Automobile imports down in May

Vietnam spent nearly 270 million USD on importing 10,000 completely-built automobiles (CBUs) in May, a decrease of 6.3% from a year earlier.

Compared to the same period last year, automobile imports in May were down 5.2% in quantity and 9.1% in value.

Imported CBUs have declined for two consecutive months in both quantity and value when compared to the previous month amid slumping demand.

However, the figures for the first five months of this year still picked up 26.7% in quantity and 16.4% in value to 64,344 CBUs and more than 1.4 billion USD, respectively, according to statistics released by the General Statistics Office (GSO).

The statistics show that in the past three months, despite car manufacturers focusing on stimulating consumer demand by offering discounts and promotional programmers, car sales are still very low.

Specifically, the Vietnam Automobile Manufacturers Association (VAMA) and two major car manufacturers Hyundai Thanh Cong (TC Group) and ViaSat announced that only 30,799 units were sold in April, down 16.2% month on month and 40.5% year on year.

Automobile manufacturers are still waiting for support from the Government, specifically a cut of 50% in the registration fee.

Teleconference seeks to tighten economic links between Vietnam, Indian region

A teleconference was held on June 2 to explore chances for investment and business partnerships between the northeastern region of India and Vietnam.

The event was held by the Vietnamese Trade Office in India, the National Investment Promotion and Facilitation Agency (Invest India) under the Indian Ministry of Commerce and Industry, and the Indian Ministry of Development of North Eastern Region (MDoNER). It also saw the participation of over 70 businesses of both countries.

Vietnamese Ambassador to India Nguyen Thanh Hai said India is an important trading partner of Vietnam, which in turn is also a pillar in the South Asian country’s Act East Policy. The northeastern region is also the starting point of this Act East Policy, so it has received the greatest number of preferential policies from the Indian Government. This region also shares many culinary, customs, and cultural similarities with Vietnam.

Le Thanh Hoa, Deputy Director of the Agro Processing and Market Development Department under the Vietnamese Ministry of Agriculture and Rural Development, said the two countries have been enjoying growth in the trade of agro-forestry-fishery products.

Vietnam exports fishery products, coffee, peppercorn, cashew nut, tea, rubber, timber, rattan and bamboo handicrafts, among others to India. Meanwhile, India ships such items as fishery products, fruits, vegetables, wheat, corn, plant oil, animal fat, and rubber to the Southeast Asian country. Vietnam is running a deficit in agro-forestry-fishery trade with India, with a value of 473.8 million USD in 2021 and 687.73 million USD in 2022, he noted.

Harpreet Singh, Joint Secretary at the MDoNER, said the northeastern region of India, with over 60% of its area covered with forest, holds potential for developing agricultural, bamboo, and handicraft products. It is also home to 17 airports as well as river and sea route systems favourable for goods transportation. These are drivers for economic growth and regional connectivity.

He suggested several areas the two sides can cooperate in, noting that transportation costs in India are declining, so Vietnamese firms can make use of this opportunity.

Geetima Krishna, head of the North East division at Invest India, said the region boasts many demographic advantages, including a young workforce with good knowledge, capability and skills, which is an important impulse for economic partnerships with Vietnam.

Dang Viet Phuong, Deputy Director of the Industry and Trade Department of Vietnam’s Phu Tho province, highlighted his locality’s economic potential and the possibility of cooperation with India in agro-forestry processing and tea export.

He called on Indian enterprises and investors to consider cooperation in tea production and transfer technology to Phu Tho to help improve tea value. He expressed his hope that tea products from his province will be sold in the northeastern region of India in the near future.

For his part, Bui Trung Thuong, Trade Counsellor of Vietnam in India, held that as the northeastern region of India and Vietnam share similarities in terms of geography, climate, and culture, they can further explore cooperation opportunities in agriculture, handicraft production, tourism, and cultural exchange.

