Vietnamnet global

21/06/2021 11:33 (GMT+07:00)

VIETNAM BUSINESS NEWS JUNE 21

Indian firms to seek investment opportunities in Vietnam after COVID-19

Many Indian companies want to come to Vietnam and explore investment opportunities after the COVID-19 situation comes under control, Dr Madan Mohan Sethi, Indian Consul General in Ho Chi Minh City, has said.

Vietnam is one of the fastest growing economies in the world and “is the country to watch out for” and “every provincial government has an open door policy and always encourages investments,” he told the first ever Invest Vietnam conclave organised by the Indian Investors Federation, the Vietnamese embassy in India and Leaps and Bounds Consulting Vietnam.

The webinar, which aimed to present Vietnam as an investment destination in various sectors, attracted the participation of 110 investors from India and other parts of the globe, officials from both governments and Indian business executives in Vietnam.

Vietnamese Ambassador to India Pham Sanh Chau said Vietnam is one of the most open economies in the world and “the Government’s vision is to make it a digital economy.”

He spoke about the potential for cooperation between the two countries, especially in sectors such as pharmaceuticals, manufacture of automobile parts and technology.

Vietnam has an eco-system for start-ups as well, and investors could also look to invest in these young companies with strong vision, and the Vietnamese embassy in New Delhi has a business-centred approach towards economic diplomacy and is keen to provide all kinds of support to the investor community, he said.

Raghu, Director of TATA Coffee Vietnam, said the smooth connectivity between industrial parks and ports is making the supply chain more efficient in the country.

He thanked the authorities for providing strong support to his company.

Sanjay Jain, CFO & HR head of Wipro Vietnam, said getting young and skilled manpower is never an issue in Vietnam, and his company plans to expand its operations, thanks to the Government’s open and supportive policies.

Ravi Vajpeyi, HCL Vietnam resident director, spoke about the rapidly growing information technology sector in Vietnam (worth 11.5 billion USD 2019) and large IT talent pool.

“The strong IT talent pool is of the biggest strengths of Vietnam’s IT industry.”

Speaking about the garment and textile sector, Selvaraj Gopal of TAP International said, “Vietnam is currently importing 85 per cent of its fabric needs from other countries, and so the scope for producing the same in Vietnam is high.”

Vishwas Saraswat, founder and director of Leaps and Bounds Consulting, said: “Given the current COVID situation, the Vietnam government is doing an excellent job and in fact last year the country’s GDP grew by 2.91 percent despite the turmoil in the global economy due to COVID-19.

“Vietnam’s open market policy with 14 plus free trade agreements will surely provide bigger markets to investors.”/.

Vietnamese lychees confident of winning over consumer taste in Netherlands

Fresh lychees from Vietnam have hit the shelves of a supermarket in the Netherlands and received warm response, expecting to make further inroads into this market in the time ahead.

To advertise Vietnamese lychees, the trade office of Vietnam in the Netherlands and the LTP Import Export BV company have organised a tasting programme at Thanh Hung Supermarket in Spijkenisse city.

The fruits for sale at this supermarket come from the batch of nearly 1 tonnes of lychees that were farmed in Thanh Ha district, Hai Duong province, and arrived at Schiphol Airport on June 17 for distribution to Asian supermarkets in the Netherlands, France, and Germany.

Earlier, the sample lychees had been sent to all Asian supermarkets in the Netherlands and won over great interest from their owners.

As a result, lychee orders from supermarkets in the Netherlands, France, Germany, and Norway, for between hundreds of kilogrammes and one tonne each, have been made, and the batches are scheduled to be shipped by air in the next one or two weeks.

E-commerce websites of the Netherlands and France have also swiftly received orders for Vietnamese lychees imported by LTP Import Export BV.

Vo Thi Ngoc Diep, Trade Counsellor of Vietnam in the Netherlands, said this is the first time fresh lychees of Vietnam have been imported via an official channel to the Netherlands, from which the fruit will be distributed to neighbouring countries.

With those encouraging signs, Vietnamese lychees will hopefully continue making further inroads into the Dutch market in the coming years.

Apart from the Netherlands, the fruit has also been successfully exported to France, Japan, and the Czech Republic, among others, which all have strict requirements for imported products./.

Vietnam ready to assist Tanzania in agricultural development: ambassador

Vietnam is ready to provide technical support and share experience in agricultural development with Tanzania, Vietnamese Ambassador to Tanzania Nguyen Nam Tien said during a recent meeting with the host country’s Minister of Agriculture Adolf Faustine Mkenda.

At the working session in Dodoma capital on June 17, Tien said the two countries boast considerable potential for cooperation in crop cultivation, animal husbandry, aquaculture, and forestry.

He also introduced Vietnam’s agricultural strengths to the Tanzania minister, noting that Vietnam earned more than 41 billion USD from agricultural exports in 2020, with the US being the largest importer, followed by China, the EU, ASEAN, and Japan.

Congratulating Mkenda on his reappointment as Minister of Agriculture, one of the most important economic sectors in Tanzania, the diplomat expressed his delight at the recent strides in the countries’ relations and spoke highly of the outcomes in bilateral cooperation in bilateral and multilateral aspects

For his part, Minister Mkenda highlighted their countries’ sound relations throughout history, noting that in agriculture, Tanzania prioritises developing crop varieties and animal breeds, boosting production supporting services, increasing irrigation, expanding markets for agricultural exports, providing finance, and managing diseases

He asked Vietnam to share experience in developing such key farm produce as rice, coffee, tea, and cashew nuts while calling on Vietnamese enterprises to invest in building agricultural processing factories in his country.

The two sides shared the view on the importance of signing agreements, firstly those on double taxation avoidance and investment facilitation and protection, so as to create a legal framework for bilateral cooperation.

