More efforts needed to refine Vietnam's economic development

The implementation of the digital economy and the circular economy will create opportunities for rapid and sustainable development, help fulfill socio-economic development goals, and effectively respond to complications due to climate change, according to experts.

On June 7, 2022, the Prime Minister issued a decision approving a project on the circular economic development in Vietnam, which affirmed that proactively developing the circular economy is inevitable, in line with global trends as well as requirements to create breakthroughs in economic recovery and the implementation of the Sustainable Development Goals (SDGs).

However, currently, Vietnam does not have a specific legal framework to develop its circular economy; or have developed and issued a set of indicators to identify, evaluate and classify the development level of the circular economy.

In addition, infrastructure for digital transformation is still limited, while the implementation of circular economy requires the innovation and application of modern technology.

Human resources are also a big challenge, as the development of these economies requires a team of experts who are good at performing all stages of the production process, especially the reuse and recycling of waste in an efficient and safe manner.

Currently, the training level of employed workers is still low, with 72.5% having no professional and technical qualifications, and 12.5% having university or higher degrees. This means that the workforce has not yet met the needs when implementing digital economy and circular economy.

Furthermore, fierce competition from foreign digital technology enterprises with big potential is a huge challenge for domestic companies whose capacity remains limited.

According to experts, in order to promote the digital and circular economies in the context of having to deal with the above-mentioned challenges, the Government should direct ministries, sectors and localities to carry out solutions to innovate the management and leadership, as well as management capacity.

Shifting to a digital platform and circular economy means transforming business models as well as the qualifications and skills of human resources.

Economist Nguyen Bich Lam, former head of the General Statistics Office, said that developing digital and circular economies is not a technological revolution but an institutional one.

It is necessary to create a legal environment that can be flexibly adjusted to encourage and absorb new technologies, products, services, and models, stated Lam.

He stressed the importance of perfecting institutions and the legal corridor to create a legal framework for economic development.

The Government also needs to amend and supplement the Law on Environmental Protection; specifies specific responsibilities of manufacturers and distributors for the collection, sorting and recycling of wastes, he added.

Human resources a driving force for southeastern region’s development: Official

The southeastern region needs long-term planning and strategy for human resources development to meet the demands of industries during its socioeconomic development towards 2030 with a vision to 2045, an official has said.

At a recent conference on Education and Training Development in the Southeast region to 2030, with a vision to 2045, organised by the Ministry of Education and Training in Binh Duong province, Deputy Prime Minister Tran Hong Ha directed localities in the region to continue to invest resources and overcome difficulties to achieve the goals of comprehensively developing high-quality human resources for the regional development.

As human resources are fundamental, only investment in education and training can create a new driving force for the development of the country, he stressed

Between 2012 and 2022, education and training networks in the southeastern region enjoyed huge investment and harmonious development following the local realities. This created favourable conditions and opportunities for students, contributing to raising the people's intellectual level, and training human resources for regional localities and the country as a whole. The region's higher education is increasingly affirming its role as a key for training high-quality human resources in the country, with nearly 60 universities and more than 300 vocational training institutions.

As the country’s economic locomotive and the largest science and technology hub in the country and the southeast region, Ho Chi Minh City is striving to increase the proportion of trained workers to 87% by 2025 and 89% by 2030.

At least 10% of public vocational education institutions in the city will be verified to meet ASEAN and international standards by 2025. The rate is expected to increase to at least 30% by 2030.

Deputy Director of the city’s Department of Labour, Invalids and Social Affairs Nguyen Van Lam said that to achieve the goals, the city is focusing on human resources training to meet the needs of the labour market and the economic restructuring.

The city will develop criteria for the evaluation and ranking of vocational education institutions as a basis for reorganising public non-business units and encourage the private sector to join develop vocational education.

Dr. Nguyen Duc Nghia, former Vice President of Vietnam National University, Ho Chi Minh City, recommended that universities and vocational education sectors must closely coordinate with State management bodies and enterprises to connect supply and demand.

Lecturer Nguyen Chu Du from the Trade Union University said the southeast region needs to focus on building and perfecting the overall strategy, system of mechanisms, and policies for developing high-quality human resources. The strategy must closely link the training and the use of high-quality human resources.

According to a research team led by Dr. Dinh Cong Khai from Ho Chi Minh City University of Economics, the State and localities need to roll out policies to support and encourage training institutions. The State should play an intermediary role, linking businesses and schools through forecasting human needs, providing information for training institutions, and creating favourable conditions for businesses and training institutions to meet and discuss in depth about each industry.

Minister of Education and Training Nguyen Kim Son said that the southeast region needs to plan to rearrange and restructure its education system at all levels, especially the university one. Now, the distribution of universities in the region is uneven, focusing mostly in Ho Chi Minh City while Tay Ninh and Binh Phuoc provinces do not have universities.

