A cargo ship loads cranes at a port in Dung Quat Economic Zone in Quang Ngai province. The EZ has been designed as a 'green and smart' industrial zone. — Photo courtesy of Doosan Vina

The Dung Quat Economic Zone in Quang Ngai Province is being designed as a key ‘green’, ‘smart’ and sustainable industrial complex and a breadwinner for the country’s budget and the central province by 2045.

Head of the managing board of the zone, Ha Hoang Viet Phuong, said the adjustment of Master Plan on the zone, which was approved by the Prime Minister in February, will develop it as a multi-sector industry and sea-based economy centre on a total area of 45,332ha, including 1,492ha of the Ly Son Islands.

He said the zone will promote good infrastructure, and prioritise renewable energy and circular economy as magnetic factors to potential investors.

“The plan will help the Dung Quat EZ develop on three key pillars – industry, tourism and service – focusing on the core industries of oil refining, steel and shipyard building with the advantage of a deep-sea port system,” Phuong said.

“Five function areas have been assigned as eco-urban, logistics, airport and sea port service, supportive industries and high-tech farming. Ly Son Islands, 30km off the coast of Quang Ngai, will serve as a unique tourism attraction hub,” he said.

Phuong said the Prime Minister’s Master Plan also included preferential policies for calling on more key investors in high-tech industries.

Investors would also enjoy a 10 per cent tax rate for 15 years, a four-year tax exemption and a 50 per cent cut in income tax for the following nine years, he said, adding a five-year free import tax on materials and semi-finished products used in production will be reserved for investors.

According to the latest report from the Dung Quat EZ, 346 projects have been in effect with nearly US$18 billion of investment capital, including 58 foreign direct investment (FDI) projects worth $1.84 billion.

Phuong said domestic investors also poured $16 billion into 288 projects – 88 per cent of total investment in projects.

Doosan Vina has invested $315 million to develop a 101ha industrial complex since 2006, earning revenue of $424 million from giant industrial equipment exports, he said.

Meanwhile, VSIP – an iconic co-operation of Viet Nam and Singapore – had an investment capital of $337.8 million on 660ha, reserving industrial production space for projects in the fields of leather, textiles and garments, foodstuffs and beverages, creating more than 13,500 jobs for local residents and experts.

Hebei Xindadong Textiles Company of mainland China was seen as the biggest investor in the park with $38 million, followed by Hong Kong shoemaker Properwell, and Singapore’s UMW Equipment Systems – an industrial and heavy machinery plant.

A deep-sea port system (19 to 21m deep) is seen as an advantage for investors as it could handle cargo vessels with 250,000 Deadweight tonnage (DWT), and it hosted 40 million tonnes in 2022.

Binh Son oil refinery is now refining 85 per cent of domestic crude and 15 per cent of crude imports, and the Dung Quat Refinery upgrading and expansion project was built with an investment of $1.8 billion in its second phase.

The expansion of the Dung Quat Refinery plant will help increase capacity of the refinery plant from 6.5 million tonnes of crude oil to 8.5 million tonnes per year.

The Dung Quat EZ has been bolstering connections with the Chu Lai Economic Open Zone in Quang Nam along with the deep sea ports and airport systems of the two neighbouring provinces.

In early June, Dung Quat EZ granted an investment licence to Messer, an industrial gas company from Germany, with an investment of $133.3 million to build a plant on 7.24ha. 

Viettel, Microsoft Vietnam improve AI application capability

Military-run telecom provider Viettel and Microsoft Vietnam have recently signed a strategic cooperation agreement to promote the application of Industry 4.0 technology solutions such as Cloud, Data & AI across various sectors and enhance digital services in Vietnam, said a Viettel representative on June 16.

Under the agreement, both sides will jointly deploy cloud computing technology. Specifically, they will integrate the Viettel Cloud infrastructure with the Microsoft Azure Cloud platform - one of the world's top four cloud ecosystems under Microsoft - to improve products, localise Microsoft applications, and distribute them within Vietnam.

For Microsoft Vietnam, utilising the data centre infrastructure and understanding the domestic market of Viettel Cloud will enable Azure Cloud to address the challenges faced by customers in the public administration segment. With the Azure Cloud ecosystem and services related to data and artificial intelligence (AI) such as Azure Machine Learning, Azure OpenAI, Viettel will have numerous opportunities to collaborate, develop solutions, and explore further business potential in popular services such as Speech Technology, OpenAI, and Chat GPT.

The representative from Viettel also said that both sides have also planned to jointly create digital solutions based on the platform and capabilities of each enterprise. Viettel will leverage Microsoft's data technology and AI to develop industry-specific service packages for partners in sectors such as telecommunications, banking, security and retail.

Through the collaboration with Viettel, Microsoft's products will be tailored to the Vietnamese market, making them more easily applicable for customers. Additionally, both parties are conducting research on the Speech & Language technology project to serve the purpose of multilingual translation. Customers will have access to internationally standardised technology that meets the need of the Vietnamese people.

A Microsoft representative also shared information about several successful cloud collaboration models that Microsoft has established with telecom service providers in the region and worldwide, such as Jio, AT&T, LG U+, Vodafone, and Singtel, thereby outlining the specific cooperation possibilities between the two sides.

Dong Nai exports first shipment of durian to China

A ceremony was held in the southern province of Dong Nai on June 16 to announce the export of the first batch of durian this year in accordance with a protocol signed between the Vietnamese Ministry of Agriculture and Rural Development and the General Administration of Customs of China.

Accordingly, six firms have been granted codes of export to China via Tan Thanh, Huu Nghi and Mong Cai border gates, with 20 containers carrying 360 tonnes of durian of Dona and Ri6 varieties, which were harvested from six different cultivation areas and packaged at six processing facilities.

Chairman of the provincial People’s Committee Vo Van Phi described durian as one of the key crops in the province. It is projected that Dong Nai will export 20,000 tonnes of durian from 11 growing areas covering 820ha this year.

On this occasion, a display area introduced durians for visitors to taste and a seminar was held to discuss improving quality standards and competitiveness of durian export to China.

Earlier on June 15, the Long Khanh fruit festival and the week honouring fruits and OCOP (One Commune, One Product) items opened in Long Khanh city, Dong Nai province.