Ambassador Tien also welcomed Tanzania attending a Vietnam - Africa conference on agriculture to be chaired by the Southeast Asian nation in late 2021./.

Manufacturing and processing sector playing key role in FDI attraction

The manufacturing and processing sector has taken the lead in attracting foreign direct investment (FDI) since the beginning of this year, pulling in 6.1 billion USD, or over 43 percent of the total.

Of the 613 foreign-invested projects in 18 sectors licensed this year, electricity production and distribution ranked second in terms of FDI attraction with more than 5.4 billion USD, or over 38 percent of the total, followed by real estate with over 1 billion USD.

Head of the Ministry of Planning and Investment (MoPI)’s Foreign Investment Agency Do Nhat Hoang said FDI flows to key areas such as energy and manufacturing and processing are evidence of Vietnam’s stability and prestige in FDI attraction.

Minister of Planning and Investment Nguyen Chi Dung recently issued a decision removing 58 administrative procedures in investment, thus helping enterprises save time and money.

The MoPI also announced 65 new administrative procedures in investment from the central to provincial levels, creating favourable conditions for investors./.

JICA intensifies collaboration with Vietnam in several fields in FY2021

The Japan International Cooperation Agency (JICA) plans to focus on health, public investment and human resource development in its activities in Vietnam in fiscal year 2021, which began on April 1, JICA's chief representative in Vietnam Shimizu Akira has confirmed.

According to Shimizu, in recent years, Vietnam has been among the countries that register the most successful cooperation with JICA in the health field, reflected in the projects to upgrade Bach Mai hospital in Hanoi and Cho Ray hospital in Ho Chi Minh City, along with stepping up the implementation of preventive measures against infectious diseases.

JICA also offered assistance in improving the testing capacity of the National Institute of Hygiene and Epidemiology, the Pasteur Institute of Ho Chi Minh City, as well as providing medical supplies for the fight against the COVID-19 pandemic.

Appreciating the country’s performance in the pandemic fight , he expressed the hope that vaccines will be distributed fairly and quickly around the world, including Vietnam.

Regarding public investment, Shimizu said that the Japanese agency has helped Vietnam promote investment in socio-economic infrastructure projects, which is seen as an effective measures to boost the national economy and improve the people's living conditions.

He cited as examples projects to upgrade the Noi Bai international airport in Hanoi, Tan Son Nhat international airport in Ho Chi Minh City, build the urban railway route No. 1 in HCM City, among others.

JICA also provided assistance to high-quality human resource development projects in several universities in Vietnam, while collaborating with localities in organising courses that connect Vietnamese and Japanese companies, he added.

The year 2023 marks the 50th anniversary of the establishment of diplomatic relations between Japan and Vietnam. In celebration, JICA will work closely with the Vietnamese Government to continue supporting the country in both building facilities and enhancing technical cooperation and developing a win-win relationship, he added./.

Manufacturing and processing sector tops FDI attraction

The manufacturing and processing sector has taken the top spot in drawing foreign direct investment (FDI) since the beginning of this year, with US$6.1 billion, accounting for 43% of the total.

Of the 613 foreign-invested projects in 18 sectors licensed this year, electricity production and distribution came second in terms of FDI attraction with more than US$5.4 billion, making up 38% of the total, trailed by real estate with more than US$1 billion.

Head of the Ministry of Planning and Investment (MoPI)’s Foreign Investment Agency Do Nhat Hoang said greater FDI flows into key areas such as energy and manufacturing and processing indicate the nation’s stability and prestige in FDI attraction.

Minister of Planning and Investment Nguyen Chi Dung recently issued a decision removing 58 administrative procedures in investment as a mean of helping enterprises save time and money moving forward.

Besides, The MoPI also announced 65 new administrative procedures regarding investment from the central to provincial levels, thereby offering optimal conditions for investors.

JICA intensifies collaboration with Vietnam in several fields in FY2021

Appreciating the country’s performance in the pandemic fight , he expressed the hope that vaccines will be distributed fairly and quickly around the world, including Vietnam.

Garment-textile exports hit 15.2 billion USD in five months: VITAS

Export revenue of the garment and textile sector surged 21.2 percent year on year in the first five months of 2021 to about 15.2 billion USD, according to the Vietnam Textile and Apparel Association (VITAS).

The association reported that fibre and yarn exports during January-May soared by 60.1 percent year-on-year to 2.1 billion USD, while that of fabrics also increased 26.4 percent to 947 million USD.

In the period, Vietnam spent more than 10.2 billion USD on importing materials for the garment and textile industry, representing a 33.4 percent increase over the same period in 2020.

The Ministry of Industry and Trade attributed the growth to positive signals from the country’s major export markets as well as domestic businesses’ effective utilisation of opportunities from free trade agreements (FTAs) which have been signed and put in place.

The United States remained the largest importer of Vietnam’s garment and textile products with a value of 6.02 billion USD, up 24.4 percent from the same period in 2020 and accounting for 49.2 percent of the sector’s total revenue.

Japan was the second largest customer with 1.31 billion USD (down 6.3 percent), followed by the European Union with 1.21 billion USD (up 14.7 percent) and the Republic of Korea at 1.07 billion USD (up 4.2 percent)./.

Fertiliser prices continue to increase: MoIT

Fertiliser prices are forecast to continue to grow for the rest of the year, caused by a number of factors including higher shipping costs, a representative of the Chemical Department said.

Speaking at the Ministry of Industry and Trade (MoIT)’s monthly press conference held on Thursday, Luu Hoang Ngoc, deputy director of the MoIT’s Chemical Department said: "The fertiliser price fluctuation in 2021 is similar to that in 2008, and the prices will continue to increase from now until the end of the year."