In addition, the region needs to promote socialisation, internationalisation, modernisation, digitisation, and universalisation, he said, adding there should not be a discrimination between the public and the private sectors in education policies.

Industry ministry, Samsung jointly train molding technicians

The Ministry of Industry and Trade (MoIT) and Samsung Vietnam kicked off the sixth batch of the training programme for molding technicians of Vietnam on June 26.

The programme aims to realise their cooperation agreement on training Vietnamese molding technicians for the 2020-2023 period, which was signed during the ninth meeting of the Vietnam-Republic of Korea (RoK) Joint Committee on Energy, Industry and Trade Cooperation in 2019.

As many as 30 trainees from mechanical engineering and mold companies will undergo a 14-week training course, including 10 weeks in Vietnam and four weeks in the RoK.

The objective of the programme is to train 200 mold technicians and improve their skills in mold design, fabrication and production with a focus on high-precision engineering.

According to the MoIT, the value of the mold and precision engineering industry in Vietnam is now estimated at over 1 billion USD each year. Particularly, with an annual growth rate of 18%, this industry is attracting the attention of many domestic and foreign businesses.

Notably, Vietnamese enterprises make only 8.5% of plastic injection molds, while the rest are metal stamping molds. Therefore, there is a high demand for molds in various industries such as plastics, mechanical engineering, machinery parts and components. This presents a significant opportunity for domestic firms to enhance their capacity to join the global supply chain.

Vietnamese firms urged to strengthen green growth strategy

The green economy and sustainable development are inescapable global trends, and businesses need to embrace them to meet the increasing demands in the domestic market and mounting pressure from foreign markets, heard the recent “Green Trade Forum” in Ho Chi Minh City.

Vice Chairman of the city People's Committee Vo Van Hoan acknowledged that Vietnam has signed numerous free trade agreements, including new-generation pacts, which present significant opportunities for local firms to expand their exports.

However, these FTAs also come with stringent environmental and sustainable development clauses, he pointed out.

“Green growth and sustainable economic development have become inevitable trends worldwide. Investors coming to HCM City always inquire about the availability of renewable energy and green materials. Investors already in the city also want to become greener. Since a failure to meet green criteria can hinder their products from being exported to European markets and other developed countries. Therefore, green transformation has become an urgent issue.”

Consumers in both local and international markets have become more environmentally conscious, he said.

To cater to them, the creation of an eco-system comprising green materials, green finance, green energy, and supportive policy systems and legal frameworks is necessary, he told the forum held by Sai Gon Giai Phong newspaper, Saigon Co.op and the HCM City Union of Business Associations.

Forums like the Green Trade Forum play a crucial role in raising awareness among consumers, producers, and society, ultimately leading to the formulation of policies conducive to a green economy.

Vietnam is committed to achieving net-zero emissions by 2050, necessitating increased awareness and contributions from the business community.

Prof. Dr. Nguyen Hong Quan, Director of the Institute for Circular Economy Development at the Vietnam National University in HCM City, cited a survey by McKinsey revealing that 63% of consumers consider brand sustainability when making purchase decisions.

Embracing environmental, social and governance (ESG) standards would provide companies with significant development opportunities, he added.

Pham Van Truong, Deputy Editor-in-Chief of Sai Gon Giai Phong newspaper, said developing a green economy and circular economy is crucial not only for businesses but also for the entire country.

But the task is challenging due to limited resources possessed by Vietnamese enterprises, 99% of which are small and medium-sized businesses, he said.

Nguyen Ngoc Hoa, Chairman of the HCM City Union of Business Associations, commended HCM City's long-standing awareness of the importance of green growth and its initiatives to promote it like the Green Enterprises Awards, which honour businesses compliant with waste treatment regulations and produce environmentally friendly products.

Under the programme, the organisers, HUBA and Sai Gon Giai Phong newspaper, will also provide firms with information about green technical barriers to trade in the domestic and export markets, and help them find the means to achieve green development.

Tran Lam Hong, deputy general director of Saigon Co.op, said the retailer gives priority to buying products from firms that are environmentally conscious.

The country’s leading consumer goods retailer and Sai Gon Giai Phong newspaper have organised the annual Green Consumption Campaign for 14 years to promote environment-friendly products.

Saigon Co.op’s distribution systems also hold the annual Green Consumption Month in June with promotions on environment-friendly products to encourage the use of green products and those made by companies that do well in environmental protection, thereby creating environment-friendly consumption habits.

Can Gio int’l container transhipment port project: a boost for HCM City’s port system

Ho Chi Minh City’s planned Can Gio international container transhipment port project has been proposed to be added to a master plan for developing Vietnam's seaport system by 2030.

The Ministry of Transport (MoT) is collecting opinions from relevant ministries and agencies on supplementing and adjusting the master plan for developing Vietnam's seaport system in the period of 2021-30, with a vision to 2050.