The week, held by the provincial Department of Agriculture and Rural Development and the Long Khanh municipal People’s Committee, featured 40 stalls showcasing local signature fruits and farm produce.

In particular, over 2.3 tonnes of rambutan will be used to serve visitors free of charge.

Running until June 23, the festival serves as a meeting point for managers, scientists, businesses and farmers to share knowledge, learn from each other, expand networking and markets, especially for fruits and OCOP products, while promoting the development of eco-agricultural tourism.

With a total area of over 11,300 ha, Dong Nai ranks first in the southeastern region and fourth nationwide in terms of durian cultivation area. The harvested area covers nearly 6,600ha, and it is estimated that the fruit production will reach around 69,000 tonnes this year.

Dong Nai has actively developed cultivation area codes and export packaging facilities for the Chinese market. At present, the province has 11 durian growing areas sprawling 820ha.

Vietnamese, Russian power companies sign MoU at SPIEF 2023

Russia’s Rosseti power grid company and the National Power Transmission Corporation (EVNNPT), a subordinate company of the Vietnam Electricity (EVN) Group, have signed a Memorandum of Understanding (MoU) to resume their long-term strategic cooperation which has been suspended due to the COVID-19 pandemic.

The signing ceremony took place on the sidelines of the 26th St. Petersburg International Economic Forum (SPIEF) in Russia.

The two companies agreed to develop joint projects based on the capability of each side and the advancements of Rosseti. They will also collaborate in technology exchange, digital transformation, personnel training, and occupational safety. Additionally, Rosseti will assist EVNNPT in developing primary power transmission lines and transnational high-voltage power connections in the region using advanced technologies.

EVNNPT Deputy General Director Vu Tran Nguyen said according to the government's plan, Vietnam needs new investments worth 15 billion USD to build and modernise over 36,000km of power transmission lines and put into operation more than 169,000 transformer stations by 2030. To such end, EVNNPT needs to cooperate with global partners, including Rosseti, in various advanced fields.

On this occasion, the EVNNPT delegation also visited the Training Centre of the Northwest Power Grid and the remotely controlled 330 kV Volkhov-Severnaya substation, which is part of the St. Petersburg Energy Belt.

Seafood export expected to reach $9 billion this year

Viet Nam will strive to achieve fisheries exports of US$9 billion this year, equivalent to the figure in 2019, the Viet Nam Association of Seafood Exporters and Producers, has said.

This comes after the industry experienced a record-breaking year in 2022, with exports reaching $11 billion for the first time in history.

At a general meeting of the association in HCM City on June 12, chairwoman Nguyen Thi Thu Sac spoke about the challenges facing the seafood industry in 2023.

The global inflation situation has worsened, resulting in a significant decrease in consumer demand and high inventory levels for businesses.

In the first five months of this year seafood exports amounted to just over $3.2 billion, a year-on-year decline of nearly 30 per cent.

Major markets such as the US, EU, and China saw decreases of 50 per cent, 32 per cent and 25 per cent.

Shrimp exports experienced a decline of nearly 36 per cent, pangasius nearly 40 per cent and tuna over 30 per cent during this period.

The ongoing conflict between Russia and Ukraine, coupled with high inflation and tight monetary policies, continue to impact the global economy.

Consequently, seafood demand in several markets will be hard to recover in the third quarter of 2023 as the forecast.

Apart from challenges posed by import markets, Vietnamese shrimp exporters face concerns over their competitiveness compared to shrimp from Ecuador and India due to higher production costs, and the European Commission's "yellow card" for Viet Nam's fishing activities.

The chairman of the association's shrimp committee, Do Ngoc Tai, attributed the 36 per cent drop in shrimp exports in the first five months to consumers tightening their spending and shifting to cheaper products due to high inflation.

He predicted that shrimp exports to major markets such as the US, EU, Japan, China, and South Korea would increase from August to cater to the festive season at the end of the year.

Le Van Quang, the association's chairman and general director of Minh Phu Seafood Corporation, noted that Viet Nam's position in the global shrimp market is diminishing due to high production costs, unchanged output of black tiger shrimp and shortcomings in shrimp breeding.

He called for measures to address these issues and promote the Vietnamese shrimp brand in the global market.

Similar challenges exist in the pangasius export sector, where Ong Han Van of Truong Giang Fisheries JSC highlighted a significant reduction in exports to major markets.

He suggested measures to lower production costs, particularly by reducing animal feed prices, which account for 70 per cent of production costs.

To address these issues, the association is taking various steps.

The Freshwater Fish Committee is developing a pangasius promotion programme and fostering linkages to improve bloodstock supply, feed quality and breeding success rates, Sac said.

The Shrimp Committee has launched a program called "For a sustainable shrimp industry," which has already had a positive impact on the market.

Efforts are also being made by the government and the association to have the European Commission's IUU yellow card lifted, which would facilitate seafood exports to the continent.

Deputy Minister of Agriculture and Rural Development Phung Duc Tien urged the association to intensify trade promotion.

He also emphasised the importance of closely monitoring market developments and providing information to businesses and farmers to help them make informed production and export plans.

He also asked the association to report problems faced by the industry to relevant ministries and agencies so as they will have measures to solve them in a timely manner. 

Snakehead fish porridge to be exported to the US for first time

Vietnamese firm Ca Men is set to export between four million and five million snakehead fish porridge products to the United States via official channels from now to 2026 through US distributor LNS International Corporation.

A document to this effect was signed on June 13 between representatives of Ca Men Company and LNS International Joint Stock Company.

The deal outlines the exclusive distribution of snakehead fish porridge, a product that is a specialty of the central province of Quang Tri, along with other packaged products to the US.

This is the first time that Quang Tri’s snakehead fish porridge has been officially exported according to FDA standards granted by the US Food and Drug Administration.

First established in 2015, Ca Men is a startup company founded by Vietnamese man Nguyen Duc Nhat Thuan. The company has notably introduced several Quang Tri-flavored meals to customers, such as Phuong Lang wet cake, snakehead fish porridge, duck porridge, chicken salad with laksa leaves, and eel noodles.

Tuyen Quang developing typical tourism products

The northern mountainous province of Tuyen Quang has been developing typical tourism products to meet the demand of domestic and international markets and turn tourism into an important economic sector in the province by 2025 and 2030.

