Vietnamese tourism growing faster than Thai and Japanese tourism: Agoda CEO

Japanese news outlet Nikkei Asia has published an article highlighting that online travel company Agoda views tourism in Vietnam as growing faster than in Thailand and Japan.

According to the media publication, Omri Morgenshtern, CEO of Agoda, points out that Thailand could maintain its edge by removing visa issues, opening more flight routes, and creating business reasons to promote travel.

The article outlines that Vietnam has grown its share of inbound travel over the first five months of the year, coming in third behind Japan and Thailand among Asian destinations. It duly jumped from fifth place in 2019, the last year of pre-pandemic travel.

Thailand topped Agoda's list in 2022, but was quickly overtaken by Japan, which reopened its borders in October.

Thailand has welcomed over 11 million visitors this year, already surpassing figures from 2022. With inbound, outbound, and domestic travel already recovered, Thailand's task is to sustainably grow its tourism industry, which in 2019 accounted for roughly a fifth of gross domestic product.

Morgenshtern told reporters on June 19 that while the Republic of Korea has sent the biggest group of inbound travelers to Thailand, more Koreans are traveling to Japan and Vietnam. He attributed this to a significant number of Korean factories opening in Vietnam over the past two decades, a factor which has seen the establishment of a community of expatriates who spread word about Vietnam back home.

According to figures from the General Statistics Office, Vietnam welcomed nearly 4.6 million international tourists during the first five months of the year, representing a 12-fold increase compared to the same period last year and fulling 57.5% of the annual plan.

Vietnamese auxiliary manufacturers must engage in global supply chain

Vietnamese auxiliary manufacturing businesses need to join in and become a component of the global supply chain.
 
Speaking at a press conference on June 20, Takeo Nakajima, chief representative of the Japan External Trade Organization (JETRO) stated, "Although the proportion of Japanese companies procuring raw materials, components, and spare parts in Vietnam has risen from 28 per cent in 2013 to 37 per cent in 2022, the growth is still exceedingly slow."

He additionally announced an arrangement for cooperation to reveal the 10th Vietnam-Japan Supporting Industry Exhibition (SIE) in Hanoi, along with the 14th Vietnam Manufacturing Expo.

Director of the Vietnam Trade Promotion Agency Vu Ba Phu stated that Vietnam currently has approximately 2,000 enterprises producing spare parts and components. However, only approximately 300 enterprises partake in the multinational supply chain, generating over 600,000 jobs. Approximately 4.5 per cent of the total number of enterprises in processing and manufacturing industries are presently engaged in supporting industries.

Nakajima stated that all foreign investors are now interested in the process of mechanisation in manufacturing and supporting industries, not just those from Japan.

Nakajima posed the questions, "Can Vietnam make the necessary adjustments to become a crucial industrial production hub in the region in a timely manner? How can businesses learn from one another to keep up with the market-dominating digital transformation and AI trends?"

According to Vu Trong Tai, general manager of RX Tradex Vietnam – an exhibition organiser – Vietnam is establishing itself as a rival production base to China for global semiconductor manufacturers, serving as a foundation for industrial and technological growth, especially in new fields such as AI.

Since September 2003, JETRO has alternately organised the SIE in Hanoi and Ho Chi Minh City with the backing and cooperation of the Vietnamese government in an effort to increase the localisation rate. This year, there are 22 Japanese exhibitors in the SIE display area who wish to purchase products from Vietnamese manufacturers.

28 Vietnamese enterprises were selected to participate as exhibitors. The majority of the selected companies, which are prospective manufacturers in supporting industries, will participate in the exhibition by displaying their products and highlighting their supply capacity.

'Going green' choice that could determine survival

Green transition is no longer a nice-to-have but a must-have for paper companies, which have been struggling to stay afloat amid weakening global demand.

Dang Van Son, secretary-general of the Vietnam Pulp and Paper Association, said 2023 would be a tough year for paper companies as slumping orders had caused a severe supply-demand imbalance in the market.

