Last year, HCMC’s tourism sector revenue fell by nearly VND40.3 trillion as the city saw no international tourists and the number of domestic guests also plunged by over 6.5 million due to the Covid-19 pandemic.

According to the municipal Department of Tourism, average occupancy of hotels in the city reached only 5%-10%. The rate at hotels requisitioned as quarantine facilities was some 75%.

During the social distancing months, the rate at some hotels which accommodated workers of enterprises applying the stay-at-work and one-route-two-destination modes hit over 90%.

In addition, among over 1,000 travel companies in the city, only 552 firms remain operational, 152 others have withdrawn from the market and the rest have yet to resume their operations after the pandemic.

The HCMC Department of Tourism will formulate a plan this year to help the tourism sector recover, with a particular focus on supporting enterprises, developing products and boosting the promotion of the city.

The department expected that the city would welcome some 3.5 million international tourists this year, up 2.2 million over 2020.

As for the domestic market, the department has worked out two scenarios. If the pandemic is brought under control, the city may welcome around 25 million visitors, surging 167% year-on-year. These tourists and international arrivals will help the city earn VND97.7 trillion.

Bank deposit growth of individual customers slowed in 2021

The deposit growth rate of individual customers at banks slowed last year due to the impacts of the pandemic.

According to the latest data from the State Bank of Vietnam (SBV), deposits of individual customers at banks by the end of November last year increased by just 2.63 percent, the lowest growth rate in many years.

Deposits totalled nearly 5.28 quadrillion VND (226 billion USD) by the end of November, down more than 23.4 trillion VND against the end of October.

Experts attributed the drop in individual deposits to the strong outbreak of the COVID-19 pandemic last year which caused incomes of many individuals to reduce. At the same time, many people could not go to banks to deposit their money as many provinces and cities had to implement social distancing measures.

According to the experts, many depositors withdrew their savings to pour into more attractive investment channels amid declining deposit interest rates last year. To lure depositors, many banks have recently increased savings interest rates.

Vietnam’s tuna exports to US enjoys stable growth

Vietnam's tuna exports to the US has increased stably, accounting for 15% of the market share in this country.

The tuna export value to the US in 2021 was estimated at about US$330 million.

The US is now Vietnam's largest single tuna importer, making up over 44% of the Southeast Asian country’s total tuna export value.

According to the Vietnam Association of Seafood Exporters and Producers (VASEP), Vietnam’s fresh and frozen tuna exports to the US rose by 47%, while processed and canned tuna exports decreased by 15% over the same period. However, the US remains the leading import market of Vietnam's frozen and processed tuna.

Supermarkets increase opening time in buildup to Tet holiday

All supermarket chains have announced they will increase opening hours to serve the high shopping demand on the occasion of the Lunar New Year holiday, known locally as Tet.

The schedule will see supermarket chain Big C open from 7 a.m. to 11 p.m. from now until January 29 or the 28th day of the last lunar month.

On January 31 or the final day of the lunar year the supermarket will then open from 6 a.m. to 2 p.m., before reopening again at 8 a.m. on February 2.

Meanwhile, store chains Hapro, Co.opmart, WinMart, and WinMart+ will open until January 30 afternoon, and they will reopen their doors again on February 4.

Most notably, AEON Mall and Circle K stores will also remain open during the Tet holiday.

Vietnam to resume cut flower exports to Australia

A new phytosanitary measure for Vietnam’s cut flowers exported to Australia was unveiled during a ceremony held on January 24. The event was jointly organised by the Plant Protection Department (PPD) under the Ministry of Agriculture and Rural Department together with the Embassy of Australia in Vietnam.

The PPD has reached an agreement with the Australian Department of Agriculture and Water Resources on the use of metsulfuron methyl instead of glyphosate, which has been banned in Vietnam since June 2021 for the sake of people's health and the environment, for treatment of bulbs of cut chrysanthemum before exporting to Australia, starting March 1.

After the resumption of Vietnam’s flower shipments to Australia, the sides will continue keeping watch on safety and effectiveness of metsulfuron methyl on the batches for the next six months, vice head of the PPD Nguyen Thi Thu Huong said.

Australia has been among important traditional markets of Vietnamese flowers for 23 years. Vietnam ships nearly 30 million cuts of flowers and foliage to the Oceania nation each year, raking in US$5.2 million.

