VIETNAM BUSINESS NEWS JUNE 26
FPT to take new trading system for HSX live at the end of June
FPT is confident that its trading system for the Ho Chi Minh City Stock Exchange (HSX) will be ready to launch within the next few days.
Duong Dung Trieu, chairman of FPT Information System (FIS) under FPT Group, is confident that the new trading infrastructure developed by FPT will dispel congestions on the HSX.
“When we were assigned by the State Securities Commission and the HSX, the special working group of 50 experts from FPT and 30 from HSX began working to address HSX’s congestion and more than triple the capacity of HSX,” Trieu said.
FPT has brought its tailored-made software for the Hanoi Stock Exchange (HNX) to deploy at HSX to alleviate order problems. To this end, FPT is modifying the trading system to align with HSX regulations and the order receiving system to fit the connection standards of securities companies in HSX.
FPT aims to integrate its new trading system into the existing systems of HSX and relevant agencies such as the Vietnam Securities Depository Centre, update daily data conversion, and help securities companies trade with the daily transaction.
Trieu also said that FPT has already identified potential issues and prepared remedial measures. It is expected that by the end of June, the FPT trading system can be taken live.
Investors have been complaining since securities companies stopped allowing the editing and cancellation of orders on HSX since June 2 to reduce the load on the system. A week later, some companies have resumed these functions but some securities were still locked at rush hour.
Meanwhile, Ho Duc Phoc, Minister of Finance, last week said that trading congestions on the HSX will be addressed in July.
The latest solution will be the forthcoming adoption of technical infrastructure from the Korea Exchange (KRX) in August.
10-year Gov’t bond futures to be launched on June 28
The 10-year government bond future contracts will be officially launched on derivatives market from June 28, according to the Hanoi Stock Exchange (HNX).
It is the third derivative product following the VN30 index and 5-year government bond futures.
The HNX hoped that the new futures will contribute to diversifying derivative products on the market and become an effective hedging tool for Government bond market.
The product has underlying assets as 10-year government bonds issued by the State Treasury, each worth 100,000 VND (4.3 USD) with an annual interest rate of 5 percent.
Since the start of its operation on August 10, 2017, derivatives market has seen a surge in trading volume, from 10,954 contracts per session in 2017 to 158,390 in 2020./.
More heat expected in e-wallet market
Contactless trends reinforced by pandemic restrictions are creating a window of opportunity for more e-wallets and payment intermediaries to further expand in the digital ecosystem, as evidenced by recent comprehensive integration between partners.
Last week, BCCard – the biggest credit card issuer in South Korea – confirmed its buyout of Vietnamese point-of-sale (POS) terminal distributor Wirecard Vietnam as part of its Southeast Asian expansion strategy.
Wirecard Vietnam, previously a local franchise of Wirecard Singapore, secures the largest market share in terms of POS system, cooperating with more than 40 major banks and electronic payment companies.
BCCard, which is backed by South Korea’s largest telecommunications company KT Corporation as well as Woori Bank, said it would provide integrated terminals that can accommodate various payment approaches.
Choi Won-Seok, president of BCCard, highlighted, “We will strive to generate profits in various fields by diversifying our business structure by entering overseas markets.”
Vietnam’s e-payment market is predicted to reach a total value of $15 billion by the end of this year, and the sector is also expected to grow by 15 per cent annually until 2025. Vietnamese state-owned telecommunications provider MobiFone last week officially launched a MobiFonePay e-wallet – a move to tap into intermediary payment services and mobile money.
MobiFonePay aims to enhance non-cash payment transactions such as mobile top-ups, bill payments, internet TV, and more.
In its first stage of development, MobiFonePay will adopt a zero-fee policy for all payment transactions, transfers, and accumulated points for consumers. This is deemed a sufficient condition for MobiFone to join the race for mobile money implementation, which was approved by the local government in March.
Previously, both Viettel and VNPT had rolled out their e-wallet services. Viettel Pay announced its number of users exceeded nine million in February 2020, while the VNPT e-wallet boasted nearly 50,000 POS across the country last year.
The bill payment market in Vietnam has gained more popularity. Payoo has also deployed its services through a home-made platform to make bill payments more convenient, especially utilities such as electricity, water, television, and internet bills. Applications to track electricity numbers and bills are prevailing in the context of social distancing and increasing demand for electricity.
Most recently, AirPay e-wallet has been renamed ShopeePay to increase its brand awareness. ShopeePay is integrated into Shopee to facilitate transactions on the e-commerce platform. The ShopeePay e-wallet is also a standalone app offering many services. The move also reflects the efforts of Sea Ltd., the parent company of Shopee, to expand its presence in Vietnam.
Foody’s Now was one of the earliest players in Vietnam’s online food delivery market. However, Now is in fierce competition with heavyweight competitors like GrabFood, Go Food, and Beamin. If ShopeePay becomes more popular, it may help Now snag more users from other rivals.
Last month VNLIFE, the parent company of VNPAY, announced its target to secure $200 million in its next fundraising round taking place in the next few months. VNLIFE had approached Facebook for investment, but the two sides were not able to reach a mutual agreement, cited DealStreetAsia.
Dang Tuyet Dung, Visa country manager for Vietnam and Laos, believed that the pandemic has been a major disruptor for businesses and consumers alike. “Banks, fintech companies, and merchants are looking at a transformed landscape where success lies in offering consumers convenient, frictionless, and safe payment methods, while educating non-users of the potential gains in going digital,” Dung said.
According to a Visa Consumer Payment Attitudes study, Vietnamese expect the country’s transition to a cashless society to happen as soon as 2030, with the majority (84 per cent of respondents) already having attempted to go digital and get by without using cash.
Prospects abound for Vietnam to become PPE hub
Vietnam is emerging as a strong personal protective equipment manufacturing hub with more producers beefing up capacity in order to meet the soaring demand.
According to the latest findings by the International Finance Corporation, Vietnam’s personal protective equipment (PPE) manufacturing capacity surged with a 6-fold jump in production in 2020.
There are a wide variety of categories in PPE such as respirators, head and face protection, hearing protection, eyewear, and high visibility clothing, and these solutions are ever more critical in people’s daily lives either for industrial, healthcare, or the consumer market.
According to Jacky Kang, country leader of 3M Vietnam, there has been a growth in PPE demand in Vietnam recently, indicating that people have become more conscious about their health and safety. Nevertheless, the numbers pale in comparison with the working population of the country. There remains, as a result, an enormous untapped potential market in the PPE industry.
As one of the leading global PPE manufacturers, 3M is continuing to innovate and create new products to support wellbeing and safety during the pandemic. Some of them entail new advanced filtering masks and respirators for consumers and businesses.
Elsewhere, Top Glove Corporation Bhd last year announced its plan to develop its first glove factory in Vietnam at Bau Bang Industrial Zone in the southern province of Binh Duong. Estimated capital expenditure for the first phase is about $70 million, while the factory’s annual initial production capacity is approximately 4.8 billion gloves from its 20 production lines.
