VIETNAM BUSINESS NEWS JULY 6
According to the Vietnam Food Association (VFA), the export price of Vietnam’s 5% broken rice is higher than that of Thailand, India and Pakistan.
Specifically, each tonne of this kind of rice is sold for 418 USD, 8 USD higher than that of Thailand, and 30 USD and 75 USD higher than those of Pakistan and India, respectively.
Meanwhile, the export price of Vietnam’s 25% broken rice is currently 403 USD per tonne, equal to that of Thailand, but 35 USD and 75 USD higher than those of Pakistan and India, respectively.
In addition, the country’s high-quality rice is being shipped to Japan and Europe. Recently, Tan Long Group JSC, in collaboration with Japan’s Kiraboshi Bank, held a ceremony in Tokyo to introduce ST25 rice, which was named the world’s best rice in 2019, to the Japanese market. Meanwhile, Loc Troi Group JSC exported nearly 500 tonnes of high-quality rice labelled with its own brand name “Com Vietnam Rice” to the EU markets in June.
EVN suggests solutions to rooftop solar power-related issues
Vietnam Electricity (EVN) has proposed several ways to tackle problems related to rooftop solar power development, especially in the context that there are few legal guidelines to regulate the highly necessary sector.
It pointed out there is currently no clear legal basis for connecting rooftop solar power systems with the national grid as well as the establishments where they are installed for self-consumption.
It said in the recent past, EVN and subsidiaries received opinions from investors and the community regarding the temporary suspension of connecting rooftop solar power systems with the grid pending Government issuance of mechanisms and the Ministry of Industry and Trade’s guidance for implementation.
Foreign investors and domestic organisations guaranteed by foreign investors or international development funds asked for permission to use their own rooftop solar systems.
As these systems would be installed outside the EVN grid, a negative response may be in the winds if investors are not permitted to plug in to their own solar systems, EVN said.
However, it noted, there are risk for loopholes in the system if EVN agrees. Regulations on procedures, standards, and technical requirements for the self-use of those systems has yet to be developed.
Lack of control over rooftop solar power may lead to difficulties in mobilising other power sources and ensuring supply - demand balance. This is especially so in the central and southern regions, when those systems break down or are unable to meet investor demand. Therefore, it is necessary to have a legal corridor to hold users responsible for their consumption, according to EVN.
The group said it has recommended the Government issue mechanisms for encouraging the development of rooftop solar power in the northern region, but neither the Government nor the Ministry of Industry and Trade has released guidance.
To create a favourable business climate for investors and help boost Vietnam’s cooperation with other countries, EVN is seeking its Members Council's permission to urge the ministry to issue detailed regulations to govern solar power systems, with priority given to the northern region.
It noted it will also propose the Ministry of Construction promulgate all-round regulations on technical standards and requirements related to the safety of buildings when installing the systems.
The EVN document also suggested ways to resolve disagreements about procedures for households and individuals to register for rooftop solar power trading. Accordingly, electricity companies are asked to pay for rooftop solar power to the households and individuals who do not have to register for trading this type of electricity because of low incomes.
As part of Vietnam’s efforts to boost renewable energy, EVN will invest more in clean energy in the years to come to meet growing demand.
The group has submitted to the Government proposals on mechanisms to encourage the development of renewable energy such as wind and solar power along with storage systems.
It has also asked for the Cabinet’s permission to develop offshore wind power in the northern region to increase electricity supply and ensure national power security.
EVN hopes to put into operation around 5,500 MW of electricity from renewables, with 4,000 MW from wind power and 1.500 MW from solar power by 2025, to prevent power shortages, especially in northern localities.
Binh Phuoc calls for Singaporean investment in various fields
The southern province of Binh Phuoc called for Singaporean investment in an array of areas during a conference held in both online and offline formats on July 5.
The areas include timber processing and furniture, food processing, goods processing from rubber latex, electronics, supporting industries, commercial centres, vocational training and health care.
