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The UK-based Financial Times has posted an article in which it assessed that after decades of showing promise, Vietnam’s economic moment may have finally arrived, and the country must capitalise on the manufacturing boom for its long-term development.
Last year, foreign direct investment (FDI) poured into the country soared to a decade high to over 20 billion USD. Big names including Dell, Google, Microsoft and Apple have all shifted parts of their supply chain to the country in recent years, and are looking to do more in the coming time.
It added that over the next decade, Vietnam must raise its productive capacity to meet the growing demands of manufacturers investment plans, and need to reinvest its current growth dividend to support the development of more productive, knowledge-rich sectors, to meet its 2045 goal. Backbone services like finance, logistics, and legal services create high-skilled jobs and add value to existing industries.
The business excitement around Vietnam is justified. But there is much work to be done to convert today’s “de-risking” trend into long-term prosperity, the Financial Times suggested.
Petrol prices see mixed changes, oil prices up
The retail prices of RON 95 petrol and all oil products increased in the latest adjustment on July 11 by the Ministry of Industry and Trade and the Ministry of Finance.
The price of RON 95 rose by 69 VND per litre to 21,497 VND ($0.91 USD), while that of E5 RON 92 petrol went down 51 VND per litre to 20,419 VND (0.86 USD).
Meanwhile, 447 VND, 394 VND, and 665 VND were added to the prices of diesel oil, kerosene, and mazut, which now stand at 18,616 VND per litre, 18,320 VND per litre, and 15,288 VND per kilogram, respectively.
In this adjustment, the two ministries decided not to extract money from petrol and oil prices for the price stablisation fund.
Gasoline prices have so far undergone 20 adjustments since the beginning of the year.
Vietjet Air to run 17 weekly flights on Vietnam-Australia routes
Budget carrier Vietjet Air plans to gradually increase the frequency of its round-trip flights between Vietnam’s Ho Chi Minh City and Australia to 17 per week in a bid to meet high travel demand during the peak season.
Accordingly, on a weekly basis, there will be seven flights connecting the southern Vietnamese metropolis to Sydney; as well as seven and three others linking it to Melbourne and Brisbane respectively. The higher frequencies will begin in early December.
According to the HCM City Department of Tourism, Australia is among the top ten markets with the highest number of tourists to Vietnam and the city in recent years.
HCM City welcomed more than 130,000 Australians last year, accounting for 3.5% of the total number of visitors to the southern economic hub.
Vietnam, WB enhance partnership in climate change response for green growth
Minister of Natural Resources and Environment Dang Quoc Khanh has hailed the World Bank (WB)’s effective cooperation with Vietnam, especially in climate change response, green growth and environmental protection.
At a working session in Hanoi on July 10 with Anna Wellenstein, Director for Sustainable Development in East Asia and the Pacific, and Global Director for Environment, Natural Resources, and Blue Economy at the WB, Khanh informed that on June 30, the Ministry of Natural Resources and Environment approved a project on the implementation of the carbon market in Vietnam and assigned its Department of Climate Change to work closely with the WB, ministries and agencies concerned on the project.
He also lauded the WB for its financial initiative to support low-carbon rice cultivation.
The minister hoped that the WB would continue with its support package for the National Water Programme with a multi-sectoral and multi-target approach and integrated water resource management. He added that the ministry asked the Department of Water Resources Management to propose tasks in need of the WB’s help, such as amending the Water Resources Law and establishing a national water resources database.
Khanh also sought the lender’s assistance in the project “Mekong Delta Climate Resilience and Integrated Transformation” to build upon the past achievements of the previous project “Mekong Delta Integrated Climate Resilience and Sustainable Livelihoods".
Regarding the second stage of the Hydro Chlorofluorocarbon (HCFC) phase-out project under the Montreal Protocol, he affirmed Vietnam's strong commitment to phasing out ozone-depleting substances. To launch the subsequent project titled "Sustainable Management of Chemicals Regulated under the Montreal Protocol”, the minister tasked the Climate Change Department with working with the WB on the prospects and approval of the project.
On environmental pollution and development of circular economy, he said the Pollution Control Department and the Institute of Strategy and Policy on Natural Resources and Environment will continue partnering with the WB to deploy air pollution measurement and management models in Hanoi, and transition to a circular economy for development and environmental protection.