The project is also being proposed as one of the priority infrastructure projects to be implemented by 2023.

According to the Vietnam Maritime Administration, scenario planning is developed in line with the spirit of the Politburo's resolutions on socio-economic development of regions and localities, meeting the development targets of each region and each locality.

The adjustment of the master plan is necessary to ensure compliance with the National Master Plan and the country’s current socio-economic development needs.

When the Can Gio international transhipment port is completed, seaports in HCM City will meet the criteria for the classification of special seaports according to the new provisions of the revised Vietnam Maritime Code in 2015.

According to the Ministry of Planning and Investment, two seaport systems in HCM City and Ba Ria-Vung Tau province are targeted to become the special seaports of the southeast region, serving as international transhipment points or international gateway ports.

With a total investment of about 6 billion USD, the project is being studied by the Vietnam Maritime Corporation (VIMC) and the Mediterranean Shipping Company (MSC) - the world's second-largest container shipping company.

The project has a designed capacity of 15 million TEUs. The two sides are working hard with foreign partners to finalise plans for investment and operations.

This project is a complement to the Cai Mep–Thi Vai seaport system, not a competition to weaken the existing seaport system.

Bac Giang lychees hit shelves in the US

Viet Nam’s early-ripening lychees of this year's harvesting season are hitting the shelves at many of the largest supermarkets and Asian markets in Houston, Texas.

From June this year, fresh lychees from the northern province of Bac Giang - dubbed the lychee granary of Viet Nam - were flown to the US.

Vietnamese fresh lychee is currently being sold at supermarkets such as Hong Kong, Tan Binh, Viet Hoa and Linda's Tropical Fruits in Houston.

Bac Giang province has signed MOUs with agencies, corporations, and associations to support the trade, according to the province's People's Assembly. As a result, Bac Giang Lychee is becoming a well-known brand. The fruit is widely regarded for its exceptional quality and has steadily picked up pace in the US market.

LNS is a distributor that specialises in advertising the "Made in Viet Nam" label in the US market. LNS will continue to work with import and transportation partners to provide Vietnamese agricultural products to numerous US states, said a company spokesperson.

The collaboration of Vietnamese firms in the market plays an important role. Specifically, product distribution through the network of supermarkets and Asian markets.

The shipment was jointly transported by LNS International Corporation (importer) and L&V Food Supply Company (distributor) based in Houston.

The rapid expansion of firms will facilitate bilateral trade, and boost exports of Vietnamese products to the United States. From there, we can focus on improving the reputation of Vietnamese firms and encouraging American consumers to purchase the country's agricultural products.

Farm produce and regional specialities introduced

Farm products and regional specialities are being showcased in Ha Noi at an agricultural fair from June 21 to 24.

The fair, called "A Week of Promoting Tea and Tropical Fruit Products" was organised by the Trade Promotion Centre for Agriculture under the Ministry of Agriculture and Rural Development and localities.

Popular commodities from provinces including Ha Noi, Hung Yen, Thanh Hoa, Lao Cai, Thai Nguyen, Bac Giang, and Cao Bang are displayed in 60 stalls at 489 Hoang Quoc Viet Street.

The fair hopefully encourages domestic consumption of agricultural, forestry, and fishing products that are key to the production of various provinces.

Nguyen Minh Tien, Director of the Trade Promotion Centre for Agricultural, said that the fair would open new markets for local agricultural products, supporting farmers, cooperatives, and enterprises in the process.

Livestream activity on TikTok and other social media platforms to sell agricultural products will be a highlight at the event.

From June 24, consumers can watch and buy products directly at the OCOP Marketplace channel on TikTok from 9am to 3pm. 

Options contracts to trade on MXN later this month

The Mercantile Exchange of Vietnam (MXV) will begin the trading of options contracts for businesses and investors on June 26.

Options can be used as hedging instruments in the commodities market.

Option contracts help buyers mitigate risk, employ more intricate trading strategies, and combine transactions to limit both risk and profit within a certain range.

"In the international market, large enterprises in the fields of production and trade use price hedging tools. Options contracts are more commonly used than other types of contracts", said Duong Duc Quang, Deputy General Director of MXV.

MXV held a training session for all 33 members on June 19.

The exchange has conducted research and added new features to the M-System dedicated to options trading, helping members, businesses, and investors easily manage their portfolios.

Quang said all members have learned about the new updates on the system. The exchange will continue to update the system in the future to support options trading, as well as commodity trading, making it more and more stable and efficient.

Clause 3, Article 64 of the Commercial Law 2005 stipulates: A call or put option contract is an agreement whereby the purchaser has the right, but not the obligation, to buy or sell a specified commodity at a pre-fixed price and must pay a certain amount to buy this right (referred to as option money). The option purchaser may opt to effect or not to effect such purchase or sale of goods.

