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VIETNAM BUSINESS NEWS JULY 3

Thaco subsidiary exports car seat covers to RoK
Auto part producer Autocom, a subsidiary of Vietnamese automaker THACO, sets to export 107,000 seat covers for Kia Bongo car model in 2022, up 18.5% from the previous year.

Last month, it exported nearly 8,000 Kia Bongo seat covers to Cellmech International Vina in the Republic of Korea.

This year, Autocom expects to supply many other auto accessories products to the RoK-based company, including gearshift covers and seat covers of Kia Rio, Hyundai i30 and Hyundai AX models.

HCM City’s CPI picks up 0.91% in June

Ho Chi Minh City’s Consumer Price Index (CPI) edged up 0.91 percent in June, with nine out of 11 groups of goods and services recording an increase in prices, the municipal Statistics Office reported.

Prices of transport services soared 3.89%, largely due to a 7.18% spike in petrol prices after they were revised up three times in June. Those of gas and other energy products, meanwhile, declined 6.09%, the office said.

Prices of food and dining services picked up 1.05% during the month. Those of rice, a major component of food, grew 0.57% on the back of low supply as the Winter-Spring harvest nears end.

Prices of foodstuff surged 1.27% last month, with the growth seen in various products, such as fresh, dried and processed vegetables (4.47%), eggs (2.59%), confectionery (1.65%), poultry meat (1.58%), and fresh and processed fruits (1.54%).

House rental rates went up 1.64% while construction materials and water supply increased 0.13 and 0.23%, respectively.

Vietjet launches direct routes to Japan’s Fukuoka, Nagoya

Vietjet has launched direct routes between Hanoi and Japan’s Nagoya and Fukuoka.

The route connecting Hanoi to Fukuoka is operated three return flights on Tuesdays, Thursdays and Saturdays every week, the Hanoi - Nagoya one is operated four return flights per week on Mondays, Wednesdays, Fridays and Sundays to serve people and tourists with almost 5 hours flying per leg.

After the routes connecting Ho Chi Minh City, Hanoi to Tokyo and Osaka, new routes to Nagoya and Fukuoka have offered more options for passengers when flying with Vietjet between Vietnam and Japan with saving cost, flexible flight schedules.

Binh Duong enjoys record-high trade surplus in H1

Binh Duong posted a highest-ever trade surplus of around 6.3 billion USD in the first half of 2022 as its foreign trade has witnessed quick recovery since the beginning of this year on the back of the recovery of global production and supply chains.

The southern province generated nearly 19 billion USD from exports and spent some 12.7 billion USD on imports, according to head of the provincial Statistics Office Ngo Van Mit.

Its largest market in H1 was the US which imported about 6.4 billion USD worth of goods and services from Binh Duong, followed by the EU (2.2 billion USD), the Republic of Korea and Japan (over 1.8 billion USD), and Taiwan (China) (over 1.4 billion USD).

Binh Duong reported a quite impressive growth of 6.84% in Gross Regional Domestic Products (GRDP) during the period; with industry and construction expanding 7.58%; services 6.60%, and agriculture, forestry and fisheries, 2.95%.

More than 3,300 enterprises have newly established in the province from January-June, registering total capital of nearly 21.26 trillion VND (911.86 million USD). It also raked in over 2.5 billion USD in foreign direct investment (FDI).

Vietnam-Korea Industrial Business Trade Week slated for next week

A trade promotion event connecting the Republic of Korea’s fundamental industrial manufacturing enterprises (PPURI Industry) and Vietnamese importers will be held online during July 4-8 by the Korea Trade and Investment Promotion Agency (KOTRA).

The event will draw 17 Korean manufacturers and suppliers focusing on machine tools and accessories, industrial robots, industrial cleaning machines, building materials, chemistry, automotive parts and industrial supplies for railway and shipping industries. These are high-quality products that have been widely used in Korea and exported to many countries around the world.

Nearly 60 online meetings have been arranged and confirmed by KOTRA for the trade week.

Vietnam Airlines relaunches services to Indonesia

National flag carrier Vietnam Airlines resumed services between Ho Chi Minh City and Jakarta (Indonesia) on July 2 after months of closure because of COVID-19.

The first flight in months, coded VN631, departed from HCM City for Jakarta at around 9:40am, with 144 passengers on board; and the return flight took off from Jakarta’s Soekarno-Hatta International Airport at 1:50pm carrying 171 passengers.

There are now regular round trips on Mondays, Wednesdays and Saturdays.