Regarding the Improved Land Governance and Database (VIGL) project, the minister proposed the WB continue providing support in certain activities related to land valuation, land information system building, and pilot activities at the Department of Planning and Development of Land Resources and in the central city of Da Nang.
Wellenstein, for her part, said the WB and Vietnam are collaborating on multiple projects related to climate change adaptation, green growth, and environmental protection.
The WB will continue increase its support for Vietnam in achieving goals regarding climate change mitigation, environmental protection toward a circular economy, greenhouse gas emission reduction, sustainable livelihood development, biodiversity conservation, she said.
Keppel Land unit acquires 65% stake in Hanoi retail property
VN Prime Vietnam Co., Ltd (VNPV), a subsidiary of Keppel Land Limited, is acquiring a 65% stake in a company that owns a retail property project in Hanoi.
VNPV is estimated to invest approximately VND1.23 trillion (US$52.2 million) in the deal, payable in two tranches in cash. Binh Minh Investment and Trading Development JSC will hold the remaining 35% stake in the project.
The retail property project is part of a mixed-use commercial development currently under construction and scheduled for completion in 2025.
The transaction was concluded on a willing-buyer willing-seller basis, taking into account, among other things, the adjusted net asset value of VNPV's interest, based on the agreed value of the project attributable to VNPV's interest.
In late May, Keppel Land acquired a 49% stake in two residential projects in Ho Chi Minh City from Khang Dien Group for a total consideration of VND3.18 trillion ($134.9 million).
In March, Keppel Land executives expressed their desire to increase investments in Vietnam as companies diversify their investment portfolios to minimize risks.
The Singapore-based property developer has been present in Vietnam since the early 1990s.
Border gates in Lang Son province maintain regular operations
Five border gates, namely Chi Ma, Huu Nghi, Tan Thanh, Coc Nam and Dong Dang, in the northern province of Lang Son have maintained their stable operations, with more than 1,000 vehicles handled each day, according to the Management Board of the Dong Dang - Lang Son Border Gate Economic Zone.
Of them, Huu Nghi and Tan Thanh have been working at a higher capacity since May when a number of Vietnamese fruits started to enter their main harvests, the board said.
Notably, the Chinese side has agreed to restore the trading of fishery products with Vietnam via the Coc Nam (Vietnam) – Nong Yao (China) border gates since July after a nearly three-year hiatus.
Deputy head of the Dong Dang - Lang Son Border Gate Economic Zone Management Board Hoang Khanh Duy said to deal with congestion of trucks at border gates, the board has coordinated with the provincial Border Guard Command and Department of Public Security in vehicle regulation.
Competent forces have also had their working hours extended until 23:00, and even on weekends, he added.
Since May, more than 67,600 vehicles have undergone customs clearance at border gates in Lang Son, of which 31,800 carried exports.
Tran Van Anh, deputy head of the Dong Dang International Railway Station customs bureau, suggested the Vietnamese Ministry of Agriculture and Rural Development and its Chinese counterpart sign a protocol on the delivery and reception of goods via the Dong Dang border gate to facilitate Vietnam’s export to the neighbouring country through the railway.
The total trade value via border gates in Lang Son in the first six months of this year was estimated at over 2.28 billion USD, accounting for 60.1% of the target, and surpassing the figure recorded in the same period last year by 1.1%.
Vietnam Airlines transports fresh lychee to 7 countries in Europe, Asia
The volume of the fresh lychee exports transported by Vietnam Airlines flights in May, June and the beginning of July increased by 200% over the same period last year.
The airline reported that it had transported nearly 90 tonnes of the fruit to the UK, France, Germany, Japan, Malaysia, Laos, and Cambodia in the period.
For the domestic market, the national flag carrier also transported nearly 1,300 tonnes.
The results were achieved thanks to the effective coordination between farmers, exporters and Vietnam Airlines' air logistics system.
In the coming time, the carrier will continue coordinating with localities and businesses to bring Vietnamese agricultural products and brands to the international market, it said.
