The first one is Duc Giang Industrial Zone (IZ) with an area of 288ha. The second one is Hoa Phu IZ-phase 2, which covers an area of 222ha in Yen Dung district. Another is Nghia Hung IZ with an area of 152ha.

The fourth one is Tien Son – Ninh Son IZ with a total area of 223ha. The construction will be separated into two periods. The first phase will have a total area of 90ha. The fifth is Xuan Cam-Huong Lam IZ in Hiep Hoa district, spanning 224ha.

At present, the province has eight IZs approved for investment with a total area of nearly 2,000ha.

In the 2021-2030 period, the province will have a total 29 IZs, which will be approved for planning by the prime minister.

Adding IZs will create better conditions for the province to draw investors. The province is working to be more selective in attracting investment projects, with a focus on high-tech, large-scale projects and those that will churn out competitive products, join the global value chain, and significantly contribute to the state budget and social welfare.

In the first six months of 2023, although the world experienced many complicated and unpredictable changes, investment in Bac Giang still saw positive results, especially in new foreign-invested projects.

Between January and June, the province attracted 34 foreign-invested projects with the total registered capital of $1.05 billion, fourfold higher than the same figure last year, ranking second in the country in terms of foreign investment attraction, following Hanoi.

Supply shortages remain in industrial property frame

New supply in the industrial real estate market will slow in the second half due to the influence of legal procedures as well as a decrease in demand from the manufacturing industries.

According to a report by Cushman & Wakefield released last week, the industrial real estate market in the south, specifically key areas such as Ho Chi Minh City, Binh Duong, Dong Nai, Long An, Ba Ria-Vung Tau, did not have any launches planned in Q2.

“Slow compensation processes and legal procedures are considered the cause of the shortage of new supply. By 2024, it is forecast that there will be about 1,800 hectares of new industrial land, mainly concentrated in the southern provinces of Binh Duong, Dong Nai, and Long An,” said Bui Trang, country head of Cushman & Wakefield in Vietnam.

Despite the slowdown in global economic growth, the market still saw a lot of demand for industrial zone (IZ) land in the south, with net absorption of more than 70 ha for new projects and capital increase in the first half of the year.

“By 2026, industrial real estate will have an additional 1.3 million sq.m of warehouse, with an annual growth rate of 5.1 per cent. The market by then will become more competitive and investors may have to come up with more attractive rental policies and incentives to draw tenants,” Trang said.

Dong Nai province has 40 IZs with a total area of nearly 19,000 ha approved by the government. Some 32 of them were put into operation with an occupancy rate of around 90 per cent.

Eight others are in the pipeline but still facing legal procedures, so industrial property available for lease is increasingly scarce.

Shortage of land creates issues for large-scale manufacturers. Lego Group waited for three years for approval for a large enough land space and moved to Binh Duong province instead, despite the group planning to invest a billion dollars in Dong Nai first.

Nguyen Huu Nguyen, director of Dong Nai Department of Planning and Investment, said that the province was aiming to entice investment in eco-friendly economic projects that take up less land and labour to move towards a green industry.

“The construction of ring roads 3 and 4 as well as Bien Hoa-Vung Tau Expressway are also being implemented to create a unique attraction for the province. Dong Nai province has come up with a number of solutions, such as setting up a working group to take notes at each locality to solve problems in new industrial property projects,” he said.

Meanwhile, Huynh Thanh Chung, general director of Minh Hung-Sikico IZ in Binh Phuoc province, said that it was a place with great potential and advantages, but the available land was limited.

“Although more land is wanted to develop the IZ, everything is still based on the government’s target and the local allocation,” Chung said.

Ho Chi Minh City has also requested adjustment of the planning of IZs, supplementing Pham Van Hai 1 and 2 IZs with 600 ha to the province’s master plan.

According to VNDirect Securities, limited supply will shape two shifting trends in the near future. Firstly, investors are gradually turning their attention to the tier-2 market, with great advantages. The tier-2 market offers more competitive rates thanks to the relatively large difference between the tier-1 and tier-2 rental rates, both north and south.

In addition, the available land in tier-2 offers more options for tenants, especially as traffic connectivity is increasingly improved. In addition, labour costs are also lower than in tier-1. Also, the connectivity between the two markets has been improved thanks to an upgraded infrastructure network, VNDirect said.

Industrial expansions help record stronger absorption

The industrial estate market was a bright spot in Vietnam in the first half of 2023 with a positive absorption rate in industrial land, ready-built factories, and warehouses both north and south.

Duong Thuy Dung, head of Valuation, Research, and Consulting at CBRE Vietnam, said that although the supply chain was disrupted and a shortage of orders occurred in almost all traditional industries, there has still been an expansion of activities among foreign enterprises so far this year.