Accordingly, the locality will focus on developing tourism products that take advantage of the local strengths in culture, history, festivals, resort tourism, healthcare tourism, and sports tourism.

Specifically, for cultural and historical tourism, the province focuses on developing products such as tours to historical revolutionary sites, particularly Tan Trao - known as Vietnam's revolutionary cradle.

For cultural - festival - spiritual tourism, Tuyen Quang focuses on developing products such as tours to visit/experience the daily life of ethnic groups in villages of Nam Dip, Pa Then - Lam Binh district, Ban Ba - Chiem Hoa district, Khau Trang - Hong Thai, Na Hang district.

Resort tourism and healthcare tourism will be promoted in areas in Na Hang lake, My Lam commune (Yen Son district), and Tan Trao Flamingo Resort.

Sports and adventure tourism includes climbing to conquer the peaks of Pac Ta - Na Hang, Khau Mut, Pu Nang Tien - Lam Binh, trekking primeval forests, waterfalls (Mo waterfall, Khuoi Nhi, Ban Ba ...) hot air balloon, paragliding, and skydiving.

To develop typical tourism products, the province focuses on perfecting incentive mechanisms and policies, and encouraging businesses and people to invest in building products based on their potential advantages and local tourism capacity.

The province also develops specific tourism markets and products, and promotes its tourism branding. In addition, localities have concertedly implemented measures to mobilise investment capital for tourism development and typical products.

The province also pays attention to developing high-quality human resources for tourism, encouraging and supporting the community to participate in tourism development, and building featured products, particularly those taking advantage of traditional cultural values such as Then singing, fire dance, Long Tong festival, “Cap sac” (coming-of-age) ritual, and Dai Phan ceremony.

According to the provincial Department of Culture, Sports, and Tourism, in 2022, the locality welcomed over 2.3 million visitors, earning a revenue of over 2.4 trillion VND (102.1 million USD). The province strives to attract over 2.5 million visitors in 2023, and get a revenue of 3 trillion VND.

UK a potential market for Vietnamese durian: insiders

Since the first batch of Vietnam’s Ri6 durian was officially exported to the UK in the beginning of May, TT Meridian Company has regularly imported 3-4 tonnes of this specialty fruit every week, which shows that it is well received by consumers in this market.

With many years of research on Vietnam's fruits that have potential and advantages for being exported to the UK market, TT Meridian, a company specialising in the distribution of Vietnamese agricultural products in the European country, sees bright prospects for durian export to this market.

Thai Tran, Managing Director of TT Meridian, said that with the preferential tax of zero under the UK-Vietnam Free Trade Agreement (UKVFTA), durian import from Vietnam has a great competitive advantage in price compared to those from other countries which is now subject to an 8% tax rate, in the context that high inflation is making price a top concern for importers, distributors and consumers in the UK.

According to him, the UK market has many customer segments and Vietnamese durian can target Asian customers as well as manufacturers and processors of durian products such as ice cream, yogurt and smoothies. The price advantage at this moment opens up opportunities for this Vietnamese fruit to reach UK consumers and distributors.

However, he also pointed to several challenges for Vietnamese durian to stand firm in this competitive market.

One of the difficulties for durian exporters is the procedure for getting a certificate of origin for shipments from the Vietnamese authorities. As a mandatory requirement to enjoy tax incentives under the UKVFTA, the procedure currently takes a long time, manpower and costs because businesses have to directly apply for a paper certificate of origin.

Therefore, he proposed the granting of the electronic certificate with online transactions.

Sharing the same view, Vietnamese Trade Counsellor in the UK Nguyen Canh Tuong suggested State management agencies support businesses by shortening the quarantine time and the time for issuing the certificate of origin to ensure the entire process of bringing fruits from the place of harvest to the laboratory, to the border gate, and through customs clearance within half of a day to be boarded on flights the same day.

Opportunity available to emulate other nations in sports betting framework

Developing sports betting within current laws could create huge revenue streams to reinvest in the sports sector, as seen in developed countries.
In Vietnam, the sports betting business is relatively new. According to a 2017 decree, Vietnam allows betting on horse racing, greyhound racing, and international football, but does not encourage it.

In January, the Ministry of Finance allowed Vietnam Lottery One Member Co., Ltd. to become the first enterprise to pilot an international football betting business with a list of accompanying tournaments. People must be 21 years or older in order to place bets.

Tran Duc Phan, deputy general director of the Vietnam Sports Administration, said that despite the decree, sports betting in Vietnam had not been widely implemented due to problems with the bidding law and many other related issues, causing the sports economy to lose out on vast amounts of profit.

Many countries have legalised sports betting for entertainment, but manage to limit its negative impacts and take advantage of the abundant resources it creates for economic development.

In the United Kingdom, a law legalising betting on horse racing dates back to the 1960s. The UK also passed the Gambling Act in 2005. Revenues from sports betting are allocated by the government to social fields, with priority given to cultural and artistic activities, sports, education, and health.

Germany allows sports betting as an exclusive business of state governments. The revenue is used to develop sports activities across the country, with about half used to finance community sports.

Many states in the United States have also legalised sports betting. During the 2022 FIFA World Cup, Americans spent about $1.7 billion on betting activities, according to Bloomberg Intelligence. However, the amount of money being bet on football is only a fraction of the $7.6 billion poured into the Super Bowl.

Statistics from Legal Sport Report at the end of last year show that some states in the US have collected a large amount of tax generated from betting. New York generated $1.1 billion in betting revenue and brought in nearly $550 million in taxes, compared with $264 million and $15 million in Arizona, respectively.

In Asia, Singapore was one of the first countries to legalise sports betting. In 1968, its government established the Singapore Pools Entertainment Complex, a state-owned monopoly that organises sports betting with the goal of mobilising finance to support community development.

In 2002, Singapore began legalising international football betting, paving the way for betting on many other sports later, such as motor racing, horse racing, basketball, baseball, golf, rugby, and boxing.

According to Transparency Market Research, annual global betting revenues are expected to reach $134.5 billion by 2027.

Thai investor suspends $2.3 billion thermal power plant project in Quang Tri

Thai International Power Company (EGATi) has submitted a document to Vietnam’s Ministry of Industry and Trade (MoIT) regarding the suspension of the Quang Tri Build-Operate-Transfer (BOT) Thermal Power Plant project.
 