EPR fees to add to plastic companies' bills
Although the Environmental Producer Responsibility (EPR) scheme could create an incentive for the phase-out of eco-unfriendly and non-recyclable packaging in the long term, it would shift the heavy financial burden for end-of-life waste management from municipalities to producers and importers.
This was the concern among Vietnamese plastic companies over the EPR scheme that will take effect on January 1, 2024.
A representative from the Vietnam Plastic Association (VPA) said the EPR scheme, which was first introduced in the Law on Environmental Protection in 2020, would make plastic producers and importers responsible for the recycling of their packaging from early 2024.
They are allowed to undertake the responsibility by either choosing a form of recycling defined in Decree No. 08 or paying EPR fees to the Vietnam Environmental Protection Fund. Four forms of recycling are available: self-implementing, engaging a recycling unit, authorising an intermediary, or combining these three forms.
Producers and importers who opt for EPR fees would be neither required to implement a recycling plan nor report on the results of recycling. The fees would come into force on January 1, 2024 for packaging, 2025 for electronics, and 2027 for vehicles.
VPA Secretary-General Huynh Thi My said the plastic industry can be divided into four main sub-industries, namely packaging, household-use plastics, building plastics, and engineering plastics. Packaging would be the only sub-industry to be made subject to EPR fees owing to its substantial impacts on the environment.
Under Decree No. 08, EPR fees are determined by multiplying volume of plastic waste (V), compulsory recycling rate (R), and reasonable recycling cost for a unit volume of packaging (Fs). Although the Fs has yet to be promulgated, plastic companies are concerned that the cost would weigh heavily on their financial position.
"Fs must be set as low as possible, or else producers would have no choice but to pass EPR fees on to their product prices, putting consumers at the receiving end of the policy," said My.
A company producing 100 tonnes of PP packaging per month could be taken as an example to demonstrate Fs's implications. As the compulsory recycling rate applicable to PP packaging is set at 15%, the company would be required to recycle at least 15 tonnes of PP plastics monthly under Decree No.08.
Suppose the Fs proposed by the Ministry of Natural Resources and Environment is used to calculate EPR fees, the fee incurred by a company would stand at 4 billion VND annually, a substantial outgoing for its revenue of 200 billion VND.
Experts called for a step-by-step approach to the promulgation of Fs to make plastic companies well-prepared for the upcoming EPR scheme. The first step, they believed, should involve setting a norm for the treatment of plastic waste; the next, building more facilities for plastic collection and recycling.
Ministry proposes new electricity tariffs
The Ministry of Industry and Trade (MoIT) has released a draft of the Prime Minister's decision on the structure of retail electricity tariffs for public feedback. The draft proposes a new pricing scheme based on a percentage of the average retail price of electricity for different groups of users.
The proposed scheme includes specific retail prices for various groups such as production, business, administrative, non-business, daily use, electric vehicle charging stations and tourist accommodation.
Regarding the retail electricity tariffs for daily use, the plan proposed by the MoIT, which suggests reducing the pricing tiers from six to five, is not much different from the proposal in September 2022. This change narrows the gap between the first steps and expands the pricing range for higher consumption levels.
Under the new plan, the first two steps are combined into tier 1, where the price for the first 100kWh is set at 90% of the average retail price. Tier 2, which remains the same as before (101 to 20 kWh), has a price equal to 108% of the average retail price. Tier 3 widens the consumption gap from 201 to 400kWh compared to before, priced at 136% of the average retail price. Tier 4 covers consumption from 401-700kWh, priced at 162% of the average retail price, while tier 5 includes consumption of 701kWh or more, with a price equal to 180% of the average retail price.
These prices do not include value-added tax (VAT) and are based on the average retail price of electricity, which was adjusted in May 2023 to 1,920.37 VND (8 US cent) per KWh.
With the new five-tier option, the lowest average retail price of electricity is 1,728 VND/KWh, and the highest is 3,457 VND/KWh (excluding VAT). The pricing scheme aims to maintain stable electricity prices for low-income households and those with low electricity usage while providing incentives for efficient electricity consumption.
The proposed changes will result in reduced electricity bills for 89% of households using 700kWh or less. However, households consuming 701 kWh per month or more (2% of households) will experience an increase in their electricity bills.