FDI in Ho Chi Minh City down 13.5% in five months

The total inflows of foreign direct investment into Ho Chi Minh City from early this year to May 20 reached over 1.14 billion USD, down 13.5% annually, reported the municipal Department of Planning and Investment.

Of them, 199.8 million USD was poured into 374 new projects, down 2.5% year-on-year.

Singapore took the lead in the number of new projects, with 72 ones valued at 121.5 million USD, accounting for 60.8% of the total newly-registered capital. Japan came next with 32 projects worth 16.5 million USD, or 8.3%, and Hong Kong (China) was third with 25 projects worth 11.1 million USD, equivalent to 5.6%.

Up to 121 projects received additional capital of 403.3 million USD, marking an annual decrease of 35.3%.

US projects recorded the most adjusted capital with 215.1 million USD, or 53.3% of the total.

Foreign investors spent 541.1 million USD on capital contribution and share purchase in the period, up 9.3% annually. Singapore and Cayman Islands posted the highest capital contribution, with 53.6% and 11/5% of the total, respectively.

FPT, Canada’s Mila institute renew strategic partnership, advancing responsible AI

FPT, Vietnam’s largest IT service provider, and Mila (Quebec Artificial Intelligence Institute) have announced the renewal of their three-year strategic partnership agreement at the recent meeting of their leaders.

As part of this continued commitment, FPT and Mila will explore collaboration on research projects related to large language models (LLMs) and natural language processing (NLP) while promoting Responsible AI, an approach to employ artificial intelligence with good intentions to empower people and organisations.

Both sides will contribute to developing guidelines, best practices, and ethical standards that will promote transparency, fairness, accountability, and privacy in AI applications.

Viettel wins most awards at IT World Awards 2023

The Viettel Military Industry and Telecoms Group (Viettel) has announced that it has become the enterprise with the most awards at the 2023 IT World Awards.

Viettel won 37/261 awards with 23 Gold prizes, four Silver prizes and 10 Bronze prizes.

The percentage of the Gold prizes achieved increased by 10% compared to the previous year and increased 23 times compared to the first time it participated in 2016 thanks to its "Made by Viettel" innovative solutions which were highly-appreciated from the council of more than 600 information technology experts in the world.

The IT World Awards is an annual award organised by the Network Product Guide of the US since 2006, to honour typical achievements and contributions of the information technology industry around the world. This is also the only and most prestigious award in the field of information technology.

Vietjet announces Ho Chi Minh City – Brisbane route

Vietjet has announced the first direct route connecting Ho Chi Minh City (HCMC) and Brisbane (Australia) under the witnesses of Prime Minister Pham Minh Chinh and his Australian counterpart, Anthony Albanese.

After Melbourne and Sydney, Brisbane is the third city of the beautiful country Australia that Vietjet has operated direct flights. It is also the first route connecting Vietnam to Brisbane and Queensland state.

The route will be officially launched on June 23 with two return flights per week on wide-body A330 modern aircraft, which will contribute to promote the trade between Vietnam and Brisbane, Queensland state and Australia in general, together with further develop bilateral relations in future.

The flights take off from Ho Chi Minh City at 10:50 (local time) and landing in Brisbane at 21:55 (local time). The return flights will depart at 23:30 (local time) and landing at Ho Chi Minh City at 05:10 in the following day (local time).

The new route will shorten the traveling time and create favourable conditions for people and tourists to fly between Ho Chi Minh City, Vietnam’s leading economic and cultural center and Brisbane, Australian third largest city.

Tokyo conference calls for Japanese investment in Vietnamese localities

An investment promotion conference was held in Tokyo on June 2 to call for Japanese investment in localities of Vietnam.

The event drew the participation of leaders of the Vietnamese Ministry of Foreign Affairs, Embassy of Vietnam in Japan, representatives of four localities, namely Can Tho city, and Kon Tum, Bac Lieu and Thua Thien-Hue provinces, and businesses of the two countries. It was part of the activities to mark the 50th founding anniversary of Vietnam-Japan diplomatic ties.