He estimated paper production at eight million tonnes per year, which was in excess of consumption (six million tonnes per year). The situation could be worse in the short term as the sector was forecast to produce three million more tonnes per year by 2025 due to overcapacity.

"The fall of 12 per cent in exports in the early months of this year has sapped the consumption of paper packaging, which accounts for 85 per cent of the aggregate paper consumption," Son said.

Luong Van Thanh, chairman of Donghai JSC in the southern Ben Tre Province, said orders for paper-based cardboard fell by 15 per cent in the early months of 2023 as fruit exporters, which use cardboard for packaging, had been hit hard by the slump in demand.

"Paper prices fell from VND12,000 (US$0.5) to VND8,000 per kilo. I reckon that the situation would remain tough for the rest of this year," Thanh said.

And the situation was not better for Dai Thanh Production and Development Trading Co. Ltd., which saw orders drop by 30 per cent in the same period. Remarkably, its paper tissues were undergoing a substantial drop in consumption.

"We sold around 100 tonnes of tissues per month in the past. Now, the figure has plummeted to around 30 tonnes," said the company's director.

Secretary-General Son believed that 'going green' could be a real lifesaver for paper companies under the current situation because customers have become more environmentally conscious than ever.

"Customers are shifting their buying patterns in favour of green producers. Those that fail to follow the trend would end up being out of favour," Son said.

Scores of paper companies are aware of green consumerism and they have sprung into action to turn the changing consumer behavior to their advantage.

For instance, Donghai JSC has upgraded its water treatment facilities to improve its water-use efficiency. The green actions have won favour with climate-conscious customers, allowing the company to maintain its customer base amid the economic downturn.

Tetra Pak, another company in the sector, has gone as far as to upgrade their factories to international green standards. The move has enabled the company to gain ground at home and abroad, especially in Australia and New Zealand.

"Green companies have a big advantage over brown ones in the international market. 'Going green' has become a matter of life and death," Son added.

The secretary-general urged paper companies to focus on recycling scrap paper to score more points with environment-conscious customers. He also said paper recycling is highly beneficial to the environment as it reduces the number of trees being cut down for paper and the volume of waste being discharged into the environment.

Northern power firm urges power savings

The Northern Power Corporation (EVNNPC), a subsidiary of the Vietnam Electricity Group, has called on residents in northern Vietnam to conserve electricity as the region is facing tight power supplies caused by heat waves and ebbing water levels at hydropower plants.

The corporation has increased its manpower and equipment to cope with power blackouts.

In order to tackle the prolonged hot weather and power source shortages while ensuring the safety of the national power system, EVNNPC has been closely coordinating with the Power System Dispatch to cope with reduced power output by engaging customers in load adjustment and energy-saving practices.

To alleviate the power undersupply, EVNNPC is managing grid overloading and collaborating with the National Load Dispatch Center to curtail power consumption through energy conservation initiatives.

In May, EVNNPC reported a total commercial electricity output of over seven billion kWh, a 5.7% increase against the same period in 2022. The electricity usage breakdown includes 63% for the construction industry, 29% for consumption management, 3.2% for trade and services, 1.7% for agriculture, forestry, and fishery, and 2.9% for other activities.

Seafood exporters feel growing pinch

Seafood exporters are facing even greater challenges than during the Covid-19 pandemic due to a significant drop in seafood prices and a decline in fresh orders.

Data from the Vietnam Association of Seafood Exporters and Producers (VASEP) showed that Vietnam’s seafood exports between January and May decreased by 28% compared to the same period last year, reaching only US$3.37 million. Companies also reported a sharp decline of 20-50% in fresh orders.

The situation has been exacerbated by falling prices resulting from weak demand, making it increasingly difficult for exporters to settle bank loans and manage their expenses.

The projected seafood exports for this year are expected to reach US$9 billion, which is nearly US$2 billion less than in 2022.

