facilitate export businesses was a recommendation made by businesses at a seminar held on January 18 to discuss solving difficulties faced by import-export enterprises and ways to boost trade facilitation amid COVID-19.
According to the Export Development Project, moving towards 2025 with a vision ahead to 2030, the southern city set an average annual export growth target of 9.5% during the 2021 to 2025 period.
However, due to the negative impact of the COVID-19 pandemic, export turnover in 2021 only reached US$44.9 billion, an increase of 1% compared to 2020.
Export turnover in the majority of export markets of the southern metropolis endured a fall over the past year, such as China down 8.7%, the US down 2.3%, and Japan down 14.7%. Despite the pandemic currently being brought under control, production and export activities of enterprises remain challenging to quickly recover.
Wood sector sets sights on export target of US$10 billion this year
Last year saw the export turnover of timber and wood products to the United States reach an estimated US$8.8 billion, a rise of 22.4% compared to 2020.
With strong recovery and advantages in terms of markets, the local wood sector is anticipated to rake in US$10 billion from exports over the course of the coming year, according to the General Department of Vietnam Customs.
Last year witnessed the sector fetch US$8.8 billion in export turnover, up 22.4% compared to 2020 with wooden furniture making up the proportion of 87.6% of the whole year’s total turnover.
Agricultural sector flexibly adapts to COVID-19 to grow further
The Ministry of Agriculture and Rural Development (MARD) will conduct agricultural restructuring in tandem with growth model reform and new-style rural area building under an action plan in 2022 recently approved.
The action plan is to implement the Government’s Resolution No. 01/NQ-CP on tasks and solutions to materialise the socio-economic development plan and State budget estimate in 2022.
The goals set by the ministry in the plan are higher than the targets set by the Government, with the sector’s GDP expected to grow about 2.8-3 percent and 73 percent of communes to be recognised as new rural areas.
Besides, agro-forestry-fishery export revenue is projected at over 50 billion USD, and 6,500 products will meet the “One Commune-One Product” (OCOP) standards.
USAID funds project to improve private sector competitiveness in Vietnam
The Ministry of Planning and Investment (MPI) and the US Agency for International Development (USAID) on January 18 launched a project on building the competitiveness of Vietnam’s small and growing businesses (SGBs).
This project will foster locally-led, locally-owned solutions that leverage the strength of the Vietnamese talent pool, including the promotion of “Made by Vietnam” products, services, and technologies, as well as solutions that contribute to improving the business enabling environment.
It aims to support 5,000 SGBs, with 240 businesses successfully participating in domestic, regional and international markets.
Agricultural sector continues to be economy's pillar
Ecological agriculture, modern rural areas and smart farmers are expected to be the three key factors helping agriculture secure its role as a firm pillar of the economy in 2022 and following years.
Despite COVID-19 impacts that caused the crackdown of the global supply chains in 2021, the agricultural sector still made a miracle with a trade surplus and a record export revenue at 48.6 billion USD, exceeding the target of 42 billion USD set by the Government for the year.
Last year, total food grain production hit nearly 44 million tonnes, meeting the demand of the domestic market and for export, proving the sector's position as a prop of the economy even during unprecedented difficult situations.
HCM City seeks ways to support exporters, importers
Export revenue recorded by businesses in Ho Chi Minh City reached 44.9 billion USD last year, up only 1 percent from 2020, partially due to impacts of the COVID-19 pandemic, heard a conference jointly held by the US Agency for International Development (USAID) and the municipal Department of Industry and Trade on January 18.
The department said the value of exports to major markets like China, the US, Japan and the European Union (EU) dropped in 2021, adding that although the southern metropolis is performing well in pandemic prevention and control, production and export-import activities have yet to be fully recovered.
It reported a range of obstacles to exports regarding workforce, warehouses, high maritime transportation cost and a shortage of containers and ships, plus tightened pandemic prevention and control measures rolled out in key markets.
Under its export development project by 2025 with a vision towards 2030, HCM City targets an average annual export growth of 9.5 percent in 2021-2025, and 9 percent in 2026-2030. Meanwhile, total export turnover is expected to hit 70 billion USD by 2025, and 108 billion USD by 2030.
Alibaba unveils promising export opportunities for Vietnamese SMEs
Alibaba.com recently issued a report on the overview of Vietnam’s digital transformation 2022 that unveils promising export sectors for Vietnamese small and medium-sized enterprises (SMEs).
Accordingly, promising export opportunities in three fields that the Vietnamese SMEs should grasp to expand their business operations on Alibaba platform include farm produce, personal care and beauty products, and housing and gardening.