The Commercial Law 2005 and other guiding decrees stipulate that the entities involved in the conclusion and exercise of option contracts as well as futures contracts are defined as customers, trading members, brokerage members, payment centers and forwarding centres of the Commodity Exchange.

In the market, there are two common types of options: American options and European options. An American option is an option contract that allows the holder to exercise the option at any time prior or on the expiration date. Meanwhile, a European option is an option contract in which the holder can exercise the option only on the expiration date.

Prices a concern for car buyers: experts

Local consumers want to buy new cars but are concerned about high prices. Many of them are waiting for more promotions to be offered by automobile manufacturers and dealers, according to car experts.

The local car market has not seen positive signals as purchasing power has gradually slowed down month by month since the beginning of this year.

Domestic car manufacturers and dealers have offered promotions to stimulate sales but have not received much increase in demand.

Tran Hoang Vuong, a Ha Noi resident, said that he'd been intending to buy a new car since Tet (Lunar New Year), noting that he's waiting for steeper discounts from manufacturers and dealers.

According to Nguyen Manh Thang, a car trader in Le Van Luong Street, the prices of best-selling cars have plummeted up to 100 million dong in the last four months. A series of promotions have been offered by car dealers, leading some consumers to try their luck by waiting longer.

In addition, articles on price pressure have been frequently shared on social media platforms with many recommending buyers wait for prices to drop further.

Nguyen Van Lan, a salesman at a Suzuki dealer in HCM City said despite lower prices, the number of buyers remained low. Lan and his colleagues had to cut their commissions to attract buyers. Lam said they were stuck in the squeeze as car buyers often asked for better deals from salesmen.

More discounts were being offered but sales failed to reach expectations, said Lan.

Tran Van Cuong, a car salesman in Ha Noi said sometimes salesman would spend their cash on social media promotion campaigns in an attempt to bring in more commissions.

The local automobile market continues to be bearish. Sales of imported cars are even worse as only domestically assembled cars can enjoy the 50 per cent vehicle registration tax.

According to a Vietnam Automobile Manufacturers Associations (VAMA) report issued on June 13, automobile sales, including imported cars of non-VAMA manufacturers, were down 52.7 per cent year-on-year to 20,726 units in May

In May, Viet Nam reported car sales with a total turnover of US$191.2 million, a sharp fall of 38.3 per cent in volume and 33.6 per cent in turnover compared with April.

This was the second time that CBU (complete built unit) imports saw a sharp downward trend. Before that, in April 2023, CBU imports were 12,323, a decrease of 19.1 per cent from March.

Experts said the sharp fall in exports was not a surprise at all, noting that imports peaked in March with 15,228 cars imported.

The market's weak demand has affected the automobile industry and dealt a strong blow to car importers. It has also affected State budget collections as tax collections from CBU car imports make up a large contribution to the State budget.

The Government Office this month has just issued a document on the registration fees for domestically manufactured and assembled cars.

Deputy Prime Minister Le Minh Khai assigned the Ministry of Finance to liaise with relevant agencies in writing a draft of the Government's decree on registration fees for domestically manufactured and assembled automobiles.

The new registration fees will be applicable from July 1 to the end of 2023. 

Longan and water coconut molasses make debut in Japan

A range of Vietnamese farm produce such as longans, water coconut molasses, coffee, mangoes, and durian debuted during Vietnamese Goods Week which is underway at the AEON supermarket chain in Japan.

The event, running from June 23 to 25, is part of the project to encourage Vietnamese enterprises to directly participate in the foreign distribution system, which has been launched by the Ministry of Industry and Trade.

On display are a range of products, mostly agricultural products, from more than 40 suppliers nationwide.

This marks the first time that the company has introduced Vietnamese longan products at the AEON Japan supermarket chain, according to Mitsuko Tsuchiya, executive vice president of AEON Corporation Japan.

Furthermore, there are many other products hitting the shelves, such as dragon fruit, coffee, shrimp, and spring rolls (harumaiki) all of which prove popular among Japanese customers.

AEON plans to deploy additional booths in order to introduce local products at all supermarkets and department stores of its chain across Japan as of 2024, revealed Mitsuko Tsuchiya.

A number of activities have been held on the sidelines of the event, including a Vietnam-Japan trade exchange and a seminar to introduce Vietnamese businesses to the necessary regulations and standards when exporting into the AEON system in Japan.

Shrimp exports set to recover ahead in Q3

Vietnamese shrimp exports are anticipated to rebound from the third quarter of the year to make up for a prolonged drop from August 2022, said Truong Dinh Hoe, general secretary of the Vietnam Association of Seafood Exporters and Producers (VASEP).

This projection is based on the positive signs witnessed in shrimp exports in March, April, and May in the United States – a market which moved to increase its shrimp imports from Vietnam and other countries.

The increasing demand for shrimp in the US market is expected to create more favourable conditions for Vietnamese shrimp to enter this market and other markets moving forward, said Hoe.