Singapore is running 15 projects in Binh Phuoc, with combined investment of 286 million USD, making up 8.5% of total foreign investment in the province. The projects mainly focus on husbandry, meat processing, and producing animal feed, batteries and accumulators.
Secretary of the provincial Party Committee Nguyen Manh Cuong suggested Singapore expand its investment in other important spheres like urban development, trade, transportation, logistics and services. Binh Phuoc's authorities will create favourable conditions for businesses to operate in the province, the official pledged.
European investors appreciate Vietnam’s green growth potential
The confidence of European investors in Vietnam’s business environment was down slightly in the second quarter, but its potential in green growth is attracting their attention, promising growth in investment over the remaining quarters of the year.
These results were found in a survey to determine the Business Climate Index (BCI) in the second quarter of the year, announced by the European Chamber of Commerce in Vietnam (or EuroCham) on July 4.
Some 79 percent of European business leaders said they appreciate Vietnam’s green development potential, and nearly 90 percent believe Vietnam should strengthen the development of its green sector to attract more foreign investment.
A representative from EuroCham said instability in the global economy is the leading cause of the slight downturn in confidence in Vietnam’s business environment, and Vietnam is not alone in facing this problem.
According to a representative from YouGov, which conducted the BCI survey, foreign investor confidence in Vietnam remains basically stable at this volatile time. FDI inflows into the country will therefore be maintained.
Vietnam’s green growth potential is indeed encouraging European investors. YouGov believes the BCI results for the second quarter and the Vietnamese market in general should be seen in a positive light.
Over 200 exhibitors to join international livestock, aquaculture expo
The 8th International Livestock, Dairy, Meat Processing and Aquaculture Exposition will be held next month in Ho Chi Minh City to help firms restore and enhance business connections, and update market information and new technologies after nearly three years of hiatus due to the COVID-19 pandemic.
ILDEX Vietnam 2022 is expected to attract more than 200 exhibitors from 25 countries and territories, including Austria, Belgium, Canada, China, the Czech Republic, Denmark, France, Germany, Italy, Japan, the Republic of Korea, the Netherlands, Thailand, the US, and the UK.
A series of activities will be organised during the three days of the exhibition, including workshops that will provide knowledge, solutions and strategies to help businesses grow and thrive, a direct business matching programme, a Potential Buyer Programme (VIP Buyer), and many other practical activities.
Organised by Minh Vi Exhibition and Advertisement Services Co., Ltd and VNU Exhibitions Asia Pacific Co., Ltd, ILDEX Vietnam will be held at the Saigon Exhibition and Convention Centre in District 7 from August 3 to 5 and is expected to attract 10,000 visitors from Vietnam and other countries in the region.
Vietnam, Japan review joint initiative
The Vietnamese Ministry of Planning and Investment, in coordination with the Japanese Embassy in Vietnam and the Japan-Vietnam Economic Committee under the Japan Business Federation (KEIDANREN), held a mid-term review meeting for the Vietnam-Japan Joint Initiative (eighth phase) in Hanoi on July 5.
It was reported at the meeting that 47 out of the total 80 sub-items in the joint initiative have been well implemented as scheduled so far, 15 are underway, six make no progress, and work will start on 12 others in the time ahead.
The Vietnam-Japan Joint Initiative was launched in April 2003 as a special cooperation mechanism between the Vietnamese and Japanese Governments.
It serves as a policy dialogue forum between Japanese investors and relevant Vietnamese ministries and agencies, where proposals are made to help competent Vietnamese agencies fine-tune laws and policies.
Over the past 19 years, the initiative has helped create an open and transparent business and investment environment in Vietnam.
The eighth phase of the initiatives focuses on 11 groups of issues, including the publication and application of case law/civil judgment enforcement/competition regime; the Law on Investment and the Law on Enterprises; improvement of the working environment; promoting infrastructure investment in the form of public-private partnership (PPP); reform of state-owned enterprises and stock market; method of implementing specific measures to create the best electricity structure in Vietnam; and efforts to improve laws and regulations related to natural gas pipeline construction and promote import of liquefied natural gas.
