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VIETNAM BUSINESS NEWS JUNE 28

Govt approves appointment of contractors for North-South expy project
Reference exchange rate down 10 VND on June 28 hinh anh 1

Deputy Prime Minister Le Van Thanh has asked the Ministry of Transport and localities where the eastern North-South Expressway project in the 2021-2025 period will pass through to award no-bid contracts to companies involved in some packages of the project.

According to the Government Office’s statement on the deputy prime minister’s requirement, contractors will be appointed for consulting, infrastructure facility relocation, resettlement, site clearance and compensation packages.

Deputy PM Thanh requested the Ministry of Transport and localities to choose experienced and capable contractors in line with law and prevent losses and wastefulness.

The deputy prime minister asked the Ministry of Transport to urge localities to complete the related tasks, ensuring the progress of the project as required by the National Assembly (NA) and the Government.

Under the NA’s resolution, the 729-kilometer North-South Expressway project in the 2021-2025 period was divided into 12 subprojects, using the State budget.

The project needs nearly 5,500 hectares of land. Localities must clear the site for six-lane sections, except for those from Can Tho City to Ca Mau Province, with four lanes.

The cost of the project is estimated at nearly VND147 trillion. The project has been prepared since 2021, and expected to be completed in 2025 and put into operation in 2026.

KTO in Vietnam restarts MICE tourism

The Korea Tourism Organization (KTO) in Vietnam officially restarted MICE tourism, a type of tourism combining meetings, incentives, conferences and events via a roadshow held in HCMC and Hanoi last weekend to promote MICE tours between South Korea and Vietnam.

The event gathered representatives from 25 travel agencies from South Korea and more than 150 tour operators in Vietnam.

“To promote more MICE tours to South Korea post pandemic, we are working to organize tourism promotion events in other Asian countries, especially Vietnam,” said Kwon Jong Sool, head at KTO’s MICE tourism department.

He expected the event to create more tourism cooperation opportunities for both sides.

Before the Covid pandemic broke out, Vietnam was among the key tourism markets of South Korea. In 2019, South Korea saw over 550,000 Vietnamese tourist arrivals, with 73,000 of them traveling to South Korea on MICE tours, up 21.7% against 2018.

Hanoi to pilot real-time reporting system in Q3

Hanoi is scheduled to pilot a real-time reporting system in the third quarter of this year, as the city looks to further enhance transparency and efficiency in state governance.

The move was revealed in the city’s plan No.173 on the development and management of Hanoi’s reporting system in the 2022-2025 period.

In the first phase, Hanoi would start piloting the reporting system for socio-economic issues in several departments, units, districts, and wards in the city during the third quarter of this year.

In the second phase (fourth quarter of 2022), the reporting system is set to be adopted by all units of the city’s apparatus, targeting 100% of socio-economic reports in the city delivered through the reporting system.

In the third phase (2023), the reporting system would cover all remaining types of reports provided by the city’s apparatus, with 100% of reports being processed through the system

With this move, Hanoi expects to step up the application of artificial intelligence and digital transformation in the reporting and statistics processing for obtaining accurate and timely data, eventually forming a city’s database.

The plan also stressed the necessity for all units and localities to ensure transparent and accurate data in providing data and reports.

The real-time reporting system is considered another step toward administrative reform and contributes to a modern, professional and transparent administrative operation in Hanoi.

To ensure the effective implementation of the system, Hanoi would review the existing technical infrastructure, along with setting up a set of socio-economic criteria for each economic sector.

Bangchak Corporation will sell electricity for Vietnam from September

BCPG, the renewable power generation arm of energy conglomerate Bangchak Corporation, will start to selling electricity for Vietnam from September.

Niwat Adirek, president and CEO of BCPG, disclosed that the company had achieved more than 90 per cent progress on the construction of the 220-kV transmission line project, Nam Tai, in Laos.

The Nam Tai project is planned to connect with the transmission line of Electricity of Vietnam (EVN) to transmit electricity generated from BCPG’s two hydropower plants in Laos, Nam San 3A and Nam San 3B, to Vietnam this September.

On December 31, 2021, BCPG Indochina, BCPG’s subsidiary, entered a share purchase agreement with Nam Tai Power Sole Co., Ltd to invest in the Nam Tai transmission line project. Accordingly, BCPG Indochina spent $32 million to acquire 25 per cent of Nam Tai Power Sole.

Vietnam’s ministries and private sector sit down on circular economy talk

Without a transition, global consumption levels will require the resources of three planets by 2050, stated the European Commission. Recognising the urgent need to transcend linear economic models and shift to a climate-neutral circular economy, the Vietnam Circular Economy Forum 2022 will be hosted on June 28 to convene relevant stakeholders for a debate on establishing circular business models to attain the country's 2050 objective of net-zero emissions.