Meanwhile, China remains a potential market for Vietnamese shrimp, he said, adding that local firms are required to pay close attention to consumption habits in order to further boost their products to this market.

At present, Vietnamese enterprises are purchasing shrimp for reserves and closely keeping up with the market demand in order to prepare for a market recovery from July.

Vietnamese shrimp exports reached approximately US$1.4 billion in the first five months and are expected to rake in US$3 billion this year.

People, enterprises encouraged to build digital identities with national domain names

Viet Nam Internet Network Information Centre (VNNIC) has launched a programme to meet the needs of local businesses and people in digital identities and building brands on the internet.

Entitled "Creating digital identities with national domain names.vn", the programme is a cooperation between VNNIC under the Ministry of Information and Communications, the Hoan Kiem District People's Committee and Ha Noi Department of Information and Communications.

Following the launch on June 24 in Ha Noi, a project of "Creating digital identities with the national domain .id.vn" is exclusively for young people with special preferential policies.

Any Vietnamese citizen aged from 18 to 23 could register to use their domain “.id.vn” with no fee for two years.

VNNIC believed that it was a great opportunity for the youth, especially students, to experience and improve their digital skills at a cost of VND0. It would also support them to have more job opportunities and connect with wider community when they have personal brands on the internet -- personal websites with the domain name "id.vn".

"This is a new but convenient service. I am interested in digital identity for fast, accurate and secure transactions on the internet," said Nguyen Quoc Cuong after he was instructed to register a domain name.

In addition to the project for the youth, the organisers also set up a project for businesses and enterprises.

For newly established enterprises within one year from the time of domain name “.biz.vn” registration, they will enjoy no fees/charges policy for two years since the domain name is granted.

 Staff of national domain name registrars will be available at No 2 Le Thai To Street counter to advice people and enterprise about domain name every weekend till end of 2023.

In addition to the preferential fee policy, the enterprises which are subjects of national incentive programmes will be provided free of charge many other products and services such as websites and emails, etc... by national domain name registrars.

"Digital transformation is developing strongly. The need of online presence and branding has become an inevitable trend of businesses and people," said Nguyen Hong Thang, VNNIC director.

"The national domain name ".vn" associated with the website and professional email address is the bridge to bring people and businesses to the digital environment quickly, safely and sustainably.

"Our preferential policies in this programme will help businesses and people easily access and use national domain names to apply in real life such as doing business, opening online stores, building brands."

At the launch, a counter for the national domain name registration has been set up to introduce and guide people to use the country domain name ".vn".

It will be maintained at No 2 Le Thai To Street every weekend to provide free domain names for the incentive-programme subjects. Experts will be available to advise and provide services to people until the end of the year.

SHB to increase chartered capital to VND36.6 trillion

The State Bank of Viet Nam (SBV) has given approval to SHB to increase its charter capital from the current VND36.6 trillion (US$1.55 billion) to VND39.6 trillion ($1.68 billion).

The capital increase would be implemented by issuing shares to pay last year's dividends to existing shareholders at the rate of 18 per cent and to issue shares under the employee stock ownership plan (ESOP).

With the capital increase, SHB will be in the Top 5 private commercial banks with largest chartered capital.

SHB has achieved sustainable growth in profits, increasing its chartered capital steadily over the years. Its liquidity and risk management indicators are all better than the SBV’s regulations.

SHB is also one of the banks that ensures the interests of shareholders through regular dividend payments from 7 to 15 per cent a year, and notably 18 per cent in 2022.

SHB’s representative said that the increase in chartered capital is important to improving the bank’s financial capacity, increasing its competitiveness in the process of international economic integration, and meeting its shareholders’ interests.

Shares issue under the ESOP are one of the policies to connect the bank with its employees. This activity also contributes to encouraging and attracting top talent and improving work efficiency. It's the driving force for SHB to complete its goals and development strategy in the future.

In 2023, SHB targets pre-tax profit of more than VND10.6 trillion, up 9.67 per cent over last year. Total assets are expected to grow by 10.09 per cent and the capital mobilisation market increased by 14.78 per cent. The dividend rate is expected to be 15 per cent.

By the end of the first quarter of 2023, the bank's total assets reached VND570.1 trillion. Total operating income (TOI) reached VND6.2 trillion, posting a 32.2 per cent year-on-year increase. Net profit reached VND4.9 trillion, up 35 per cent over the same period last year. This result helped SHB to enter the group of banks with the highest net profit growth in the first quarter of 2023. Despite actively making provisions for risk mitigation (nearly 3 times higher than in the same period last year), the bank still achieved a pre-tax profit of VND3.6 trillion.

International credit rating agency Moody's gave SHB a B1 credit rating. SHB's B1 and B2 BCA ratings reflect its expectation that SHB's credit index will remain stable over the next 12 to 18 months. B2 BCA also considers the bank's capital and liquidity.