Addressing the opening ceremony, Vietnamese Deputy Minister of Foreign Affairs Le Thi Thu Hang said ample room remains for the development of bilateral cooperation in general and cooperation between Vietnamese and Japanese localities, contributing to the enhancement of their relations and bringing benefits to the people of the two countries.

According to Tsukada Manabu, Senior Director for Global Strategy (Southeast Asia) at the Japan External Trade Organisation (JETRO), Vietnam plays an increasingly prominent role in the Association of Southeast Asian Nations (ASEAN) on attracting investment from Japanese enterprises.

The result of a recent survey conducted by JETRO showed that up to 60% of Japanese enterprises said they will expand their investment in Vietnam, while only 47% of businesses said they will expand their investment in Southeast Asia in general. This fact shows that Vietnam is appreciated by Japanese businesses more than ASEAN in terms of cooperation potential and market resilience.

Nguyen Huu Thap, Vice Chairman of the Kon Tum Provincial People's Committee, said that since 2017, the province has sent eight business delegations to Japan and welcomed 31 delegations of Japanese experts, scientists and representative agencies.

According to the official, there are 33 official development assistance (ODA) projects funded by the Japanese Government in Kon Tum province to improve socio-economic infrastructure with a total investment of 16 million USD. It has also received more than 2.17 million USD from Japanese organisations for the implementation of 14 projects, focusing on healthcare, rural infrastructure construction and education-training.

Kon Tum province prioritises attracting investment in the fields of high-tech agriculture, renewable energy, urban development, eco-tourism and community, Thap added.

Meanwhile, Nguyen Ngoc He, Vice Chairman of the Can Tho City People's Committee, said it intends to offer favourable conditions for investors to push up the locality’s development in a sustainable manner. Accordingly, domestic and foreign businesses will enjoy preferential policies on customs procedures, corporate income tax and land rent exemption for the long term.

Within the framework of the conference, participants witnessed the granting of an investment certificate of Thua Thien-Hue province to Okura Industrial Company of Japan and the exchange of contracts between Saigon - Hue Investment Joint Stock Company and the Okura Industrial Company.

Focusing on export, investment, consumption to boost growth: PM

Prime Minister Pham Minh Chinh on June 3 asked ministries, agencies and localities to push the three engines of export, investment and consumption in order to spur the country's economic growth in the time ahead.

Speaking at an online regular meeting between the Government and localities, the leader stressed the need to remove obstacles to production and business, and help enterprises in administrative procedures, interest rates and market expansion.

He also urged localities to accelerate the disbursement of public investment capital and the implementation of the socio-economic recovery and development programme as well as national target programmes, and focus on site clearance and material preparations for key projects.

Apart from promoting domestic consumption, it is necessary to expand export markets, the PM said, highlighting other tasks such as effectively optimising free trade agreements, materialising the National Power Development Plan VIII which has been approved recently, ensuring food for domestic consumption and exports, having the European Commission (EC)'s “yellow card” warning against Vietnam's seafood exports lifted, and dealing with the shortage of medicines, vaccines and medical equipment, among others.
 
The move is to maintain the macro-economic stability, control inflation, boost growth and ensure major economic balances, PM Chinh emphasised.

According to the leader, over the past five months, thanks to joint efforts by the Government, ministries, agencies and localities, progress has been made in production, business, export, foreign direct investment (FDI) attraction and the real estate market.

The socio-cultural and sport fields have also recorded development, he continued, adding that people’s lives have remained stable, social order and safety and national defence and security have been ensured, and external affairs and international integration have been stepped up.

The participating Deputy PMs, and representatives of ministries, agencies and localities shared the view on the drastic, close instruction and the flexible, effective management of the Government and the PM over the past time, leading to positive changes in the socio-economic situation despite a range of difficulties and challenges.

They also pointed to the huge growth pressure in the remaining months of this year, saying the growth rate must be higher than that recorded in the previous period.