The forum is organised by the Ministry of Natural Resources and Environment in collaboration with relevant agencies. It welcomes nearly 500 delegates, which are representatives of ministries, municipalities, foreign embassies, international organisations, as well as research and educational institutes.

According to the Asian Development Bank Institute (ADBI), developing Asia's ongoing reliance on fossil fuels and raw materials for manufacturing continues to strain already vulnerable ecosystems.

Vietnam has the second-highest levels of air pollution in Southeast Asia in 2019, as a result of its rapid economic expansion and rising energy consumption, World Bank reported. The challenge is to transition from energy generated from fossil fuels to low-carbon and renewable energy sources while ensuring equitable regional economic growth.

Hanoi greets over 8.61 million visitors in first half

About 8.61 million tourists, including some 211,300 foreigners, visited Hanoi between January and June, nearly tripling the figure in the same period last year.

The city's total tourism revenue in the first half of 2022 amounted to approximately 25.2 trillion VND (1.08 billion USD), more than three times higher than the figure in the first six months of 2021.

Local hotels rated 1-5 stars recorded an average occupation rate of over 30% during the period, up 6.11% year-on-year.

The capital city, home to 24 recognised tourist destinations, is offering a series of enticing products to attract tourists given its reopening of the local tourism industry. These include night tours at Hoa Lo Prison and Thang Long ancient citadel; a northern mountainous wet market programme at Vietnam National Village for Ethnic Culture and Tourism in Son Tay township; and Hanoi City Tour by double-decker buses.  

In addition, Hanoi has also launched many tourism exhibitions, trade fairs, and festivals.

The city eyes to welcome over 30 million visitors, including 7 foreigners, by 2025, according to the municipal Party Committee’ draft conclusion on tourism development for 2016-2020 and following years. The visitors are expected to spend more than 130 trillion VND while in the capital.

Room remains to boost Vietnam-Hungary cooperation: official

Although substantial results have been achieved between Vietnam and Hungary in terms of economic cooperation, it is still not really commensurate with the potential of the two sides, Deputy Prime Minister Le Van Thanh has said.

He made the statement at a Hungary-Vietnam dialogue on economic, trade and investment cooperation held on June 27 (local time) in Budapest, which was part of National Assembly Chairman Vuong Dinh Hue's official visit to the European country. The event drew the participation of nearly 100 businesses from two countries.

Trade value between the two countries surged from 266 million USD in 2016 to 1.3 billion USD in 2020.

Thanh emphasised that Vietnam’s economy has achieved important improvements in the 35 years since adopting the doi moi (renewal) process. The country’s GDP reached 6% in the 2016-2021 period. Despite the COVID-19 pandemic, its economy expanded by 2.58 percent last year, being one of the few countries in the world that posted positive growth.

Aside from Vietnam's efforts, the cooperation and assistance of international friends, including friendly collaboration between Vietnam and Hungary, also contributed to the achievements, Thanh said, adding the dialogue offers an opportunity for the two sides to promote the collaboration between their enterprises.

Participants at the event discussed issues of mutual interest. Officials of the two sides pledged to create favourable conditions for Hungarian investors to make successful, effective and long-term investments in Vietnam.

Saigon Hi-tech Park to speed up investment procedures

Ho Chi Minh City will focus on helping businesses invest in the Saigon Hi-tech Park in Thu Duc city by addressing slow administrative procedures, a conference on facilitating investment heard on June 27.

Vo Sy Nhan, general director of office space provider Onehub Saigon Bund, said though the park has been making efforts to help, his company’s project there has been slow to make a start.

It was approved in 2014, but has been stymied by administrative bottlenecks, he said.

For instance, approval for its land planning adjustment has been slow, and since the park itself is also going through a similar process, it could take long, he said.

It is also having difficulty extending its land lease contract, which requires the city’s approval, he said.

Nhan has asked relevant authorities to quickly approve both so that work on the project could begin soon.

Other businesses at the conference also complained about slow administrative procedures.

Pham Tan Dat, founder of e-commerce platform FADO, said he is looking at investment in the hi-tech park, but needs assurance about administrative deadlines.

Phan Van Mai, Chairman of the HCM City People’s Committee, admitted there have been numerous cases of tardy processing, hindering investment activities.

He said the city would focus on assisting investors, such as quickly approving land planning faster, and urged businesses to work with authorities to resolve administrative problems.