SHB also completed the transfer of half of SHB Finance's charter capital to its Krungsri (Thailand) partner in the process of divesting 100 per cent of its capital according to the previously signed deal.

In the next three years, the bank will transfer all the remaining 50 per cent shares to Krungsri according to the agreement. The transaction will bring a significant surplus for SHB shareholders, freeing up more resources for the bank to continue to strengthen its financial capacity and fundamental factors, thereby promoting business activities in key segments, especially boosting investment in digital transformation.

The surplus from the deal also helps SHB to strengthen its capital buffer, one of the bases to accelerate the application of the Basel III roadmap to comply with international financial reporting standards (IFRS) in 2023.

Many large financial institutions such as WB, ADB, IFC, and KFW have co-operated with SHB through grants and investments worth hundreds of millions of US dollars. Recently, SHB and IFC signed a high-end loan co-operation agreement, in which, the first loan in a total loan package of $120 million from IFC's direct capital has a term of three years. The loan is intended to assist SHB in developing its small and medium-sized enterprise (SME) loan portfolio, which includes women-owned businesses and those involved in the supply chain.

Seafood exports have solid May, difficulties remain

Exports of seafood products saw their best month in May since the beginning of this year, a positive signal amidst the gloomy outlook of global demand.

The latest updates from the Viet Nam Association of Seafood Exporters and Producers (VASEP) showed that seafood exports reached more than US$808 million last month.

That said, total seafood exports for 2023 saw a 29 per cent drop over the same period last year, estimated at around $3.37 billion. Exporters saw the number of orders drop by 20-50 per cent.

Major products saw significant drops in exports, for example, tra fish by 40 per cent, shrimp by 34 per cent and tuna by 31 per cent.

Exports to the US fell by 48 per cent, the EU by 33 per cent, China by 25 per cent, Korea by 21 per cent and Japan by 8 per cent.

VASEP said that seafood exports were struggling due to falling global consumer demand and growing competition with other countries like Ecuador and India.

The resilience of farmers and seafood enterprises weakened on rising production costs, slower consumption and increasing inventory, as well as capital exhaustion and difficulties in accessing credit, they said.

VASEP warned about a potential shortage of raw materials at the beginning of 2024 when the market is expected to recover. Businesses might be exhausted by this point. “The situation is even more difficult than the peak of the COVID-19 pandemic,” the association said.

Although seafood exports saw improvement in May, the global market demand has not seen positive signals overall, the association said, adding that there is a very low chance the market will fully recover before the end of this year.

VASEP predicted that seafood exports this year will likely reach just US$9 billion, about US$2 billion lower than last year.

In the US and the EU, problems abound regardless of positive signals in the economy and stabilising inflation - notably with regard to existing stockpiles of seafood products. These markets imported massively in 2022 and then encountered an inflation shock, which pushed up inventories while pushing down prices.

The whirlwind of cheap products from Ecuador and India also overwhelmed Vietnamese products in these markets.

In the short term, seafood exports to these markets will remain difficult, the association said.

Exports to Japan and South Korea also dropped on inflation pressure but did not see dramatic falls like in the US and the EU. Firms are optimistic about these markets, noting that if inflation slows, exports will recover rapidly.

VASEP said the biggest problem facing firms is high input costs alongside low selling prices. If farmers and firms abandoned ponds, the consequences would be serious, the association said. When the market recovers, there will be no materials for processing and Viet Nam might lose its position to other countries.

“It is pressing to lower interest rates to unlock the capital flows for production and business,” Vasep said. The lending rates for loans in US dollars should be reduced to below 4 per cent and 7 per cent for Vietnamese dong to support exporters.

From the third quarter of 2022, the lending rates for loans in US dollars increased from lows of 2.2 per cent to highs of 4.9 per cent.

A special credit package with reasonable rates should be raised for farmers who are facing difficulties in accessing credit to encourage them to maintain production instead of abandoning their ponds.

The association also called for the launch of a package worth VND10 billion for producers and exporters in Mekong River Delta to buy raw materials for reserves. 

Top 10 prestigious insurance firms in 2023 announced

The Vietnam Report JSC has announced the list of the top 10 most prestigious life and non-life insurance companies in Viet Nam in 2023.

The 10 most prestigious life insurance companies include Bao Viet Insurance, Dai-Ichi Vietnam, AIA Vietnam, Prudential Vietnam, Chubb Vietnam, Generali Vietnam, Hanwha Life Vietnam, Cathay Vietnam, MB Ageas and Mirae Asset Prevoir.

Meanwhile, the top 10 non-life insurance companies in 2023 are Bao Viet Insurance, PVI Insurance, Bao Minh Joint Stock Corporation, VietinBank Insurance Company, Military Insurance Corporation (MIC), Petrolimex Joint Stock Insurance Company (PJICO), BIDV Insurance Corporation, Aviation Insurance JSC, Agriculture Bank Insurance Joint Stock Corporation, and Saigon-Hanoi Insurance Corporation.