Meanwhile, the Japanese government has assisted a number of their companies to make medical devices, face masks, and protective clothes in Vietnam. Japanese apparel maker Matsuoka Corp. plans to invest around $28 million into its Vietnamese manufacturing unit An Nam Matsuoka Garment Company to produce protective clothing.
Other Japanese investors also secured Japanese government subsidies to expand PPE production in Vietnam, like Nitto Denko Corporation producing materials for N95 masks, Shingoshu Co., Ltd. producing PPE and its material fabric, and Showa Co., Ltd, making medical masks, as well as Able Yamauchi making medical protective clothing.
In addition to foreign players, some local manufacturers also identify business in this field. As traditional suppliers struggled to meet the growing worldwide demand, Vietnamese textile manufacturers – who in 2020 saw their orders drop – decided to leverage their expertise and untapped production capacity to start producing PPE, according to Filippo Bortoletti, senior manager of International Business Advisory at consultancy firm Dezan Shira & Associates.
Data by the Ministry of Industry and Trade showed that Vietnam is home to more than 6,000 garment and textile factories employing about three million workers. Such significant industrial capacity makes it well positioned to take an important role in the global PPE supply chain and results are so far moving in the right direction.
Bortoletti said that PPE manufacturers first targeted the domestic market due to restrictions imposed on exports. But as such restrictions were lifted over a year ago, the PPE made in Vietnam started circulating worldwide.
“This happened naturally, and the diversification of the PPE supply chain worldwide is beneficial to avoid future shortages and disruptions, as COVID-19 taught us. Therefore, there is an interest – not only locally – to foster the development of Vietnam’s PPE industry to smoothen the manufacturing process,” he said.
According to insiders, it is likely that the global demand for PPE will stay robust and some even forecast a steady increase in demand until 2025. When the pandemic is over, the demand for PPE will likely drop, but not plummet, as governments and consumers are likely becoming more sensitive towards health and prevention.
Pham Xuan Hong, chairman of the Association of Garments-Textiles-Embroidery-Knitting in Ho Chi Minh City, said that many textile manufacturers had shifted production to PPE in response to the health emergency and to mitigate losses caused by cancelled orders for garments.
Another potential sector for PPE manufacturers is the development of respirators. Kang from 3M Vietnam pointed out that they can be considered as a highlighted category observing significant changes and growth, and there are many factors leading to the growth of this category.
“Firstly, it is the impact of the pandemic and media endorsements that help promote a better understanding of respirators to ordinary consumers,” Kang said. “Secondly, the fast growth of Vietnam’s middle class makes respirators more accessible for far more consumers. Finally, some companies have expanded their distribution to end-users, enabling consumers to easily purchase high-quality respirators in their residential areas.”
While PPE manufacturing is not likely to be a long-term business for most current producers, it could become a core business for some. Bortoletti from Dezan Shira & Associates added, “I see the opportunity of manufacturing PPE as very short-term solution to utilise untapped production capacity and exploit a ‘new’ market. A few local players might seriously consider switching towards PPE for the long-term.”
New rule reshuffles tax burden
While new efforts from the Vietnamese government to press e-commerce platforms to declare and pay tax on behalf of individual vendors and business households would unscramble tax enforcement for local authorities, e-commerce platforms are pushing back against the extra burden placed on them.
On June 1, the Ministry of Finance (MoF) issued Circular No.40/2021/TT-BTC to extend the collection of VAT, personal income tax (PIT), and tax administration from business households and individuals operating on e-commerce platforms.
Under the circular, from August 1, the owners of e-commerce platforms will be responsible for declaring and paying tax on behalf of the individuals according to a roadmap announced by the tax authorities. While this is not yet possible, as a temporary measure, e-commerce platform owners are now legally obligated to provide information related to individuals’ business activities on their platforms at the request of tax authorities.
The income threshold for business households and individuals to be subject to VAT and PIT will remain at VND100 million ($4,350). Taxpayers include individuals earning income from e-commerce businesses as well as digital content and service provision.
Circular 40 is part of the ongoing regulatory clampdown on Vietnam’s e-commerce market. With the new regulation, the government can now ensure e-commerce platforms play their part in tax collection. The circular will also create a level-playing field for brick-and-mortar retailers which have been fighting from a tax disadvantage in past years.
Tracking these e-commerce platforms to ensure VAT and PIT are paid through data sharing and extending liability to platform owners will allow local tax authorities to focus enforcement efforts on the relatively few marketplaces rather than the millions of vendors operating through them.
E-commerce platforms, including the likes of Shopee, Lazada, Tiki, and Sendo, will have to declare and pay tax for their online sellers from August 1, but many questions remain unanswered. A representative of Lazada Vietnam said that it is managing online sellers across many countries so the app is built uniformly to ensure the efficiency and safety of the e-commerce platform.
Any technical change to serve tax management will require close coordination between e-commerce platforms and local tax authorities. To accommodate this work, Lazada has proposed extending the roadmap to implement the new regulation. In addition, she suggested the clarification of which tax authorities are entitled to request businesses to provide information as well as the exact information businesses will have to disclose to ensure information security and avoid clashes with other laws.
Meanwhile, a spokesperson for Shopee Vietnam said that regulations need to provide clear guidance on distinguishing business households and individuals as e-commerce platforms will only have to declare and pay tax on behalf of individuals. Clear classification will help e-commerce platforms to upgrade their apps to comply with Circular 40.
She added that regulatory bodies should also pass regulations to manage individuals selling on social networking platforms to ensure fairness.
Voicing agreement, Nguyen Ngoc Dung, vice chairman of the Vietnam E-commerce Association added, “The new rules will trigger inequality between e-commerce and social commerce, such as Facebook. Inevitably, this will discourage businesses from increasing their presence here via e-commerce, which goes against the government’s policies to encourage the development of the digital economy.”
He also voiced concerns over major challenges stemming from the new tax regulation. Specifically, due to the short time until Circular 40 comes into effect, businesses will find it difficult to prepare data in time to report to the tax authorities.
Furthermore, there will be great geographic disparities as according to Article 45 of the Law on Tax Administration, tax declarations have to be submitted to local tax authorities where the tax subject is physically located. However, e-commerce platforms maintain extensive networks with a myriad vendors located across many cities.
“This will create conflicts with other regulations,” Dung warned.
Moreover, by creating additional administrative procedures, the new circular clashes with Article 3.1 of Decree No.63/2010/ND-CP and the Law on Promulgation of Legal Documents 2016.
Requests to provide information also need to ensure compliance with current regulations on the protection of personal information in the Law on Cybersecurity, the Law on Protection of Consumers’ Rights, and the Law on E-transactions, Dung added.
HCM City supermarkets stock up goods amid Covid-19 outbreak
Supermarkets in HCM City are stocking up and tightening preventive measures during the Covid-19 outbreak as the number of customers increases.
HCM City has 237 supermarkets and nearly 2,800 convenience stores. Some convenience stores including a Big C Supermarket in District 10 were shut after Covid-19 patients found to have visited those stores.
After HCM City authorities ordered to close flea markets and tighten prevention measures, more residents have switched to supermarkets and convenience stores. As the result, supermarkets in HCM City have stocked up while applying stricter preventive measures.