To alleviate the hardships faced by the industry, VASEP has urged the Government to further reduce lending rates and make credit more accessible. Specifically, it is calling for a reduction of interest rates on U.S. dollar loans to below 4% and on Vietnamese dong loans to below 7%.

VASEP has proposed a four to six-month extension of loan repayments and the implementation of a special credit package specifically tailored for small seafood producers.

Furthermore, VASEP suggests that the disbursement of the VND10-trillion stimulus package, currently under consideration for the Mekong Delta region, be expedited so that exporters can begin stockpiling raw materials in advance.

In April, Prime Minister Pham Minh Chinh instructed the State Bank of Vietnam to consider the implementation of such a package.

HCMC to use seaport fee revenue for key projects

HCMC will use seaport infrastructure fee revenue to fund three major infrastructure projects in Thu Duc City.

Tran Quang Lam, director of the HCMC Department of Transport, said on June 20 that VND2,700 billion would be sourced from seaport infrastructure fee collections to develop My Thuy and An Phu interchanges, and Beltway No. 2.

Since seaport infrastructure fee collection began in April last year, an estimated VND2,700 billion had been collected by the end of May, or VND7-8 billion per day.

According to Lam, the revenue will be specifically allocated to infrastructure projects associated with seaports, including My Thuy and An Phu interchanges, and Beltway No. 2.

Among the three projects, the construction of a section of Beltway No. 2 requires the highest investment cost of VND9,800 billion. The city People’s Council plans to approve the investment policy for the project during a meeting in July.

The An Phu and My Thuy interchange projects, which cost VND3,400 billion and VND3,600 billion, respectively, are currently under construction and expected to be completed by 2025.

Once completed, these projects will improve traffic flow, enhance regional connectivity at the eastern gateway of the city, and reduce traffic accidents near Cat Lai port.

The revenue from providing infrastructure services will also be used for other projects related to ports, such as the expansion of Nguyen Thi Dinh, Vo Chi Cong, and Nguyen Duy Trinh streets, according to the Department of Transport.

Pre-trading margin requirement is a bottleneck for market upgradation

Pre-trading margin requirement is a bottleneck in the process of upgrading the Vietnamese stock market.

This information was shared by the leaders of the Asian Securities and Financial Markets Association (ASIFMA) during a meeting with the delegation of the State Securities Commission (SSC) of Viet Nam within the framework of the 48th annual meeting of the International Organisation of Securities Commissions (IOSCO).

Chairman of the State Securities Commission Vu Thi Chan Phuong informed the meeting about the development, achieved results and potential and investment opportunities of the macro-economy in general and Viet Nam’s stock market in particular.

She also updated information about practical changes in the Vietnamese stock market recently and discussed with ASIFMA about the green and sustainable development orientation of Viet Nam’s capital market in the future.

Alice Law, general director of ASIFMA, said that the current members of the ASIFMA include institutional investors, securities service providers, market rating agencies, global custodial banks, securities depository and clearing institutions, law firms and securities brokerage firms doing business in Asia. ASIFMA closely follows information and provides a lot of support to its members when participating in regional markets.

ASIFMA’s members were very interested in the Vietnamese stock market, as well as forecasting the high growth potential of service activities and foreign indirect investment in Viet Nam in the near future. In order to unlock and promote this potential, upgrading the stock market from marginal to emerging is a priority for Viet Nam, Alice Law said.

According to Alice Law, ASIFMA members are currently investing and providing securities services in Viet Nam. A number of bottlenecks have been proposed to the State Securities Commission to solve in terms of policy implementation, such as increasing access to information in English for foreign investors; publicise and update foreign investors’ ownership ratio; increasing the number of listed companies; strengthening inspection in the market to ensure transparency in information disclosure; the procedure for opening a trading account; and strengthening dialogue with investors.

However, one bottleneck that foreign depository banks hope for a radical solution is the requirement of pre-transaction margin and securities blockade.