Nguyen Anh Thi, head of the park management, also promised it would strive to reduce the time and expenses taken to complete administrative procedures.

It is soliciting investments in business incubation and training, high-technology manufacturing, hi-tech services, and smart factories.

A 10 percentage point cut in corporate income tax is offered to hi-tech investors for the first 15 years of a new project. Large investors are also offered tax breaks.

Depending on new projects’ scale and industry, they are also exempt from paying land rent for 18 to 22 years or the entire duration of a project, or get rent waivers of up to 75 percent.

Macquarie Group plans to invest 3 billion USD in Hai Phong wind farm

Corio Generation of Macquarie Group (Australia) proposed researching an offshore wind power plant project with a capacity of about 1,000MW at the total investment of between 2-3 billion USD in the northern port city of Hai Phong.

The proposal was discussed in a meeting with the city's leaders and a delegation of the Australian Embassy and Australian investors seeking cooperation and investment opportunities in Hai Phong last week.

The business representative said that the project would have a capacity of about 1,000MW in 30 years and would be expected to meet about 50 percent of the city's electricity demand, creating jobs for local workers.

Earlier, the group signed a joint development agreement with FECON, a leading Vietnamese construction and infrastructure group, for a proposed 500 MW offshore windfarm in Ba Ria - Vung Tau province. 

The proposed 500 MW Ba Ria - Vung Tau offshore windfarm, located 23-35km from the coast, could be among the first large-scale offshore wind projects to be built in the country, once licences and approvals are obtained.

Once constructed, the fixed-bottom project could produce around 1,250 GWh of clean electricity and avoid more than 600,000 tonnes of carbon emissions a year, according to an analysis by the Green Investment Group.

Fee reductions offer little benefit to maritime firms

The Vietnam Maritime Administration (VMA) has sent a report to the Ministry of Transport (MoT), assessing the possible impact of reduced fees on Vietnamese maritime firms amid mounting fuel prices.

The report asserted that adjustments in fees for international transport would have a negligible impact on Vietnamese firms since freight transport between Vietnamese ports and international ports is undertaken predominately by foreign shipping lines.

Additionally, maritime fees account for just 7-9 percent of total costs incurred by a vessel engaging in international transport and 3-5 percent in domestic transportation. That means fees reduction is not much of a solution to the problem of mounting petrol bills.

“Fuel costs, wages and insurance premiums take up the lion's share in maritime firms’ total costs. Accordingly, fees reduction would only improve their costs marginally, not enough to offset the rise in fuel prices,” the report said.

The Port Authority shows that Vietnamese ports collected 16.9 billion VND (727,000 USD) of fees from domestic transport in 2021. On average, every vessel paid around 37,000 VND each time it entered and left a port.

Such an amount is so meagre that even if VMA removes the fees, it will make no big difference to maritime firms' total costs. The fees are not supposed to be reduced or removed to offset fuel costs because of their nature.

"The fees are the amounts of money firms have to pay for the public services provided by State agencies. Undoubtedly, it is against their nature to reduce or remove the fees to cover other irrelevant costs," the report added.

During the pandemic, VMA advised MoT to issue the Circular 74 to reduce fees applicable to maritime firms to lift them out of financial hardship. The circular was much appreciated by the firms at the time.

As fuel prices have been increasing steadily recently, Deputy Minister of Transport Le Dinh Tho has asked VMA to consider reducing maritime fees again to help firms cover higher fuel costs.

This time, VMA believed that the policy will not do much good for firms as it did in the past.

Hanoi’s farm economy yields high economic value

In recent years, Hanoi’s agriculture sector has created favourable conditions for organisations and individuals to develop the farm economy. 

This model has contributed to the restructuring of the rural economy and helped farmers to utilise capital more efficiently, as well as apply scientific and technical advances to production for economic efficiency.

“Hanoi currently has 1,759 farms, including 37 plantations, 1,410 livestock farms, 191 aquaculture farms, one forestry farm and 120 general farms," said Nguyen Van Chi, Director of the Hanoi Sub-department of Rural Development. "The farm economy in the city is concentrated, large-scale and sustainable. It also effectively promoted land resources, and investment capital and created many jobs for people in rural Hanoi."

Dan Phuong is one example of farm models bringing high economic efficiency. In the district, there are 25 farms in Phuong Dinh, Tho An, Trung Chau communes, of which there are 23 pig farms, one chicken farm and one cow farm with an average production value average 4-5 billion VND (172,000-215,000 USD) per farm. This not only creates regular jobs for local workers, but the farm economy also creates favourable conditions to manage the supply of agricultural products for the market and trace the origin and origin of products.