Co.opmart and Co.opXtra supermarkets ask customers to complete a medical declaration form before entering and regulate the number of customers to avoid large crowds inside the supermarket.
Supermarkets at Aeon Malls were disinfected four times a day. Nguyen Nhon Quy, head of the PR Department of Aeon Vietnam, said shippers at the mall wait in a separate area, while drivers and employees that have direct contact with customers were provided with face shields.
Nguyen Thi Kim from Tan Phu District said she had completely switched to online shopping. "I only have to wait at home and can avoid going to crowded places. I can make online payments so direct contact is limited," she said.
Most supermarkets and convenience stores in HCM City now offer online services and have improved their services daily to attract customers.
Pham Thi Van, manager of Satrafood convenience store chain said, "Our online orders increased by 50% and revenue increased by 30%."
Fair introduces high-quality Vietnamese products to Thai consumers
A trade promotion expo featuring more than 150 Vietnamese goods of high quality is taking place in Thailand's Udon Thani province from June 24 to 27 as part of activities marking the 45th anniversary of diplomatic relations between the two countries.
The Vietnamese Goods Week in Thailand - Udon Thani 2021 themed "A Flavour of Vietnam" is being participated by more than 20 Vietnamese firms, including Dalat Hasfarm, which sells fresh flowers and plants; Lam Dong Pharmaceutical JSC; Dong Xuan knitting company; Hong Ha and Thien Long stationery companies.
As part of the event at the Central Plaza in Udon Thani, fruits imported from Vietnam by the Central Group like lychee, dragon fruit, and sweet potato, are on display. Notably, close to 200kg of lychees prepared by the organisers have sold out. Other stalls selling traditional Vietnamese food like pho and spring roll are attracting many visitors.
Speaking at the opening ceremony on June 24, Vietnamese Trade Counsellor in Thailand Tran Thi Thanh My said the programme brings opportunities for Vietnamese companies to introduce their goods in Thailand and for Thai people to access made-in-Vietnam products.
She said the number of participating firms is limited due to COVID-19, expressing her belief that Vietnamese products on display will be favoured by Thai locals.
My hoped for more trade promotion events to take place in the time to come for increasing economic and commercial cooperation between the business communities, and people of Vietnam and Thailand.
Wanchai Janporn, Deputy Governor of Udon Thani, informed that his province houses the highest number of Vietnamese expatriates in Thailand, reflecting deep ties between locals and Vietnamese people. The official also highlighted his confidence in the success of the expo.
Emmananuel Couronne, Chief Merchandise Officer at Central Food Retail Group, said the Vietnamese Goods Week in Thailand is an important annual event of the Central Group, considering it a good chance for boosting Vietnam - Thailand relations and connecting their enterprises, serving Vietnamese and Thai consumers' demand.
The Central Group and its partners wish to play the role of a product promotion channel for Vietnamese goods in Thailand and in the world, he affirmed./.
Hanoi’s economy expands in H1 despite COVID-19
Hanoi’s economy still expanded despite impacts from the COVID-19 pandemic, with its gross regional domestic product (GRDP) up 5.91 precent in the six months of 2021, higher than 3.39 percent recorded in the same period last year, said Vice Chairman of the municipal People’s Committee Le Hong Son.
During a conference held in the capital city on June 24, Director of the municipal Department of Planning and Investment Do Anh Tuan said the city's state budget collection was estimated at over 124.85 trillion VND (5.42 billion USD) during the period, equivalent to 53 percent of the estimate and a 7.1 percent rise year-on-year.
The city continued supporting investors and firms from business registration to project implementation, creating a healthy and fair environment to access land.
The flow of foreign direct investment reached 694.26 million USD, including 96.05 million USD registered for 171 new projects, 447.7 million USD added to 78 existing projects, and 120.5 million USD in capital contribution and share purchases.
The amount of domestic investment hit over 7.1 trillion VND, including 1.47 trillion VND registerd for 10 new projects and more than 5.63 trillion VND added to 38 underway projects.
There were 13,125 newly-established firms with a total registered capital of over 165.7 trillion VND, up 4 percent in the number of enterprises and down 7 percent in value, bringing the total firms in the city to 314,248.
To achieve a growth rate of 7.5 percent this year, Son called for further attention to the manufacturing and processing sector, allocating State budget to key areas, stepping up the equitisation of State-owned enterprises, providing support for tourism companies in restructuring, popularise Hanoi’s products to cities and provinces, and start construction of industrial complexes on schedule.
He asked the municipal Department of Justice to review and supplement legal documents to lay a legal foundation for sustainable development.
The Vice Chairman also assigned specific jobs to agencies, departments and localities to fulfill key tasks in the remaining months of this year./.
Vietnam considered in good position to attract FDI: UK-based website
The Vietnamese economy has fared better than most during the COVID-19 pandemic and is well placed to capture renewed FDI interest, according to an article posted on the UK website lexology.com on June 23.
The article said in recent years, the Vietnamese Government has focused on opening its market while also boosting its international trade ties. After joining the World Trade Organization (WTO) in 2007 and many regional conventional trade agreement with the US, China, Europe, Japan, the Republic of Korea (RoK) and most of the significant economies in the world, the country has become a member of the “new era” global free trade agreements that form the biggest trading blocks of the world today such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the Regional Comprehensive Economic Partnership (RCEP) as well as free trade agreements with the European Union, Japan and the RoK.
It noted that Vietnam’s position in the World Bank’s annual ease of doing business ratings has climbed from 91 out of 183 countries in 2010 to 70 out of 190 countries in 2019, adding that the country has also begun to look away beyond low-tech manufacturing to high value added and high tech sectors of the new economy, industry 4.0 and digital transformation.
Aware of that the ability to hold on to its competitive edge in the cheap manufacturing space is very limited, Vietnam has thrown its weight behind high-value industries such as electronics and software engineering, positioning itself to capitalise upon the fourth industrial revolution.
The electronics industry is one of the country’s fastest-growing. The value of its electronics exports rose from 47.3 billion USD in 2015 to 96 billion USD in 2020, accounting for a third of national exports. In the global ranking of electronics exporters, Vietnam has climbed from 47th place in 2001 to 12th place in 2019.
The article cited statistics of the Vietnamese Ministry of Industry and Trade data which showed that FDI firms accounted for 95 percent of electronics export revenue in the first quarter of 2021. It affirmed that there is little reason to suspect that this trend will change in the coming years.
Vietnam has committed to climbing the manufacturing value chain through FDI and has been working for years to upskill its population in preparation. The Vietnamese government’s economic and regulatory efforts will help drive FDI towards the Southeast Asian nation in the coming years, wrote the article./.
Ba Ria-Vung Tau: Container cargo through ports rise by 38 percent in 5 months
The total volume of goods passing through seaports in the southern port province of Ba Ria – Vung Tau reached nearly 48.28 million tonnes in the first five months of this year, up 9 percent year-on-year, according to the Vung Tau Port Authority.
It said the volume of container cargo through the local seaports rose by more than 38 percent, despite impacts of COVID-19.
The ports welcomed nearly 40,000 ship arrivals from January-May, up 12 percent year-on-year. This includes 6,169 ships taking domestic routes.