This is another international destination Vietnam Airlines has relaunched air route to after the Vietnam reopened its border and lifted travel restrictions.

Nguyen Minh Toan, head of Vietnam Airline’s representative office in Indonesia, said there is high travel demand between Vietnam and Indonesia, and the resumption of an air route between the two countries, with three flights per week, marked a start for the carrier before it can recover the flight frequency to seven per week like pre-pandemic.

Real estate firms advised to catch up with green growth trend

Positive changes in the real estate sector are crucial if the country wants to meet its green growth targets. Along with construction, the sector is the source of nearly 40% of carbon emissions in the world and consumes about 36 percent of total power generated globally, according to experts.

Real estate firm Savills cited the Global Status Report for Buildings and Construction 2021, which showed that in 2020, the real estate and construction sector accounted for 36% of global final energy consumption and 37% of energy related CO2 emissions, as compared to other end use sectors.

Building activities ares the reason for 27% of total CO2 emissions every year, it noted.

Savills General Director Troy Griffiths affirmed that real estate is an area that poses the strongest impacts on the environment.

In late 2021, the Government of Vietnam approved a national strategy on green growth for the 2021-2030 period with a vision to 2050, which aims to switch the country’s growth model towards a greener economy with the application of a circular economic model through the economical and efficient use of natural resources and energy, and developing sustainable infrastructure for higher growth quality, thus promoting competitiveness and reducing negative impacts on the environment.

According to Savills World Research Director Paul Tostevin, the number of office buildings meeting green criteria in cities remains modest, but this provided a good chance for investors to develop green real estate.

Master plan targets long-term prosperity for Mekong Delta

The recently-approved master plan for the Mekong Delta region in the 2021-2030 period with a vision to 2050 is expected to create new values and changes towards sustainable and green growth, and long-term prosperity for the region.

According to Carolyn Turk, Country Director for the World Bank in Vietnam, the master plan demonstrated the whole-of-government approach and a strong commitment to promoting sustainable development and enhancing the climate resilience of the Mekong Delta.

The planning highlighted the new mindset and new vision for the region considered a global hotspot for climate change, she said.

Hirai Shinji, Chief Representative of the Japan Trade Promotion Organisation (JETRO) in Ho Chi Minh City, said the master plan has well presented the view that the Mekong Delta’s development is in line with the socio-economic development of Vietnam in general.

Former Director of the Institute of Policy and Strategy for Agriculture and Rural Development under the Ministry of Agriculture and Rural Development Dang Kim Son said during the planning process, Vietnam had learned lessons through the involvement of experts from the Netherlands – the country is facing sea level rise, but ranks second in the world in exporting agricultural products.

He underlined the need to promote regional linkage and involve domestic and international investors developing the region.

For her part, Dutch Ambassador to Vietnam Nienke Trooster said to achieve the goal of turning the Mekong Delta into a land suitable for economic development and worth living, it requires an integrated approach through supporting and promoting high-value and sustainable agricultural production.

She recommended that the planning of the Mekong Delta should be carried out on the principle of conformity with natural ecological conditions, and meeting the demand of consumers and the market.

Meanwhile, Turk said the planning should be accompanied by a strategic and feasible action plan, which investment priorities in a time frame and with certain resources for socio-economic development are clearly defined.

Much room for Vietnam’s coffee export to Japan

Vietnam is believed to have much room for exporting coffee to Japan, whose hot coffee market is forecast to grow 4.2 percent during 2020 – 2025.

In April, Vietnam shipped over 10,500 tonnes of coffee worth 25.9 million USD to Japan, up nearly 40 percent in volume and nearly 62 percent in value from a year earlier.

The four-month figures reached more than 45,100 tonnes and over 110 million USD, respectively rising 13 percent and 45 percent, according to the General Department of Vietnam Customs.

Coffee export prices stood at 2,440 USD per tonne on average in the first four months, representing a year-on-year increase of 28 percent.

Notably, a surge was recorded in the sale of processed coffee to Japan, by 63.6 percent in the first quarter to 16.3 million USD.

GlobalData, a London-based data analytics company, predicted Japan’s hot coffee market will expand by 4.2 percent during 2020 - 2025.

Da Nang offering preferential policies to attract investors

Da Nang city has granted investment registration certificates and investment policy decisions to 27 projects with total capital of some 5.6 bln USD. It also offers many preferential policies to attract domestic and foreign investors. Issues relating to policies, incentives, and transport infrastructure will also be addressed to attract investment and contribute to socio-economic development.