“The northern region continued to record strong demand from the electronics sector. In the first half of the year, the industrial market recorded the expansion of large manufacturers such as Foxconn and Goertek in industrial zones (IZs) in Bac Giang and Bac Ninh provinces,” Dung said.

In addition, the strong expansion of Chinese manufacturers in different sectors also contributed to the industrial land and ready-built factories segment recording good absorption in the north.

Meanwhile, southern market demand was very diverse. Tenants mainly from the vehicle, textile and packaging industries were among the most active seekers of industrial land, warehouses and ready-made workshops.

In the industrial land market, the absorption area of northern and southern tier-1 markets reached 386 ha and 397 ha, respectively. This absorption was 20 per cent higher for the south and 60 per cent for the north compared to the same period last year.

Due to the limited availability of industrial land available for handover in both regions, while demand is abundant, the rental price of such land continues to maintain a strong growth rate.

For the warehouse and ready-built factory market, supply has grown strongly over the past three years, CBRE said.

In the first six months, 900,000 sq.m of ready-made warehouses and factories were completed in the tier-1 market in both regions, in which 60 per cent of supply came from the north.

Supply has increased by more than 20 per cent annually in the north and 18-49 per cent annually in the south over the past four years. As competition increases, the rental growth rate of these segments has maintained 2-3 per cent per year for the past four years.

John Campbell, head of Industrial Services at Savills Vietnam, confirmed that Vietnam’s industrial market was currently benefiting from the advantages of border opening and the stable exchange rate and an attractive corporate tax rates.

“In particular, multinational companies are looking to diversify their areas of operation, or relocate from China, industrial real estate in Vietnam will become a bright spot by creating better conditions to draw investors,” said Campbell.

It is expected that industry and manufacturing will take the lead in attracting foreign capital, with foreign investors’ increasing interest in industrial land and high-quality ready-built supply.

However, finding a supply of such land is becoming a difficult problem for businesses, and the occupancy rate of IZs is consistently at a high level.

Campbell said that to best support the supply of industrial land to meet the needs of the market, procedures in investment, as well as legal and project approval needed to be accelerated.

A report released in July by Mirae Asset Securities assessed that the China +1 strategy would open up opportunities for northern IZs. Enterprises with large land banks located in the north are the main beneficiaries of this trend.

“Many new projects are expected to commit to investing in Vietnam in the near future. In addition, electronic component manufacturers in the Taiwan market are interested in the Vietnamese market and have plans to expand investment in the north,” the report said.

In addition, the flow of public investment is a factor supporting the development of IZs in the long term. Accelerating infrastructure investment will be a top priority of the government in 2023-2025, with a goal of completing more than 1,600 km of highways over the next three years.

“The development of infrastructure will increase the attractiveness of IZs in the long term, through optimising operating and transportation costs,” it said.

50 per cent of textile firms adopt sustainable production

In the context of high inventories and dwindling demand, textile firms are seeking to green their production to receive orders.
 
Trung Quy Textile in the Mekong Delta province of Long An spent more than $11.4 million on environmentally friendly production processes, allowing the company to save 60–70 per cent on water compared to the previous weaving and dying technology.

"The business exports two containers of fabric made from organic fibres to a US partner. This is the initial cargo since we took pleasure in the possibility to invest in a new factory equipped with German and Italian technology five years ago and to transition to a sustainable manufacturing model at the end of 2022. All apparatus and equipment at Trung Quy have the green label as a result," said Tran Van Quy, general manager of the company.

In addition, businesses like Tran Hiep Thanh Textile Corporation use coal instead of tree bark to supplant emission sources like furnaces, gas, and green energy control.

"Thanks to the cost monitoring structure, we've been able to use 80 per cent green fuel and 30 to 35 per cent recyclable materials," said Le Van Linh, director of the Equipment Infrastructure at Tran Hiep Thanh.

This is one of the prevalent instances of greening textile industry production. Vu Duc Giang, chairman of the Vietnam Textile and Apparel Association (VITAS) said, "Approximately 50 per cent of textile and garment firms have greened manufacturing so that they can receive orders in today's challenging and fiercely competitive market."

He said that sustainable development is the path forward for the textile industry. However, this path is extremely perilous, and the greatest obstacle is a lack of financial resources. Therefore, environmentally conscious production requires specific policies and procedures.

"It is conceivable to establish a resource and environment fund from which enterprises can borrow at zero or between 1 and 2 per cent per year to invest in sustainability," Giang said, adding that the policy should be implemented as soon as feasible because global competing regulations would not wait for anyone.

In addition, it is essential to be mindful of the objective of sustainable growth, to invest in manufacturing facilities, technology, renewable energy, and the environment, and to educate the leadership team and staff.

According to VITAS, Vietnam's garment and textile industry's export turnover fell by 17.6 per cent in H1/2023, to $18.6 billion.