The province now has a total of 60 port terminals, 25 of which are located on Cai Mep – Thi Vai River, 22 on Dinh River, one in Con Dao, and 10 offshore oil terminals.
The Vung Tau Port Authority is cooperating with local authorities to undertake preventive measures against the coronavirus to ensure safety for crewmen, said Director Le Van Thuc./.
Dong Nai’s six-month FDI attraction surpasses yearly target
So far this year, industrial parks (IPs) in the southern province of Dong Nai have attracted close to 80 foreign direct investment (FDI) projects totally worth some 715 million USD, exceeding its target of 700 million USD for the entire year.
According to the provincial IPs management board, 485 million USD were added to 53 existing projects and the remainder, for new projects. Most of the licenced projects are in the field of support industries, using modern assembly lines and not labour intensive.
Projects posting large investment included the 100 million USD Hansol Electronics project at the Ho Nai IP, the 60 million USD plant of the Ojitex company at the Loc An – Binh Son IP, and an over 130 million USD coffee project by Nestle Vietnam at the Amata IP.
Le Van Danh, deputy head of the board, said the total FDI attracted in the period was 15 percent higher year on year.
Dong Nai is seeing chances of obtaining more than 1 billion USD worth of foreign capital this year, equaling its pre-pandemic average level.
Danh attributed the increase in FDI to the local administration's reform that has simplified procedures and employed digital transaction methods.
The province is home to 32 operating IPs. To date, it has recorded close to 1,400 valid FDI projects whose value tops 27 billion USD, from 41 nations and territories./.
Dong Thap: IPs, industrial clusters lure over 1 bln USD of investment
The Mekong Delta province of Dong Thap has attracted 123 investment projects worth over 24 trillion VND (over 1 billion USD) to three industrial parks (IPs) and 16 industrial clusters, according to the provincial Department of Industry and Trade.
Deputy Director of the department Nguyen Van Na said the occupancy rate in the Sa Dec, Tran Quoc Toan and Song Hau IPs reached 98 percent.
Local authorities are paying attention to developing IPs and industrial clusters, and border economic zones with favourable locations, and promoting connection with neighboring regions and localities such Can Tho, Vinh Long, and Long An, thus creating a network to catch investment inflows.
IPs and industrial clusters in the locality have seen projects belonging various industries, especially food, aquatic and animal feed processing.
The province has 20 aquatic processing enterprises operating in IPs, creating jobs for about 21,000 labourers, contributing to lifting the locality’s processing industry value to 11 trillion VND in 2020.
In the coming time, local authorities will continue to focus on accelerating administrative reform, making it easier for investors’ business and production.
Dong Thap is striving to realise its plan to develop IPs and industrial clusters in the 2021 – 2031 period, with a vision after 2030./.
Minister: Vietnam looks towards sustainable agriculture
Minister of Agriculture and Rural Development Le Minh Hoan has pledged to tackle obstacles to two projects on food safety and hygiene, and sustainable fishery development, saying that they are urgent to Vietnam’s agriculture.
During a working session with World Bank Country Director in Vietnam Carolyn Turk on June 23, Hoan said following the 13th National Party Congress, Vietnam set the goal of developing ecological and sustainable agriculture, and changed mindset from agricultural production to agricultural economy, thus creating multiple values.
In the document “Transforming Vietnam’s Agriculture” compiled by the WB in 2016, he said Vietnam’s achievements and obstacles in agriculture have been pointed out, along with successful models in the world that Vietnam could learn from.
He wished that Vietnam could receive support and advice from the lender and other experts during the process of building agriculture ecological system to spread to other regions, thus improving farmers’ lives.
The minister also called for the WB’s assistance in policy and strategy consultation, and mechanism renovation so as to fully tap the strength of both public and private sectors, farming enterprises, as well as farmers and cooperatives.
The Vietnamese Government has issued a resolution on sustainable development of the Mekong Delta in adaptation with climate change. However, problems regarding the shift of farming models in adaptation with reduction in water resource and extreme weather remain, he said, adding that Vietnam also needs the WB’s support in disaster prevention, and ensuring the safety of dykes and irrigation infrastructure in service of production, especially clean water and rural environment.
The WB also needs to work closely with the Ministry of Agriculture and Rural Development (MARD) to build projects using loans, with priority orientations to fishery, food safety and climate change adaptation.
Turk, for her part, hoped that ties between the WB and the MARD would be strengthened in the near future. She added that challenges in the next decade will be harder than those in the past 25 years.
She wants to partner with Vietnam to develop agriculture with low carbon emissions in the future.
According to the official, apart from food safety, consumers also favour and are willing pay high for farm produce with low carbon emissions.
She also proposed cleaning water sources as soon as possible to save costs, saying the WB is ready to work with the MARD to offer financial assistance to future projects./.
Australian businesses interested in agritech in Vietnam
Local businesses in Australia’s New South Wales (NSW) have shown their interest in joining the agricultural technology as well as food and beverage sectors in Vietnam – a promising market in their eyes.
Vietnam’s fast and sustainable growth over the past many years has made the market attractive to companies in NSW, said Karla Lampe, Director for International Engagement & Market Development at NSW Treasury at an online conference held this week to explore business opportunities in Vietnam.
She said that the advantages in population and the increase in the middle-income people have created more trade and investment opportunities for Australian firms.
Lampe said that Vietnam is currently the ninth largest trade partner of NSW, stressing that NSW businesses place agritech, food and beverage at the top priority for investment in Vietnam.
Meanwhile, Rebecca Ball, Australian Deputy Consul-General in Vietnam and Cambodia said that Vietnam’s attention to agritech development is a great chance for Australia to engage in the market.
According to Ball, Australia can help Vietnam improve farming productivity, water resources, animal feeds and pest management, and origin trace through introducing effective agricultural solutions, thus responding to challenges in food security and food safety.
In the first quarter of 2021, Australia’s export revenue of farm produce from Vietnam increased 44 percent year on year, she noted, adding that Vietnam is likely to become the fifth biggest export market of Australian agricultural products in the end of 2021 from the current eighth position.
At the event, representatives from numerous of successful businesses in Vietnam and Australian agencies shared their experience and answered questions regarding Vietnamese agritech, food and beverage sectors./.
Pangasius exports to potential markets skyrocket over five months
Vietnamese pangasius exports to a number of potential markets, including Mexico, Brazil, Colombia, Thailand, and Russia, have all enjoyed robust growth during the opening five months of the year, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).
May alone saw local pangasius exports to Russia, Colombia, and Mexico increase sharply by 458%, 230%, and 167%, to US$4 million, US$1.9 million, and US$6.42 million, respectively.
VASEP’s data show Vietnamese pangasius exports to Mexico, Brazil, Thailand, Colombia, and Russia all witnessed surges of 61.7%, 65.5%, 18.7%, 65.7%, and 124.5% to US$30.3 million, US$27.2 million, US$25.6 million, US$17.9 million, and US$ 16.9 million, respectively, over the reviewed period.
Most notably, China remains the leading consumer of Vietnamese pangasius, importing the fish worth US$165.5 million over five months, representing an annual rise of 2.1% and making up nearly 26% of all Vietnamese pangasius exports.