RoK firm invests US$200 million in solar power in Vietnam

Nami Solar, a subsidiary of Vietnam’s Nami Energy company, and SK Ecoplant, a member of the Republic of Korea’s conglomerate SK Group, sealed a joint venture deal on January 24 to pump US$200 million into solar energy development in Vietnam.

The money is earmarked for building a 250 MWp rooftop solar power project in Vietnam.

According to a representative from Nami Energy, both the Vietnamese and RoK Governments highly value programmes in response to climate change, recovery, and green growth. Vietnam has pledged to be carbon neutral by 2050, while the RoK has vowed to cut carbon emissions by 40% by 2030.

The joint venture expected that solar power development will help concretise high-level commitments of the two governments. At the same time, it will assist SK Ecoplant in realising its goal of becoming a major renewable energy investor in the world, and Nami Solar in becoming a leading company in distributed solar power in Vietnam.

Vietnam-China trade grows strongly in 2021

Although the COVID-19 pandemic negatively affected global trade last year, two-way trade between Vietnam and China grew steadily and strongly, according to Nong Duc Lai, Commercial Counselor of the Embassy of Vietnam in China.

Data of the General Department of Vietnam Customs showed that two-way trade between the two countries reached US$165.8 billion in 2021, soaring 24.6% year-on-year.

China continued to be Vietnam’s biggest trade partner and second biggest importer of Vietnamese goods in the world.

On the other hand, Vietnam was China’s biggest trade partner among the Association of South East Asian Nations and its sixth largest trade partner globally, after the United States, Japan, the Republic of Korea, Germany and Australia.

Uniqlo to open first store in Hai Phong this summer

Popular Japanese fashion retailer Uniqlo have recently announced plans to open its first Hai Phong store this summer, taking their total number of stores to 11 in Vietnam. The store will be located inside Aeon Mall Le Chan, spreading over an area of 2,000 square metres.

A summer opening for the store seems most likely, although an exact date is not yet known.

So far, Uniqlo boasts a total of 10 stores in Ho Chi Minh City and Hanoi, with its first opening on Dong Khoi street in Ho Chi Minh City's District 1 in 2019. At the opening day approximately 2,000 people queued up from 4 a.m. to take advantage of discounts on offer.

India coffee maker invests US$20 mln to double capacity of Vietnam facility

Coffee company CCL Products India Ltd (Continental Coffee), based in Andhra Pradesh, is investing US$20 million in doubling the capacity of its coffee manufacturing facility in Vietnam, Times of India reported.

The capacity of the Vietnam facility, which makes about 13,000 – 14,000 metric tonnes per annum (mtpa) spray dried coffee for global markets, are expected to double to 26,000 mtpa by the end of 2022, said CCL Products CEO Praveen Jaipuriar.

Currently, CCL has a total capacity of 36,000 – 37,000 mtpa, a chunk of which is exported. This includes 25,000 mtpa in India across plants at Duggirala, Vijayawada.

Having clocked revenues of around INR12.42 billion (US$167 million) in financial year 2020-2021, CCL is now eyeing revenues of around INR16 billion in the current fiscal.

Trade promotion prioritises medium-term programmes in 2022

Prioritizing medium-term schemes for a number of potential export sectors and outlining activities suitable for each industry and market must be viewed as the key task for this year’s trade promotion activities.

According to a representative of the Trade Promotion Agency, this year will likely see trade activities eased because the pandemic has been partly contained. However, the primary challenges will come from changes in consumption demand, particularly as transportation costs have yet to go down and more stringent technical standards may be imposed on Vietnamese goods.

With the role of promoting consumption and connecting Vietnamese goods to foreign markets, trade promotion activities are prioritized with medium-term programmes for a number of potential export industries.

In line with this, schemes will be devised to suit each industry and market in line with the synchronous implementation of commitments in the new generation free trade agreements (FTAs).

Moreover, the purpose of the programmes is to mobilize and promote the strength of Vietnamese representative agencies and trade deals abroad in export promotion.

Moving forward, the Ministry will continue to implement the Project "Promoting the application of information technology and digital transformation in trade promotion activities in the 2021 – 2030 period" aimed at supporting firms in having effective access to digital platform-based trade promotion programmes.