Product prices at risk of hike with incoming recycle rules

Plastic companies as well as food and beverage makers are asking for clear and suitable guidelines regarding recycling costs of waste, ahead of new rules expected to take effect next year.
 
Draft rules are specifying the costs for overseeing various aspects of waste collection and treatment, photo Le Toan
Huynh Thi My, secretary general of the Vietnam Plastic Association, said plastic enterprises are very supportive of responsible production for environmental protection, but there are also many concerns related to fees and extended producer responsibility (EPR) for the plastic industry.

“According to the draft regulations, nearly all types of packaging must pay a recycling fee. Paying a high recycling fee will cause businesses to have to factor in the production cost and output product price, and consumers will have to pay this fee, adding to the burden on them,” said My.

She explained that plastic groups have faced a slump of orders of 15-20 per cent on-year so far in 2023.

EPR in Vietnam is implemented via Decree No.08/2022/ND-CP implementing some articles in the Law on Environmental Protection, and an additional circular that were both made effective in January 2022.

Under the draft decision regarding recycling costs determination proposed by the Ministry of Natural Resources and Environment, unit volume of product and packaging (Fs) includes costs for sorting, collecting, transporting, and recycling products and packaging, as well as administrative expenses to support the implementation of recycling responsibilities of manufacturers and importers.

The recycling costs apply adjustment factor is the coefficient that demonstrates recycling efficiency. Products and packaging with high recycling efficiency have a low adjustment factor and vice versa. The draft also specifies administrative costs for administering, overseeing, and assisting producers and importers in carrying out their waste collection and treatment responsibilities. As Decree 08 indicated, 3 per cent of the financial contribution to assist waste treatment would be removed.

Chu Thi Van Anh, general secretary of the Vietnam Beverage Association, said that many proposals for Fs recycling norms are unreasonably high, which leads to the risk of high consumer prices and production costs.

She cited that the Fs for aluminium packaging is nearly five times higher than the average in other countries, and Fs with mixed paper is 4.8 times higher than the global average.

“This price increase only takes into account the direct cost of recycling packaging. If we include the cost of recycling indirect packaging such as cartons, as well as the cost of recycling equipment and transport, the price increase is much higher,” Anh said.

Baker McKenzie cited the main requirements of Decree 08 that all producers and importers subject to recycling obligations will be required to register and report on their recycling activities or declare their contribution to the Vietnam Environmental Protection Fund every year before March 31. If producers or importers authorise a third party to recycle on their behalf, the third party is responsible for registering and reporting on recycling activities.

Each type of packaging and product that needs to be recycled will be subject to a mandatory recycling rate on the basis of the life cycle, disposal rate, and collection rate of the product or packaging, national recycling targets, environmental protection requirements, and socioeconomic conditions. This required recycling rate will be measured and adjusted every three years.

HoREA urges capital injection into housing market to fuel economic growth

The HCMC Real Estate Association (HoREA) has called for the immediate allocation of funds to the real estate sector to drive economic growth.

In a letter addressed to the prime minister and the State Bank of Vietnam (SBV) on July 17, HoREA highlighted the persistent challenges faced by the real estate sector. It emphasized that weak demand has led to a lack of cash flow, declining liquidity, and even insolvency for real estate businesses.

Real estate enterprises have been encountering difficulties in accessing alternative sources of funding, such as the corporate bond market and pre-order financing. As a result, bank loans have become vital for their survival.

However, consumer mortgage loans declined in the first half of 2023 in comparison to the same period last year. This decline indicates that homebuyers and real estate investors were facing obstacles in obtaining real estate loans or reducing their borrowing demand due to market uncertainties.

To address these challenges, HoREA stressed the importance of introducing credit support mechanisms to stimulate demand and enhance market activity in the real estate sector. By improving the accessibility of credit, there can be an increase in demand and a revitalization of the real estate market.

However, industry experts have raised concerns about the upcoming implementation of the SBV’s Circular 06, scheduled to take effect on September 1. They believe that certain provisions within the circular may make it harder to borrow from banks.

In its letter, HoREA expressed concerns about the practicality and alignment of certain regulations in the circular with the current realities of the industry.

The association emphasized the need for consistency and unity with existing legal frameworks to ensure the effective implementation of the circular’s provisions. HoREA believes that some aspects of the circular may not adequately address the needs and challenges faced by real estate enterprises, potentially hindering their access to credit from banks.

Vinamilk to pay 24.5% cash dividends next month

Vietnam Dairy Products Joint Stock Company (Vinamilk) will proceed with the payment of the outstanding dividend for 2022 and the first dividend payment for this year, with August 3 set as the record date.

The company will pay the remaining dividend for 2022 at 9.5%, and a dividend of 15% for the first quarter of 2023, or a combined dividend of 24.5%.

With over 2.09 billion shares in circulation, Vinamilk will allocate over VND5.12 trillion for the dividend payment to its shareholders.