Meanwhile, exports to the US also enjoyed a strong rise of 55.3% to US$134.2 million during the reviewed period, with high export turnover being recorded in both April and May.
In general, the country raked in US$637.8 million from exporting pangasius, an increase of 14.7% against the same period from last year, with turnover reaching US$148.4 million in May alone, up 39.3%.
At present, the price of raw pangasius in the Mekong Delta region over recent months has seen a slight increase of between VND21,500 and VND22,000 per kilo, showing positive signs for the industry after facing a long period of decline.
Ca Mau posts growth in shrimp exports despite pandemic
Shrimp exports of the southernmost province of Ca Mau grew in the first half of this year despite the impact of the COVID-19 pandemic, according to the provincial Department of Industry and Trade.
The province’s shrimp output was estimated to exceed 107,000 tonnes in the period, a year-on-year increase of 9.5 per cent, while exports raked in about US$400 million, up 16.6 per cent.
This year, Ca Mau, one of the country’s leading localities in aquatic exports, is projected to earn more than $1 billion from shrimp shipments.
COVID-19 has been kept under control in the province as well as its traditional markets such as the US, Europe, China, Japan and the Republic of Korea. Therefore, demand for the products in the restaurant industry has gradually recovered.
In addition, trade deals like the EU-Viet Nam free trade agreement (EVFTA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) are hoped to help exporters seek new markets.
The province is home to more than 40 export firms and 32 processing plants serving exports with a combined capacity of 250,000 tonnes per year. Its shrimp products have been shipped to 60 countries and territories.
Statistics of the Ca Mau Department of Industry and Trade showed the province’s revenue from shrimp exports to signatories of the EVFTA surged 148.56 per cent and to those of the CPTPP rose 9.8 per cent in the first half of the year against the same period last year.
The province aims to bolster trade promotion via online platforms with foreign distributors and businesses to search for new partners. It will also support local firms to offer their products in prestigious e-commerce marketplaces.
Fertiliser exports reach record high
Viet Nam exported nearly 616,000 tonnes of fertiliser for US$213 million from the beginning of the year to mid-June, up 49 per cent in volume and 1.76 times in value from the same period last year.
Statistics from the General Department of Customs showed this was the first time the country saw fertiliser exports hit this record high in both quality and quantity after more than eight years of shipping fertiliser to overseas markets.
During the period, Cambodia, Malaysia and Laos were the top importers while the Philippines and Mozambique markets emerged as promising markets for Vietnamese fertiliser, the department noted.
Trade experts attributed the period's positive export performance to the fact that from the end of 2020 some fertiliser manufacturers signed contracts for delivery in the first quarter of 2021, to reduce their inventories and balance domestic supply and demand.
Previously, 2021 was forecast to be a difficult year for the fertiliser market with a high inventory of goods, and the possibility of natural disasters, such as drought in the southwestern, southeastern and Central Highlands regions, as well as floods in the northern region.
Viet Nam is home to four fertiliser factories, namely Phu My, Ca Mau, Ninh Binh and Ha Bac, producing about 2.5 million tonnes of urea per year. These factories sell only 1.8 million tonnes of urea per year, resulting in more than 500,000 tonnes of urea being stockpiled annually, so they have to find ways to export the excess urea.
Nhan Dan (The People) newspaper quoted Nguyen Thi Hien, Deputy General Director of PetroVietnam Ca Mau Fertiliser JSC (PVCFC), as saying that as the fertiliser oversupply situation in the country led to high inventories, PVCFC has made efforts to seek export outlets such as the Philippines, Cambodia and some African nations.
Thanks to close geographic location and low logistics costs, Cambodia was the leading market of PVCFC, consuming between 80,000 and 130,000 tonnes of fertiliser each year, Hien said.
VN fruit, vegetable exports to top record $4b in 2021
Exports of fruits and vegetables were worth US$2.06 billion in the first six months of this year, up 17.4 per cent year-on-year, and are expected to reach a record $4 billion this year.
Dang Phuc Nguyen, general secretary of the Viet Nam Vegetables Association, said exports would increase sharply this year since importing countries are recovering economically, leading to an increase in demand.
But in the next few months Thailand, Malaysia, China, and other countries would also have their fruit harvest season making competition very fierce, he said.
New-generation free trade agreements such as the EU-Viet Nam Free Trade Agreement (EVFTA), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and Regional Comprehensive Economic Partnership (RCEP) are helping Vietnamese businesses increase fruit and vegetable exports this year, he said.
The UK – Viet Nam Free Trade Agreement (UKFTA) that took effect late last year scrapped taxes on more than 94 per cent of vegetables and fruits, he said.
Experts said to take advantage of opportunities and boost exports, exporters should improve processing technologies, especially in the post-harvest and packaging stages, to preserve their products longer and enhance their value.
Viet Nam is gradually expanding exports to the US, EU, Japan, and South Korea, but China remains the leading market for Viet Nam’s farming, forestry and seafood products.
It accounted for 64.7 per cent of Viet Nam's fruit and vegetable exports in the first quarter of this year.
The Ministry of Agriculture and Rural Development has urged the Ministry of Health to issue safety certificates for drivers transporting agricultural products and pay attention to deploying a priority mechanism for COVID-19 vaccination, and the Ministry of Foreign Affairs asked to consider negotiate with bordering countries on the form of "vaccine passport" for drivers transporting goods across the border.
Viet Nam hopes that when COVID-19 is brought under control, Chinese experts can come to re-evaluate the technical processes for its durian.
If it gets approval for official export to China, Viet Nam could become a competitor to Thailand and Malaysia.
Construction of major tourism site begins in Thanh Hoa
A ceremony to launch the construction of a tourism project worth more than VND3.66 trillion (US$159.61 million) took place in Nghi Son Township of the north-central coastal province of Thanh Hoa on Wednesday.
The project, covering 84.8 ha, is invested by the T&T Group.
The site will have beachfront villas, a five-star hotel, a shopping area, a golf course, pedestrian zones and recreation facilities, among other amenities.
It is hoped to become a driving force for the socio-economic development of the locality and surrounding regions, especially creating a chain of tourism sites along Thanh Hoa’s coastline.
The first phase of the project is set to be completed in October next year and the entire project will be operational in May 2024.
Speaking at the ceremony, Vice Chairman of the provincial People’s Committee Nguyen Van Thi spoke highly of efforts and co-operation between the investor and relevant agencies in land clearance and meeting requirements to carry out the project against the backdrop of COVID-19.
He asked the local authorities to continue helping the investor address bottlenecks in terms of land and legal procedures, as well as support local people affected by the implementation of the project.
The T&T Group was requested to ensure progress and quality of the project in compliance with regulations.
HCM City ensures social distancing does not cause scarcity of essential goods
Supermarkets in HCM City have assured there will be no short supply of foodstuffs and other essential goods until the end of the extended social distancing period on June 30, a deputy director of the Department of Industry and Trade has said.
Nguyen Nguyen Phuong said his department has drafted plans to provide more than 10,000 tonnes of food daily to consumers and has programmes to connect with 22 provinces to ensure sufficient supply of foods.