Vietnam imports over 4.5 million tonnes of fertilizer in 2021

Vietnam imported 4.54 million tonnes of fertilizer in 2021 at a cost of US$1.45 billion, up 19.4% in volume and 27.8% in value on-year, according to figures given by the General Department of Vietnam Customs,

China was the major supplier of fertilizers of all kinds to the country, accounting for 44.5% of the total volume and 42% of the total fertilizer import turnover, reaching 2.02 million tonnes worth US$610.29 million.

During the reviewed period the Southeast Asian market was the nation’s second largest fertilizer provider, with 504,838 tonnes, followed by Russia with 386,193 tonnes.

Vietnamese dragon fruit exports enjoy robust growth to Australian market

The export of local dragon fruit to Australia last year grew by more than 14% compared to 2020, despite facing a number of challenges in transportation as a result of the COVID-19 pandemic.

Recently, a 14 tonne-batch of dragon fruit imported by 4wayfresh Company has become available in two states of Western Australia and South Australia.

Furthermore, Hoa Australia Company has also launched 14 tonnes of white flesh and red-flesh dragon fruit in the Australian market. The firm’s next shipment anticipated to arrive next week.

At present, dragon fruit is being sold in various supermarket chains in Sydney, New South Wales, Melbourne, Perth, and South Australia amid the traditional Vietnamese Lunar New Year drawing near.

During the course of a recent virtual event held with Vietnamese trade office, importers agreed to promote Vietnamese dragon fruit among young people in Australia as a way of fully tapping into the potential market, with the selling price reaching up to VND200,000 per kilo.

Through numerous promotional programmes launched at the beginning of the year, the Vietnamese trade office in Australia expressed their confidence that local agricultural products will continue to enjoy impressive growth over the coming year.

Gold prices rise significantly before Tet

Domestic gold prices continued to enjoy a considerable increase on January 24 to close at VND62 million per tael with just a few days to go ahead of the Lunar New Year of Tet.

The prices of gold at the Saigon Gold and Jewelry Company were being traded at VND61.3 million per tael for the buying rate and VND61.95 million per tael for the selling rate, up VND150,000 and VND200,000 per tael, respectively, compared to the previous recorded rate.

Simultaneously, DOJI Group also raised their buying price to VND61.25 million and their selling price to VND61.85 million per tael, representing an increase of VND150,000 per tael compared to the transactions one day earlier.

As part of the global market, gold prices on the morning of January 24 hovered at approximately US$1,836.6 per ounce, a drop of US$5.4 per ounce from the previous trading session, and equivalent to VND50.35 million per tael when converted in the domestic exchange rate.

Vietnam has grounds for complete reopening to int’l tourists from May

Addressing a workshop on January 24, Minister of Culture, Sports and Tourism Nguyen Van Hung said tourism was identified as a spearhead industry greatly contributing to national development, about 10 percent of GDP before the COVID-19 pandemic started. However, the coronavirus outbreaks have taken a heavy toll on it, pushing the sector to stagnation.

Thanks to the Government’s green light, about 9,000 international travellers have come to Vietnam under a pilot scheme over the last nearly two months, he said, noting that the encouraging initial outcomes have proved Vietnam as a safe and attractive destination as well as the adaptability of the tourism sector.

He added from now to late March, relevant parties need to step up preparations for smoothly welcoming foreign tourists back while still ensuring safety.

The ministry proposed the pilot reopening continue until April 30 while international travel activities, including inbound and outbound tours, be fully resumed in the new normal from May 1.

It explained that it is an appropriate point of time for the move because if Vietnam delays the opening, the local attractiveness to global tourists will be undermined as many regional countries are also planning to reopen their borders. Meanwhile, the time from now to May is enough for relevant ministries and sectors to amend rules and issue guidance, and for travel companies to make arrangements.

In addition, Vietnam will host the 31st Southeast Asian Games (SEA Games) in May. The early announcement of the time for international tourism reactivation will help attract visitors from regional countries, which have had relatively large vaccination coverage.

At the workshop, some participants recommended the tourism market be completely reopened even before May 1.

Reference exchange rate up 6 VND

The State Bank of Vietnam set the daily reference exchange rate for the US dollar at 23,066 VND/USD on January 25, up 6 VND from the previous day.