“To encourage the development of the farm economy, Hanoi needs a preferential loan policy from the Farmers Support Fund or the Agricultural Extension Fund", said Hoang Chi Dung, head of the Soc Son Economic Division. "Hanoi also needs to create favourable conditions for people to accumulate land to develop concentrated farms. Along with that is to support joint activities to consume goods and agricultural products for farmers.

Director of the Hanoi Department of Agriculture and Rural Development Chu Phu My said: "Hanoi in the future will focus on developing various types of farm economy according to the supply chain, combining with the development of eco-tourism and education projects associated with the consumption of agricultural products and craft village products, contributing to the growth of the agricultural sector."

"The Hanoi Department of Agriculture and Rural Development will advise the city to develop mechanisms and policies to encourage investment in the development of large-scale farms, value chain production, and industrial application with high technology and create safe, quality products with high economic value and sustainability. At the same time, we will implement production plans to ensure food safety and hygiene; registration for protection of trademarks associated with product traceability; encourage and create conditions for efficient farms to develop into co-operatives and agricultural enterprises.”

Binh Duong - attractive destination for green industries: EuroCham official

Secretary General of the European Chamber of Commerce (EuroCham) Erwin Debarea has said the southern province of Binh Duong has potential to attract investors in green industries such as high technology, digital transformation, climate change mitigation and environmental protection towards green growth and sustainable development - areas of European investors' interest and priority.

At a meeting with provincial leaders on June 27, Debarea, who was leading an EuroCham delegation to explore the investment environment in the southern industrial hub, highlighted the attractiveness of Binh Duong.

He pointed out two major reasons making Binh Duong a good choice for European investors: transparency and effective support for investors.

Debarea expressed hope that leaders of Binh Duong will continue to assist European firms in expanding their operations in the locality, thus contributing to promoting the strategic partnership between Vietnam and Europe and EuroCham members.

For his part, Chairman of the provincial People’s Committee Nguyen Van Danh affirmed that Binh Duong has always been one of the leading localities in the country in terms of socio-economic development and FDI attraction. He said that Europe is a promising partner for Binh Duong.

The province has attracted 403 FDI projects from 24 countries and territories with a total capital of over 6.8 billion USD.

Binh Duong has set up partnerships with European partners through conferences and online meetings with localities in Europe and diplomatic agencies, international organisations and partners in the UK, Italy, the Netherlands and Denmark.

Saigon Hi-Tech Park sees significant capital added to three projects

The management board of the Saigon Hi-Tech Park (SHTP) in Ho Chi Minh City granted certificates to three projects to increase their investment by more than 848.74 million USD in total at an investment conference for the park on June 27.

The lion’s share of the financial comes from 841 million USD at Samsung Electronics HCMC CE Complex Co., Ltd. The new funding increases the total investment in the factory to over 2.84 billion USD.

The other two projects are Hoa Binh innovation centre and a Vietnamese pharmaceuticals factory, which saw their capital rising by 130 billion VND (5.59 million USD) and 30 billion VND, respectively.

Since its establishment in 2002, the SHTP has granted investment licences to 163 projects worth more than 12 billion USD.

Quang Ninh sees slow disbursement of public investment capital

Public investment disbursement in the northern province of Quang Ninh reached 27 percent as of mid-June, much lower than the target, according to the provincial Department of Planning and Investment.

The department reported that the province has disbursed nearly 4.4 trillion VND (189 million USD) of the 16.28 trillion VND (700.2 million USD) of total public investment it has been allocated for the whole year.

Earlier, the province set a target of disbursing 50 percent of the total capital by June 30, 80 percent by September 30 and 100 percent by December 31.

To fulfill its tasks for the year, Quang Ninh has rolled out a number of measures to remove difficulties facing business and production activities, speed up the disbursement of public investment capital, and ensure social security in the post-pandemic period.

Agro-forestry and fishery exports up 13.9% over six months

Agro-forestry-fishery exports hit roughly US$27.88 billion in the first six months of the year, recording a year-on-year rise of 13.9%, according to the Ministry of Agriculture and Rural Development.

During the initial half of the year, farm produce export earnings were estimated at US$11.37 billion, up 8.8%, while revenues from forestry and aquatic product shipments reached US$9.1 billion and US$5.8 billion, up 3% and 40.8% respectively. 

Nine groups of products witnessed export values exceeding US$1 billion each, including coffee, rubber, vegetables, rice, pangasuis fish, shrimps, and wooden products.

The United States remains Vietnam’s largest export market with a value of roughly US$7.61 billion, up 7.9% year on year. It was followed by China, Japan and the Republic of Korea.