For production, business, administrative customers, electric vehicle charging stations, and tourist accommodation establishments, the prices are categorised based on voltage levels, ranging from 1 to 35kV, with the lowest price set at 54% and the highest price at 167% of the average retail price of electricity.
This draft also includes electricity prices for electric vehicle charging stations for the first time, ranging from 68% to 205% of the average retail price based on voltage level.
The MoIT has stated that the proposed retail prices aim to maintain consistency while affecting different customer groups to varying degrees. Some groups will benefit from reduced electricity bills, while others will face increases.
The draft decision also specifies that households classified as poor based on income criteria, as determined by the Prime Minister, will receive electricity subsidies. The monthly subsidy amount is equivalent to the cost of electricity usage of 30kWh, calculated based on the current retail price of electricity for household usage in tier 1.
Foreign firms expect better business in Q3: EuroCham
The European Chamber of Commerce in Vietnam (EuroCham) on July 10 announced its Business Confidence Index (BCI) report for Vietnam in the second quarter of 2023, showing a 9% increase in the number of business leaders who positively assess their business prospects for the third quarter of 2023 compared to their assessment for the second quarter.
In the second quarter, a modest decline of 4.5 points were recorded in European business confidence towards the Vietnamese market, with the current score of 43.5 reflecting prevailing market conditions, according to the report.
It said that businesses are prudently assessing the landscape, focusing on optimising revenue and orders, with a marginal increase of 4% in the proportion of companies anticipating a decline in these areas.
Additionally, there is a proactive approach, as 7% more companies plan to carefully manage investments in the upcoming quarter. It is intriguing to note that despite these challenges, workforce planning remains stable, reflecting a resolute commitment to maintaining stability regardless of the prevailing conditions.
It underlined that despite the challenges, Vietnam continues to attract foreign investors, with 48% of the respondents expecting an increase in their company’s foreign direct investment (FDI) in the country next quarter. However, a total of 40% of the businesses express no plans for elevated FDI, marking a 4% increase from the previous BCI. Nevertheless, Vietnam remains firmly positioned among the top five investment destinations for over one-third of the businesses, underscoring its enduring appeal, it said.
In the current cautious business climate, respondents highlight regulatory reforms and the availability of skilled labour as crucial drivers for their companies’ growth, it said, adding that regulatory reforms are deemed the primary factor contributing to the growth in the service sector, while the manufacturing sector places significant emphasis on the availability of skilled labour.
The survey reveals that over half of the businesses surveyed have benefited from the European Union-Vietnam Free Trade Agreement (EVFTA). Among these beneficiaries, 35% of business leaders have reported gains from tariff reductions. Despite these gains, businesses continue to face challenges in fully capitalising on the agreement, with administrative procedures and a lack of understanding remaining the main barriers to the full capitalisation.
Commenting on the BCI, EuroCham Chairman Gabor Fluit said that Vietnam’s economy relies heavily on manufacturing and exports, and it has taken a big hit from the tough global situation. This decline in exports and orders has had a major impact on European businesses and the overall business community. The BCI clearly shows this current gloomy outlook, he said.
To address these challenges, the Vietnamese government has swiftly taken practical steps, particularly by expediting key infrastructure projects. EuroCham commends these efforts, which will surely bring a substantial long-term boost to the economy, he stated.
By taking prompt and comprehensive action, Vietnam can not only attract foreign investment but also ensure a resilient economy capable of overcoming future obstacles, he said, stressing that EuroCham is fully committed to providing support through ongoing dialogue and policy consultations every step of the way.
Hanoi takes action to remove difficulties for production, business
Chairman of the People’s Committee of Hanoi Tran Sy Thanh has issued a directive on continuing to drastically implement tasks and measures to remove difficulties for production and business activities.
The chairman required the heads of departments, agencies, and district-level People’s Committees to monitor the implementation of the set tasks and measures.
The city will accelerate the disbursement of public investment capital under the programme on socio-economic recovery and development, national target programmes, and key projects of the city, especially the Belt Road No4 of the Hanoi Capital Region and urban railway routes.
The municipal authorities will continue to push ahead with cutting unnecessary administrative procedures and digital transformation.