According to Quang Tri Economic Zones Management Authority, on May 29, EGATi sent a letter to the MoIT announcing their decision to halt the development of the Quang Tri project.

With a capacity of 1,200MW (and a gross capacity of 1,320MW), the project was approved by the prime minister in 2013, designating EGATi as the project's investor under the BOT framework.

As per the design, the power plant was intended to consist of two units, each with a capacity of 660MW, requiring a total investment of around $2.3 billion.

Following the project's approval, local authorities agreed on the route alignment, and National Power Transmission Corporation completed the construction of a 500kV power transmission line to facilitate the thermal power plant.

In light of the suspension of the thermal power plant project, Quang Tri Economic Zones Management Authority has proposed that Quang Tri People's Committee ask the prime minister and relevant central ministries to approve a revised plan for a 1,320MW power plant, allowing Quang Tri to explore alternative environmentally friendly fuel sources to replace the use of coal.

Currently, the province has already reclaimed a land area of 56.8 hectares for the project.

This decision by EGATi reflects an emerging trend towards more sustainable and environmentally friendly energy sources. The move aligns with global efforts to reduce reliance on coal and transition to cleaner forms of power generation.

Quang Tri, located in the central province of Vietnam, has recognised the importance of mitigating environmental impacts and is seeking solutions to ensure the region's energy needs are met while minimising harm to the environment.

By proposing the exploration of alternative fuel sources, Quang Tri aims to promote the use of more eco-friendly energy options and contribute to the country's sustainable development goals.

At a forum that was held at the headquarters of the Thai Ministry of Energy in October last year, a provincial delegation from Quang Tri participated in a bilateral meeting between the Vietnamese MoIT, the Thai Ministry of Energy, the Electricity Generating Authority of Thailand (EGAT), and the Thai Ambassador to Vietnam.

The purpose of this meeting was to discuss the future of the Quang Tri project, which is receiving investment from EGAT as the project's owner.

The project has been put on hold due to various factors, including financial considerations, objective obstacles, and the commitment to achieving net-zero emissions by 2050 – as agreed to by the governments of both Vietnam and Thailand.

Furthermore, the Thai side had suggested that Vietnam’s MoIT and Quang Tri continue to facilitate opportunities for EGAT and its subsidiary EGATi to seek investments in other renewable energy projects or infrastructure development for energy projects in Vietnam as a whole, and specifically in the central province.

SKC to invest $1.5 billion in Haiphong

Haiphong has granted the investment registration certificate for four projects with the total investment capital of $230 million, and simultaneously signed an agreement with SKC valued at $1.5 billion.
 
On June 12, Haiphong People’s Committee together with the Korea International Trade Association organised the Haiphong-Korea Trade Investment Promotion Conference in Seoul, with participation of nearly 200 delegates.

At the conference, leaders of Haiphong granted the investment registration certificate for four newly registered and added-capital projects.

They combine $35 million from Bumhan Vina Heavy Industries-Nam Dinh Vu, $43.5 million of added capital in Haewon Vina’s plant, Hala Electronics Vina’s $35 million added capital, and EST Vina Haiphong’s project with the amended capital of $68 million.

On the same day, SKC, a unit under the energy-to-telecom conglomerate SK Group, signed a comprehensive business agreement on “eco-friendly, high-tech materials” with Haiphong at its headquarters in the Jongno district of Seoul.

Based on this agreement, SKC plans to incrementally review investments in eco-friendly materials and future advanced materials businesses in the city.

Accordingly, Haiphong will offer full support in areas such as electricity and environmental infrastructure if SKC decides to invest, not to mention efforts to attract incentives from Vietnam's central government.

Korea has poured $81.5 billion into the Southeast Asian country so far, of which nearly $10 billion has been injected into this key industrial city in northeastern Vietnam, mainly in electronics, auto parts, and machinery.

Haiphong is the production hub of many Korean giants. LG Group has selected the major industrial and port city as its strategic location in Vietnam.

About two hours from Hanoi, the city is home to three companies under the LG roof. LG Electronics Vietnam Haiphong focuses on electronics, LG Innotek Vietnam Haiphong supplies electronic components, while LG Display Vietnam Haiphong manufactures LCD and OLED displays.

Korea now ranks first among 42 countries and territories investing in Haiphong in terms of both quantity and quality of investment projects, and the city is home to 14 operational industrial zones.

Four mega highway projects to kick off

The construction of inter-regional highway projects and Ho Chi Minh City’s Ring Road No.3 will start in mid-June, according to the prime minister's plan.

Based on the proposal of the Ministry of Transport, the prime minister approved the start of construction of three highway projects together with Ho Chi Minh City’s Ring Road No.3 on June 17-18.

The first is the component project of Chau Doc - Can Tho - Soc Trang Expressway, which has a total length of more than 188km with its starting point connected with the National Highway No.91 in Chau Doc city, An Giang, and its ending point intersecting with Nam Song Hau street, connecting to Tran De Port in Soc Trang province.

The project is separated into four component projects with a total investment of VND44.69 trillion ($1.86 billion) with a design of four lanes, an emergency stopping lane, and a speed of 100km per hour.

Meanwhile, Khanh Hoa People’s Committee is set to get off the ground on the first component of Khanh Hoa-Buon Ma Thuot Expressway next month at a total cost of over VND5.3 trillion ($220.8 million).

In this component, the road will be around 31.5km long. The four-lane road is designed with a maximum speed of 100km per hour, and 21 bridges and three interchanges. The project is expected to be completed by 2026. The project is divided into three components to be developed under the public investment format. The entire road length will be 117.5km.

The third project is Bien Hoa-Vung Tau Expressway, which has a total length of 53.7km. With an investment capital of $743.3 million, the expressway is particularly significant in connecting and shortening the transport time from the Southern Key Economic Region to the Cai Mep - Thi Vai deep-water seaport cluster and Long Thanh International Airport.

Ho Chi Minh City's Ring Road No.3 project has a total length of about 76.34km. The project, with total investment estimated at VND75.378 trillion ($3.2 billion), is expected to be completed by the end of June 2026.

Ring Road No. 3 is a strategic traffic axis, creating a premise to remove bottlenecks and opening up new directions for urban, industrial, commercial, and service development.