They also cover land-related issues; the supporting industry; activities of the Vietnam National Innovation Center (NIC) and innovation activities in localities and businesses; and highly skilled human resources development.
Because the global economy was seriously affected by the COVID-19 pandemic, especially disruptions in supply chains, Vietnam and Japan agreed to add three new groups of issues: development of the supporting industry, innovation and development of highly skilled human resources.
Mechanical engineering firms urged to enhance cooperation
Domestic mechanical engineering enterprises should strengthen cooperation to improve competitiveness and gain more market share, industry experts have suggested.
Nguyen Quang Hieu, general director of PetroVietnam Marine Shipyard JSC (PV Shipyard), said that there were enormous opportunities for mechanical engineering firms to tap into the lucrative local market with a scale of up to billions of US dollars.
Hieu cited offshore wind power projects as a good example. He said Vietnamese enterprises could produce offshore wind turbine foundations. Even a small-scale wind power project comprises about 30-40 turbines, and its turbine foundation system would need an estimated 300,000 tonnes of equipment.
With each tonne equivalent to 4,000 USD, including the cost of materials, on average, there would be about 1.2 billion USD worth of market share for local mechanical engineering enterprises, Hieu said.
Dao Phan Long, chairman of Vietnam Association of Mechanical Industry (VAMI), said the domestic mechanical engineering enterprises enjoyed relatively abundant development potential. In the past 5-10 years, Vietnam has spent about 40 billion USD each year importing equipment and machinery from abroad to serve the entire economic sector, including industrial production, agriculture, infrastructure construction, services and national security. This is a large demand that not many countries have.
The country will also implement many essential and large-scale projects, such as the National Power Development Plan for 2021-30, Long Thanh International Airport and inner-city railways, traffic works and irrigation, which means the local mechanical market remains lucrative, according to industry experts.
However, domestic mechanical engineering, mostly small and medium-sized, has failed to gain a larger share of the domestic mechanical market due to their limited financial capacities, lack of equipment, poor linkages between companies and insufficient supportive policies from the Government.
General Director of LILAMA Corporation Le Van Tuan said mechanical engineering was a key industrial sector and the backbone of national development. However, enterprises still had to find their way to develop due to the lack of a Government resolution for the industry.
Tech firms winning reputation award 2022 announced
Vietnam Report announced the Vietnam Top 10 Technology Companies Reputation Award 2022 on July 5, with Viettel, FPT, and VNPT among the big names in the rankings.
The list of the 10 most prestigious information technology - telecommunications companies in 2022 comprise Military Industry and Telecoms Group Viettel, FPT Group, Vietnam Posts and Telecommunications Group (VNPT), VNPT Vinaphone Corporation, Mobifone Telecommunications Corporation, CMC Technology Group, Hanel Joint Stock Company, Vietnam Technology & Telecommunication JSC, Vietnam Maritime Communication and Electronics Company (VISHIPEL), and Hanoi Telecom JSC.
Meanwhile, the top 10 suppliers of system integration services and software solutions are FPT Software Co. Ltd, Misa JSC, FPT Information System Company, CMC Technology & Solution Corporation, VNPT Technology JSC, Joint Stock Company for Telecoms and Informatics (CTIN), Elcom Technology - Telecommunication JSC, Tuong Minh Software Solutions Co. Ltd, FSI Investment and Technology Development JSC, and HPT InformaticTechnology Services JSC.
The lists were compiled basing on the companies’ financial capacity and reputation on the media, along with opinions from some relevant parties interviewed in June 2022.
Vietnam, India eye partnership in pharmaceutical sector
Viet Nam is seeking co-operation with India in the field of pharmaceuticals, especially manufacture of vaccines for COVID-19, a conference heard on Tuesday.