Vinamilk already made two dividend payments for 2022, with the first payment of 15% made in August 2022 and the second payment of 14% in February 2023.

With the additional payment, the company will distribute a cash dividend of 38.5% for 2022. This year, Vinamilk plans to distribute a minimum of 50% of its consolidated after-tax profits as cash dividends to shareholders.

The company looks to obtain total revenue of VND63.38 trillion in 2023, up 5.5% over 2022, and maintain pre-tax profit of nearly VND10.5 trillion, the same as the year-ago level.

In its preliminary business results for the second quarter, consolidated revenue is estimated to reach VND15.2 trillion, a 1.6% increase against the same period last year and an 8.9% increase from the previous quarter.

The estimated after-tax profit is VND2.22 trillion, up by 5.6% year-on-year and 16.5% versus the first quarter.

VND9,000 billion needed for aquatic protection and exploitation

Vietnam will need over VND9,000 billion for the protection and sustainable exploitation of aquatic resources, with the goal of developing a modern, competitive, and sustainable fishery sector in the region.

During a meeting of the Appraisal Council on July 18, which focused on the planning for the conservation and exploitation of aquatic resources from 2021 to 2030, with a vision toward 2050, the Ministry of Agriculture and Rural Development presented a comprehensive roadmap for the fishery sector.

The country plans to establish 27 protected marine areas by 2030, covering a total water surface of 454,676 hectares. These areas will account for 0.454% of the country’s natural marine area.

The plan also includes the protection and effective management of aquatic resources in 149 areas in the territorial sea and 119 areas in internal waters. This will involve preserving breeding areas and areas where young aquatic animals gather.

Total seafood output is projected to reach 2.8 million tons by 2030. The fishery sector will comprise around 83,600 fishing boats and employ around 600,000 individuals.

In parallel, a comprehensive system of fishing ports and shelter areas for fishing boats will be developed step-by-step to provide better logistics services for the fishery sector.

According to the Vietnam Directorate of Fisheries, seafood exploitation in the first five months of this year totaled over 1.5 million tons, a 0.4% decline versus the same period last year.

Traffic infrastructure vital for growth in southeastern provinces

The development of traffic infrastructure plays a vital role in driving growth and development in southeastern provinces, said Minister of Planning and Investment Nguyen Chi Dung.

However, the southeastern region is still facing various obstacles and shortcomings that hinder its full potential despite its significant contributions to the country’s socio-economic development, he told the first session of the Southeastern Region Coordination Council chaired by Prime Minister Pham Minh Chinh this morning, July 18.

These challenges include insufficient and poorly integrated infrastructure within the region itself and in connection with other regions, as well as disparities in development among different provinces within the region. Other issues such as traffic congestion, environmental pollution, and localized flooding also need to be addressed.

Minister Dung also expressed concerns about the high population density in major urban areas, particularly HCMC. The current population density in HCMC is 4,292 people per square kilometer, significantly higher than Hanoi City with 2,398 people, the southeastern region with 795 people, and the national average with 320 people.

To tackle these problems, Minister Dung emphasized the strategic importance of coordinating the development of economic and social infrastructure to fuel growth in southeastern Vietnam.

Addressing the high population density in HCMC requires a focus on developing and improving transportation infrastructure and public transit systems, offering viable alternatives to private vehicle usage. This approach can help alleviate congestion, enhance mobility, and create a more livable urban environment in major urban areas like HCMC.

At the meeting, Minister of Transport Nguyen Van Thang presented plans to transform the southeastern region, focusing on improving its roadways, railways, waterways, and airports.

These plans entail a significant investment of VND738.5 trillion, divided into two phases: VND342 trillion from 2021 to 2025 and VND396.5 trillion from 2026 to 2030.

The Transport Ministry’s primary emphasis is on roadways, with a priority on completing component projects of the North-South Expressway, as well as major gateways and transport hubs.

Typical projects include constructing Beltway No. 3, Beltway No. 4, and expressways that connect Ben Luc and Long Thanh, HCMC and Moc Bai, HCMC and Chon Thanh, and Bien Hoa and Vung Tau.

In terms of railways, the focus is on enhancing rail transportation efficiency, particularly by upgrading the North-South railway and improving the HCMC transport hub.

To optimize inland waterway transportation, the ministry aims to renovate and complete various waterway routes. Additionally, investments will be made to upgrade ports, facilitating efficient cargo collection and clearance.

In the aviation sector, the plan includes initiating operations at Terminal 3 of Tan Son Nhat International Airport, commencing phase one of Long Thanh International Airport, and investing in phase two to increase capacity.

Minister Thang also proposed developing special policies and mechanisms for the region, similar to the initiatives in HCMC that have been endorsed by the National Assembly.