In farm produce, cooking oil should be the top priority with over 300 consumers each day and over 250,000 products in need of supply.
In personal care and beauty products, the most consumed are hair extensions and wigs with over 3,500 active users on average each day and over 500,000 products in need of supply. It was followed by skin care products and tools with over 400,000 being sold each day and more than 1,000 active buyers.
Tableware and kitchen utensils are the best sellers in housing and gardening category, mostly sought by the US, the UK, the Philippines, Brazil and Russia. Products for pet and gardening tools rank second and third, respectively, in terms of revenue.
Vietnam’s 2022 economic growth projected at 6.5-6.7 percent: Fibre2Fashion article
The US-based Fibre2Fashion portal has recently run an article highlighting several foreign financial organisations’ relatively positive predictions for Vietnam’s economy, saying that its growth is expected at 6.5-6.7 percent in 2022.
The article wrote that Standards Chartered Bank recently forecast that the Southeast Asian nation’s gross domestic product (GDP) growth will be 6.7 percent this year and 7 percent in 2023.
Fibre2Fashion quoted Tim Leelahaphan, economist for Thailand and Vietnam at Standard Chartered, as saying that the Vietnamese economy should continue to bounce back in 2022 as the pandemic improves.
The expert also noted that COVID-19 remains a key risk, at least in the short term. Therefore, the first quarter could see a full resumption of factory operations, after closures in the third quarter of 2021, and government stimulus; and clearer recovery is expected in March, the article wrote.
IFC increases loan package for SeAbank to 220 million USD
After four months, the International Finance Corporation (IFC) and international lenders increased the loan package granted to Southeast Asia Commercial Joint Stock Bank (SeABank), from 150 million USD to 220 million USD in order to maintain the cooperation with SeABank in re-financing SMEs, women-owned businesses and the climate.
This funding package enables SeABank to better support businesses, narrow the financial gap and ensure sustainable development.
In the strategic roadmap to support women-owned businesses, SeABank has adopted preferential policies, including diversification of corporate credit granting with a competitive loan to value ratio and free digital service packages to support businesses in digital transformation.
VIMC records 3.75 trillion VND in profit in 2021
The Vietnam Maritime Corporation (VIMC) had great performance in 2021, earning around 3.75 trillion VND (165 million USD), according to Nguyen Canh Tinh, general director of the shipping giant.
By the end of 2021, the VIMC’s revenues hit over 19.6 trillion VND (862.5 million USD), up 24 percent year-on-year and 29 percent higher than the target.
Notably, its earnings took a steep turn for the better, soaring from a loss of 145.3 billion VND (6.4 million USD) in 2020 to a profit of trillions of dong.
Tinh said the disruption of global supply chains due to COVID-19 had been pushing freight rates up significantly. VIMC has switched from domestic to international transportation in order to turn the rising freight rates to its advantage and succeeded.
Fishermen in Khanh Hoa net bumper tuna catch
After a long hiatus, over the closing days of lunar 2021, Hon Ro Port in Nha Trang city, in south-central coastal Khanh Hoa province, has welcomed tuna fishing vessels from many different localities. All of the fishermen are happy, as prices are higher than before the fourth COVID-19 outbreak occurred.
Vo Phi Phap, the owner of a tuna fishing vessel and from Phuoc Dong commune in Nha Trang city, won big after a 20-day journey at sea, catching 70 tuna fish weighing 35 kg each, meeting the needs of his trading partners.
Between January 1 and 17, 35 of the 57 vessels docking at Hon Ro Port, the largest of its kind in the south-central region, specialised in tuna fishing. Each netted 1.5-2 tonnes of tuna with a sales price of over 140,000 VND per kg, bringing high profits.
Vietnam-Japan trade turnover hits US$42.7 billion in 2021
Vietnam’s trade turnover with Japan reached roughly US$42.7 billion last year, of which the country raked in US$20.13 billion from exports, an increase of 4.4% compared to 2020, according to the latest statistics from the General Department of Vietnam Customs.
Meanwhile, the import of goods from Japan surged by 11.3% to nearly US$22.65 billion compared to 2020, making Vietnam suffer a trade deficit of over US$2.52 billion.
Computers, electronic products and components took the lead in terms of import turnover with nearly US$6.22 billion, accounting for 27.5% of the total import turnover of goods from the Japanese market. They were followed by machinery, equipment, tools and spare parts with roughly US$4.45 billion and iron and steel products with US$1.73 billion.