The Ministry of Agriculture and Rural Development said it has completed negotiations to export mangos and chicken to the Republic of Korea, pomelos and lemons to New Zealand, feathers, swallow bird's nest products, milk and dairy products to China, and honey to the EU.

It is currently completing to ship pomelos to the US – a lucrative but demanding market of Vietnamese farm products.

Inland Waterway Administration submits report on local fee collections
     
After receiving several complaints about waterway fee collections in Ho Chi Minh City and Hai Phong Province, the Viet Nam Inland Waterway Administration (VIWA) has submitted a report to the Ministry of Transport (MoT), commenting on the case.

VIWA asserts that the freight involved in the complaints was transported via natural waterways connecting to seaports, which are under the management of MoT, but not via local facilities connecting to seaports, which are under the management of local authorities. Accordingly, it is beyond local authority to collect facility fees on the freight.

Regarding Cambodia's complaints that some Cambodian vessels were not exempt from the fees to enjoy the most-favoured-nation treatment, as stated in the bilateral agreement on waterway transportation in 2009, VIWA urges HCM City to consider fee exemption on the freight transported via the waterways defined in the agreement.

VIWA underscores local collections as noncompliance to the agreement, adversely affecting the Viet Nam-Cambodia relationship.

VIWA reveals that waterway transportation between Viet Nam and Cambodia goes through two international border gates, which are Thuong Phuoc-Kok Rohka Gate and Vinh Xuong-Caom Samnor Gate. The waterways allow goods to transit from Sai Gon Port and Thi Vai-Cai Mep Port to Cambodia.

Meat, vegetable prices shoot up in HCM City
     
Fruit, vegetable and meat prices increased sharply in HCM City last week amid the prolonged heavy rain in the south and rising gasoline prices.

The price of pork has increased by VND15,000-30,000 per kilogramme since early this month to VND120,000-180,000 (US$5.1-7.7), and that of chicken by VND10,000-15,000 to around VND60,000.

A kilogramme of pork rib at Ong Dia Market in Tan Binh District costs VND180,000, while bacon is VND160,000 and cutlets, VND140,000.

The price of piglets is up 20 per cent from two months ago.

The rises have been blamed on high transportation and feed costs.

Egg prices have also increased sharply, and they retail at VND4,000-4,300 per chicken egg and VND4,300 in the case of duck eggs.

But farmers, however, are still suffering losses because of the high prices of packaging, fuel and other inputs.

Fresh measures to facilitate construction of North-South highway’s eastern part

On June 27, the Government Office released a notice reporting on Deputy Prime Minister Le Van Thanh’s conclusion about the implementation of the construction of the North-South highway’s eastern part.

According to the deputy PM, it is a key task set in the eighth National Party Congress Resolution to finalise the construction of 23 component projects by 2025 to smoothen travel in the North-South highway’s eastern part that runs over 2,000 km from Huu Nghi to Ca Mau province.

As per schedule, it is a must to complete the construction of a 361.5km highway by late 2022, as well as an additional 652km by March 2024, and 729km extra by 2025.

Thanh noted that to facilitate the implementation, the National Assembly and the government have greenlit the application of several specific mechanisms on contractor appointment and mineral exploitation serving the production of common building materials and several works during the project preparation stage, among others.

Agricultural sector ensures food security, exports

Vietnam has continued to make gains in agro-forestry-fishery production, and seen increases in agricultural exports thanks to its successful COVID-19 containment.

As of mid-May, about 2.67 million ha out of 4.28 million ha of rice from the winter-spring crop had been harvested, up 3.6% over the same period last year, with total output of about 17.7 million tonnes.

In the first five months, Vietnam shipped 2.86 million tonnes of rice overseas, a year-on-year rise of 10.3%, raking in 1.39 billion USD.

According to Nguyen Nhu Cuong, head of the Department of Crop Production under the Ministry of Agriculture and Rural Development, Vietnam has about 7.3 million ha of rice and 1 million ha of vegetables. Basically, the country faces no risk of food security.

In husbandry, cattle farms have grown by 1.6% compared with May 2021, while pig populations rose 5.7% and poultry by 1.9%. Only buffalo numbers decreased by 1.5%.

Vietnamese processed chickens have been exported to seven countries and territories, while milk and dairy products have been shipped to nearly 50 countries, including China. Vietnam has also exported pork and eggs to a number of markets.

Deputy Minister of Agriculture and Rural Development Phung Duc Tien said to boost the export of animals and their products, units, agencies and localities should focus on building production chains and breeding areas that should satisfy international standards as well as the requirements of importers.

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

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