The Lien Chieu deep-water port project, on a planned area of about 450 hectares, will be the largest container port in the central region upon completion and be capable of berthing container vessels of up to 8,000 TEUs.

The project consists of 2 components, with an implementation period from 2021 to 2025. Da Nang is now calling for investment in the project and offering incentives.

Considered a highlight of Da Nang’s investment attraction efforts, its Hi-Tech Park has been attracting a host of projects, in particular foreign investment focusing on information technology and high-tech industry.

To take advantage of investment attraction efforts, Da Nang is perfecting its infrastructure to welcome investors in projects such as airports, seaports, and logistics, among others. An auxiliary industrial park is also on the way.

Top 10 prestigious insurance firms in 2022 announced

The Vietnam Report JSC on July 1 announced the lists of Top 10 most prestigious life and non-life insurance companies in Vietnam in 2022.

Accordingly, the 10 prestigious life insurance companies included Bao Viet Insurance, Dai-Ichi Vietnam, AIA Vietnam, Prudential Vietnam, Chubb Vietnam, MB Ageas, Hanwha Life Vietnam, Manulife Vietnam, Generali Vietnam, and Cathay Vietnam.

Meanwhile, the top 10 non-life insurance companies in 2022 are Bao Viet Insurance, Posts and Telecommunications Joint Stock Insurance Corporation (PTI), PVI Insurance, Petrolimex Joint Stock Insurance Company (PJICO), Military Insurance Corporation (MIC), BIDV Insurance Corporation, Bao Minh Joint Stock Corporation, VietinBank Insurance Company, Agriculture Bank Insurance Joint Stock Corporation and Saigon-Hanoi Insurance Corporation.

Based on the reputation of insurance companies, Vietnam Report made assessments objectively and independently on the foundation of their financial capacity, media reputation and a survey of relevant organisations and individuals conducted in June 2022.

Vietnam Report announces Top 10 prestigious banks

The Vietnam Report JSC has recently published the list of the top 10 prestigious banks in Vietnam in 2022.

The 10 banks honoured as the most prestigious commercial banks in the country are Vietcombank, VietinBank, Techcombank, Military Bank, VPBank, ACB, BIDV, TPBank, VIB and AgriBank.

Meanwhile, the list of the 10 most prestigious private joint-stock banks comprises Techcombank, VPBank, ACB, TPBank, VIB, HDBank, Sacombank, SHB, OCB and MSB.

The banks have been ranked based on three criteria: financial capacity shown on the latest financial statement, credibility on media evaluated by the Media Coding method, and stakeholder opinions collected in a survey in June.

The survey also showed that 48% of bank customers think the banking industry has been playing a leading role in the country's economic recovery, 77% think banks have been maintaining decent customer services, and 58.9% think banks have managed to adapt their products to the pandemic.

Vietnam business association in Vientiane holds first congress

The Vietnam Business Association in Vientiane, Laos, on July 1 held its first congress for the 2022-2027 term.

This was one of the practical activities in response to the Vietnam-Laos Solidarity and Friendship Year 2022.

Established under the direction of the Vietnamese Embassy in Laos and the guidance of the Vietnam Business Association for Cooperation and Investment in Laos (BACI), the association groups Vietnamese enterprises from Vietnam and companies of overseas Vietnamese (OVs) which are operating in Vientiane and Xaysomboun provinces, and the capital city of Vientiane.

It is expected to made practical contributions to Lao localities’ socio-economic development in particular, and economic cooperation between Vietnam and Laos in general.

In his speech at the event, newly-elected Chairman of the Vietnam Business Association Nguyen Xuan Ha pledged that the organisation will deploy its directions and actions in the best way to protect the interests of its members.

Textile enterprises' results mixed in second half of 2022

Textile and garment export turnover in the first six months of 2022 is estimated to increase 23% on-year to about 22 billion USD, reaching the highest level ever, according to the Vietnam Textile and Apparel Association. 

Of which, the US market played an essential role for the industry. Data from the General Department of Customs of Vietnam showed that textile and garment exports in the first five months of 2022 to the US market increased by 26% over last year to 7.58 billion USD, accounting for 57% of the total value of Vietnam’s textile and garment exports.

The newly updated report by Viet Dragon Securities JSC (VDSC) said that these figures imply that the prospects of the country’s textile and garment industry will depend heavily on economic developments in the US market.

However, in the second half of 2022, VDSC forecasts that the demand for textiles and garments will tend to decrease due to high consumption in 2021, while inflation is cutting people's spending on unnecessary products. 