The chairman assigned the Department of Industry and Trade to coordinate with relevant departments, agencies and district-level People’s Committees to effectively implement the municipal People’s Committee’s plans on implementing free trade agreements and international integration so as to optimise trade opportunities and enhance capacity and quality of international integration.
The department is also required to promote sustainable export, build brands for local goods, expand and divesify export products and markets.
Chairman Thanh urged departments and agencies to pay attention to supporting the development of support industries, key industries and rural industries in the city.
He urged relevant agencies to ensure electricity supply for socio-economic development and political-diplomatic-cultural events in the city.
The Hanoi branch of the State Bank of Vietnam is asked to coordinate with relevant agencies to guide credit institutions in the city in implementing measures to support the people and enterprises, including reducing lending interest rates.
Commercial banks, mainly the four State run - Agribank, BIDV, Vietcombank and Vietinbank – are required to roll out the credit programme supporting social housing development under the Government’s resolution 33/NQ-CP.
The Chairman of the municipal People’s Committee assigned the city’s tax department to effectively carry out policies on extending, exempt and reduce taxes, fees and land lease in accordance with approved decisions.
The Planning and Investment Department is responsible for intensifying the implementation of enterprise support projects and plans approved by the municipal People’s Committee.
Vietnam Airlines reports 7% growth in domestic aviation market over pre-pandemic level
The national flag carrier Vietnam Airlines reported a 7% growth in the domestic aviation market in the first half of this year compared to the same period in 2019, before the COVID-19 pandemic broke out.
However, the international market has not fully recovered, reaching over 80% of the pre-pandemic level, the airline said.
To meet rising travel demand in the peak summer season, Vietnam Airlines has increased domestic flights and offered attractive promotional programmes.
In particular, the airline has rolled out a promotion campaign reducing 15-30% of ticket fares for both domestic and international routes for groups of 4-6 passengers, which is intended to stimulate both tourism and trade demand in the second half of the year.
HCM City’s enterprises keep pace with growth momentum
With flourishing economic results in the first six months of this year, many enterprises in Ho Chi Minh City expect to keep pace with the growth momentum to accelerate their production and business activities in the coming months.
According to the municipal Statistics Office, in the period, total retail sales of goods rose by 9.7% year-on-year, revenue from accommodation and food services increased by 36.2%. In particular, the number of foreign tourists to the city tripled over the same period, contributing to the boost in domestic demand and economic growth.
The index of industrial production (IIP) in June rose by 2.3% month-on-month, and 4.8% against that of the same month of last year. In the January-June period, the IIP increased by 1.9% year-on-year.
A survey on business trends of manufacturing and processing enterprises in Ho Chi Minh City also showed an improvement in production and business activities in the second quarter of 2023 compared to the previous one. Specifically, 19.3% of the enterprises rated their production and business situation as better; 34.1% held steady and 46.6% more difficult.
State-owned enterprises were the most optimistic with 66.7% of the respondents saying that their operations were better and kept stable. Meanwhile, the rates in foreign-invested and non-state enterprises are 56.2% and 50.3%, respectively.
For the third quarter, 26.4% of the respondents predicted that their production and business will be better, 35.1% stable, and 38.5% more difficult.
Nearly 90 tonnes of fresh Vietnamese lychee shipped abroad
National flag carrier Vietnam Airlines has unveiled that it transported nearly 90 tonnes of fresh lychee for exports to Asia and European countries such as the UK, France, and Germany in May, June and early July.
According to details of the export, the lychee output transported by Vietnam Airlines in May, June, and early July increased by 200% against the same period from last year.
With regard to the domestic market, the airline transported nearly 1,300 tonnes of lychee across the country. These achievements can be attributed to effective co-ordination among farmers, exporters, and Vietnam Airlines' air logistics system.
A representative from the airline stated that it will continue to stand alongside localities and businesses to introduce Vietnamese agricultural products and brands to the international market moving forward.
The demand for lychee exports by air this year is anticipated to grow by 50% compared to 2022.
Seafood exporters to see improved profits in H2
Seafood exporters will start to record improved profits in the second half of 2023 thanks to lower costs, including lower input prices and reduced transportation costs.