Meanwhile, Vietnam boasted three categories of commodities with a large export turnover to Japan, including garments and textiles (over US$3.23 billion), machinery, equipment and spare parts (over US$2.56 billion), and means of transport (over US$2.47 billion).
Animal feed imports rise 28.4% to nearly US$5 billion
Vietnam spent nearly US$5 billion on importing animal feed and related raw materials last year, representing a rise of 28.4% compared to 2020, according to preliminary statistics released by the General Department of Vietnam Customs.
The major suppliers of animal feed and raw materials to the country were Argentina, the United States, Brazil, and the European Union.
Most notably, imports from Argentina were worth US$1.66 billion or 33.6% of the total, an increase of 7.8% compared to 2020, followed by the US with turnover increasing by 61.7% to US$817.64 million.
Imports of animal feed and raw materials from Brazil witnessed a sharp rise of 68.4% to US$659.69 million, while those from the EU and Southeast Asian markets edged up 39.7% and 20.9% to US$398.25 million and US$362.22 million, respectively.
Mekong Delta seafood exports boom despite pandemic
Despite the Covid-19 pandemic, Cuu Long (Mekong) Delta provinces managed to beat the seafood export targets last year.
Soc Trang and Ca Mau provinces both topped US$1billion mark.
Vo Van Chieu, director of the Soc Trang Department of Industry and Trade, said exports exceeded the target by 28 per cent and increased by 14.8 per cent from the previous year to $1.28 billion.
Shrimp accounted for $1.03 billion, a 22.9 per cent increase, which is a good sign in the context the economy still faced many difficulties due to the pandemic, he said.
Huynh Quoc Viet, chairman of the Ca Mau Province People's Committee, said exports were worth $1.1billion, with shrimp accounting for a lion’s share.
To maintain the growth momentum, the province needed to develop infrastructure, especially for inter-provincial linkages and connecting with seaports, he added.
Central Highlands coffee growers embrace sustainable models
Many coffee growers in Central Highlands have switched to sustainable production models from traditional ones.
Viet Nam’s largest coffee-growing region has around 639,000ha under the crop, or 92 per cent of the country's total.
But production there is unsustainable and does not fetch high value due to its fragmented and small scale.
A model that combines coffee farming with creating landscapes and ensuring high quality have been chosen by local farmers as solutions for increasing the value of coffee.
Phan Viet Ha, deputy director of the Ministry of Agriculture and Rural Development’s Central Highlands Agro-Forestry Science and Technology Institute, said relevant agencies needed to restructure coffee production areas to diversify products and increase value, promoting organic and other quality standards.
Coffee farmers needed to embrace technology, and grow new varieties with high quality and productivity, he said.
SBV focuses on improving credit quality
Governor of the State Bank of Vietnam (SBV) Nguyen Thi Hong has issued Directive No.01/CT-NHNN on organising the implementation of the key tasks of the banking sector, with a focus on improving credit quality and tightly controlling loans to potentially risky industries.
Accordingly, the Governor has required banks to take necessary measures for controlling credit size and growth, focusing loans on production and priority fields in accordance with the Government's policy to support economic recovery and development, while strictly controlling loans for potentially risky areas such as real estate, the stock market, Build-Operate-Transfer (BOT) and Build-Transfer (BT) transport projects.
Banks must accelerate the implementation of measures to control and limit any newly arising bad debts and maintain the bad debt ratio below 3 per cent, the Governor said, adding the SBV’s authorities would strengthen the inspection and supervision of banks' operations, especially in the areas with high potential risks.
Investment into industrial parks rises despite Covid-19
Despite the negative impact of the Covid-19 pandemic, industrial parks and economic zones nationwide attracted 539 foreign-invested projects and 615 domestic ones, with their registered capital totaling US$12.8 billion last year, rising 15% against 2020.
Besides, investors poured VND236.2 trillion (US$10.3 billion) to expand existing projects, equivalent to that in 2020, according to the Ministry of Planning and Investment.
The ministry’s Department of Economic Zones Management said as of the end of last year, Vietnam had 564 industrial parks under planning with a total area of 211,700 hectares. The country was also home to some 400 established ones covering 123,500 hectares in total, including 292 industrial parks that had been put into operation and 108 under construction.
The occupancy rate at industrial parks reached 52.5% overall, while that at the operational ones was approximately 71%.
In addition, the country has established 18 coastal economic zones in 17 cities and provinces with total land and water surface area of 871,500 hectares.
Motorbike sales fall for third straight year
With nearly 2.5 million motorbikes sold in 2021, the local motorbike market continued to see declining sales for three consecutive years.