India is now the third biggest supplier of pharmaceutical products to Viet Nam, Tran Ngoc Liem, general director of the Viet Nam Chamber of Commerce and Industry’s HCM City branch, told the India-Viet Nam Pharmaceuticals and Health Industry Conference.
Pharmaceuticals were one of India’s key exports to Viet Nam last year at US$267 million, he said.
India is ranked third globally in terms of pharmaceutical output and 14th in terms of value.
Its leading companies all meet international standards.
The Vietnamese pharmaceutical market has been experiencing strong growth in recent years with 250 factories, 200 import-export facilities, 4,300 wholesalers, and 62,000 retailers as of this year.
Around 300 Indian drug companies had representative offices in Viet Nam, including large firms such as Sun Pharma, Natco, and Mylan, but there was an absence of joint ventures between Viet Nam and India, he remarked.
Wheat shortages bode well for Vietnamese rice
The disruption of global wheat supply caused by the Russian military operations in Ukraine has left importers no choice but to seek substitution for the grains in rice-exporting countries, boding well for Vietnamese rice.
Vietnamese rice has been increasing steadily in price in recent months, surpassing Thai rice and leaving many other countries’ rice far behind.
Vietnamese high-quality varieties of rice rose by US$10-15 per tonne in June, with common white rice reaching $430-440 per tonne, Jasmine rice $540-550 per tonne and Number 5451 white rice $480-490 per tonne.
In the first five months, rice exports hit 2.77 million tonnes, up 6.6 per cent year-on-year, raking in $1.35 billion. Of which, the volume of rice exported to leading trade partners rose considerably.
Specifically, the figures to Africa went up by 76 per cent, to Philippines by 34.6 per cent and to Malaysia by 19 per cent.
The rising demand for Vietnamese rice can be observed not only in traditional markets, but also in high-end markets, including Germany, Sweden and Poland.
By early June, the Department of Crop Production has granted 149 certificates to eight rice exporters, allowing over 15,100 tonnes of rice to enter the European market.
Agro-forestry-fishery exports on track to surpass yearly target
Viet Nam earned US$27.88 billion from agro-forestry-fishery exports in the first half of this year (H1), up 14 per cent year-on-year despite the difficulties and impact of the world economic environment, according to the Ministry of Agriculture and Rural Development (MARD).
Of the sum, exports of key farm produce and forestry products reached $11.37 billion and $9.1 billion, surging 8.8 per cent and 3 per cent year-on-year, respectively, fishery products hit $5.8 billion, up 41 per cent annually, while that of livestock reached $176 million, down 16 per cent, and production input topped $1.42 billion, up 65 per cent.
Nine types of goods recorded an export revenue exceeding $1 billion in the period: coffee, rubber, cashew, fruit and vegetable, rice, tra fish, shrimp, wooden goods, and inputs for production.
Items which saw increases in both export volume and value included coffee, up 22 per cent and 50 per cent respectively; cassava and cassava products (13 per cent and 28 per cent); rubber (9.2 per cent and 12 per cent) and rice (16 per cent and 5 per cent).
During the first six months, the US, China, Japan and South Korea remained the four biggest importers of Vietnamese agro-forestry-fishery goods.
Typically, the US took the lead with a turnover of $7.61 billion, up 8 per cent year-on-year or equivalent to 27.3 per cent of the country's total export value. MARD said that China ranked second with $4.97 billion, a yearly hike of 6 per cent or 17.8 per cent of the total.
Also, in the first half, Viet Nam spent about $22.1 billion on purchasing agro-forestry-fishery products, creating a trade surplus of approximately $5.75 billion, nearly double the figure posted in the same period last year.
Packaging industry benefits from e-commerce
The packaging industry will benefit from the growth of e-commerce, and the free trade agreements that Viet Nam has joined, said Nguyen Duc Trung, deputy director of the Enterprise Development Agency, at a training workshop in the southern province of Dong Nai last week.
Trung said this was one of the fastest-growing industries, significantly when domestic demand is increasing. The packaging industry grows at an average of over 10 per cent per year.