The supply of agricultural products such as vegetables and fruits, foods and livestock and poultry meat from provinces remains smooth, supply is enough to meet demand and prices are steady, he said.
Some 8,000 tonnes of vegetables and fruits are available daily at the Binh Dien, Hoc Mon and Thu Duc wholesale markets, enough to meet 70 per cent of demand.
The remaining 30 per cent is met by supermarkets and other large distributors.
Supply is abundant
Many people have been rushing to stock up on food, but Phuong said they need not be worried about any possible shortage.
He has instructed enterprises to enhance online sales to reduce gatherings.
Many major supermarkets have increased supply and worked out long-term plans to ensure sufficient availability of essential goods.
Retailers and production and business units are also encouraged to offer discounts to share the burden with consumers amid the pandemic.
Nguyen Anh Duc, general director of the Saigon Union of Trading Cooperatives (Saigon Co.op), said besides joining the programme to help stabilise prices, it has also carried out many promotions.
From now until July 10, its Co.opmart and Co.opXtra chains would reduce prices by 25-50 per cent and have buy-one-get-one-free offers on more than 3.5 million COVID-19-prevention items like cloth masks and hand sanitisers, and more than 10,000 essential items would be sold at discounted prices, he said.
The prices of cooking oil, sugar, rice, packaged foods, and nutritious drinks are discounted by 20-30 per cent, and those of pork, seafood, vegetables, and fruits by 15-20 per cent.
Big C supermarket is carrying out the ‘Fruit Festival Programme’ to encourage customers to buy seasonal fruits from other provinces and support struggling farmers.
On June 19 the city People’s Committee replaced Directive No.15 with Directive No.10 to make social distancing stricter, banning gatherings of more than three people, instead of the earlier five, in public places and outside of offices, schools and hospitals and requiring people to maintain a minimum distance of 1.5 metres in public.
It also closes all non-essential businesses and temporary markets, and requires the public to refrain from leaving home except for buying food or medicine, getting emergency care or working in factories.
Good corporate governance attracts investments: securities webinar
Good corporate governance plays an important role in improving companies’ long-term performance, experts said.
Pham Hong Son, deputy chairman of the State Securities Commission of Viet Nam (SSC) told a webinar on ‘Corporate Governance Code of Best Practices on Tuesday that “Listed companies are improving their corporate governance.”
It would play an important role in helping them clearly distinguish between ownership, management and operating roles, he said.
In 2019 Viet Nam launched the Corporate Governance Code of Best Practices with a number of recommendations on best practices, primarily for public and listed companies.
Beside good practices, which have been incorporated in laws and regulations and adopted by companies, the code also encouraged companies to go beyond the minimum legal and regulatory requirements and move towards international best practices.
Phan Duc Hieu, deputy general director of the Central Institute for Economic Management, said corporate governance at many companies is actually not very good.
For example, the 2020 Enterprise Law requires separating the positions of chairman and general director, but hundreds of businesses have still not complied.
Delegates speaking at the webinar agreed that companies with good corporate governance practices create confidence in investors and so have a competitive advantage in attracting capital.
Besides, high governance standards contribute to more effective boards and management, leading to improved decision-making, better operational efficiency and reduced risks, they said.
Do Le Hung, an independent member of the Vinamilk board, said: “For sustainable development, there must be good corporate governance.
“The benefits of good corporate governance are very clear. The main driving force for the adoption of good corporate governance is not only the law or authorities, but also the perception of a company's leadership and the requirements of the market and investors.
“The implementation of good corporate governance is a long process of persuasion, testing, adaptation, evaluation, adjustment, and recognition. There is no one-size-fits-all formula. Therefore, each enterprise needs to choose the appropriate steps and ways to do it.”
Nguyen Nguyet Anh, corporate governance expert at the International Finance Corporation, said this code provides important guidance for Vietnamese companies seeking to improve their governance practices based on international standards
This, in turn, would help ensure Vietnamese companies are aligned with their ASEAN and international peers and remain competitive for long-term growth.
Tran Anh Dao, deputy general director of the Ho Chi Minh Stock Exchange (HOSE) said the exchange encourages large listed companies to ensure good corporate governance to attract foreign investors.
New regulations related to corporate governance are included in HOSE’s guidelines sent to listed companies so that they could assess where they are and try to implement them, he added.
The webinar was organised by the State Securities Commission of Viet Nam, the IFC and the Ho Chi Minh and Ha Noi stock exchanges.
Brokers stay upbeat
Local and foreign securities companies are beefing up their presence in Vietnam, with increasing enthusiasm in the nation’s equity market as they are capitalising on the resilient growth economy.
Viet Capital Securities (VCI) last week announced to close the list of shareholders on June 21 and that it will issue 166.5 million shares under its employee stock ownership plan, with par value of 4.3 US cents. After the issuance, VCI will double its charter capital to $144.8 million. By the end of 2020, VCI recorded 50,000 active trading accounts, up 12.1 per cent on-year.
According to SSI Research, VCI is among the five largest securities brokerages in Vietnam, with market share at the Ho Chi Minh Stock Exchange (HSX) of around 7.7 per cent, declining 0.5 per cent compared to 2019. Its diminishing market pie could be explained by an increasingly intense competition among local and foreign-backed securities companies, and VCI’s reliance on investment banking business – a component which was rather stagnant due to the COVID-19 pandemic in 2020.
The company expects that investment banking activities will rebound in 2021, with total value of ongoing deals estimated at $174 million in consumer finance, consumer goods, and logistics.
VNDIRECT Securities also plans to double its charter capital, which is currently at $95.8 million by issuing 214.5 million shares to its existing shareholders. The Hanoi-based company expects the funding source to diversify its business, especially by increasing its margin loan segment.
Likewise, Ho Chi Minh City Securities Corporation has announced its plan to issue 152.5 million shares for $91.3 million, raising its charter capital by 50 per cent to over $195.7 million. Similarly, ACB recently agreed to pour another $65.2 million into its securities company subsidiary.
SSI – Vietnam’s largest brokerage – is implementing its proposal to raise capital to $478 million. Likewise, SHS – SHB’s securities company – is planning to issue 103.6 million shares for its existing shareholders to raise more than $65.2 million.
The Board of Directors of SHS believed that Vietnam’s stock market status will likely be upgraded in September, which is believed to be a pillar to thrust foreign appetite forward. Furthermore, cooperation between Vietnam’s HSX and the Korean Exchange will facilitate a better, more solid trading infrastructure while providing a synchronous and integrated platform for the entire Vietnamese stock market.
Earlier this month, Pinetree Securities also inked a $20 million loan contract with Wooribank’s Hong Kong branch. The 1-year-tenure loan, with preferential interest rate, is slated to provide additional capacity to Pinetree Securities to expand its operation in Vietnam’s stock market.
In 2019, South Korean Hanwha Investment & Securities acquired 90.05 per cent in Hanoi-based online stock brokerage HFT Securities for $4.3 million, then changed its name to Pinetree Securities.
Pinetree Securities has grown strongly in the past two years and has continuously attracted customers thanks to its zero-fee policy, low margin interest rate at 9 per cent.