Regarding input materials, the prices of raw shrimp and fish, accounting for 20 per cent of the cost of goods sold (COGS), decreased by 9 per cent and 4 per cent respectively over the same period last year, while the price of aqua feed remained high.
The average price of aqua feed peaked in May 2023 at VND14,900 per kg and feed companies only started reducing the price from June 2023. Thus, the price of aqua feed in the first six months of 2023 was still 8 per cent higher than in the same period last year.
As feed prices account for 60 per cent of COGS, coupled with a decline in the industry's average selling price in the first half of 2023, analysts from SSI believe that most manufacturers in the industry have witnessed margins and profits may have bottomed out in the first half of 2023.
SSI analysts said although the prospect of orders to the US and China is still uncertain due to the slow recovery of the economy and high inventory levels, companies dealing in seafood export will start to see the profit margins improve in the second half of 2023, thanks to lower raw material and aqua feed costs, and lower transportation costs.
According to Vietcombank Securities Company, port congestion has been gradually cleared since January 2023. The occupancy rates at ports in North America and Northern Europe are no longer as high as they were at the end of 2022.
Waterway freight rates are still maintaining low levels compared to the peak of the COVID-19 epidemic season. With the ships and containers being oversupplied, Viet Nam's seafood exports to Western countries will be more positive in 2023.
SSI expects businesses that export to the US market such as Vinh Hoan Joint Stock Company (VHC) to record a slight decrease or flat profit in the third quarter of 2023. Nam Viet Joint Stock Company (ANV) also benefits from being exempted from US anti-dumping duty this year.
For Vinh Hoan Joint Stock Company, according to the management of this business, orders in the third quarter of 2023 are gradually improving compared to the second quarter of 2023 in terms of consumption volume. SSI expects net revenue and net profit in 2023 to reach VND11 trillion and VND1.3 trillion, respectively, down 17 per cent and 34 per cent compared to the same period in 2022. In 2024, SSI expects that net income and net profit will increase sharply.
For Nam Viet Joint Stock Company, SSI estimates net revenue and net profit in 2023 at VND4.9 trillion, up 1 per cent and VN465 billion, down 31 per cent, respectively. However, SSI estimates that net sales and net profit will rebound strongly in 2024, as exports will begin to recover by the end of the fourth quarter of 2023 or the beginning of 2024.
With Sao Ta Food Joint Stock Company (FMC), SSI estimates net revenue in the first six months of 2023 at VND2.1 trillion, down 25 per cent year-on-year. In June 2023, export turnover of shrimp increased sharply with revenue of VND442 billion, up 1 per cent over the same period last year and 71 per cent compared to the previous month, close to the peak in 2022.
SSI expects Sao Ta Food Joint Stock Company's revenue to recover from the second half of 2023.
Le Hang, communications director of the Viet Nam Association of Seafood Exporters and Producers, said that in addition to the difficulties caused by weak consumption demand, shrimp and pangasius producers and exporters suffered a decrease in profits because the prices of feed, seed and input costs all increased, while the selling prices decreased, leading to higher inventories.
Forecasting the next few months, she said the main export markets of Vietnamese seafood such as the US, EU, China, and Japan will continue to be affected by inflation and inventory issues.
Demand from these markets is expected to increase in the second half of the year. However, inflation in many markets has not shown any signs of cooling down, which inhibits the recovery of their seafood consumption and import demand.
According to SSI, in June 2023, Viet Nam's seafood export turnover was estimated at US$800 million, down 21 per cent over the same period last year; in which, shrimp exports reached $341 million, down 18 per cent compared year on year, but up 3 per cent month on month, and pangasius exports reached $156 million, down 26 per cent year-on-year and 2 per cent less than the previous month's figure.
Shrimp exports in the first half of 2023 reached $1.6 billion, down 31 per cent over the same period last year, and pangasius exports reached $885 million, down 38 per cent.
EPR fees to add to plastic companies' bills
Although the Environmental Producer Responsibility (EPR) scheme could create an incentive for the phase-out of eco-unfriendly and non-recyclable packaging in the long term, it would shift the heavy financial burden for end-of-life waste management from municipalities to producers and importers.