The US market also began to show many warning signs of a cooling down in apparel demand. In the first quarter of 2022, clothing accounted for just 3.9% of total US consumer spending, down from 4.3% in 2019 before the pandemic. According to Vinatex, the US market's textile and garment import demand is likely to decline by 7-10% in the second half of 2022.

On the other hand, the US ban on cotton originating from the Xinjiang region that officially took effect on June 21 also caused disruptions in the supply chain and contributed to higher cotton prices. 

VDSC data shows that only 10.5% of US cotton apparel imports came from China in April, down from about 15% at the beginning of the year. The ban may affect the source of raw materials of Vietnamese enterprises and create barriers when exporting to the US market.

But this can also be an advantage for large textile and garment enterprises in Vietnam, who have the ability to diversify sources of raw materials, replacing orders to the US of Chinese companies. 

Besides, the shutdown of China's economy also contributed to the shift of orders from China to Vietnam recently. In April, China's market share in textile imports to the US fell to a new record low of 26.3% in volume and 16.8% in value. 

Analysts said that the raw material problem will only be solved when China gradually reopens its economy, as most of the raw materials for the Vietnamese textile and garment industry are imported from China.

China is also showing some positive signs in easing border restrictions on recession worries in the second half of this year. It is expected to help gradually reduce input costs for businesses and improve profit margins for the rest of 2022.

According to VDSC, there is likely to be divergence among the profits of Vietnamese textile and garment companies in the second half of the year. Specifically, the last six months of 2022, domestic manufacturers will aggressively compete in terms of both input materials and output as orders are no longer as abundant as in the first half of the year.

Regarding the prospects of enterprises in the industry in the second half of 2022, VDSC believes that some enterprises will be able to grow better than the industry in general, thanks to their expanded production capacity and large customer base. Moreover, they also less affected by the cost of raw materials than other companies in the industry, mainly due to the FOB method. 

In a recent report, SSI Research also estimated that revenue growth of textile and garment manufacturing companies in Vietnam will decelerate in the last six months of 2022 and 2023.

Laos promotes construction of Laos - Vietnam railway’s section

The Lao government has “green-lighted” a feasibility study on a railway route connecting the Vientiane capital with Thakhek in central Khammouane province, part of the Laos-Vietnam Railway Project (LVRP).

Under a Memorandum of Understanding (MOU) just signed by the Lao government with the Lao Petroleum Trading Lao Public Company (PetroTrade), the LVRP, which is a high-speed electrified railway project, has a length of about 452km, with total investment of 5 billion USD.

In the first phase, the railway will connect Thakhek town with Vung Ang seaport of Vietnam with a length of about 139km. Meanwhile, the second phase will be a 312-km route connecting Thakhek to Vientiane.

The LVRP, which has been under consideration since 2015, will allow the connection of logistics supply routes between Laos and Vietnam.

This is part of the Laos Logistics Link (LLL) project, connecting Vung Ang seaport with the Laos-Vietnam Railway, Thanaleng Inland Port and Vientiane’s logistics area.

Bright outlook predicted for rice exports

As many countries in the world have limited food exports to guarantee domestic food security, rice – a staple in most of Asia – is forecast to witness surging prices in the time ahead, which is said to be a chance for Vietnam – one of the world’s largest rice exporters.

In the first five months of 2022, nearly 2.77 million tonnes of milled rice worth over 1.35 billion USD were shipped abroad, rising 6.6% in volume but declining 4% in value year on year, according to preliminary data from the General Department of Vietnam Customs.

The Philippines remained the biggest importer, accounting for about 46% and 43.6% of total rice export volume and value. It was followed by China with 14% and 15% of the respective figures.

Strong growth was also recorded in shipments to many markets such as Africa (up over 76% from a year earlier), including Ivory Coast (37%) and Mozambique (47%).

Though export prices, 489 USD per tones on average, have fallen compared to 2021, they are still higher than rice prices of other major exporters like India, Pakistan, and Myanmar.

Apart from traditional buyers, businesses are also stepping up shipments to demanding markets such as the US and EU countries like Germany, Sweden, Belgium, and Poland.

Vietnam’s Trade Office in Sweden noted rice is the commodity posting the strongest growth in exports to Northern Europe, adding that since the EU - Vietnam Free Trade Agreement (EVFTA) took effect in August 2020, Sweden’s imports of the Vietnamese grains have gone up considerably.