To that end, they raised proposals regarding the implementation of big investment and construction projects, credit and tax policies, work permit and visa, and wage, among others.

Vietnam’s manufacturing sector experienced third consecutive decline

Vietnam's manufacturing sector continued a declining path in May with economists and industry insiders saying weak demand is a major contributor, according to a report published on June 1 by S&P Global.

They said output and the number of new orders have decreased sharply with companies looking to cut jobs and reduce purchases.

The report said the Southeast Asian economy's Purchasing Managers' Index (PMI) was reported to have fallen to 45.3 in May from 46.7 in April. It marked the third consecutive month of decline and the largest drop since September 2021.

S&P Global said global demand for goods and services has remained weak, resulting in a significant drop in new orders. Revenue from export markets has also suffered for the third consecutive month.

Meanwhile, companies have taken measures to scale down production since the beginning of Q2, 2023, most notably in intermediate goods manufacturing. Weak demand has been hurting business confidence with Vietnam's PMI at its lowest level since November last year.

However, it has given companies time to address some backlog orders from previous months.

Despite companies reducing their operational capacity, they were able to tackle a significant portion of the backlog of work in May. The amount of unfinished work has decreased at the fastest pace since June 2021.

As production decreased, companies have been reducing both purchasing activities and inventory, marking the sharpest decline in inventory level in nearly two years.

Meanwhile, the operational efficiency of sellers has improved for the fifth consecutive time.

Finished goods inventory has also decreased as companies adjust their production operations in line with the decline in new orders. This is the first decrease in three months. Meanwhile, demand for input goods continues to decline, relieving pressure on the supply chain.

The operational efficiency of sellers has improved for the fifth consecutive year with the most significant improvement recorded since February 2015. Decreased purchasing activities also relieved some pressure on the supply chain.

Weaker demand has forced suppliers to reduce prices to boost demand while input costs have decreased for the first time in the last three years. Prices were reported to have gone down for a second consecutive month.

Andrew Harker, economics director at S&P Global Market Intelligence, said the current decline in the number of new orders is a warning sign for the country's manufacturing sector and the sector will likely face an extended period of contraction rather than just a temporary downturn.

He said companies should be on the lookout for economic data for the coming months as they will be crucial to determine if the market is going to recover.

State budget collection reaches over 48% of estimate in five months

The total State budget revenue in the first five months of this year reached over 663.84 trillion VND (28.27 billion USD), equivalent to 48.3% of the ordinance estimate and 96.9% compared to the figure in the same period last year, reported the General Department of Taxation on June 2.

Out of 20 receipts and taxes, 12 achieved a relatively high level of collection (above 48%) while others had lower revenue, including environmental protection tax which was equivalent to 53% of the same period last year, registration fee 72.5%, land use fee 44.6%, and land and water surface lease fee 48.9%.

According to the general department, 17 out of the country's 63 provinces and centrally-run cities recorded a high level of budget collection (above 48%). Several provinces and cities saw slow progress with less than 35% of the estimate, namely Lao Cai, Thai Nguyen, Quang Binh, Quang Tri, Lai Chau, Thai Binh, Ninh Binh, Tuyen Quang, Binh Phuoc, Phu Yen, Ha Giang, Hoa Binh, and Son La.

Since the beginning of this year, the sector has identified the potential revenue sources to make up for any shortfalls, strengthen inspections to prevent budget losses and recover tax arrears, thus striving to fulfill the 2023 State budget revenue targets.

Master plan must reflect Vietnam’s energy commitments: Deputy PM

Deputy Prime Minister Tran Hong Ha has requested the national energy master plan for 2021 - 2030, with a vision to 2050 reflect and help implement Vietnam’s commitments on net zero emissions and in the Just Energy Transition Partnership (JETP).

Ha made the request at a meeting with the national appraisal council for the draft national energy master plan in Hanoi on June 2.