With the current trading band of +/-3 percent, the ceiling rate applicable to commercial banks during the day is 23,760 VND/USD and the floor rate 22,376 VND/USD.

Used and new car market sees rising demand as Tet approaches

With one week until the Lunar New Year Festival (Tet), which falls on February 1 this year, it is the 'hottest' time of the year for the domestic auto market.

Clients are rushing to buy used and new cars, leading to a shortage in the market, according to car dealerships in Hanoi.

According to car dealers in Hanoi, it is quite different from a few months ago. The price of a used car could be a few million to 10 million VND higher than usual.

Expensive cars with prices ranging from 500 million VND (21,000 USD) to a few billion are still available, but cars with prices below 500 million VND have become rare.

The most sought-after used cars are mainly Japanese and Korean, such as the Toyota Vios, Yaris, Corolla Altis; Kia Forte, Kia Morning, Hyundai Grand i10, Getz, Honda City or Daewoo Lacetti CDX.

Car dealerships attribute the rising demand for used and new cars to long vacations during the Tet holiday. In addition, the development of the pandemic remains complicated resulting in limited public transport and taxis, so demand for private cars to travel during Tet is higher than usual.

However, car experts have warned that buyers should be careful when buying used cars to avoid purchasing smuggled ones. Users are also recommended to find qualified car dealerships or ask those who can tell if a vehicle is in good condition or not.

Hai Phong grants investment licenses to five projects

The Hai Phong Economic Zone Authority (HEZA) on January 24 granted investment licenses to five projects in industrial parks, including three foreign-invested projects worth 140 million USD and two domestic ones valued at over 2 trillion VND (86.9 million USD).

Last year, industrial and economic zones drew 81 foreign-invested projects with new and additional capital of 2.96 billion USD, two share purchases worth 2.2 billion USD by foreign investors. The total foreign investment hit 5.2 billion USD, marking a 3.4-fold rise year-on-year, or 206 percent of the target.

This year, Hai Phong strives to lure 2.5-3 billion USD in FDI.

Meanwhile, they attracted 24 domestic projects with new and additional capital of over 135.5 trillion VND, up 75 times from the same period last year.

Vietnam's rubber exports to continue growing in 2022: Experts

Vietnam’s rubber export revenue is expected to reach 3.5 billion USD in 2022, and rubber price would rise to 3.8 USD per kg in the second half of the year, experts have said.

Exerts explained that the increase of rubber price is due to the scarcity of natural rubber and soaring oil price, noting that rubber price would bounce back by the end of the first quarter.

Many forecast that Vietnam’s rubber sector will benefit from the global new price increase cycle in 2022-2024, which is caused by the supply crunch.

According to the Ministry of Industry and Trade (MoIT)’s Agency for Foreign Trade, Vietnam shipped abroad 1.97 million tonnes of rubber worth 3.3 billion USD last year, up 12.9 percent in volume and 39 percent in value year-on-year.

Such markets as China, India, the Republic of Korea, the US, Indonesia, Turkey, the Netherlands, the Czech Republic and Canada increased the import of Vietnamese rubber in the year.

Steel producers make provisions for devaluation in inventory as prices cool down

After increasing inventories at the beginning of 2021 to take advantage of price differences to maximise profits, the strategy has now hit steel producers hard as global steel prices plunged at the end of the year.

The first two steel companies have announced their financial statements for the fourth quarter of 2021, showing less-than-positive results.

SMC Trading Investment JSC (SMC) said that in the last quarter of 2021, the company recorded a net revenue increase of 37.3 per cent on-year to VND6.1 trillion (US$271.5 million), but profit after tax fell 78.7 per cent to VND34.07 billion. Notably, the gross profit margin decreased from 7.6 per cent to only 2.1 per cent.

In 2021, the company’s net revenue edged up 35.4 per cent to VND21.3 trillion, with profit after tax up by 184.9 per cent to VND903.06 billion.

Meanwhile, Thai Nguyen Iron and Steel JSC (TIS) recorded an increase of 26.1 per cent in net revenue to VND12.1 trillion in 2021, with profit after tax up over 16.5 times to VND122.67 billion.

Both companies had increased their inventories in 2021, the financial reports showed, but they started to make provision for devaluation in inventory in the fourth quarter as steel prices cooled down.