On July 11, the prime minister issued Decision No. 825, officially establishing the Southeast Region Coordination Council. The council aims to promote collaboration and address the challenges faced by the region by bringing together key stakeholders and fostering coordination among relevant authorities.

As per the decision, the prime minister serves as the chairman of the council, with the Minister of Planning and Investment assuming the role of standing deputy chairman. Other vice-chairpersons include ministers from various sectors such as Transport, Science and Technology, Construction, and Natural Resources and Environment. Council members consist of leaders from relevant ministries and chairpersons of the People’s Committees of the six provinces in the region.

The southeastern region comprises HCMC and five neighboring provinces – Dong Nai, Binh Duong, Ba Ria – Vung Tau, Binh Phuoc, and Tay Ninh. It covers an area of 23,551 square kilometers, accounting for 7.1% of the country’s total land area. With a population of 18.8 million people, the region represents 18.9% of the national population in 2022.

The southeastern region has a critical position in Vietnam’s socio-economic development as the largest economic hub in the country. In 2022, it contributed around 31% to the nation’s gross domestic product (GDP), 35% to exports, and 38% to the nation’s budget revenue.

The per capita GDP in the southeastern region is 1.64 times higher than the national average. Additionally, the region boasts a high urbanization rate of 66.5%, which is 1.8 times the national average.

Airfares fall during summer

Both domestic and international airfares have dropped significantly during this summer due to consumers’ belt-tightening and the availability of abundant flights offered by domestic airlines.

The average domestic airfare of Vietnam Airlines in June 2023 has decreased by nearly 7% compared to the same period in 2019.

Similarly, the average domestic airfare of three carriers – Vietnam Airlines, Pacific Airlines, and VASCO – dropped by 6.6% in June against the previous year.

Vietjet Air and Bamboo Airways have also lowered their airfares to compete with Vietnam Airlines.

For example, for a round-trip from Hanoi to Phu Quoc departing on July 27 and returning on July 30 during morning hours (9-11 a.m.), and booked 10 days in advance, Vietjet Air offers tickets at around VND3 million per passenger, which is half the price of Vietnam Airlines.

Bamboo Airways’ air ticket for the same route is priced at about VND4.51 million per passenger.

Despite the decrease in airfares, the occupancy rates on flights to popular domestic destinations such as Hue, Danang, Dalat, and Phu Quoc have only reached 60-70% in July. It is anticipated that these rates will continue to decline in the coming months.

International flight ticket prices have also seen a slump, with airfares to Southeast Asian countries matching those of domestic flights.

Data from the Civil Aviation Authority of Vietnam showed that the total number of domestic passengers in June 2023 exceeded 4.14 million, up 14.3% over the same period in 2019.

However, the supply capacity of airlines has surged by 18.3% compared to the previous year, reaching nearly five million seats.

Work on North-South Expressway sped up

Work is being sped up on the second phase of the Eastern North-South Expressway project, with more than 500 working groups deployed to its construction sites nationwide.

Contractors are working diligently to maintain the project’s timeline, taking advantage of favorable weather conditions, reported the Vietnam News Agency.

Significant progress is being made with over 11,000 personnel on-site, including workers, engineers and consultants, along with 5,000 equipment and machinery facilities.

Local authorities in 12 provinces and cities where the expressway project passes through have completed about 87% of land clearance work.

Half of the technical infrastructure relocation activities within the project construction sites have been accomplished.

The Ministry of Transport has confirmed the operation of nine construction material mining areas, with an additional 26 currently under consideration for approval.

The ministry expected that the necessary procedures could be expedited so that exploitation activities can commence by the end of this month.

A consistent supply of construction materials is crucial in overcoming major obstacles that hinder the implementation phase of the North-South Expressway project.

Market-based pricing essential to a healthy power market

Electricity pricing policy was the core issue to the development of the sector because it would affect the attraction of investment, the implementation of sustainable goals and commitments to climate change adaptation.

A conference on the electricity market, organized by the Standing Committee of the National Assembly on Tuesday, emphasized the need for a market-based mechanism for electricity pricing. This move is crucial to restructuring the power market and ensuring energy security.

Deputy Chairman of the National Assembly, Nguyen Duc Hai, acknowledged issues with electricity pricing policies and the slow progress in developing a competitive energy market. Le Quang Huy, Chairman of the Committee of Science, Technology and Environment, emphasized the importance of developing the power sector to support socioeconomic growth and national energy security.

The pricing policy for electricity plays a central role in attracting investment and achieving sustainable goals, including climate change adaptation.

Nguyen Dinh Phuoc, head of finance and accounting department of Vietnam Electricity (EVN), said that although average electricity retail prices increased by 3 percent from April 29, the increase, estimated at VNĐ8 trillion in total, was not enough for EVN to deal with financial difficulties, which would affect the operation of power plants and electricity supply.