The main factor pushing up prices is higher cost to hire shipping containers, while imported fertilisers, such as diammonium phosphate (DAP), mono-ammonium phosphate (MAP) and urea, are mainly transported on containers.

Currently, the cost to hire shipping containers has increased five times compared to the previous year.

In addition, fertiliser supply in Southeast Asia has declined as many factories have entered the period of maintenance.

The price of raw materials has increased on the world market so the price of domestically-made fertiliser products has also soared, according to the Chemical Department.

At present, the Ministry of Agriculture and Rural Development (MARD) manages production, trading, and import-export of none organic and organic fertilisers.

However, "the MoIT manages import-export activities and the domestic market, working closely with MARD to ensure supply," Ngoc said.

According to Le Trieu Dung, director of the MoIT’s Trade Remedies Department, the strong increase in prices started early 2021. The reason has been mainly due to the increase in cost of material for production of DAP and MAP fertilisers, of which the price surged by two times for sulfur and 30 per cent for ammonia.

However, after assessing supply and demand, the MARD and MoIT have found that there is enough fertiliser supply for domestic use.

“The supply of fertilisers, especially DAP fertilisers, is still enough for the domestic needs," Dung said.

"Specifically, the import of DAP and MAP fertilisers from the beginning of the year to now increased by 50 per cent, while the domestic production also increased by about 30 per cent.”

In addition, the prices of domestically-produced DAP and MAP fertilisers are between VND8-10 million per tonne, lower than the price of imported fertiliser at VND14-15 million per tonne. This is also a factor helping to stabilise the domestic market.

Over the past month, the MoIT has taken safeguard measures for imported DAP and MAP fertilisers to protect domestic production. After an investigation on import fertiliser, the ministry has issued a decision to impose taxes on those products from 2017, according to Dung.

In the future, the MoIT will continue to coordinate with the MARD to monitor the fertiliser market and have measures to stabilise the market.

Long An to have 4 new industrial clusters this year

Long An Province is set to get four industrial clusters this year, Vinh Khang, Tan My, Tu Phuong, and Hiep Hoa, according to its Department of Industry and Trade.

Their developers are expected to clear the lands by the end of this month and then begin construction of infrastructure for wastewater treatment, traffic, water, drainage, and electricity, which are expected to be completed by the end of this year.

Once completed, they will add nearly 200 hectares to the province’s availability of industrial lands.

The province has 16 industrial parks with a total area of over 2,282ha and average occupancy of 89.2 per cent.

They house 796 foreign projects worth a total of US$7.857 billion and 831 local ones worth VND92.32 trillion ($4.02 billion).

It is also home to 22 industrial clusters with an occupancy rate of 86.5 per cent. There are 647 projects with a total investment of VND16.128 trillion ($701.2 million), including 60 foreign ones worth $209.6 million.

According to its Department of Industry and Trade, the province’s industrial cluster development plan for until 2020 envisaged having 62 industrial clusters with a total area of more than 3,100ha by then, but currently only 22 industrial clusters have been put into operation.

The department said it would focus on completing the province’s industrial cluster development plan for 2021 – 30 to attract more investment.

Besides, it would monitor and ensure developers of infrastructure in the clusters finish the work in time, it added.

EPC contract signed for power plant in Quang Binh

A contract on a bidding package worth VND30 trillion (nearly US$1.29 billion) on engineering, procurement and construction (EPC) of the Quang Trach 1 thermal power plant in the central province of Quang Binh was signed in Ha Noi on Thursday.

The signatories are Vietnam Electricity (EVN), and a consortium of contractors comprising Japan's Mitsubishi Corp, Hyundai Engineering and Construction Company (HEC) of the Republic of Korea (RoK), and Construction Corporation No 1 of Viet Nam.

The construction of the project, which has a total investment of over VND41.1 trillion (nearly $1.79 billion), is expected to begin in the third quarter of this year, and complete in 2025. It will cover an area of 48.6 ha in Quang Trach district’s Quang Dong commune.

The plant, which has two turbines with a combined design capacity of 1,200 MW, is expected to supply about 8.4 billion kWh of electricity to the national grid per year, contributing to ensuring national energy security.

The plant will use the ultra-supercritical coal combustion technology (USC) and be equipped with synchronous treatment systems of wastewater and exhaust gas, and dust filtration systems, in line with Viet Nam’s environmental standards.

IPs in Dong Nai take measures to prevent COVID spread from HCM City

Businesses in Dong Nai Province’s industrial parks are taking strict measures to protect themselves against COVID-19 and the risk of transmission from HCM City, which is currently the third largest COVID-19 hotspot in the country.

Pham Van Cuong, deputy head of Dong Nai Industrial Zones Authority’s management board, said that local businesses faced a high risk because the province is adjacent to HCM City.

Busy trade occurs daily between HCM City and Dong Nai so there is a risk of COVID entering the province’s 32 industrial parks that employ more than 1.2 million workers, some of whom reside in HCM City and travel back and forth every day.

Phan Huy Anh Vu, director of the province’s Department of Health, said that some HCM City residents who work in Dong Nai and tested positive for COVID have had contact with locals in the province.

On June 8 the province recorded the first F1 case (close contact with an infected person or F0) in Bien Hoa City’s Amata Industrial Park. The local Centre for Disease Control immediately began working with authorities to trace and quarantine contacts.

The province has identified 111 F1 cases and around 5,600 F2 cases related to HCM City patients over the last two weeks.

Businesses at the industrial parks are trying to maintain production while staying safe from COVID. They have been following strict preventive measures, with some preparing living spaces so that experts and workers can stay in Dong Nai instead of returning to their homes in other areas.

Le Duc Vinh, operation director of Fujitsu Viet Nam at Bien Hoa 2 Industrial Park, said that his company had been raising staff awareness about the pandemic and how to stay safe. The company also has health clinic rooms with quarantine areas.