This was the concern among Vietnamese plastic companies over the EPR scheme that will take effect on January 1, 2024.
A representative from the Vietnam Plastic Association (VPA) said the EPR scheme, which was first introduced in the Law on Environmental Protection in 2020, would make plastic producers and importers responsible for the recycling of their packaging from early 2024.
They are allowed to undertake the responsibility by either choosing a form of recycling defined in Decree No.08 or paying EPR fees to the Vietnam Environmental Protection Fund. Four forms of recycling are available: self-implementing, engaging a recycling unit, authorising an intermediary, or combining these three forms.
Producers and importers who opt for EPR fees would be neither required to implement a recycling plan nor report on the results of recycling. The fees would come into force on January 1, 2024 for packaging, 2025 for electronics, and 2027 for vehicles.
VPA Secretary-General Huynh Thi My said the plastic industry can be divided into four main sub-industries, namely packaging, household-use plastics, building plastics, and engineering plastics. Packaging would be the only sub-industry to be made subject to EPR fees owing to its substantial impacts on the environment.
Under Decree No.08, EPR fees are determined by multiplying volume of plastic waste (V), compulsory recycling rate (R), and reasonable recycling cost for a unit volume of packaging (Fs). Although the Fs has yet to be promulgated, plastic companies are concerned that the cost would weigh heavily on their financial position.
"Fs must be set as low as possible, or else producers would have no choice but to pass EPR fees on to their product prices, putting consumers at the receiving end of the policy," said My.
A company producing 100 tonnes of PP packaging per month could be taken as an example to demonstrate Fs's implications. As the compulsory recycling rate applicable to PP packaging is set at 15 per cent, the company would be required to recycle at least 15 tonnes of PP plastics monthly under Decree No.08.
Suppose the Fs proposed by the Ministry of Natural Resources and Environment is used to calculate EPR fees, the fee incurred by a company would stand at VND4 billion annually, a substantial outgoing for its revenue of VND200 billion.
Experts called for a step-by-step approach to the promulgation of Fs to make plastic companies well-prepared for the upcoming EPR scheme. The first step, they believed, should involve setting a norm for the treatment of plastic waste; the next, building more facilities for plastic collection and recycling.
Quang Ninh Province exceeds investment capital goals six months early
Quang Ninh Province has achieved impressive results in both domestic and foreign investment attraction in the first six months of this year, solidifying its position as a prominent economic development hub in the northern region.
The province attracted VND44 trillion (US$1.9 billion) worth of domestic capital, exceeding its target for the whole year by 2.4 per cent right in the first six months. This number also represented an increase of 29.8 per cent year-on-year.
Some notable projects include the Stavian Quang Yen Petrochemical Plant, situated in the Quang Yen Coastal Economic Zone, with a total expected investment capital of VND36 trillion ($1.5 billion), and the construction investment project of Yen Hung Liquid Cargo Port worth VND792 billion.
Apart from domestic investment, Quang Ninh has also successfully attracted $894 million in foreign direct investment (FDI), reaching 89 per cent of the target set by the provincial Party Committee's Resolution (minimum of $1 billion) and 74.5 per cent of the plan set by the provincial People's Committee ($1.2 billion).
The province has granted nine new FDI projects and planned to issue five additional projects with a total capital of nearly $800 million. Many of these projects belong to the "new generation" category, focusing on environmentally friendly processing and manufacturing industries that aim to reduce resource consumption.
Among the recent FDI projects is the approval of two factories by Foxconn Group in Song Khoai Industrial Park, valued at $250 million. These projects are expected to create employment opportunities for nearly 2,000 local workers.
Hoang Trung Kien, head of the Management Board of Quang Ninh Economic Zone, has expressed confidence in achieving the target of $1.2 billion from FDI projects.
In addition to traditional investors from mainland China, Hong Kong, Singapore and Japan, the province has attracted investment from Swedish investors for the first time. Autoliv Vietnam Company, with a total investment of $154 million, is establishing a project in Song Khoai Industrial Park to manufacture safety products for export, with a capacity of 10 million products per year.