Bui Xuan Hoi, Rector of the North Electricity College, said that unreasonable electricity prices would undermine EVN’s ability to reinvest in expanding the power system and put pressure on the economy.

According to Tran Tue Quang, Deputy Director of the Electricity Regulatory Authority of Việt Nam under the Ministry of Industry and Trade, electricity pricing must be market-based to ensure the development of the power market.

Ha Dang Son, Director of the Energy and Green Growth Research Center, highlighted the need for bold actions in restructuring Vietnam's power sector to align with the ambitious National Power Development Plan for 2021-2030.

He said that the development of a competitive power market must be accelerated.

The National Load Dispatch Center would be developed into an independent unit to ensure the operation of the power market with transparency and fairness among parties, he added.

In the short term, the focus should be placed on completing the legal framework for the operation of a competitive retail electricity market.

The mechanism of direct power purchase should be issued to encourage renewable power plants to participate in the power market, he said, adding that this would also create impetus for investment in and use of renewable energies to realize sustainable development goals.

The competitive electricity generation market was piloted in Vietnam from July 1, 2012 to December 21, 2018 and officially operated from the beginning of 2019.

To implement the competitive electricity retail market following the Prime Minister's Decision No 63/2013/QĐ-TTg dated November 8, 2013, the Ministry of Industry and Trade issued Decision No 2093/QĐ-BCT dated August 7 to approve the design of the competitive electricity retail market model.

Several points of the Law on Electricity were amended and took effect from March 1, 2022, to pave the way for the construction of a competitive electricity retail market.

HCMC boosting promotions, stimulating year-end shopping

The HCMC Department of Industry and Trade yesterday held a press conference to inform about upcoming promotion campaigns to stimulate year-end shopping.

Accordingly, large-scale promotion programs are going to be organized citywide. HCMC Industry and Trade Department is planning to cooperate with tourism businesses to offer budget tours to both domestic and foreign holidaymakers.

Particularly, the shopping scheme ‘Shopping Season’ from July 15 to September 15, including the promotion of renowned branded products from August 25-27, will continue to encourage the shopping spirit of city dwellers.

Statistics reveal that in the first stage of this shopping scheme from June 15 to July 15, over 3,000 businesses took part, providing more than 7,200 promotion programs with a discount of 50 percent and above. This has greatly contributed to the significant increase in retail sales compared to the previous month.

In the first 6 months of 2023, the total retail turnover of consumer merchandise and services reached VND555.7 trillion (US$23.5 million), a rise of 6 percent compared to this time last year.

Deputy Director of the HCMC Department of Industry and Trade Nguyen Nguyen Phuong said that to limit the case of ‘unacceptable price increase’ or fake promotion (intentionally increasing prices before applying discounts), his department is going to tighten its monitoring activities to timely detect and handle such situations.

Pepper, cashew exporting businesses to Dubai indicate being victims of scams

The Vietnam Cashew Association (VINACAS) has recently sent a notification to businesses regarding a suspected case of fraud in the export of cashew nuts to Dubai.

Recently, VINACAS received a report from Tin Mai Company, a member of VINACAS, regarding its contract to sell cashew nuts to a business partner in Dubai (contact person: Mr. Naeem Chaudhry, Mobile/WhatsApp: +971 58 600 1304, email: naeem@barft.com).

According to the report, after the customer advanced 15 percent of the total contract value, the company shipped the goods, and on June 24, the shipment arrived at Jebel Ali port, UAE. Subsequently, the goods were unloaded, and the empty container was returned on June 27. However, Tin Mai Company has not yet received the remaining 85 percent of the payment.

The Vietnam Pepper Association also revealed that, besides Tin Mai Company, at least two other businesses involved in exporting pepper and spices had faced a similar situation with the same customer.

Mr. Tran Huu Hau, Deputy Secretary-General of VINACAS, announced that VINACAS would work in coordination with the Vietnam Pepper Association to arrange a meeting with the affected businesses to gather detailed information. Subsequently, they would submit official requests to the relevant authorities in Vietnam and the UAE, urging them to consider and provide assistance in resolving the situation faced by these businesses.

Apartments under VND25 million/m² scarce on market

Vice Chairman Pham Lam of Vietnam Association of Real Estate Brokers informed of a scarcity of low-cost apartments in yesterday’s formal discussion ‘Buying a House to Live in, Now or Later?’, held by Tuoi Tre Newspaper.

Accordingly, Vice Chairman Pham Lam revealed that since the second quarter this year, new real estate supplies are so limited, mostly consisting of land lots and low-rise houses at medium-high prices of VND30-80 million/m² (US$1,270-3,380). Apartments at the price of VND25 million/m² ($1,057) only account for 2 percent.

Deputy Director of HCMC Construction Department Nguyen Thanh Khiet further informed that in the first 6 months this year, HCMC is running 13 accommodation projects to sell over 14,500 apartments.