Meanwhile, Dong Nai Province has issued regulations to manage HCM City residents who enter the province for work. Businesses using buses to transport their workers from HCM City have to register their bus number plates and provide a list of workers and pick-up and drop-off locations.

All workers who enter the province have to make a health declaration and have their temperature taken at pandemic inspection stations.

The province is also carrying out random COVID-19 tests at industrial parks.

The Dong Nai Industrial Zones Authority is instructing businesses to carry out inspections and evaluate COVID-19 risks in their workplaces and dormitories. The province said it might suspend production activities in areas vulnerable to COVID transmission.

Dong Nai is among the top provinces in Viet Nam in terms of exports and production. In 2020 it ranked sixth in exports.

Sacombank sets aside more than $434 million for preferential loans to corporate customers

Sacombank has set aside VND10 trillion (US$434.78 million) for preferential loans to corporate customers at interest rates starting at 4 per cent for a maximum tenor of six months to help exporters and businesses overcome the difficulties caused by the COVID-19 pandemic.

The programme targets enterprises ranging in size from micro to large that use the bank’s services like e-banking, salary payment, guarantee, international payment, and others.

The interest rate will be 4-6.7 per cent depending on the type of business, scale of operation, loan tenor, and the use of the bank’s services.

The loans will be given until December 31 or the package is exhausted.

In addition to useful financial solutions, Sacombank also offers promotions to increase benefits for corporate customers.

From June 1 to August 31, all corporate customers can choose account numbers for free, have their annual fees for business cards exempted and payroll service fees waived for three years and get fee waivers or reductions on a number of services, while their staff are entitled to preferential treatment when using modern, full-package banking services.

New and existing corporate customers with increases in transactions or resume transactions at Sacombank and meeting certain conditions in terms of value of transactions and average balance in their current accounts will be eligible to participate in the lucky spin programme ‘Tung bung xe sang – Trieu deal thang hang.’

It will offer one special prize of an Audi Q2 car worth VND1.8 billion ($78,283), six first prizes of combos worth VND100 million each and 12 second prizes of combos worth VND50 million each.

Customers who win the first and second prizes can choose their gifts, which are combos of modern office equipment like interactive screens, projectors, laptops, printers, and tablets and office healthcare equipment like air purifiers, automatic hand washing equipment and thermometer.

There will be three spins each of the lucky wheel in the two programmes in July, August and September.

By offering promotions and modern financial solutions, Sacombank is actively supporting businesses in terms of providing funding and financial management, thereby optimising their cost efficiency and competitiveness.

Beverage stocks face more challenges despite positive results in Q1

Despite the positive business results in the first quarter of 2021, the beverage industry still has to face more challenges in the near future.

In May some provinces imposed social distancing measures to contain the new wave of COVID-19, including restrictions in gatherings and dining out.

This led to the index of industrial production (IIP) of the beverage industry to fall by 0.5 per cent month-on-month in May. However, the index increased 12.8 per cent over the year in the first five months of 2021, while the IIP declined 14.6 per cent in the same period last year. Beer output was more than 1.7 billion litres, up 11.7 per compared to the first five months of last year.

Saigon Alcohol Beer and Beverage Corporation (Sabeco, SAB), one of the leading companies in producing beer, reported a significant improvement. Its financial results showed that as of March 31, the company’s net revenue rose 19 per cent year-on-year to more than VND5.86 trillion (US$253.6 million), resulting in a gain of 38 per cent in profit after tax to VND986.2 billion.

At this year’s General Meeting of Shareholders, the company passed the business plan with a target of nearly VND33.5 trillion in net revenue and nearly VND5.3 trillion in profit. According to this plan, Sabeco has accomplished 17.5 per cent of the revenue plan and 18.6 per cent of the profit plan.

Similarly, Hanoi Beer Alcohol and Beverage Joint Stock Corporation (Habeco, BHN), another big beer producer in Viet Nam, also recorded a good performance in the first quarter.

In its first quarter’s financial statement, Habeco said its revenue reached nearly VND1.4 trillion, up 78 per cent over the same period of last year. Consequently, the company posted a profit after tax of VND47.6 billion while it had lost VND98.3 billion last year.

With this year’s target of nearly VND5.4 trillion in net revenue and VND255 billion in profit after tax, Habeco has completed 25.5 per cent and 19 per cent of its plan, respectively.

On the stock market, there have been reductions since the beginning of the year. Even though summer is a perfect season for beverage stocks to reverse course, it is difficult to witness a positive break through.

SAB shares closed last Friday at VND171,200 per share, down 4.3 per cent compared to April and 16.5 per cent since the beginning of the year.

Meanwhile, BHN shares were traded at VND64,000 per share on the last trading day of the week, down 16.3 per cent compared to earlier this year.

Stocks of SAB and BHN’s subsidiaries reported a similar trend. For example, Ha Noi Beer Trading JSC (HAT) fell 17.4 per cent, and Ha Noi - Nam Dinh Beer JSC (BBM) down 17.3 per cent.

On the contrary, investors are looking at companies producing soft drinks, mineral water, healthy drinks because these products are not affected by Decree No. 100/2019 (on administrative penalties for alcohol users driving traffic).

Sanna Khanh Hoa Beverage JSC (SKN) shares, which listed on UPCOM, surged 101 per cent since the beginning of the year, rising from VND9,200 to VND18,500.

In 2021, the company will build a Sanna beverage factory in Song Cau Industrial Complex with a capacity of 5,000 products per hour. The goal of the project is to use good quality groundwater with large reserves, to reduce the cost of transporting products from factory to markets.