Bamboo Airways to conduct direct flights to Germany next month

Bamboo Airways plans to launch a regular direct flight linking Hanoi and the German city of Frankfurt from February 25 to meet growing travel demand.

The carrier will operate two flights per week and the frequency is expected to be raised later based on demand. The tickets for the route have been sold from Monday on Bamboo Airways’ website available at www.bambooairways.com as well as its ticket agents nationwide.

Bamboo Airways will use Boeing 787-9 Dreamliner for the route.

Dang Tat Thang, general director of Bamboo Airways, said that after the Hanoi- Frankfurt air route, the carrier has planned to expand more flights to Germany, including to Munich and Berlin.

Germany is home to around 200,000 Vietnamese people.

Bamboo Airways plans to run regular flights from Hanoi to London twice weekly from March 22 and from HCM City to Melbourne on March 19 with the same frequency.

Construction of coastal road starts in Quang Binh

Authorities in the central province of Quang Binh on Monday held a groundbreaking ceremony for a coastal road project.

The VND 2.19 trillion (USD 95.52 million) project, is one of the major projects being carried out in the province between 2021-2026.

The 86-kilometre coastal road will run through six districts and cities. It will be 12 metres wide and have a speed limit of 80 kilometres per hour.

Ring Road No. 3 project to be funded by Govt, localities

Prime Minister Pham Minh Chinh has approved that the Ring Road No. 3 project, which will connect HCMC, Binh Duong, Dong Nai and Long An, will be executed under the public investment mode using the budgets of the State and the localities.

The HCMC government has been assigned to prepare to implement the project. The city must quickly complete the prefeasibility report for the project in early February and submit it to the National Assembly at its sitting in May, the local media reported.

The HCMC government must also establish a working team to study and flesh out the investment plan for the project at the earliest. The working team will be responsible for drawing up a detailed plan to ensure the progress of the project; prepare for the compensation, site clearance and resettlement in a cost-saving, effective, feasible and legal manner; and propose an appropriate ratio of the State budget and localities’ budgets as well as necessary policies.

The working team must report the results of these jobs to the Government before February 5.

The prime minister assigned Deputy Prime Minister Le Van Thanh to direct the working team to fulfill its duties.

Vietnam has first $1.1billion logistics fund

The new fund will focus on developing modern and environmentally-friendly logistics facilities in Hanoi and Ho Chi Minh City.

The recently established GLP Vietnam Development Partners I (GLP VDP I) with an investment capacity of US$1.1 billion is set to be one of the largest logistics development funds in Southeast Asia (SEA).

The fund has received commitments from a well-diversified investor group across Asia, Europe, North America, and the Middle East representing pension funds, sovereign wealth funds, and insurance companies.

Through this transaction, several new investors to its fund management platform included the Dutch pension fund manager APG Asset Management (APG) and Toronto-headquartered global financial services provider, Manulife.

Finance ministry proposes VAT cut to aid business recovery

A lower value-added tax is seen as instrumental to promote business/production activities at a time of economic hardship due to the Covid-19 pandemic.

Vietnam’s state budget would see a decline by over VND49 trillion ($2.1 billion) this year as the Government will cut the value-added tax (VAT) rate to 8% from the current 10% to aid business recovery, a move which is scheduled to take place since February.

It was part of a draft decree of the Ministry of Finance (MoF) detailing tax cut policies, which is based on resolution No.43/2022/QH15 of the National Assembly on the socio-economic recovery program.

In addition to a lower VAT rate, businesses’ financial support for the Covid-19 response will be written off on corporate income tax (CIT).

The MoF estimated the cut would cause a decline of VND49.4 trillion ($2.1 billion) in budget revenue for this year while writing of tax payments from financial supports for the Covid-19 fight would mean foregoing around VND2 trillion ($88 million).

To minimize impacts from such a move on the state budget, the MoF said it would cooperate with other ministries and localities in ensuring the effective implementation of the Law on Tax Administration, along with steps to reform the tax system, administrative procedures, and prevent tax losses.

Source: VNA/VOV/VNS/SGT/VIR/Hanoitimes

VIETNAM BUSINESS NEWS JANUARY 24

Tax authorities clamping down on foreign evaders