According to the latest data released by the Vietnam Association of Motorcycle Manufacturers (VAMM), its five members, comprising Honda Vietnam, Piaggio Vietnam, Suzuki Vietnam, SYM Vietnam and Yamaha Motor Vietnam, sold 2.492 million motorbikes last year, down over 220,200 vehicles or 8.1% against the 2020 figure.
Although this represents the sales of the five VAMM members, these brands have overwhelmingly dominated the local motorbike market for years.
The total sales of the local two-wheel industry inched down, but the market share of Honda continued its upward trend in Vietnam.
The local motorbike market reaching a saturation point and the extended Covid-19 pandemic were reportedly the reasons for the 8% decline in motorbike sales last year.
Vietnam to start researching 6G network: telecoms official
The research and development of the sixth-generation (6G) wireless technology must be carried out this year and huge efforts are required to make Vietnam one of the world’s leading countries in 6G technology development, said a telecoms official.
Speaking at a conference reviewing the performance of the local telecoms industry in 2021 and introducing its new tasks for 2022 last weekend, Nguyen Manh Hung, Minister of Information and Technology, said the local telecoms industry should take up a pioneering position instead of being a follower. The industry must act to take the lead in 5G frequency allocation and development, as well as in 6G research this year.
The local telecoms network has to quickly switch to a cloud-based one so that it can become smart and flexible, the minister added.
Besides this, Minister Hung encouraged the use of locally-made equipment rather than that from overseas. The local industry has to research and manufacture 5G, 6G, transmitting and terminal devices, in addition to issuing standards for telecom equipment in Vietnam. Telecoms carriers have to invite local manufacturers of telecom devices to their bidding sessions for procurement.
Further, the minister announced that Vietnam would be one of the first 10 countries to have a 6G steering committee. He asserted that Vietnam must be among the world’s top nations in 6G technology, and the ministry would license 6G frequencies in 2028, if possible, before commercializing 6G services.
Coal sector sees positive prospect in 2022
With many signs of rising demand for coal in various economic sectors in 2022, the Vietnam National Coal – Mineral Industries Group (Vinacomin) will capitalise on advantages and turn challenges into opportunities, said its Chairman of Member Council Le Minh Chuan.
Vinacomin will push ahead with set plans to carry out the Government’s action programme for the implementation of the Politburo’s Resolution No.55-NQ/TW dated February 11, 2020 on strategic orientations to national energy development till 2030 with a vision to 2045, he said.
This year, Vinacomin sets the goals of earning 131.6 trillion VND (5.72 billion USD) in revenue, up 2 percent from 2021, contributing 18.1 trillion VND to the State budget and raking in 3.5 trillion VND in profit.
It will also strive to sell 43 million tonnes of coal, including 41.2 million tonnes at home and 1.8 million tonnes for export, exploit 39.1 million tonnes of coal and generate 9.6 billion kWh of electricity.
Tien Phong Securities fined for unannounced land purchase
Tien Phong Securities Corporation (ORS) has been fined VND85 million for failing to publicize its deposit of VND500 billion for the purchase of a land lot from Sai Gon Thu Thiem Investment Company.
The fine, which was imposed by the State Securities Commission of Vietnam, was in line with the Government’s Decree 108/2013/ND-CP on administrative sanctions against violations in the securities sector, the local media reported.
According to the commission, Tien Phong Securities signed a contract in December 2020 to buy a land lot worth VND650 billion from Sai Gon Thu Thiem Investment Company to build its headquarters. It placed a deposit of VND500 billion, or 124% of the company’s assets. However, Tien Phong Securities did not announce this information as required by law.
The ORS stock has been traded on the Hochiminh Stock Exchange since early November last year. In the January-September period of 2021, the firm earned a profit of VND223 billion, triple the figure in the same period in 2020.
HCMC Justice Dept asked to report issues with Thu Thiem land auctions
The Judicial Support Department under the Ministry of Justice has asked the HCMC Department of Justice to report all issues related to the auctions of four land lots in the Thu Thiem New Urban Area in HCMC’s Thu Duc City before January 25.
According to the Judicial Support Department, the auctions of the land lots, especially the 3-12 land lot, have sparked controversy, the local media reported.
The department made the requirement after Do Anh Dung, chairman and general director of Tan Hoang Minh Group, whose subsidiary Viet Star Real Estate Investment Co., Ltd, won the auction for the land lot coded 3-12 with an area of over 10,000 square meters at VND24.5 trillion, proposed cancelling a contract to buy the land lot.
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