Vietnam Report made assessments independently on the grounds of their financial capacity and media reputation, and a survey of relevant organisations and individuals conducted in May – June this year.

According to Vietnam Report General Director Vu Dang Vinh, insurance premium revenue in the first five months of 2023 was estimated at nearly VND93.2 trillion (roughly US$4 billion), down nearly 1.5 per cent over the same period last year. Many insurers admit that this is a difficult period for the insurance market.

Experts held that after economic fluctuations and disruptions in the global supply chain due to the COVID-19 pandemic, the Law on Insurance Business (amended), which took effect on January 1, 2023, is expected to be a dose of “vaccine” to make the insurance market more transparent.

They believed that difficulties facing the sector would last for only a short time, and the potential of the market would remain great.

Up to 72.7 per cent of the respondents in the survey by Vietnam Report said that strong technological development and application of technology in all stages of the insurance industry’s value chain represent the greatest opportunity to promote recovery of the industry. 

RoK’s group eyes eco-friendly energy market in Vietnam

The Republic of Korea’s Doosan Group said it is eyeing to expand eco-friendly energy investment in Vietnam as one of the future strategies that it is aiming at the potential clean energy market in the Southeast Asian country.

Doosan Enerbility company has signed agreements with three companies operating thermal power plants in Vietnam to promote an environmentally friendly fuel conversion project. The signing ceremony was held within the frame work of the just-concluded state visit to Vietnam by the RoK’s President Suk Yeol.

The RoK’s firm and Nghi Son 2 Power Limited Liability Company have signed a memorandum of understanding (MoU) on energy collaboration to research the application of carbon reduction solutions in electricity production, coal consumption, and greenhouse gas emission.

The Vietnamese government has been accelerating the transition to eco-friendly fuels with a plan to reach net zero carbon emissions by 2050.

In 2020, coal accounted for about 30% of power plants' capacity in Vietnam. The sector is considered to have a great potential in the future transition to clean energy.

Food industry faces challenges but remains competitive

Faced with increased competition at home and stringent export requirements, food companies can remain competitive only by improving quality and production methods, experts have said.

The ongoing weak global demand is affecting the industry as are issues related to barriers in export markets and the impacts of climate change on food production, they said.

Viet Nam’s major markets like the US, EU and China have tough standards in terms of quality, food hygiene and safety that its exporters must comply with.

Geopolitical instability, with the ongoing Russia-Ukraine conflict being a significant factor, and changing consumption patterns, with a shift towards plant-based protein sources, are also affecting the industry.

Speaking at a seminar last Friday, Nguyen Thi Chan, head of the food department at TUV SUD Vietnam Company, said to remain competitive, local exporters must enhance production methods, trading habits and market approaches.

They must ensure traceability for their products and improve quality to meet the strict requirements abroad, she said.

For this, they need to continually innovate their production methods and study trade barriers, she added.

Nguyen Tuan, deputy director of the HCM City Investment and Trade Promotion Center (ITPC), said these challenges do not preclude opportunities for the industry.

HCM City is focusing on developing a sustainable food processing industry, he said.

To support food processing businesses, it has drafted a plan to attract investments and keep firms updated on the latest market trends, standards and quality requirements, he added.

The seminar was held by the ITPC and HCM City Food and Foodstuff Association as part of the second HCM City Food Exhibition (HCMC FOODEX 2023) to be held from June 28 to 30.

Viet Nam’s leading food and beverage expo, which will have over 200 local and foreign exhibitors, will showcase agricultural products, seafood, spices, machinery and equipment, and processed foods.

Visitors can also attend B2B matchmaking sessions and seminars and conferences on new trends and technologies, opportunities, challenges, and more.

The Vietnamese culinary culture and other cuisines will be highlighted at the three-day fair. 

Doosan Group commits $120 million investment in Hai Duong

Doosan Group pledges $120 million investment for the expansion of an automotive electronic component manufacturing facility in the northern province of Hai Duong.
 
Hai Duong, in a recent development, has successfully concluded an MoU with Doosan Group, a prominent multinational conglomerate, regarding a collaborative investment endeavour. The agreement aims to expand an existing electronic component manufacturing facility catering specifically to the automotive industry.

Under the agreement, Doosan Group has committed to executing and overseeing the investment project's expansion in Hai Duong. The project's primary focus will be on the production of flexible printed circuit boards and battery management system components utilised in electric vehicles.

Doosan Group will adhere to laws and prevailing regulations while engaging in import, export, and wholesale activities. The projected supplementary investment capital for this firm amounts to an estimated $120 million.