ASIFMA member depository banks believe there should be a separate mechanism for guaranteeing payment for securities transactions or granting short-term credit lines to foreign investors who conduct securities transactions, said Alice Law.

She wishes to act as a bridge between the securities regulator and investment institutions, providing securities services so that they can frankly discuss and recommend solutions to help the Vietnamese stock market be upgraded.

Also at the meeting, the two sides agreed to coordinate with the World Bank to organise a seminar on solutions to upgrade Viet Nam’s stock market in August 2023 in Hong Kong on the occasion that the State Securities Commission is about to visit rating agencies FTSE Russel and MSCI.

Amended law on electronic transactions to hasten digital transformation

New features in the amended Law on Electronic Transactions represent a crucial milestone in boosting electronic trading activities, said experts.

The revised Law adds provisions on the validity of the conversion between paper and electronic forms, and regulations on electronic certificates. It also expands the scope of the law.

"The expansion of the scope of the Law will help cut costs compared to traditional transactions," Vương Quốc Thắng, member of the Science, Technology, and Environment Committee of the National Assembly, told baodautu.vn.

"For example, state agencies perform an average of 600,000 transactions on administrative procedures a day. If these transactions are done in electronic form by default, it is estimated to save at least VNĐ9 trillion (US$383 million) per year."

Đậu Anh Tuấn, Deputy General Secretary of the Vietnam Chamber of Commerce and Industry (VCCI), said that the revised Law on Electronic Transactions impacts all activities of social life, saving more money than traditional transactions, creating breakthroughs, and bringing greater efficiency.

"It will save a lot on transaction fees, as the parties in the transaction are not required to meet face-to-face to complete the transaction. Transaction times are short since parties may conduct transactions from anywhere using a few basic procedures on electronic devices," Tuấn explained.

The amended Law also added regulations on the use and recognition of foreign electronic signatures, helping to reduce cross-border transaction expenses for firms and individuals and promoting international electronic transactions.

In addition, it includes regulations on databases, data sharing, and connections between state agencies.

If the revised regulations are successfully implemented, administrative procedures will be much simpler.

Digital economy and transformation promotion

The VCCI’s director said that the amended law, once in effect, will have a widespread impact on activities in the electronic environment of state agencies, individuals, and enterprises.

Electronic transaction execution mechanisms that are clearly defined would assure the validity of electronic transactions, offering a full legal corridor for the transformation of activities from the physical to the digital across all industries.

Meanwhile, in the National Strategy for Development of the Digital Economy and Society to 2025, the Prime Minister has set a target for the percentage of the adult population having digital signatures or personal electronic signatures to reach over 50 per cent by 2025 and 70 per cent by 2030.

The strategy also identifies the deployment of remote digital signatures in the direction of prioritising the universalisation of the use of personal digital signatures for citizens in a simple, convenient, and secure way. 

As a result, the revised Law will help to successfully implement the digital transformation strategy.

Personal digital signatures aid in the settlement of all electronic transactions that need the authentication of the user's identity, according to Vũ Ngọc Sơn, Technical Director of NCS Company, so this will be an indispensable component in the development of the digital economy. 

The universalisation of personal digital signatures will help solve all administrative procedures through the internet, shorten the time for processing documents, reduce administrative costs, and improve the efficiency and transparency of online transactions.

Personal digital signatures can also be applied to replace authentication with OTP codes in banking and financial transactions with higher security, he added.

"If every citizen has a digital identity and a digital signature, we will gradually move towards a paperless society. Most of the procedures can be done online while still ensuring the same reliability as printed documents. It will be a revolution in digital transformation for everyone," said Sơn. 

Landmark M&A transactions highlight hospitality allure

The hotel and resort segment is proving enticing to foreign investors in mergers and acquisitions.

The ibis Saigon South and Capri by Fraser were among the latest transactions announced last week by JLL Hotels & Hospitality Group.