Ben Tre emerging destination of ecotourism, river-based tours

The Mekong Delta province of Ben Tre, renowned as the kingdom of coconut and for its large acreages of fruit farming, is striving to become a top destination for ecotourism and river-based tours.

The province has been focusing on seizing its advantages to develop tour packages, including ecotourism, river-based tourism, sight seeing at historic and cultural relics, community-based tourism and leisure tourism, according to Director of the provincial Department of Culture, Sports and Tourism Nguyen Van Ban.

One of the most popular ecotourism projects in Ben Tre is Nghenh Xuan Farmstay in Thanh Trieu commune in the district of Chau Thanh, which lies on the banks of Thanh Trieu River.

Chau Thanh’s Tan Phu commune is a paradise of tropical fruits in Ben Tre with numerous plantations growing durian, mangosteen, lanzones, jackfruit, rambutan, longan and others.

Paying only 80,000 VND (3.44 USD) per person for entrance, visitors can take a tour around a fruit farm and devour a fresh fruit buffet straight from the trees.

The province has been calling for investors both at home and overseas to develop luxurious river-based and seaside resorts, and those for cultural and spiritual tourism and MICE.

Vietjet reopens Hanoi - Busan (RoK) air route

Budget airline Vietjet Air on July 1 resumed its air route linking Hanoi and Busan, a beautiful coastal city in the Republic of Korea (RoK).

Initially, Vietjet will operate three return flights per week on Wednesdays, Fridays and Sundays, which will be made daily from July 12.

On the occasion, the airline has offered a an unprecedented price of 280,000 VND (12 USD) per leg, excluding taxes and fees, for tickets in air routes between Vietnam and the RoK.

Vietnam’s famous rice gains access to Japan

Tan Long Group JSC, in collaboration with Kiraboshi Bank, held a ceremony in Tokyo on June 30 to introduce ST25 rice, which was named the world’s best rice in 2019, to the Japanese market.

Vietnamese Ambassador to Japan Vu Hong Nam appreciated the two sides’ efforts to bring the grain to such a high-standard market like Japan.

Vietnam is one of the world’s leading rice exporters, and the country’s grain has been available in more than 100 markets over the world. But it is the first time the ST25 rice has been shipped to Japan. To bring ST25 to Japan, Vietnam must meet over 600 technical standards.

30 Vietnamese firms register for field demonstrations at Agritechnica Asia Live

A total of 30 firms and 10 units in Vietnam have so far registered to perform machinery field demonstrations at the upcoming 2022 Agritechnica Asia Live.

The event, the theme of which highlights concerted mechanisation towards sustainable agriculture, is scheduled to take place in Can Tho on August 24-26.

Other activities include machinery exhibition and seminars on mechanisation in fruit and fishery sectors as well as on collecting feedback for the establishment of a mechanical centre in the delta. The event, annually held in Asian nations, aims at promoting commercial transactions and presents an opportunity for domestic and foreign enterprises to find suitable partners.

It is also the first time an Agritechnica Asia Live takes place in Vietnam, with the number of participants estimated to reach about 4,000.  

Björn Ole Sander, Chief Representative of the International Rice Research Institute (IRRI) in Vietnam, said before the event takes place, IRRI will coordinate with scientists to evaluate and verify the effectiveness of machines and technologies that are about to be on display.

Petrol prices down after seven consecutive increases

Petrol prices were adjusted down from 3pm on July 1 by the Ministries of Industry and Trade, and Finance, after seven consecutive increases.

The retail price of RON95 dropped by 110 VND to a maximum of 32,763 VND (1.41 USD) per litre, while that of E5RON92 bio-fuel was down 411 VND to 30,891 VND per litre.

Meanwhile, the prices of diesel 0.05S and kerosene decreased by 404 VND and 432 VND to 29,615 VND and 28,353 VND per litre, respectively.

The two ministries also decided to use the petrol price stabilisation fund at a rate of 100-800 VND per litre.

Fresh lychee on national flag carrier’s in-flight menu

Fresh lychee, which is in season now in northern Vietnam, has returned to in-flight meals on Vietnam Airlines after a hiatus due to the COVID-19 pandemic.

The fruit, grown in Bac Giang province, is being served to business class passengers on the national flag carrier’s domestic and international routes from Hanoi from July 1-15.

The move aims to introduce the specialty to both domestic and foreign passengers and expand cooperation with businesses and localities to promote Vietnamese agricultural products to the world.

Since June 24, Vietnam Airlines has coordinated with Bac Giang province to promote lychee on e-commerce platform VNAMall.

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

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Domestic securities companies face losses

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