It will connect to five radial highways – Ho Chi Minh City-Trung Luong, Ho Chi Minh City-Moc Bai, Ho Chi Minh City-Chon Thanh, Long Thanh-Dau Giay and Ben Luc-Long Thanh, enhancing inter-regional connectivity.

Construction and real estate grapple with insolvency

Although numerous plans have been issued in an attempt to revitalise the real estate market and various related construction schemes, policy complexities persist.

Nguyen Quoc Hiep, president of the Vietnam Association of Construction Contractors (VACC), stated at an expanded executive committee meeting at the beginning of June that the construction sector is “scarcely afloat; even the largest contractors function in moderation, with a severe lack of cash flow”.

According to Hiep, at the conclusion of the first quarter of 2023, approximately 30 per cent of construction companies were forced to close. “There were primarily small- and medium-sized enterprises with less than $1.28 million in capital and less than five years of operating history,” Hiep said.

But the major developers are suffering too. According to its Q1 financial statement, revenues of Hoa Binh Construction Group, one of the largest in Vietnam, plunged by 60 per cent compared to the same period last year, earning only $50.8 million, its lowest figure since the Q3 of 2015.

Other construction groups also suffered a decline in revenue. After the first three months of the year, Hung Thinh Incons endured a financial loss, with a negative after-tax profit of $749,000. During the same period last year, Hung Thinh earned $1.84 million in profit.

Comparatively, Vietnam Construction and Import-Export had a profit after taxes of approximately $809,000 in the first quarter, a decrease of 98 per cent compared to the same period last year.

Elsewhere, Quang Nam People's Court initiated bankruptcy proceedings against Dana HomeLand at the end of May. Dana HomeLand is a property development business in the central region of Quang Nam, Quang Ngai, and Danang. Investors had been waiting several months to prosecute the company for failing to transfer Dien Nam-Dien Ngoc Urban Area projects as promised, according to Quang Nam People’s Committee.

President of the Vietnam Association of Realtors Nguyen Van Dinh told VIR that there are thousands of real estate initiatives across the country that have had to be suspended, with a total investment value of approximately $30 billion.

The crisis level of businesses is depicted in the summary report of the Ministry of Planning and Investment for the first five months of 2023. Over 41,000 construction and real estate companies withdrew from the market, ranking first among industries with the highest number of defunct companies.

Numerous solutions, such as a $5 billion credit support programme or the fostering of public investment, have been proposed to the market in an effort to rectify the situation. However, according to Hiep of VACC, corporations that can invest in the public sector often prioritise technical infrastructure. As a result, only a handful of businesses with adequate equipment, capacity, and experience will be chosen via the contractor appointment mechanism.

Similar to the $5 billion credit programme, not all enterprises are eligible for assistance.

To promote the market, policies such as Resolution No.33/NQ-CP and Decree No.10/2023/ND-CP were enacted earlier this year; however, it is still necessary to be patient with the policy's delay.

According to Dinh, however, actual constraints on businesses are being alleviated slowly.

Further fall projected for interest rates

Several banks have followed the State Bank of Vietnam’s (SBV) lead by lowering their base interest rates, aiming to encourage and facilitate increased credit demand within the market.

Techcombank last week announced adjustments to its base interest rate, resulting in a reference rate of 8.8 per cent per annum for individual customers seeking real estate, car, and consumer loans with terms ranging from one to five years.

For projects, Techcombank’s base interest rate varies between 8.65 and 9.25 per cent for the same term range, while the reference interest rate stands at 9 per cent.

Earlier, Sacombank initiated an early base interest rate adjustment, reducing it by 0.4 per cent compared to the beginning of the year for terms of one month or longer.

Several other banks, including MSB and ABBank, have undergone similar adjustments, resulting in a cooling effect on savings interest rates across various terms.

Based on data from VNDirect Securities, the private banking sector has experienced significant drops in the average savings interest rates for 3-month and 12-month terms.

Since the beginning of May, these rates have decreased by 57 and 28 basis points, respectively. Similarly, state-owned banks have observed an 80bps decrease in the 3-month term and a 40bps decrease in the 12-month term for average deposit rates.

Economist Dinh Quang Hinh anticipates that the average 12-month deposit interest rate will decline to 6.5-6.7 per cent per annum by the end of 2023.

Experts from SSI Securities shared a similar perspective, suggesting that deposit rates may drop by an additional 50-100 bps from now until the end of the year, with further decreases expected in 2024.

Nguyen Hung, CEO of TPBank, said that the bank had continued to reduce lending interest rates by 0.3-0.8 per cent since the beginning of June.

According to Mirae Asset Securities, a continued reduction in the deposit ceiling rate by 0.5 per cent would yield positive repercussions for industries burdened with substantial short-term and long-term debt obligations.

Drawing from comprehensive data analysis encompassing the conclusion of 2022, it is evident that five industries – real estate, steel production, food processing, agriculture and aquaculture, and construction – currently exhibit elevated borrowing levels. Consequently, these sectors are poised to derive significant benefits in the immediate future as a direct outcome of the interest rate reduction.

SBV Deputy Governor Pham Thanh Ha highlighted the effectiveness of the operating measures undertaken from March to May, leading to a decrease in interest rates. Recent data indicates that average lending rates for new loans currently stand at approximately 9.07 per cent, representing a 0.9 per cent decline compared to the end of the previous year.

Bui Nguyen Khoa, head of Market Analysis at BIDV Securities, believed that interest rates cut serves as a significant supporting factor in accelerating the stock market’s recovery process after a downward cycle. The decrease in interest rates will to some extent attract investors, thereby improving overall market liquidity.

Vietnam’s Jan-Jun air passengers up 49.6%

Vietnam’s air passenger traffic has soared in the year to date, with Vietnamese airlines carrying 34.7 million passengers, up 49.6% compared to the same period last year.

Out of the total passenger count, 14.7 million are international guests, a five-fold surge compared to the previous year. Meanwhile, the number of local passengers has edged up 3.4% year-on-year.

For air cargo transport in Vietnam, the volume of cargo carried from January to June has dropped by 26% compared to the previous year, totaling 483,000 tons. International air cargo volume has declined by 30% to 405,000 tons, while domestic cargo has inched up by 10% to 77,600 tons.