Khanh Hoa Sanest Beverage JSC shares (SKH) posted more modest growth, up 11 per cent for the year, from VND20,900 to VND23,200 last Friday.

With the current developments of the pandemic, the expert team of SSI Research cautiously forecast that the recovery of the whole industry will be slow, and demand will only recover in 2022. For the beer industry, besides the epidemic, the price of raw materials may affect consumption demand and product prices.

The lack of tourists is also affecting the industry products’ consumption.

Shares to move up but investors should be cautious

Securities companies have forecast that the stock market's uptrend may continue this week but investors should adopt risk management measures.

On the Ho Chi Minh Stock Exchange (HoSE), the VN-Index gained 1.31 per cent, to close Friday at 1,377.77 points, the highest milestone so far.

It gained 1.93 per cent in total last week.

An average of 770.9 million shares were traded on the southern exchange each session last week, worth VND23.9 trillion (US$1 billion).

According to SSI Securities Incorporation (SSI), the VN-Index has the impetus to continue towards the target of 1,400 points in the coming sessions.

“However, the buying force might increase when the index approaches the resistance zone of 1,400 points. Therefore, investors should focus on risk management during the index's uptrend,” it said.

BOS Securities Joint Stock Company (BOS) said it was likely the VN-Index would maintain an increase and move towards a stronger resistance area at 1,380 - 1,400 points.

However, according to the company, the index may retest the old peak of 1,370 - 1,375 points in the early sessions of this week before confirming the short-term uptrend.

MB Securities Joint Stock Company (MBS) believes the market has recovered after the correction in the early sessions of June. The return of leading stocks like banks, securities and steel have helped VN-Index reach a new high.

“Technically, the market may enter a new bullish wave after successfully surpassing the old peak to move towards the short-term target at 1,420 - 1,450 points,” it said.

Viet Dragon Securities Joint Stock Company (VDSC) said at the end of last week, the VN-Index set a new peak with many stocks rising to new price ranges, boosting investors' sentiment.

“The spread of smart money has not stopped,” VDSC said.

Saigon-Hanoi Securities Joint Stock Company (SHS) said the market rallied last week with reduced liquidity compared to the previous week, but still higher than the average level of the last 20 trading weeks.

“The buying demand is still relatively strong. However, there was more caution among investors than before,” it said.

“From a technical point of view, the VN-Index ending last week above the threshold of 1,375 points opens an opportunity for an extension of the uptrend with the target around 1,400 points,” it said.

“However, the index's gaining momentum over 1,375 points is not definitive and the liquidity dropped. Therefore, it is still necessary to observe more movements in the session on June 21 to assess the trend of the VN-Index,” it said.

Energy stocks gained the most last week, mainly thanks to the increase of pillars such as PetroVietnam Gas JSC (GAS) up 6.6 per cent, PV Power (POW) rising 2.1 per cent, Binh Son Refinery (BSR) increasing 8.8 per cent, Vietnam National Petroleum Group (PLX) climbing 4.6 per cent and PV Oil (OIL) up 3.5 per cent.

They were followed by materials stocks, including Phu My Fertilisers (DPM) up 7.5 per cent, Hoa Sen Group (HSG) up 7.3 per cent, Petro Viet Nam Ca Mau Fertilizer JSC (DCM) rising 6.6 per cent and Nam Kim Group (NKG) gaining 4.2 per cent.

The financial group also performed well with gainers like Viet Capital Incorporation (VCI) up 14.4 per cent, Saigon-Hanoi Securities Co (SHS) up 10.2 per cent, VNDirect (VND) rising 9.8 per cent and SSI Securities Co (SSI) up 2.7 per cent.

Big discounts offered to boost Vietnam car sales

Automobile manufacturers and distributors in Vietnam have launched strong discounts this month to boost sales.

This has been the biggest discount since January 1 this year when the 50% discount scheme on car registration fees finished.

At present, many Kia models such as Kia Cerato, Sorento and Sedona have seen discounts of up to VND50 million (USD2,173) each. The price fall of between VND30-120 million has also been applied for the Mazda CX5, CX6 and CX8 models.

Hyundai Thanh Cong have reduced the prices of Elantra and Kona models by VND15-40 million, especially as Kona is facing fierce competition from the Toyota Cross and Kia Seltos. Meanwhile, Elantra’s big rivals are the Kia Cerato and Mazda 3.

VinFast slashed the prices of its three car models in June, comprising Fadil, Lux A and Lux SA. Fadil model buyers this month enjoy a 100% discount on registration fees, while the discount on the Lux SA is VND60-80 million.

Toyota reduced the prices of VND35 million for its Vios; while Mitsubishi gives customers a fuel card valued at VND25-40 million when buying its cars.

For Ford and Suzuki-branded cars, the discounts are also up to VND45-90 million, depending on different models.

According to the latest report from the Vietnam Automobile Manufacturers’ Association, car sales of Kia, Mazda, Honda, Ford, Toyota, Mitsubishi and Hyundai all saw a drop against April.

Phan Dang Hung, owner of a car dealership in Hanoi, said that discounts were being offered in order to achieve the revenue target for the second quarter. Car sales would also be low in the coming lunar month of July, as Ghost Month is considered an inauspicious time of the year for buying valuable items such as cars as well as doing important things such as holding weddings or ground-breaking ceremonies for houses.

The Covid-19 pandemic has reduced car demand for those wanting to provide taxi services. The end of registration fees discounts had also slowed car sales, Hung said.

Positive factors in place for economic growth in 2021

The country’s economic growth in the first half of the year is expected to remain lower than expected due to the pandemic affecting production and business. However, whether the economy can ensure its growth target for the whole year remains in question, with some international forecasts still proving upbeat.