In its latest announcement, JLL said that a landmark transaction, including two developments in Vietnam and one in Indonesia, settled for $106.1 million, marking the first hotel portfolio sale in the Southeast Asia region for 2023. Three hotels are strategically located in the key gateway cities of Jakarta and Ho Chi Minh City, representing 632 rooms.

The Capri by Fraser and ibis Saigon South are the only internationally branded hotels situated in walking distance of offices tenanted by multinational companies and the Saigon Exhibition and Convention Centre, the city’s largest exhibition facility.

As a consultant who regularly contacts investors, Phan Xuan Can, chairman of Sohovietnam, a company specialising in the transfer and sale of real estate projects, said that there were currently a number of domestic and international investors with capital resources in hand, looking for 4-star and 5-star hotels.

Potential buyers are funds specialising in hotel and resort investments from wealthy families around the world. These funds have clear strategies and criteria for the Vietnamese market.

The second potential group is foreign companies and corporations operating in other fields, such as essential consumer goods and medical equipment, and want to expand their portfolio into the hotel and resort segment.

In the past 10 years, Vietnam market has been the focus of the property mergers and acquisitions sector with dozens of deals carried out involving foreign capital. The most favoured destinations are Ho Chi Minh City, Hanoi, Danang, Phu Quoc, Dalat, and Quang Nam.

Hanoi and Ho Chi Minh City both have a hotel merger and acquisition (M&A) market outperforming the rest, while the latter is the leader in terms of transaction value across the country.

In the past, Ho Chi Minh City was not only the centre of high-class hotel M&A transactions on a national level, but also entered the top 10 most popular hotel M&A deals in the Asia-Pacific region.

Among the deals were Indochine Park Tower, Movenpick Saigon, Riverside Serviced Apartments, New World Saigon Hotel, Duxton Hotel Saigon, and Intercontinental Asiana Saigon.

DE&I: ESG key factors in sustainable development

Diverse, Equity, and Inclusion (DE&I) culture is an essential trend that many businesses pursue on their sustainable development journey.

At the 2023 Business Forum: Diversity, Equity, and Inclusion - Key Elements in Sustainable ESG Development, organised by the Vietnam Business Coalition for Women’s Empowerment (VBCWE), in cooperation with the Vietnam Business Council for Sustainable Development (VBCSD) in Hanoi on June 14, delegates discussed the importance of DE&I.

This forum was designed for business associations, social organisations, and members within the VBCWE network, along with leaders who are interested in and practice DE&I promotion in Vietnam.

The event provided an opportunity for leaders and managers to discuss and share goals and successful practices in the sustainable environmental, social, and governance (ESG) development of businesses.

DE&I is an important component associated with the social aspect of ESG, where businesses create an equal environment for employees, and a space where they can be proud, confident, and true to themselves, without gender discrimination, family circumstances, or differences in each person's background.

Le Nhan Tam, chief technology officer at Microsoft Vietnam, provided insights and updates on trends in human resource development related to elements of DE&I as well as opportunities and job quality for women in the era of AI technology.

Representatives of the VBCWE reviewed the results of five years of implementing Gender Diversity and Inclusion (GD&I) in private-sector businesses. Business leaders and managers came together to discuss and share goals and successful practices in sustainable ESG development.

Ha Thu Thanh, chairwoman of the VBCWE said, “During the past five years, the VBCWE has tried to promote the sustainable development of businesses and the business community by becoming a bridge to connect and gather pioneering enterprises that create and uphold the values of diverse and inclusive cultures."

Over the past five years, with the support of DFAT through the Investing in Women project, the VBCWE made pioneering contributions to promoting gender equality in the workplace, focusing on the private sector.

It has contributed to creating equal and fair value for workers. The VBCWE has been actively promoting diversity and inclusion, increasing employment opportunities and job quality for women, expanding and targeting the female workforce in industrial zones, and focusing on disabled women, women-led enterprises, and employment opportunities related to childcare policies.

At the end of the forum, three businesses: PVCFC, Phuc Khang Construction and Investment Corporation, and Bao Minh Confectionery Company were honoured for their efforts in promoting gender equality in the workplace and receiving global GEARS certification.