Currently, Viet Nam has more than 900 packaging factories, about 70 per cent of which are located in the southern provinces.
The Viet Nam Plastics Association reported that the plastic packaging industry had also developed strongly recently, with an average growth rate of more than 25 per cent per year.
Plastic packaging thrived due to the excellent growth of the food industry, said the association.
More than the purpose of packaging and protecting goods, today, packaging has become more of a "storyteller" for brands, playing a big role in businesses' marketing and communication campaigns.
A global packaging company MeadWestvaco Corporation study shows that up to 64 per cent of consumers decided to buy a product off the shelf without prior research.
Packaging is one of the important factors affecting the purchase decision, helping products catch the eye of the buyer at first sight.
Under the sharing of packaging design expert Tran Huu Nhu Anh, Director of Light Packaging Company, the training session re-systematised the thinking and strategy of packaging development to meet business trends in the new era.
Vietnamese enterprises have invested in new technology lines and supplied the market with many types of high-class packaging, meeting strict standards of food safety and hygiene.
Although the country’s packaging industry is considered to have high growth potential, Trung said Vietnamese packaging enterprises seemed overwhelmed by competition with foreign enterprises.
Viet Nam Report announces top 10 technology companies in 2022
The Viet Nam Report JSC officially announced its top 10 prestigious technology companies in 2022 in Ha Noi on Tuesday.
Specifically, the top 10 prestigious information technology - telecommunications companies include Military-run Industry and Telecoms Group (Viettel), FPT Corporation, Viet Nam Posts and Telecommunications Corporation, VNPT Vinaphone Corporation, Mobifone Corporation, CMC Corporation, Hanel Joint Stock Company, Viet Nam Technology & Telecommunication Joint Stock Company, Viet Nam Maritime Communication and Electronics Company, and Ha Noi Telecom Joint Stock Company.
In parallel, the list of Top 10 reputable technology companies providing services, software solutions and system integration comprised FPT-Soft Co. Ltd., Misa Joint Stock Company, FPT Information System Corporation, CMC Technology and Solution Company Limited, Viet Nam Posts and Telecommunications Group, Joint Stock Company For Telecoms And Informatics, Elcom Technology Communications Corporation, Tuong Minh Software Solutions Company Limited, FSI Technology Development and Trading Investment Joint Stock Company, HPT Viet Nam Corporation.
Vinamilk among top stocks to watch in Southeast Asia
HSBC Global Research has selected the Vietnamese dairy company Vinamilk (VNM) as one of the top five stocks to watch in Southeast Asia as commodity prices are entering a stage of stability.
VNM is also Vietnam’s only stock in the food and beverage industry to have been recommended by HSBC in a report released on June 30.
The other four companies are in the finance-banking and technology-retail sectors from Indonesia, Singapore and Thailand.
In the early months of 2022, Vinamilk stock was not an investors’ favourite but now it is one of the best-performing blue-chip stocks, yielding profit of nearly 12% in the 12 most recent sessions.
Loc Troi joins hands with MBB to produce rice
Loc Troi Group has cut deals with the Kien Giang Department of Agriculture and Rural Development and Military Commercial Joint Stock Bank (MBB) to produce high-quality rice, with a total value of over VND12 trillion.
The deal is aimed at expanding rice production, improving the quality of farm produce, raising output and enhancing farmers’ quality of life.
Under the cooperation, MBB will provide credit worth VND12 trillion for all rice production activities, while the provincial department and Loc Troi Group will develop a rice-growing area of up to 300,000 hectares in the province. The entire output of rice will be exported, the local media reported.
The credit package will be valid until December 31, 2024, and will be able to be extended after the rice production chain works effectively.
Revenue of information technology industry estimated at US$57 billion
The group of information technology and telecommunications enterprises has achieved good growth and is a bright spot in the economic picture that is gradually regaining its recovery momentum.