Currently, Vietnamese airlines operate 650 daily domestic flights, connecting major cities such as Hanoi, HCMC, and Danang with 19 airports throughout the country.

Coal-fired power plants to shift to using ammonia and biomass fuels

Thermal power plants will be required to develop a roadmap for shifting to running on biomass or ammonia after operating for 20 years. Failure to do so will result in the closure of these plants after 40 years of operation.

Minister of Industry and Trade Nguyen Hong Dien was speaking of this request at a meeting with thermal energy investors on June 13.

This directive aligns with Prime Minister’s Decision 500, which focuses on fuel conversion in coal-fired power plants in line with the national power development plan VIII.

The power development plan VIII for the 2021-2030 period, with a vision to 2050, prioritizes the development of electricity sources and transmission lines of 220kV and above.

Vietnam Electricity Group’s Deputy General Director Nguyen Tai Anh said that the company is exploring methods to generate electricity using biomass and ammonia in some of its coal-fired power plants.

However, the ammonia co-firing technology is still under development and in the testing phase. Its impacts on the economy, human health, and the environment have not been assessed yet, and there is also limited global supply of biomass and ammonia.

Representatives of coal-fired power plants expressed concerns about the higher prices of biomass compared to coal and the absence of incentive mechanisms for the transition.

The Electricity and Renewable Energy Authority at the Ministry of Industry and Trade, along with relevant agencies, has been tasked with conducting research to develop supportive mechanisms for thermal power plants to switch to electricity generated by ammonia or biomass.

Deposits soar in Q1 despite interest rate cuts

Individuals’ deposits at commercial banks in the first quarter of 2023 soared by around VND415 trillion, the highest level in over 10 years, despite lower interest rates, showed data from the State Bank of Vietnam (SBV).

By the end of March, individuals’ deposits totaled VND6,280 trillion, a 7% increase compared to the beginning of the year.

In the first three months of the year, individuals deposited an additional VND415 trillion into the banking system, which is significantly higher than the average of VND150 trillion during the first quarter over the past several years.

Conversely, deposits from organizations and businesses decreased by nearly 4.9% compared to the beginning of the year, totaling VND5,660 trillion. This decline can be attributed to cash flow shortages faced by real estate businesses and a lack of new orders for manufacturing and trading enterprises.

As a result of the opposite trends between individual and institutional depositors, the overall money inflow into the banking system in the first quarter grew by a mere 1% versus the beginning of the year, equivalent to nearly VND150 trillion.

Due to interest rate reductions since April, the deposit channel has lately appeared less attractive to individuals. By the end of May, most banks had lowered their interest rates to below 8.5% per year, following the SBV’s decision to further decrease key interest rates in its easing cycle.

Vietnam’s fishery export may fall short of full-year goal

The revenue target of US$10 billion for Vietnam’s fishery export may not be met as business conditions are expected to continue to worsen until the third quarter of the year.

According to statistics from the Vietnam Association of Seafood Exporters and Producers (VASEP), seafood shipments from January to May reached over US$3 billion, down 30% versus the same period last year. Exports to major markets decreased 10% to 50%.

Exports to the U.S. market dropped by 50% year-on-year, followed by the European and Chinese markets with respective plunges of 32% and 25%.

Key export items also faced double-digit falls. Shrimp exports slid the most, falling by 34% to US$1.2 billion against the previous year. Whiteleg shrimp contributed US$900 million, or 74%, to the overall value, a 36% slump. Black tiger shrimp accounted for 15% of the total value, with US$180 million, dropping by 29%. Lobster and other varieties plummeted by 41% year-on-year, totaling US$134 million.

Shrimp shipments to major markets slipped between 28% and 50%, with the EU, U.S., and China experiencing the steepest declines of 49%, 44%, and 25%, respectively.

Exports of Tra fish and tuna also edged down by around 30% compared to the same period last year, reaching US$841 million and US$317 million, respectively.

Foreign shipments of squid and octopus recorded the smallest decrease, down by 13% year-on-year, reaching US$239 million.

These figures were released by VASEP at a membership meeting held on June 12.

Truong Dinh Hoe, General Secretary of VASEP, said that orders for fishery products from foreign markets have plummeted since late 2022, and the situation has worsened in the first half of 2023, resulting in supply surpassing demand in overseas markets.

Weak demand has led to export prices of Vietnamese shrimp and Tra fish falling on the international market. However, sales remain stagnant due to heightened competition with seafood products from Ecuador and India.

Nguyen Thi Thu Sac, chairwoman of VASEP, said that high inflation and the banking crisis in the U.S. have significantly impacted its economy and seafood demand. Furthermore, global food prices have become volatile due to supply chain disruptions caused by the ongoing Russia-Ukraine military conflict and monetary tightening resulting from runaway inflation in major economies.

Sac predicted that business conditions may further deteriorate in the third quarter of the year, instead of recovering as previously anticipated. She emphasized the need for appropriate actions to support seafood exporters in restoring production.

Interest exemption proposed for late tax payments

The Ministry of Finance has written to the National Assembly proposing issuing a resolution that would exempt loss-making businesses from interest on late payments of taxes, land use fees and land rentals in 2022 and 2023.

If approved, the proposal could result in lost revenue of VND2.5 trillion for the state.

This was one of the measures taken by the Government in 2020 and 2021 to alleviate the financial burden on struggling companies.

The ministry said that the current Law on Tax Administration imposes an interest rate of 0.03% per day on outstanding tax payments, which creates a significant financial burden for businesses, especially those making losses.

In 2022, the policy allowed the tax authority to waive more than VND2.1 trillion in late payment interest accumulated by loss-making companies in 2020 and 2021.

Hanoi's State-owned enterprises to be taken over by private investors

Hanoi mulls a plan to offload the entire State-owned shares in 23 local companies until 2025.

The enterprises include shoe manufacturer Thuong Dinh Footwear Company, Hanoi Housing Development and Investment Corp (Handico), Urban Infrastructure Development Investment Corporation (UDIC), bicycle manufacturer Thong Nhat Hanoi JSC, consumer and service company Viet Ha JSC, Tran Phu Electric Mechanical JSC, and Hanoi Book JSC.

The city aims to sell all 30% stakes of the said companies in 2024 and complete its exit from the rest in 2025.