Semiconductor makers set up shop

In a testament to Vietnam’s burgeoning semiconductor market, numerous foreign manufacturers have swiftly announced plans to establish a presence in the country.

Amkor Technology’s $1.6 billion semiconductor plant in the northern province of Bac Ninh, Amkor’s largest facility worldwide, is scheduled for trial production by late October 2023.

Secretary of Bac Ninh Party Committee Nguyen Anh Tuan conducted an inspection of the construction progress at Amkor Technology Vietnam’s plant last week. Tuan expressed his joy at the on-schedule construction of the Amkor plant, while ensuring labour safety. “This facility will not only be Amkor’s largest and most advanced plant globally, but also a model working environment for the group. Amkor plant in Bac Ninh is a key project, marking the beginning of a new trend in attracting new investment to the province,” Tuan said.

South Korean chip equipment giant Hanmi Semiconductor last week announced the introduction of its local arm, Hanmi Vietnam set in Bac Ninh province, in a bid to revolutionise the semiconductor landscape.

Hanmi Semiconductor’s CEO Kwak Dong-shin believes that Vietnam’s rising status as a global production hub for semiconductor giants makes expanding into the country a strategic move.

Following suit, Infineon Technologies AG, Germany’s largest semiconductor manufacturer, earlier this month disclosed its plans to expand operations in Vietnam. The development coincided with the official inauguration of Infineon’s new office in Hanoi, with a primary focus on chip technology research and development, as well as sales and marketing.

By the end of 2023, Infineon aims to assemble a team of approximately 25 technical experts in the chip development division.

“Hanoi seeks to solidify its position as an internationally renowned hub for research and development, comparable to Infineon’s prominent centres in Germany, Austria, India, and Singapore,” noted C.S. Chua, chairman and CEO of Infineon Technologies Asia-Pacific.

The semiconductor market value in Vietnam is set to grow by $1.65 billion over 2020-2025, according to research firm Technavio.

The growing adoption of the Internet of Things and smart home technologies are driving the growth of the semiconductor market in Vietnam, and semiconductor component manufacturing sites are being expedited to alleviate global shortages. Foreign companies, including Samsung, Hana Micron Vina, and Amkor Technology, among others, have invested in these projects.

Liu Xin, marketing director of Vietnam Ibe Laser Technology Co., Ltd. expressed optimism, “Vietnam presents greater opportunities as the electronics landscape evolves, transitioning away from China’s dominance. I think the number of printed circuit board assembly and semiconductor manufacturers will double or triple in the country soon.”

Ibe Vietnam may consider doubling the size of its factory in the next five years, Xin added. “At present, despite our new entry, I believe that Vietnam is a great country for investment thanks to support from the local authorities,” she told VIR. In late April, Ibe Vietnam commenced operations at its $15 million factory after three years of construction.

A report by the Bank of Korea (BOK) in May highlighted Vietnam’s rapid emergence as a significant market for South Korean semiconductor makers, who have been grappling with reduced demand in China due to the escalating US-China conflict.

“Major smartphone manufacturers have established production bases in Vietnam, with South Korean semiconductors playing a crucial role as intermediary goods in the production of finished products. Vietnam’s abundant low-wage workforce and its proximity to the Chinese market have attracted global businesses, including South Korean firms, to establish manufacturing facilities in the Southeast Asian nation,” outlined the BOK.

Dr. Nguyen Khac Giang, a scholar from the ISEAS - Yusof Ishak Institute, said that by strategically embracing semiconductor sector development, Vietnam has the potential to elevate its global standing within the value chain, transitioning from a labour-intensive paradigm to a technologically advanced economic framework.

“This transformative shift would enable Vietnam to realise its ambition of achieving a per capita GDP surpassing $18,000 by 2045,” he said.

However, Giang underscored the imperative for recalibrating the policy framework, fostering increased vocational training programmes in high-tech domains, and bolstering support mechanisms for domestic firms.