In early 2021, the company raised its charter capital to more than $43.5 million in a bid to expand its business and promptly respond to customer needs with an increase in credit limit and portfolio of margin loans.
Lee Jun Hyuck, CEO of Pinetree Securities said, “The additional fund is envisaged to better facilitate investors’ needs in the context of Vietnam’s stock market proving its glitter. With the government’s efforts to beef up state divestment, many listed companies will benefit from ongoing infrastructure development initiatives.” He added, “The stock market continues to be one of the most important capital mobilisations of Vietnam’s economy.”
Hyuck also revealed that Pinetree Securities will continue to increase charter capital for the second time in 2021 to expand operations and best serve customers.
In the same vein, Maybank Kim Eng Securities company unveiled its plan to increase its capital to $75.9 million from the parent corporation Malaysia-headquartered Maybank Kim Eng Holdings Ltd. Its most recent capital increase was in 2018.
According to data provider FiinGroup, revenue and profit in the first quarter of 2021 of listed securities companies increased by 21.4 per cent and 26.7 per cent on-year, respectively. The explosion of market activity by retail and inexperienced investors of all flavours is one of the biggest trends in the stock sector.
LienVietPostBank to increase to $523 million of charter capital
The State Bank of Vietnam (SBV) has approved LienVietPostBank (HNX: LPB) to increase its charter capital to VND12.036 trillion ($523 million).
Specifically, LienVietPostBank has been approved to increase its charter capital by a maximum of nearly VND1.29 trillion ($56.1 million) through the form of stock issuance to pay dividends.
According to the plan approved by the annual shareholders' general meeting, LienVietPostBank will issue nearly 129 million shares, equivalent to VND1.29 trillion to pay dividends in 2020 at the rate of 12 per cent. Thereby, the bank's charter capital is expected to increase to VND12.036 trillion ($523 million) after the issuance.
In addition, LienVietPostBank also plans to privately issue 66.7 million shares to foreign investors, 265 million shares for existing shareholders and 35 million shares under the employee stock ownership plan (ESOP).
In 2021, LienVietPostBank aims to achieve the pre-tax profit of VND3.2 trillion ($139.13 million), up 32 per cent compared to 2020. Total assets are expected at the end of the year to reach VND282.6 trillion ($12.3 billion), up 16.6 per cent compared to the beginning.
Credit card balance in the market for economic organisations and residents is planned to increase by 20 per cent to VND213 trillion ($9.26 billion), capital mobilisation increased 15 per cent to VND237.8 trillion ($10.34 billion). With this business plan, LienVietPostBank is expected to pay a dividend rate of 10 per cent in 2021.
At the end of the first quarter, LienVietPostBank reported a pre-tax profit of VND1.1 trillion (47.83 million), up 84.2 per cent over the same period last year thanks to the growth momentum from lending, services, and foreign exchange.
As of March 31, LienVietPostBank's total assets reached VND245.2 trillion ($10.66 billion), up 1.2 per cent, of which customer loans increased by 3.5 per cent to VND182.7 trillion ($7.94 billion). Deposits from customers grew modestly by 0.9 per cent compared to the end of last year.
The bank's bad debts increased slightly to VND2.6 trillion ($113 million), the bad debt ratio remained unchanged at 1.42 per cent. The bank no longer has bad debts at Vietnam Asset Management Company (VAMC).
On June 23, Thaiholdings JSC bought 20 million LPB shares raising its ownership to 1.86 per cent. The transaction was made after the company sold all of its shares in the bank (719,400 shares) on June 16. It is estimated that the amount of money this company has to spend to make the transaction is more than VND570 billion ($24.8 million).
LPB shares closed the June 24 session at VND29,450 ($1.28).
E-cars gear up for policy assistance
Not only VinFast could benefit if it is exempt from taxes and fees as proposed – the whole auto industry is also holding its breath waiting for policies.
In mid-May, Vingroup proposed piloting excise tax and registration fee for five years with electric cars, in a meeting with leaders of the government, ministries, and sectors.
The leaders agreed that there should be strong and drastic solutions to support the development of electric car production, and Vingroup’s proposal will be evaluated by the Ministry of Finance for completion.
The results of the meeting showed that VinFast is on the right track with the government’s wishes. The mission of the car models is more important – that is, pioneering a new development orientation for the country.
About five years ago, and especially since VinFast started construction of a 335-hectare complex on the northern city of Haiphong’s Cat Hai Island in 2018, the goal of developing the automobile industry was aimed towards domestic production and assembly, while limiting imports.
At this time, when Truong Hai Auto Corporation and Thanh Cong are still focusing on internal combustion engine vehicles, VinFast is focusing on electric vehicles, which involves many challenges in terms of both production and consumption. Estimates by experts around the world showed that the cost of producing electric cars, compared with traditional internal combustion engine cars of the same size, is still about 45 per cent more expensive. At the end of this decade, this figure will decrease to about 9 per cent, still more expensive to produce.
While electric cars have a simpler structure and are easier to manufacture, what makes the production cost more expensive than gasoline cars? The answer comes from the battery pack. Battery costs still account for about 40 per cent of an electric vehicle. The battery is the soul of an electric vehicle, but car manufacturers cannot hold this soul on their own, and depend on suppliers.
Currently, many companies are researching solutions to increase capacity and lifespan, reduce size and charging time, and lower battery cost, but have not been able to commercialise it at a cheap price. Therefore, car manufacturers must depend on and accept higher production costs than traditional cars.
In return, with good effects on the environment such as no smoke, no polluting emissions, and no need for lubricating oil or fuel, environmental experts said that electric vehicles are an inevitable trend worldwide, and especially necessary for the environment in Vietnam.
Professor Pham Ngoc Dang, vice president of the Vietnam Association for the Protection of Nature and Environment, has noted that up to 70 per cent of fine dust in the air comes from motorbikes and cars using internal combustion engines. In addition the greenhouse effect and noise pollution are also problems that electric vehicles will thoroughly solve compared to gasoline and diesel cars.
As for needing more electricity to charge cars, environmental experts said it is practically controllable. The amount of electricity in Vietnam is currently generated from 36 per cent hydroelectricity and renewable energy, meaning processes that do not pollute the environment. Although the majority is thermal power, with the potential of hydroelectricity and wind and solar power growing, these issues can be resolved to reconcile all benefits.
From an economic perspective, electric vehicles should also be encouraged. Bui Quang Tuan, director of the Vietnam Institute of Economics, said that this type of vehicle should be supported and provided with economic incentives such as exemption from excise tax and registration fees, as proposed by Vingroup.
Tuan analysed that there will be no need to worry about the budget deficit because when there are incentives, the car price will be cheaper and sales volumes will increase. In addition, the electric car industry is an amalgamation of many other industries, so if electric vehicles develop, the supporting industry also develops, which can create breakthroughs and solve macro problems such as employment and income as well as national status.
On a national scale, electric vehicles are the trend and ambition of most governments, from developed to developing countries. China was the world’s largest electric vehicle market in 2020 with nearly 1.38 million vehicles sold.