Minister of Planning and Investment Nguyen Chi Dung has reported to the government a fresh scenario for economic growth for the first half of 2021, based on positive performance of the economy in the first five months in defiance of difficulties caused by the health crisis.

The Ministry of Planning and Investment (MPI) forecast that the economy will likely grow 5.8 per cent on-year in the first six months, or 1.31 per cent lower than the target of 7.11 per cent set in the government’s Resolution No.01/NQ-CP released on January 1 on key tasks for implementation of the socioeconomic development plan and state budget estimates for 2021.

However, the expected 5.8 per cent rate, if realised, will also be far higher than in the same period last year, when GDP grew 1.81 per cent on-year, also the lowest six-month rise of each year in the 2011-2020 period.

“The momentum for economic growth in 2021 will come from the industrial-construction sector and the service sector, especially the processing and manufacturing industry, a rise in investment and expansion of trade activities,” said Minister Dung.

The MPI forecast that in the first six months, while agricultural production will climb 3 per cent on-year, industrial production will ascend 7.8 per cent on-year. Total retail and consumption service revenue is forecast to rise 7.1 per cent on-year, and the service sector will likely expand 5 per cent on-year.

“The number of newly-established enterprises is expected to increase at a low level, at only 1.6 per cent on-year, but the volume of newly-registered capital will soar by 34.8 per cent as compared to the same period last year,” Minister Dung said.

Difficulties caused by the health crisis still lingered in the first five months of 2021, forcing the MPI to propose a reduction in the target of economic growth for the first half of the year, despite the fact that domestic production is bouncing back.

The 1.31 per cent reduction in economic growth will mean a loss of about 400,000 direct jobs. So far this year, key input products for the economy saw a big reduction in production.

For example, state-owned PetroVietnam reported that in 2021 so far, its production has reduced on-year. Exploitation of crude oil hit 4.54 million tonnes, down 9 per cent – in which exploitation of domestic oil reached 3.78 million, down 9 per cent, and exploitation of overseas oil raked in 760,000 tonnes, also down 9 per cent; exploitation of natural gas hit 3.47 billion cubic metres, down 13 per cent; production of nitrate 627,900 tonnes, reducing 17 per cent; and assorted petrol 2.77 million tonnes, down 14 per cent.

PetroVietnam’s export turnover in the first five months was $781.9 million, down 2 per cent on-year. In which, export of crude oil was 3.77 million tonnes, down 2 per cent.

In another case, state-owned Vietnam National Coal and Mineral Industries Group (Vinacomin) also reported that in the first five months of 2021, its total revenue is estimated to be $2.16 billion, down 9 per cent on-year. In which revenue from coal sales hit over $1.26 billion, down 11 per cent; revenue from electricity production and sale was $247.4 million, down 8 per cent; and revenue from other business sectors sat at $248.7 million, a 15 per cent reduction. Moreover, Vinacomin’s coal production also declined on-year, including rough coal (16.9 million tonnes, down 6 per cent), and consumed coal (17.74 million tonnes, down 11 per cent).

However, electricity, one of the vital inputs for the economy, saw an on-year increase.

According to state-run Electricity of Vietnam (EVN), its total industrial gross output in the year so far hit over $6.39 billion, up 8.06 per cent on-year. Produced and purchased electricity is estimated to be nearly 100 billion kilowatt hours, up 7.1 per cent on-year.

EVN’s commercialised electricity in the five months is estimated to be 90.14 billion kWh, an 8.06 per cent on-year increase. In which, electricity for agro-forestry-fishery activities accounts for 3.9 per cent, electricity for industrial and construction activities holds 55.91 per cent, and electricity for households occupies 31,5 per cent. The rate for hotels is 4.5 per cent.

EVN’s revenue from electricity sales for January to the end of April is estimated to stand at $7.24 billion, up 11.06 per cent on-year.

According to the General Statistics Office (GSO), the economy’s production and distribution of electricity to the end of May expanded 8.3 per cent as compared to that of only 2.1 per cent per cent on-year in the corresponding period of 2021.

“COVID-19 has seriously hurt domestic production. However, production is strongly recovering and we need to boost this recovery,” said Prime Minister Pham Minh Chinh at a government cabinet meeting held a fortnight ago.

According to the latest Economic Outlook report from Oxford Economics, commissioned by chartered accountancy body Institute of Chartered Accountants in England and Wales and released last week, despite the recent resurgence of COVID-19 cases, Vietnam’s growth outlook remains optimistic and the economy is expected to return to pre-pandemic levels by the second quarter of 2021, with GDP forecast to grow at 7.6 per cent in 2021, one of the highest in the region where GDP will rebound strongly to 4.8 per cent in 2021, after contracting 4.1 per cent in 2020.

“Singapore and Vietnam are expected to continue leading the region in recovery. Despite a resurgence of COVID-19 cases in Vietnam, which has affected its manufacturing sector and export industries, its economy is predicted to rebound swiftly once restrictions are lifted,” the report said.

Standard Chartered Bank has also freshly projected that Vietnam’s GDP will grow 6.7 and 7.3 per cent in 2021 and 2022, respectively.

“Vietnam’s economic fundamentals remain robust. The country has been one of the world’s best-performing economies during the pandemic. That said, we are closely watching the domestic COVID-19 situation,” said Tim Leelahaphan, economist for Thailand and Vietnam at Standard Chartered, in the bank’s recent Global Research report on Vietnam’s performance.

Vietnam began vaccinations on March 8, with about one million of the population of 96 million having been administered one shot. Wider vaccination rollout is a precondition for a tourism rebound and a sustainable economic recovery, according to Standard Chartered.

The bank’s economists pointed out that trade data has maintained the positive momentum.

In the first five months of 2021, Vietnam’s total export-import turnover is estimated to have reached $262.2 billion, including $130.9 billion from exports – up 30.7 per cent on-year, and $131.3 billion from imports - up 36.4 per cent on-year.