With a primary focus on attracting prominent industry leaders, Vietnam has successfully enticed investments from notable entities such as Intel, which stands as the pioneer multinational corporation to manufacture semiconductor chips within Vietnam’s borders, with its manufacturing facility strategically situated in Ho Chi Minh City.

Steady rise to goal of carbon neutrality

The carbon-neutral investment outlook in Vietnam is expected to be joined by an increased number of both local and overseas players.

At the end of May, for the first time, a dairy farm and a processing facility of Vinamilk in the central province of Nghe An was certified by the British Standards Institute (BSI) to be carbon neutral. The system of heat recovery, biomass energy utilisation, solar power addition, and methane combustion during treating wastewater as synchronous solutions is to be updated regularly to further cut down emissions from Vinamilk’s facility in the central province of Nghe An.

At the same time, Vinamilk also announced its pathway to dairy net-zero by 2050, via hitting 15 per cent in 2027 and 55 per cent in 2035.

“By the end of this year, we will reduce emissions of more than 200 tonnes of carbon gas into the environment compared to 2022. Solar energy contributes 20 per cent of electricity consumption and is going to contribute 50 per cent in the next five years,” said Ngo Cong Thang, director of Vinamilk’s Nghe An facility, who added that the company would plant 2-3 million trees in the next five years.

The total amount of CO2 that the business neutralises exceeds 17,500 tonnes, equivalent to planting 1.7 million new trees.

Luu Thi Mai Huong, certification manager at Bureau Veritas Certification Vietnam, said, “In difficult markets like the United States, they all have requirements for their suppliers and goods. However, a good signal is that Vietnamese businesses also volunteer proactively to follow these sustainable standards because it is a trend.”

According to some advisory firms, in Vietnam, only a few dozen businesses have registered to carry out full calculations of carbon emissions into the environment. In fact, only Vinamilk and Dutch lighting company Signify have been officially certified by the BSI as carbon-neutral in this country.

However, more will likely be on the way. On a larger scale, Lego is building a $1-billion project for the first carbon-neutral factory, which is expected to be put into operation next year in the southern province of Binh Duong.

Preben Elnef, Lego Vietnam general manager, said, “By the hands of Vietnamese people, this land will become a factory with a scale equivalent to about 60 football fields, entirely operated by renewable energy. Solar panels can be seen everywhere, and there is a solar farm with a capacity of 50MW. Besides that, we have committed to planting about 50,000 trees.”

Also in Binh Duong, Denmark’s Pandora Group is building a $100-million manufacturing plant for world-class jewellery. The factory is built with LEED Gold standards and uses renewable energy.

Meanwhile, SEP Group from South Korea plans to pour $200 million to establish Vietnam’s first carbon-neutral industrial complex for the footwear industry, and carbon-reducing infrastructure over 180 hectares at Tam Lap 2 industrial cluster in the province’s Phu Giao district. Specifically, SEP carbon-neutral technologies include solar energy, good waste and wastewater treatment systems, and industrial waste recycling technology.

“About 20 members of SEP will participate and invest in carbon-neutral solutions at this project, contributing to reducing greenhouse gas (GHG) emissions and protecting the environment towards sustainable development and the net-zero goal of the Vietnamese government,” said Dong Hoon Hyun, SEP chairman.

Meanwhile, in February, Becamex IDC Corporation and Singaporean industrial developer Sembcorp Development signed an agreement to develop five green, smart, and sustainable industrial parks in Vietnam with a total investment of about $1 billion.

As of this year, manufacturers in Vietnam under a designated list are expected to carry out the periodical inventory of their GHG emissions. In the 2026-2030 period, emission reductions will be implemented according to the quota allocated by the Ministry of Natural Resources and Environment.

If emissions at a manufacturing facility are excessive, they can buy carbon credits and Vietnam will operate a trial carbon credit exchange by 2025, before going into official operation in 2028.

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