There are several groups of policies that China and other countries are applying, including deals for car manufacturers; car-buying subsidies, and administrative procedures for prioritising electric vehicles. Specifically, electric vehicle manufacturing companies are supported by the power grid from state-owned companies, a 30 per cent capital subsidy to build a charging station, and a subsidy of nearly $8,000 for each vehicle produced.
Meanwhile, people in this country have been supported with 50-100 per cent reduction in registration fees, and free or very low charging costs. With administrative procedures, customers using electric cars do not have to wait 6-12 months to be registered like petrol cars.
In Europe, where Norway was the only country in the world to sell more electric cars than petrol cars in 2020, the policies are equally rich. Electric car companies are exempted from a series of taxes such as sales, import, and VAT; and subsidised 50 per cent of production costs and subsidised charging station installation costs. Users are supported with nearly $5,000 when buying a car, though discounts for fast-charging services, free parking, use of bus lanes, and some road and ferry fees waived.
With the market and economic form closest to Vietnam, Southeast Asian countries such as Thailand, Indonesia, and Malaysia all have their own policies for electric vehicles. Based on the level of CO2 emissions to excise tax, electric vehicles in these countries can be subject to zero or a very small 5 per cent tax.
A synchronous policy system from production and consumption to use is being applied by countries to promote electric vehicles and limit petrol cars. The application of any kind of incentive depends on the reality of the economy and the state budget as well as the long-term orientations in each place. But according to experts, in order to popularise new vehicles, it is still necessary to have separate mechanisms for all processes as other countries are carrying out. Even if Vingroup’s proposal is approved, it may not be enough to motivate consumers to buy electric cars.
Moreover, if these incentives are effective but only VinFast makes electric cars, it will not solve the big picture. So these could be incentives for the whole auto industry, especially joint ventures, which already have products and research on this car line.
Currently, almost no car company besides VinFast intends to sell electric cars in the near future because of concerns about costs, infrastructure, and user habits, even though Nissan has registered to protect industrial designs for cars. Its Ariya electric crossover model has been registered for industrial design protection in Vietnam, while Thanh Cong’s TC Motor also has its own plans for electric and hybrid vehicles when its factory in the northeastern province of Quang Ninh comes into operation.
But when these proposals come to fruition and there are more attractive incentives, companies may have to accelerate the progress of bringing electric vehicles to Vietnam. If the platter is prepared, and it is full of delicious dishes, whoever is late will lose their share, said one vehicle industry strategist.
When electric cars from Toyota, Honda, Mitsubishi, Ford, and more are produced in Vietnam, the beneficiaries will be customers. Many companies can change the system together and obstacles decrease with customer numbers, the strategist said. As for the government, the problem of environmental pollution opens up part of a simple answer, which is a move towards more electric vehicles.
Deeper funding key for agri-processing
As the oversupply of raw agri-products has been threatening local farmers and exporters, especially amid logistical issues caused by COVID-19, plans for deeper processing and added value are targeted by most stakeholders, aiming to transform Vietnam into one of the world’s most important agri-product hubs.
According to Hoang Ba Nghi, member of the Central Steering Committee for VietGAP, Vietnam is experiencing an overproduction due to the rapidly increasing output of agri-products. Meanwhile, businesses pay little attention to market research in agriculture, and very few businesses make investments in the processing stage, so Vietnam mainly sells raw products with low value.
During the current lychee season, local authorities and management agencies have mobilised stakeholders to ensure output of fresh lychees and minimise negative effects on farmers. The Ministry of Industry and Trade said that Vietnam has exported about 100 tonnes of fresh lychees to Japan, the US, Australia, France, the Czech Republic, and China this season.
In 2020, exported lychees got stuck at the border gates in large quantities, causing damage to businesses. Thus, the Ministry of Agriculture and Rural Development (MARD) has been more proactive amid this year’s lychee crop as the resurgence of the pandemic could lead to the isolation of some lychee-growing provinces.
The MARD has established working groups to support provinces in accelerating customs clearance for products. It also sent dispatches to relevant ministries to seek cooperation and promote the trade flow of agri-products in the peak season. Some measures have been adapted to facilitate the transport of agri-products including an extension of the working time, eased administrative procedures, reduced transportation fees, and the issuance of certificates for disease safety. Another measure has been to diversify distribution channels by selling agri-products on e-commerce and digital platforms.
However, these are all just short-term solutions to increase the output for agri-products. In the long term, Vietnam may need to invest heavily in deep processing to help farmers avoid falling prices despite the bumper harvest seasons. According to the government’s Resolution No.53/NQ-CP dated July 17, 2019 on solutions to encourage and promote enterprises to invest in agriculture, Vietnam aims to be among the top 15 countries with the most advanced agriculture worldwide, and among the world’s top 10 in terms of processing by 2030.
Post-harvest processing is also crucial to increase value of agri-products and reduce losses, helping businesses actively find consumption markets and earn higher revenue. However, since 2017, localities have attracted only around 70 projects in agri-forestry-fishery processing, with total capital of $2.56 billion.
Meanwhile, fishery by-products are a valuable source of raw materials for processing value-added products. Vietnam’s total seafood output reaches about seven million tonnes per year, of which fishery by-products account for about 15-20 per cent (about one million tonnes).
Phan Thanh Loc, vice chairman of Vietnam Food JSC, said that many developed countries soon realised the potential of the industry and successfully developed high-added value seafood by-products. He said Vietnam has a target of $10 billion for shrimp exports by 2025 with a total shrimp output of over 1.15 million tonnes. However, only 55-65 per cent of the shrimp’s value has been exploited while the remaining 35-45 per cent is often discarded.
MARD Minister Le Minh Hoan said at a conference last week that only 20-30 per cent of Vietnam’s agri-products are processed before being sold to the market. Meanwhile, this figure is nearly 80 per cent in Taiwan. “Thus, the sector needs to compare and formulate a development plan to create added value for agri-products, meant to solve the oversupply issue and reduce pressure on farmers,” Hoan said.
According to Hoan, the government needs to work with businesses to connect them with consumers as well as conduct more research. It is also necessary to pay more attention to cooperatives and also smaller players in order to promote logistics, post-harvest preservation, and processing technology.
Long An’s economic growth in H1 ranks third in Mekong Delta
Long An province posted high growth in the first half of 2021 despite the negative impact of COVID-19, coming third amongst 13 Mekong Delta localities, according to the provincial People’s Committee.
The province’s economy expanded 6.06 percent in H1, higher than the 4.34 percent recorded in the same period last year.
The outcome made Long An rank fourth amongst eight cities and provinces in the country’s southern key economic region.
Of note, a number of industrial sectors have seen signs of recovery, as the index of industrial production rose 7.5 percent year on year. Power production and distribution increased 14.9 percent and construction 10.4 percent.
In the period, Long An authorities handed over investment licences to 77 domestic projects with a registered capital nearing 5.6 trillion VND (243.44 million USD), and 30 foreign ones worth over 3.2 billion USD.
The provincial People’s Committee asked relevant agencies to continue realising the dual targets of curbing the spread of COVID-19 and bolstering socio-economic development./.
Source: VNA/VNS/VOV/VIR/SGT/Nhan Dan/Hanoitimes
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