Also according to the GSO, up to the end of May about 55,800 enterprises were newly established, with total registered capital of $33.84 billion and employing 412,400 new labourers, up 15.4 per cent in the number of enterprises and 39.5 per cent in registered capital. Furthermore, 22,600 businesses also resumed their operations, up 3.9 per cent on-year.

According to an AHK World Business Outlook Survey released in mid-May, 47 per cent of German businesses in Vietnam intend to expand their activities in the country – up from 22.7 per cent in spring last year, and 50 per cent assume an increase in employment in 2021/2022 – up from 27.3 per cent in spring of 2020. About 65.8 and 73.7 per cent expected the country’s economic and business situation to get better this year.

However, MPI Minister Dung took great caution when talking about the economic outlook for the second half of the year.

“The pandemic remains quite complicated, so there will be risks for the economy’s outlook in the latter half of the year when businesses’ activities will remain difficult, though their performance is significantly improving,” he added. “Thus, the successful containment of COVID-19 will be a very important driver for the economic recovery and outlook in the second half of the year.”

HCMC lifts lockdown at SP-ITC container port

The SP-ITC International Container Terminal in Phu Huu Ward, Thu Duc City, HCMC, has resumed operations after more than 300 workers at the port tested negative for Covid-19.

The port was temporarily locked down on June 13 due to a probable Covid-19 case. According to Nguyen Thai Quang, general director of International Transport and Trading Joint Stock Company - operator of the SP-ITC International Container Terminal, the suspected case is an employee of a quality inspection company that worked at the port early this month.

All areas at the port have been disinfected. The port has also adjusted the way it operates to ensure the safety of its employees and the crew of vessels coming to the port.

Shipping lines and businesses are encouraged to make their transactions with the port via online channels and the port’s website, eport.sp-itc.com.vn.

People coming to the port must comply with Covid-19 infection prevention and control measures including the wearing of face masks, completing health declarations, using hand sanitizers and keeping a safe physical distance from each other.

The SP-ITC International Container Terminal is the first international private container port in HCMC. The port is located on the Dong Nai River and is capable of receiving ships of up to 45.000 DWT.

The SP-ITC International Container Terminal, which came into operation in September 2016, has become one of the most important seaports not just in HCMC but the entire country.

Pension fund landscape to be diversified

Driven by incrementally surging demand from a gradually ageing population, more credit institutions and consumer finance companies are diversifying their loan schemes, including loan programmes for retirees.

Retirement credit is the first product for individual customers to enjoy a monthly pension to support flexible financial resources, helping customers become financially proactive for their individual consumption needs.

The lack of capital and increasing price of life has forced many citizens, including the elderly, to turn towards diverse financial solutions like payday loans or some pension-related loan options. Vietnam Post is one of the pioneers in providing the elderly with an optimal personal pension loan through its network of post offices nationwide.

“This scheme would help Vietnamese retirees to secure better medical aid, or grant financial assistance for their children and grandchildren,” Vietnam Post explained.

As the target customers are the elderly, Vietnam Post believes its wide physical coverage, including remote areas, could help them gain an upper hand and reach out to more potential clients. However, these customers belong to the baby boomer generation, they may feel they are lagging the latest digital banking trends and lending habits.

Likewise, Sacombank is also keeping up with efforts to provide diverse needs from different customers segments and boost the customer experience. The southern-based bank also bestows pension-backed loans for people under 65 with a loan amount of up to VND200 million ($8,700), 5-year loan tenure, and no collateral required.

LienVietPostBank also rolls out a lending programme for the elderly, with many similarities to products from Sacombank and Vietnam Post

“After retirement, many people think that they will have leisure time without too much stress about financial need. However, in reality, daily life often uncovers unexpected consumption needs. Therefore, the loan programme for pensioners is considered a good solutions for retirees who need to access credit for their plans,” LienVietPostBank highlighted.

Some other local banks, such as VietinBank and BIDV, also tap into this sector. Pension-backed loans only make up for a tiny proportion in banks’ portfolios, especially in comparison to a variety of products for the working population.

Banks and other credit institutions in Vietnam might be sceptical on pension credit due to customers’ age, habits, and preferences. Meanwhile, retirees may find also it difficult to approach complex loan procedures and financial records.

FE Credit – backed by VPBank and Sumitomo Mitsui Financial Group – is the first consumer finance firm in the country to roll out pension-backed credit, with the aim to provide a more optimal solution with simple and quick procedures without any collateral required.

“With our extensive network nationwide and vast experience in the unsecured loan segment, we proudly present our first-of-its-kind loan scheme targeting the local retirees. FE Credit has served more than 14 million customers and cooperated with more than 10,000 partners at more than 22,000 service introduction points,” a representative of FE Credit said.

“Compared to banks, the interest rate of consumer finance companies’ pension products is higher. However, this is widely understood as the nature of products with smaller loan amounts, shorter loan tenures, and higher risk costs compared to banks,” the representative added.

Accordingly, the maximum age threshold which can be eligible for the loan is 65 years, instead of the traditional 60. Senior citizens could lend a max loan amount of eight times as much as pension income, and four- or eight-fold higher than the standard income-proof product. Moreover, participants can enjoy the lowest interest rate among income-proof products.

According to the General Statistics Office, Vietnam’s population is ageing at an unprecedented rate. The country has 11.4 million elderly people at the age 60 and over, accounting for 11.86 per cent of the total population. Moreover, the ageing index increased from 35.9 per cent in 2009 to 48.8 per cent in 2019.

With such changes in demographic figures and to cope with contributed benefits for aged employees, Vietnam has developed attractive social insurance and pension programmes that offer full benefits and allowance to pensioners.