Among them, the luxury apartment segment of VND40 million/m² ($1,690) and above occupies 87 percent, which is an increase of 7.2 percent compared to this time last year. The mid-end segment of VND20-40 million/m² ($846-1,690) is witnessing a remarkable drop. Those under VND25 million/m² ($1,057) are extremely scarce, being replaced by social housing, because the investment for accommodation projects is at VND11 million/m² ($465) to begin with.

Experts in the field commented that despite the limited new real estate supplies, the number of accommodation transactions is seeing a slight rise, mostly in the apartment segment. In particular, in the second quarter of this year, there were about 3,700 successful transactions, making up 18 percent of the total new sales. That is a development of 30 percent compared to the previous quarter even though it is only 60 percent of this time last year.

This increase is thanks to more consumer confidence as a result of new policies issued by the Government, a drop in loan interest rates of banks, and incentive programs offered by real estate businesses. Therefore, it seems now is a good time to obtain a new house if needed.

Sadly, many people at present want to buy an apartment, yet they are unable to do so despite the financial support from the State because of a shortage in reasonable houses of under VND30 million/m² ($1,269). For instance, during the first 6 months of this year, the three new accommodation projects in HCMC belong to the mid-to-high-end segment.

It is necessary to introduce a support mechanism for affordable commercial and social housing, solutions to address legal-related issues, and more loan interest rate reduction, to increase the supply in this segment and help both investors as well as house buyers.

Hanoi develops high-quality manpower in key industries

The quality of manpower in Hanoi has undergone positive changes with a focus on developing skillful human resources in key industries, namely social management, economic administration, culture, and tourism, according to the municipal People's Committee.

The focus is to serve the increasing integration requirements, and the results have met the need, said the local authorities. 

Hanoi's administrative apparatus currently employs more than 7,200 officials with higher education degrees. Among them, there are 80 PhDs (1.15%), more than 2,600 master's degree holders (35.81%), and more than 4,300 graduates (60.01%).

Since Hanoi defines tourism as a very specific industry requiring highly professionalized personnel, the capital's tourism workforce must meet all the conditions of communication, foreign languages, and competent use of information technology.

Given the importance of human resources, Hanoi has held training courses for the tourism industry workforce, with the connection between training institutions and tourism enterprises to associate training with practice. It's considered a key factor in improving the quality and competitiveness of the industry.  

According to the statistics of the cultural sector, more than 72,000 people (including those working in regulatory agencies in charge of culture, art, physical training and sports, non-business units, and enterprises) work directly in the tourism industry, while indirect human resources are estimated at 150,000.

Currently, the city has 17 People's Artists and 128 Meritorious Artists working in literature, theater, cinema, music, fine arts, photography, dance, architecture, and folk art.

The city government has issued a decision approving the "Project on Reorganization and Capacity Improvement towards Streamlining, Professionalism, and Efficiency of Public Performing Arts Units in Hanoi". This is an important prerequisite for theatres to improve the quality of programs and performances, upgrade the qualifications of artists and performers, strengthen the involvement of social resources to develop the autonomy of theatres, and preserve and promote the values of traditional art forms of the capital.

Hanoi's property market booms with rising condo prices

The selling price of condominium apartments in Hanoi is expected to continue to rise based on the current market situation, according to local insiders.

Nguyen Van Dinh, chairman of the Vietnam Association of Realtors (VARS), said the lack of new housing supply in the Hanoi condominium market leads to a price surge. "The mid-end and affordable segments, as well as commercial properties with good profitability, are still seeing transactions, and their prices are unlikely to fall, especially in the current context of limited supply," he added.

A report on the real estate market by CBRE Vietnam showed that new residential supply in Hanoi remained low in the second quarter of 2023, with 1,820 apartments from nine projects listed for sale.

Nguyen Hoai An, senior director of CBRE Vietnam's Hanoi office, said the total new supply in the first half of 2023 reached 3,926 apartments, down more than 53% year-on-year due to existing macro challenges.

"This is also the lowest number of new launches in a six-month period in the past five years. The high-end segments accounted for a larger share of all newly listed units at 51%," she said.

In the second quarter of 2023, the average primary price in Hanoi's condominium market increased by 1.6% from the previous quarter and 9.5% from the same period in 2022, reaching VND47.5 million ($2,008) per sqm (excluding VAT and maintenance fees).

The average selling price of mid-end apartments was around VND31 million ($1,310) per sqm, almost unchanged from the previous quarter but up 3.2% year-on-year. In terms of location, most areas saw price increases compared to the same period last year, with Dong Da, Cau Giay, Ha Dong and Bac Tu Liem showing the highest increases of 5-6% year-on-year.