Under the plan, the capital's authorities will reduce State ownership from 100% to a maximum of 50% in Hanoi Investment Export Import and Construction Development Co. Ltd, and to 50-65% in Lighting and Urban Equipment Co. Ltd.

On the other hand, the city will nationalize Hanoi Movies Co. Ltd. The local government decides to keep the State's ownership in Son Tay Water Company, Market Operator Dong Xuan JSC, Hanoi Livestock Breeding JSC, and Hanoi Transport Project JSC unchanged. The state owns between 60.3% and 95.6% of these four companies.

Eighteen enterprises will remain in the form of limited liability companies, in which Government agencies hold 100% of the enterprises on behalf of the State, including Hanoitourist Corp, Hanoi Transport Corporation, Hanoi Metro, Hanoi Capital Construction Lottery Company, and Ho Guom Investment, Tourist and Im-Export Company.

Municipal authorities will submit to the Prime Minister the divestment plans for UDIC, Handico, electronics firm Hanel JSC, and Thang Long Metal Wares JSC.

The companies on the disinvestment and privatization list must resolve issues related to their finances and assets in 2023. They must seek instructions and solutions from the Ministry of Natural Resources and Environment on land issues.

According to the Ministry of Finance, no State enterprises were privatized in the first five months of the year. During this period, the State sold shares in five State-run enterprises, earning VND179.2 billion (US$7.63 million).

The ministry blames the slow pace of divestment on the volatility of domestic and international financial markets and the pandemic. In addition, many companies operate on a large scale, making it difficult to value their assets.

There are reports from the ministry that several State-owned enterprises have violated asset and capital management regulations and are under investigation. Meanwhile, some State-owned enterprises have failed to comply with their obligations voluntarily.

Many Government agencies have not paid much attention to restructuring the disinvestment plan for 2021-2025, while the targeted companies have not resolved the obstacles regarding their real estate, financial conditions, and public assets.

Vietnam joins Hong Kong International Travel Expo

National flag carrier Vietnam Airlines has participated in the Hong Kong International Travel Expo (ITE-2023) in Hong Kong (China) from June 15-18.

The English and Chinese versions of Vietnam Pictorial, a magazine published by the Vietnam News Agency (VNA), are on display at the annual expo, also the biggest travel event in Hong Kong.

ITE-2023, in its 37th edition, brings together more than 400 enterprises from over 50 countries and territories worldwide.

In an interview granted to VNA correspondents in Hong Kong, Vietnamese Consul General in Hong Kong Pham Binh Dam noted his belief that tourism cooperation between Vietnam and Hong Kong will soon be restored, even grow stronger than that before the COVID-19 pandemic broke out, saying the two sides hold great potential for the collaboration.

Ngo Tri Hung, chief of the airline's branch in Hong Kong, said the expo will help promote the image of Vietnam and Vietnam Airlines among Hong Kong people, while boosting Vietnamese tourism in the time ahead.

The number of Hong Kong visitors to Vietnam is expected to rise in the second half of this year. Therefore, the carrier said it will increase its daily flights from Hanoi and Ho Chi Minh City to Hong Kong to two from July.

Some businesspersons suggested that visa procedures should be accelerated to attract more Hong Kong tourists to the Southeast Asian nation.

Within the framework of the expo, there will be workshops on tourist destinations and products, and tourism trends, thus helping recover Hong Kong’s tourism sector completely. The expo is expected to welcome some 60,000 visitors.

Construction of trans-Mekong Delta expressway kicks off

Prime Minister Pham Minh Chinh on June 17 attended a ceremony in An Giang province where he ordered simultaneously beginning the construction of four components projects of the first phase of the 188km Chau Doc - Can Tho - Soc Trang expressway.

Crossing the Mekong Delta region, the expressway begins in Soc Trang province’s Tran De port, runs through Hau Giang province and Can Tho city, and ends in An Giang province’s Chau Doc city. It is designed to be 32.25m wide and have six lanes, with its total cost exceeding 44.69 trillion VND (1.89 billion USD) sourced from the central and local budgets.

The project is divided into four sub-projects, whose investment management agencies are the People's Committees of Soc Trang, Hau Giang, and An Giang provinces and Can Tho city. The expressway is expected to be completed in 2026 and the entire project in 2027.

Addressing the ceremony, PM Chinh said the expressway is the first horizontal axis one in the Mekong Delta, connecting the region with the national expressway system. It is expected to be one of six expressways that change the Mekong Delta as well as connect many economic centres, international border gates and seaports, he added.

The Government leader stated that the implementation of the project is a step to concretise the Resolution of the 13th National Party Congress as well as the guidelines and policies of the Party and State on infrastructure and social-economic development, and on ensuring national defence and security in the region.

He also highlighted the need to build the Mekong Delta into a key economic region with high and sustainable growth.

The PM affirmed that the Government always pays attention and works drastically so that the project and other infrastructure development projects are completed on schedule and with quality, meeting the requirements of socio-economic development and improving people's living standards.

He ordered the construction of the expressway to be done efficiently, safely and without waste.

Vietnam, Russia's Far East region seek to boost trade cooperation

A roundtable on prospects for trade cooperation between Vietnam and Russia's Far East region was held by the Far Eastern Federal University (FEFU) in Vladivostosk on June 15.

Participants heard that Vietnam recorded a strong economic rebound after the COVID-19 pandemic, and experienced a growth of 8.02% in 2022. The Southeast Asian nation welcomed 3.7 million foreign tourists in the year.

The workshop also highlighted the significant cooperation between the two countries in the oil and gas sector, exemplified by the two joint ventures, VietXoPetro in Vietnam and RusVietPetro in Russia.

In his speech, the Vietnamese Consulate General in Vladivostok Nguyen Dang Hien stressed that Vietnam’s efforts to maintain macroeconomic stability and improve the investment environment have helped the country become a reliable destination for foreign investors.

There remains huge potential for the two countries to expand trade and tourism cooperation, he said, noting that it is necessary to resume direct flights between Vietnam and Russia and set up tourism promotion offices in each country.

The Russian government may also consider visa exemption for Vietnamese tourists for 15 days to stimulate tourism demand, he added.

Meanwhile, chief of the Vietnam trade mission in the Far East Nguyen Hong Thanh said the region plays an important role in the Russian government's "pivot to the East" policy.