Data from Vietnam Social Insurance revealed that on average, participants of social insurance contribute in 28 years around 22 per cent to the retirement and survivorship fund, while receiving a 25-year average pension with an average rate of 70.1 per cent. Besides that, the ratio of expenses/revenue to the retirement and survivorship fund has been on an upward trajectory in the recent years.

FE Credit believed the rate of pension payment over the number of years of contributions in Vietnam is high, with the maximum level of 75 per cent for 35 years of contribution for men and 30 years of that for women, corresponding to a cumulative rate of 2.14 per cent per year of contribution for men and 2.5 per cent for women.

Appraisal council established for $191 million Quang Tri Airport

The Minister of Planning and Investment was assigned to be the chairman of the appraisal council to appraise the pre-feasibility report for the construction of Quang Tri Airport.

The deputy chairman of the appraisal council is a deputy minister of Planning and Investment. The members are representatives of the ministries of transport, finance, construction, as well as natural resources and environment, among others.

The airport would be developed under the public-private partnership (PPP) financing mechanism.

In early April, the government authorised Quang Tri People’s Committee to conduct a pre-feasibility study for the construction of the airport. After that, Quang Tri People’s Committee allowed T&T Group to build the pre-feasibility report.

Quang Tri Airport has the total investment capital of VND4.4 trillion ($191.3 million), which makes it suitable to develop under the PPP model. The capital will be mobilised from both public and private resources.

According to the decision, the projected Quang Tri will be a joint-use airport, covering 316 hectares in Gio Quang commune, Gio Linh district. It will be a 4C category airport under the International Civil Aviation Organization (ICAO) classification.

In a working session with leaders of Quang Tri People’s Committee, Do Quang Hien, chairman cum general director of T&T Group, said that the group will focus resources on investment projects in Quang Tri, including the airport in order to touch the goal of starting the construction of airport in early September 2021. The airport is expected to be operational by 2030 with a capacity of one million passengers and 3,100 tonnes of cargo per year.

Mitsubishi to build onshore wind farm in Laos to sell electricity to Vietnam

Mitsubishi Corporation will build an onshore wind farm based in Laos, which could then sell electricity to Vietnam.

Japanese corporation Mitsubishi plans to build an onshore wind farm in Laos and sell electricity to Vietnam
Mitsubishi Corporation will develop a wind farm with power generation capacity of 600MW. Accordingly, this could be one of the largest onshore wind farms in Southeast Asia, according to Nikkei Asia.

Although the Japanese giant did not disclose the detailed figure, experts anticipate that the investment could be roughly hundreds of millions of dollars.

In 2016, Vietnam entered an agreement to share electricity with Laos. Mitsubishi expects that cross-border power sharing will gain steam in Southeast Asia's renewable energy industry, following the footsteps of other European countries.

One of Mitsubishi's subsidiaries will hold a 20 per cent stake in the joint venture to be formed with two Thai renewable-energy developers. Construction by the new company is predicted to start by the end of this year with operations to begin in 2024, Nikkei Asia reported. Moreover, a grid network will be built to send power to Vietnam under a 25-year contract.

According to the International Finance Corporation under the World Bank, despite Vietnam’s huge potential, by the end of 2020, wind power accounted for less than 1 per cent (or 670MW) of the nation’s total installed capacity. The Vietnamese government aims to increase renewable energy capacity – mainly wind but also solar power, including rooftop solar – by 19GW to more than 36GW by 2030.

Meanwhile, coal and hydropower each make up for around 40 per cent of Vietnam's energy sources. However, during Vietnam's dry seasons, usage at hydroelectric plants declines, leading to severe power shortages.

Offshore wind farms worth USD billions line up for approval

Numerous foreign investors are interested in developing offshore wind farms worth billions of dollars in total investment capital in Vietnam.

In late May, La Gan Wind Power Development Corporation, the developer of the 3.5GW La Gan offshore wind farm project signed with Northern Regional Center for Marine Environmental and Natural Resources Planning and Investigation (CPIM) a contract for geophysical survey and a contract for geological research. The La Gan offshore wind power project is owned by Copenhagen Infrastructure Partners, Asiapetro, and Novasia.

The geophysical survey and research are key works to help understand the condition of the seabed and stimulate activities to develop surface models and designs for the foundation.

Previously in February, La Gan Wind Power Development Corporation signed four MoUs with Vietnam-based contractors, including CS Wind Corporation, PTSC Mechanical and Construction (PTSC M&C), Southern Petroleum Construction JSC (Alpha ECC), and Vietsovpetro.

Having the total investment of $10.5 trillion, the project is expected to become one of the largest offshore wind farms in Vietnam. The project will contribute to decreasing a carbon emissions by 130 million tonnes during the operation progress.

Meanwhile, Enterprize Energy Group proposed to develop Thang Long Offshore Wind Power Project in Ke Ga cape, Binh Thuan with a total planned installed capacity of 3,400MW and the total investment of $11.9 billion.

The statistics published by the Ministry of Industry and Trade show that 157 offshore wind farms with a total capacity of 61,000MW are waiting for approval for either surveying or to be added to the planning.

The feed-in tariff (FiT) for offshore wind power currently stands at 9.8 cents per kWh. The FiT for land-based wind power is 8.5 US cents. These rates are applicable to plants that begin commercial operation before November 1, 2021 and for a period of 20 years.

Despite great potential and opportunities, offshore wind power also faces some investment risks. For example, the investment cost for offshore wind power is more than double that of onshore wind power. Besides, it takes five to seven years to build a farm, excluding the time needed for investment procedures, licenses, geological surveys, gauging wind conditions, and others.

Source: VNA/VNS/VOV/VIR/SGT/Nhan Dan/Hanoitimes