In recent years, Quang Ninh has actively collaborated with ministries and regional leaders to promote investment activities and achieved remarkable results. The province has already implemented its Investment Promotion Programme for 2023 and is working on a scheme to attract prominent FDI investors to the region, with a particular focus on key industrial parks and economic zones such as Quang Yen Coastal and Mong Cai Border Gate. The province prioritises eco-friendly manufacturing and processing industries.
Quang Ninh is a leading coastal economic hub in the North. The province ranked fourth nationwide in terms of economic growth during the first half, with its economic growth rate (GRDP) reaching 9.46 per cent.
Credit growth target for credit institutions to be adjusted
The credit growth target for credit institutions will be adjusted by the State Bank of Vietnam to provide more credit capital to meet the demand while keeping an eye on inflation risk.
In its press release issued on July 10, the State Bank of Vietnam (SBV) announced this. Moreover, according to the SBV, the credit growth target in 2023 for credit institutions with the delivery rate of the whole system is about 14 percent, instead of expansion as before.
At the beginning of 2023, the State Bank oriented credit growth in 2023 towards around 14 percent to 15 percent with adjustments for the actual situation and based on the economic growth and inflation targets set by the National Assembly and the Government.
Accordingly, with the adjustment of the credit growth target in 2023 for credit institutions, the State Bank requires these institutions to continue effectively implementing the Governor of the State Bank’s Directive 01/CT-NHNN on the key tasks of the banking industry in 2023. moreover, they must focus on implementing solutions to promote safe and effective credit growth and improve credit quality while simultaneously cutting administrative procedures and simplifying and shortening loan processes and procedures.
Explaining the adjustment, the State Bank said that the economic growth in the first 6 months of the year was lower than the scenario. In addition, the State Bank decided to adjust credit growth targets for credit institutions following the request of credit institutions and upon each credit institution’s operational situation, financial capacity, management and ability to expand credit, ensuring liquidity and operational safety of the administrative procedures system.
According to the SBV, as of June 30, the economy's credit balance reached over VND 12.4 trillion (over US$520 million), up 4.73 percent compared to the end of 2022.
Tuna exports to Israel skyrocket by 83%
Vietnamese tuna exports to Israel during the initial five months of the year skyrocketed by 83% to nearly US$21 million despite experiencing a downward trajectory in some major markets throughout the Middle East, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).
Unlike frozen tuna loin, the export of canned tuna to the Middle East market tended to recover in May and rose sharply by 75% against the same period from last year.
Meanwhile, tuna exports to Saudi Arabia plummeted by 81% to nearly US$3 million during the reviewed period.
Furthermore, Egypt and Jordan also moved to reduce tuna imports from Vietnam as exports to these markets fell by 83% and 20%, respectively.
VASEP statistics indicate that five-month tuna exports to the Middle East region dropped by 21% to US$32 million year on year, with canned tuna and frozen tuna loin products accounting for 48% and 43%, respectively, becoming the country’s two main export items to this market.
Industry experts say tuna exports to the Middle East are not likely to bounce back in the coming time as economies across the region are anticipated to slow down this year due to high inflation coupled with rising interest rates.
Vietnam Airlines to auction three air craft
National flag carrier Vietnam Airlines has announced it will put three Airbus A321 CEOs up for auction.
The A350, A351, A352 which were all produced in 2007, will be auctioned in the third quarter of this year with starting prices of USD5 million each, the airlines said.
The three planes are currently kept at Noi Bai and Tan Son Nhat airports.
Since 2020, Vietnam Airlines has started to sell A321 CEOs produced between 2004-2008.
The airlines said that the move was part of their programme to replace older-generation aircraft that have been in use for at least 12 years. The auction was also expected to offset the decrease in cash flow caused by the Covid-19 pandemic.
The carrier sold five planes in 2020 for an average USD7.40 million each.
In 2021, Vietnam Airlines continued to put 11 Airbus A321 CEOs up for auction. They also sold some ATR 72 planes which were used for flights to smaller airports like Con Dao and Dien Bien.
According to Planespotters, Vietnam Airlines currently has a fleet of 94 aircraft including 65 Airbus A321 CEOs with average ages of 9.30 years.
Source: VNA/SGT/VNS/VOV/Dtinews/SGGP/VGP/Hanoitimes
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