According to Thanh, the most prominent event in the economic and trade relations between the Far East region and Vietnam is the resumption of a container shipping route by FESCO to deliver goods from Hai Phong and HCM City of Vietnam to Russia, and vice versa.

FESCO is planning to build a transshipment point at HCM City port to forward Russian goods to further markets such as Indonesia, Malaysia, Thailand, Myanmar, and India and vice versa.

Besides FESCO, other operators such as OOO Transit and AO Transinergi have also started operating maritime routes from the Far East to Vietnam, Thanh said.

He noted that the Far East will be a good investment destination for Vietnamese businesses if there is a channel to provide sufficient information for the Vietnamese business community.

Vietnamese enterprises can consider cooperating with partners in the Far East region in potential fields such as civil and industrial construction, furniture production, coal and mineral mining, high-tech development, and food processing, he said.

Seminar discusses quality improvement for food exports to China

The Investment and Trade Promotion Centre of Ho Chi Minh City (ITPC) and the Vietnamese Trade Office in China on June 16 co-organised a seminar on improving the quality of food products shipped to the China, the biggest export market of Vietnam.

ITPC Director Tran Phu Lu said Vietnam’s main exports to the market are processing, manufacturing, agro-fishery goods, adding that the nations have secured a host of bilateral and multilateral cooperation pacts, including the ASEAN–China Free Trade Area (ACFTA) and the Regional Comprehensive Economic Partnership (RCEP).

Luong Van Tai, a trade attaché from the office, informed the seminar that Vietnam currently ranks 10th among the countries exporting farm produce to China, with its turnover from such shipments to the market exceeding 6 billion USD last year but only accounting for about 2.6% of China's total agricultural import value.

Vietnam is also China’s 3rd biggest exporter of fruits and vegetables, following Thailand and Chile, Tai said, noting that the market’s demand for tropical fruits is large and grow annually.
 
He advised Vietnamese exporters to carefully study requirements from China, which is lifting its tariff barriers but tightening its technical specifications, food safety and quarantine standards and using anti-dumping measures frequently.

Sharing his export experience involving the Chinese market, Chairman of 365 Group Dinh Vinh Cuong said experts consider China the largest destination for Vietnamese agricultural products given global inflation, due to its surging demand, close geographical proximity, and lower logistics costs and risks compared to other markets.

So far, Vietnam has officially exported 13 key agricultural products to China.

In order to turn the exports into an opportunity to increase market share, Cuong suggested developing a strategic plan for the industry, as well as building brands and large-scale specialised production and concentrated farming areas based on market signals.

It is also important to devise a logistics strategy and establish agricultural product storage facilities in border localities, he added.

Festival opens in HCM City to promote cashless transactions

The cashless revolution continued to gather steam with the Cashless Town Festival opening on Friday in HCM City to promote digital payments.

Organised as part of Cashless Day 2023, the festival at Le Loi Boulevard in downtown District 1 has attracted a diverse collection of merchants, consumers and tech enthusiasts.

The three-day “Data Connection, Smart Payment” event offers various promotion programmes for shoppers and showcases a wide range of payment solutions, including mobile wallets, QR code payments, contactless cards, and wearable technology.

Those taking part have the opportunity to explore the latest innovations in payment technologies and learn about the advantages of cashless payments.

Visitors can enjoy live music performances, food and drinks and an exhibition on the “History of Money.”

​A seminar on Friday will focus on data connectivity in promoting cashless payments and educate consumers on maximising the benefits of cashless technology.

Pham Anh Tuan, director of the State Bank of Vietnam's payment department, speaking at the opening ceremony, said: “The festival celebrates the amazing progress we have made in the field of digital payments and is a testament to the transformative power of cashless technology.”

 A foreign tourist makes a payment using a QR code at a food stall at the Cashless Town Festival being organised as part of Cashless Day 2023 this weekend in HCM City. VNS Photo Bo Xuan Hiep
The festival also serves as an opportunity for government officials and industry leaders to reflect on the progress of the cashless revolution in the country and develop plans for future growth.

According to a State Bank of Vietnam report, interbank electronic payment transactions increased by 8.6 per cent year-on-year in terms of value in the first quarter.

Transactions through the financial switching and electronic clearing system saw a significant increase of 70.8 per cent in volume and 18.6 per cent in value, the report said.

There is a strong shift from cash withdrawal to cashless payment, with the number of transactions via POS increasing by 37.6 per cent in volume and 32.1 per cent in value.

Cash withdrawals at ATMs continued to decline, falling by 2.37 per cent in quantity and 4.02 per cent in value.

Over more than a year of mobile-money services, 3.71 million mobile money accounts have been opened, 30 per cent in remote areas and islands.

Banks and intermediary payment service providers have introduced new, modern and cost-effective payment solutions such as QR code payment and contactless payment to enhance the customer experience and encourage individuals and businesses to adopt cashless payment. 

NIC and Can Tho University to develop startups in Mekong delta

Innovation and science technologies are expected to significantly contribute to the sustainable development of the Mekong River Delta.

Under a workshop on sustainable development in the Mekong delta taking place on June 16, Can Tho University signed an agreement with the Ministry of Planning and Investment's (MPI) National Innovation Centre, with the Vietnam Chamber of Commerce and Industry in Can Tho, with Rynan Technologies Vietnam JSC to utilise resources of all sides, and deliver better value for socioeconomic development.

With the vision and mission of these units, the cooperation will promote the resources of the parties, connecting and implementing activities to make practical and effective contributions to the development of innovation and the startup ecosystem in the Mekong River Delta region and the country in general.

Can Tho University has been playing a key role in education, research, technology transfer and community services for the development of the region. It is also actively leading and implementing many national and international collaborative programmes and projects, to contribute more effectively to the Mekong Delta, country, and region.

Tran Duy Dong, MPI deputy minister, said with the goals of the digital transformation across the country, developing digital economy should be based on innovation and science technologies, improving productivity, quality, performance, and competitiveness of the economy, closely connecting local and overseas markets.

The Mekonng delta is the biggest centre for producing rice, fruit, and seafood in the country, with a key role to ensure food nationwide. Despite its great advantages and opportunities for the development, the region also struggles with numerous challenges.

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