Doosan Group's decision to embark on this venture follows its prior substantial investments in Vietnam, particularly in energy generation, encompassing coal and wind power projects.

The upcoming project is slated to be implemented within Hai Duong's designated industrial zones, leveraging the region's favourable business environment and infrastructure.

As of the beginning of June, Hai Duong successfully attracted a significant influx of foreign direct investment (FDI), totalling nearly $210 million.

Quang Binh grants agreements for projects worth $5 billion

Quang Binh People's Committee has awarded investment agreements to 32 projects with value reaching $5 billion at a conference in Hanoi on June 25.

Three of the deals involve infrastructure projects worth $506 million;17 are in real estate, reporting $1.41 billion in total capital; and five in sports and tourism are worth $144.34 million.

In addition, provincial leaders also granted cooperation agreements for six projects in industry, mining, and energy worth $2.79 billion, and one in agriculture worth $17.4 million.

Regarding the criteria to select investors, Quang Binh prioritises attracting foreign investors with globally known brands, large financial capacities, and stable and long-term investment policies, and will refuse labour-intensive, non-technological projects that may disrupt the region's labour supply.

For domestic ventures, Quang Binh will give priority to investments from large corporations, especially those in the Top 500 largest enterprises in Vietnam from the manufacturing, processing, tourism, and logistics industries.

Selection of upcoming projects:

- $2.17 billion in Quang Trach II thermal power plant by Electricity of Vietnam in Hon La Economic Zone

- The T2 passenger terminal at Dong Hoi Airport to raise capacity to three million passengers each year. The project will require $53 million funded by ACV.

- 860-hectare Bo Trach Industrial Zone by Thanh Binh Phu My worth $295.65 million.

- The $154.78 million IWATANI Hoang Loang titanium slag deep processing plant in Hon La, from a consortium of IWATANI and Hoang Long Mining JSC.

- The 450-hectare urban area in Dong Hoi city by Truong Thinh Group worth $117.39 million.

- An urban-service area for Cam Lien Industrial Zone from Capella Land, worth $70 million.

Sunrise Material Group invests $100 million in Nam Dinh

Sunrise Material Group plans to inject $100 million into the northern province of Nam Dinh's high-tech packaging film sector, with anticipated annual imports of $200 million and exports of $500 million.

Nam Dinh leaders recently held a working session with executives from Sunrise Material Group, a Singaporean enterprise specialising in advanced technology polymer packaging films for the food sector.

Representatives from Sunrise Material Group expressed their interest in acquiring a 4-hectare land plot for the establishment of a cutting-edge production facility dedicated to high-tech packaging films. The facility aims to cater specifically to the intricate packaging requirements of the industrial sector, with a focus on serving the demanding US market.

Highlighting their environmentally friendly production practices and minimal energy consumption, Sunrise Material Group sought to familiarise themselves with Nam Dinh's mechanisms and support policies for businesses before committing to any investment decisions.

To address the company's needs, Pham Gia Tuc, Secretary of Nam Dinh Party Committee, recommended My Thuan Industrial Zone among the province's many industrial clusters and zones.

My Thuan Industrial Zone is currently undergoing accelerated development of advanced infrastructure, offering excellent connectivity to airports and seaports, as well as an ample land reserve to meet the requirements of Sunrise Material Group.

Visa, Vietnam Airlines cut deal to improve customer experiences

Visa, a world leader in digital payments, and Vietnam Airlines have signed a memorandum of understanding (MOU) to enhance Vietnam Airlines’ digital capabilities and improve the customer experience throughout their flights.

This is in line with Visa’s commitment to boosting digital payments in the country, reinforced by a visit to Vietnam by Oliver Jenkyn, Visa’s group president.

The company will work with Vietnam Airlines to launch a unique co-branded product, enhance the airline’s digital capabilities, and improve the consumer experience, especially in transforming digital payments.

As part of its five-year digital transformation strategy through 2026, Vietnam Airlines aims to become the country’s first digital airline by 2025 and a digital transformation leader in ASEAN’s aviation industry, with a strong emphasis on digital technology, digital data, and digital culture.

“We eagerly anticipate collaborating with Visa to guarantee a convenient and secure digital payment experience for all our passengers,” said Nguyen Sy Thanh, director of Lotusmiles, Vietnam Airlines.

Visa and Vietnam Airlines have pledged to work together on various ventures, such as facilitating digital acceptance capabilities and utilizing Visa Consulting Analytics. This collaboration aims to establish distinct customer segments and analyze customer spending patterns.

The collaboration comes at a time when local pasengers are re-discovering travel post pandemic. According to the 2022 Visa Consumer Payment Attitudes Study, over half of Vietnamese consumers have taken a trip since 2021, with Japan, Australia and South Korea among preferred overseas destinations.

Notably, 48% of Vietnamese respondents expect overseas travel to go fully cashless moving forward, highlighting a desire to pay for travel through digital methods.

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