Nguyen Manh Ha, Vice Chairman of the Vietnam Real Estate Association, said: "It is difficult for primary condominiums to lower the selling price if there is still a shortage of new property supply and the flow of credit remains restricted."

He pointed out that the time required for legal review, completion of project approval applications, and increased costs have led to higher prices for certain projects within the same segment. 

According to Tran Quang Trung, Business Development Director of Vietnam's Protech OneHousing, many buyers expecting a drop in housing prices will be disappointed due to the continued increase in primary prices, limited supply, and rising input costs.

Over 2,300 business regulations streamlined

As many as 2,352 business regulations in 191 legal documents have been simplified since 2021 as part of efforts to further improve the investment environment, said Minister of Home Affairs Pham Thi Thanh Tra.

Minister Pham made the announcement at a meeting held on Wednesday to review administrative reform progress in the first half of 2023 and set tasks for the rest of the year.

In the first half, the Prime Minister approved the abolishment of 47 business regulations, while ministries cut  210 others.

Prime Minister Pham Minh Chinh asked the Ministry of Industry and Trade, the Ministry of Finance and the State Bank of Viet Nam to hold more dialogues and contacts with associations and enterprises to remove hurdles in credit access, import and export activities as well as payment settlement.  

The Ministry of Labor, Invalids, and Social Affairs was urged to put forward amendments to Decree No. 152/2020/ND-CP regulating the management of foreign workers in Viet Nam and the recruitment and management of Vietnamese working for foreign organizations and individuals in Viet Nam (Decree 152) in July.  

The simplification of business regulations had yet met the Government’s requirements, said Ngo Hai Phan, Director-General of the Administrative Procedures Control Agency under the Government Office.

Under its Resolution No. 68/NQ-CP dated May 12, 2020, the Government targets to simplify at least 20 percent of business regulations in the 2020-25 period but some ministries have issued their plans to implement the resolution.

Ngo said ministries and agencies should need make more efforts to implement the resolution through consulting associations and businesses plan to remove the regulations that are hindering the development of businesses.

Asia remains pretty good place for investment: HSBC

For all the hullabaloo about dimming growth prospects and deglobalization, foreign direct investment (FDI) continues to pour into Asia, including Viet Nam, said HSBC in its report released on July 18.

According to HSBC, much of this is manufacturing focused, which should cement the region's position as the center of global trade. 

ASEAN has pushed past mainland China for the second year in a row, especially when it comes to new, rather than repeat, investment. 

At the same time, manufacturers from mainland China are increasingly investing in other economies as well, notably in ASEAN. 

Relative to the size of economies, inflows are especially large in Viet Nam, Malaysia, Australia, and New Zealand; far less so in South Korea, mainland China, and Japan.

Still, across the board, the pandemic has not put much of a dent into Asian FDI flows. Asia is a pretty good place for investment, the bank highlighted. 

FDI inflows into Asia, keeps on pushing higher, with a notable jump over the past three years, with FDI inflows into Asia more than doubling since 2010.

In Viet Nam, Malaysia, New Zealand, Australia, and the Philippines, FDI inflows top 2 percent of GDP compared to one percent in South Korea, Japan, mainland China, and Bangladesh.

In Viet Nam, total disbursed volume of FDI reached US$10.02 billion in the first half of 2023, a year-on-year increase of 0.5 percent.

The Ministry of Planning and Investment reported that FDI inflows into Viet Nam reached US$13.43 billion in the first half of 2023, down 4.3 percent on year.

Exhibition on sustainable production and consumption begins in Hanoi

An exhibition promoting sustainable production and consumption in a modern distribution system opened in Hanoi on July 21, welcoming the participation of than 20 domestic and foreign enterprises.

The three-day event is taking place as part of the National Action Program on Sustainable Production and Consumption in the 2021 - 2030 period.

Addressing the opening ceremony, Le Trieu Dung, chairman of the Vietnam Competition and Consumer Authority under the Ministry of Industry and Trade, emphasised that the exhibition is expected to create opportunities for businesses to strengthen connectivity and share sustainable consumption practices.

It also represents an ideal venue for management agencies, organisations, and associations to propose initiatives and solutions aimed at promoting sustainable production and consumption within a modern distribution system, Dung added.

Pham Thi Thuy Linh, head of Corporates and Property Acquisition - North - Central Retail in Vietnam, underscored the importance of the expo in changing the mindset of consumers towards the goal of sustainable production and consumption in the country.

She expressed her wish that visitors to the expo will start widespread green consumption habits towards enjoying a more healthy life moving forward.

A recent survey conducted by Nielsen Vietnam indicates that up to 80% of Vietnamese consumers are willing to pay more for green and clean products using environmentally-friendly materials.

In order to compete with the increasingly popular trend of green branding, many businesses have exerted great efforts to invest in launching green products.

However, local brands with a commitment to green and clean factors typically see a growth rate of only about 4% per year.

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