In the report of Top 10 Reputable Technology Companies in 2022 published by Vietnam Report Joint Stock Company on July 5, the revenue of enterprises in the information technology and telecommunications industry in the first five months of 2022 is estimated at US$57 billion, up 8.5 percent over the same period in 2021.
With revenue growth in the first five months of the year, the information technology and telecommunications industry is expected to grow strongly in the last months of the year because the wave of digital transformation continues to take place. Technology investment is considered a natural demand, helping to improve operational efficiency and reduce production costs across all sectors.
The forecast of information technology market data provider IDC shows that investment in global digital transformation is still growing at a compound annual growth rate (CAGR) forecasted to reach 15.5 percent in the 2020-2023 period.
According to the survey results of the Vietnam Report, all businesses and experts believe that the prospect of the last six months of 2022 will continue to grow. Of which, 61.1 percent believe that the growth will be robust.
Vietnam targets 70% of population to have bank accounts in 2022
The State Bank of Vietnam (SBV) targets to have 65-70% of the public in the age group of 15 and above to have bank accounts this year.
The move was part of the central bank’s decision No.1097/QD-NHNN, mapping out the plan for digital transformation in the banking sector in 2022.
Other objectives include 100% of online public services under the administration of the SBV being integrated into the national online public services portal; the rate of people and businesses using online public services related to banking and finance matters of 80%; and 100% administrative procedures are processed online.
To push for these goals, the SBV is expected to draft a Government decree on supervising the operation of fintech and promote the use of online public services across the sector.
The SBV eyes the development of digital platforms to accelerate the development of the digital economy and society, especially in data management and information sharing systems among agencies.
VinFast to install 300 EV charging equipment at filling stations this year
VinFast, the Vietnamese automaker, will install nearly 300 VinFast electric vehicle chargers at Vietnam Oil Corporation (PVOIL) filling stations nationwide in 2022.
VinFast, a subsidiary of Vietnamese conglomerate Vingroup, announced its plan at the inauguration of the first electric vehicle chargers at PVOIL petrol station in Cat Hai District, the northern city of Haiphong on July 4.
The cooperation with PVOIL to develop a system of chargers at filling stations nationwide is part of VinFast’s roadmap towards the goal of installing 150,000 charging points across the country this year.
This charging station included one 150-kW fast charger and five 60kW others, which can refill 12 electric vehicles (EV) at the same time.
Like other EV charging stations in buildings and commercial centers, the EV chargers at gas station meets European standards and ensures the safety of power source and fire prevention, are anti-leakage and are waterproof.
The two Vietnamese enterprises will continue to seek suitable locations to expand the number of charging stations.
IMF hails Vietnam’s moves to cushion COVID-19 impacts
The Executive Board of the International Monetary Fund (IMF) has highly valued Vietnam’s policy support to cushion the impact of COVID-19 in tandem with successful maintenance of fiscal, external, and financial stability and an impressive vaccination rollout.
In a press release following a recent consultation with Vietnam, the IMF Executive Board said a recovery is underway and high frequency indicators point to stronger momentum going into 2022, with rising retail sales, industrial production, and firm entry. Growth is expected to reach 6% in 2022 as activity normalisation continues and the programme for recovery and development is implemented.
However, the recovery of the labour market is lagging as underemployment remains high. While inflation has recently picked up due to rising commodity prices and supply-chain disruptions, it remains well below the central bank’s inflation ceiling.
The Executive Board called for agile policy making, proactively adjusted to the pace of the recovery and evolution of risks.
They also underscored the need for fiscal policy to take the lead and be flexibly adjusted to evolving economic conditions. They welcomed the programme for recovery and development and emphasised the importance of targeting, spending efficiency, and steadfast implementation.
The IMF executive board stressed the need for monetary policy to be nimble and vigilant of inflationary risks. They also emphasised the importance of addressing problem loans, normalising regulatory forbearance in a timely fashion, and closely monitoring real estate sector risks.
They welcomed Vietnam's recent steps towards greater exchange rate flexibility and monetary policy modernisation and encouraged continued efforts in this direction.