The Deputy PM said the plan should include some new viewpoints and specify important tasks in identifying the relationship and the mechanism for coordination among energy segments (coal, oil and gas, electricity, renewable energy, among others). It also needs to be consistent with other plans such as those on land use and sea space.

The national energy master plan must show a consistent mindset and help implement Vietnam’s commitments on net zero emissions and in the JETP as well as the plans for energy segments, typically the recently approved National Power Development Plan for 2021 - 2030, with a vision to 2050 (Power Plan VIII).

It is also necessary to devise measures for capitalising on fossil fuels such as coal, oil and gas in the most economically efficient manner, he stressed.

Ha demanded the Ministry of Industry and Trade, which drafts the master plan, compile a list of the ongoing key energy projects and potential ones and build criteria in terms of technology and profitability for selecting new energy or energy transition projects.

He also asked for the draft to be supplemented with the content about investment in researching scientific and technological solutions to convert primary energy sources from fossil fuels to new ones (green hydrogen, green ammonia), and developing new energy sources like nuclear power, geothermal power, wave and tidal energy, and solar thermal energy that could be exploited in the future.

According to the consulting unit, the draft master plan targets sufficient energy supply to serve domestic demand and help reach socio-economic development targets, including annual GDP growth of 7% during 2021 - 2030 and 6.5 - 7.5% during 2031 - 2050. Renewable energy is set to account for 15 - 20% of total primary energy sources by 2030 and 80 - 85% by 2050.

Under the draft plan, Vietnam will develop an independent and self-reliant energy industry and form an energy industry ecosystem based on renewable and new energy. Some clean energy centres are expected to have taken shape by 2030.

130 foreign firms to attend HanoiPlasPrintPack 2023 exhibition

As many as 130 foreign exhibitors are expected to attend HanoiPlasPrintPack 2023, an international exhibition which focuses on the plastic, print, and packaging industries, from June 8 to 11 in the capital.      

The event is anticipated to help accelerate industrial transformation, upgrade the industrial sector in the northern region and serve to open up a wealth of co-operation opportunities.

Renowned suppliers operating in the plastics, printing, packaging, and rubber industries are expected to present their latest technologies and innovative solutions across 340 pavilions at the exhibition, including CMIC, GUIBAO, BOLE, CUTECH, SANSIN, FUJIFILM, EPSON, LI SHENQ, JORN, DRICK, PAN STONE, NASTAH, SQUARE SILICONE, and HUAQI SEALING.

Especially, a seminar will be held during the event with the participation of speakers from Alibaba, the world's leading e-commerce platform, the Vietnam Plastic Association and Fujifilm Business Innovation Vietnam, aiming to strengthen connectivity among businesses and help participants gain more insight into the future of plastics, printing and packaging industries.

Judy Wang, president of Yorkers Trade and Marketing Service Co, ltd, revealed that the Vietnamese plastic industry has developed impressively and boasts an output of 11.2 million tonnes last year, representing an annual rise of 12.5%.

The exhibition will help local firms enhance their production capacity seek new business opportunities moving forward, she said.

Cashew nut export sees positive growth over five-month period

Vietnam exported 219,000 tonnes of cashew nuts worth US$1.28 billion during the first five months of the year, increasing by 8.0% in volume and 5.5% in value compared to the same period last year, according to the General Department of Vietnam Customs.     

May alone witnessed the country ship 57,000 tonnes valued at US$331 million abroad, up 13.9% in volume and 8.3% in value year on year.

The average export price of the Vietnamese cashew stood at an estimated US$5,850 per tonne, marking a decline of 2.4% against the same period last year.

Vietnam mainly exported W320, W240, and W180 cashew nuts, all of which accounted for 62.3% of the total volume and 69.5% of the total export turnover of all product types.

The Vietnam Cashew Association (Vinacas)  reported businesses raked in US$3.08 billion from exporting 519,782 tonnes of cashew nuts last year, down 10.3% in volume and 15.1% in value compared to 2021.

Experts pointed out that the local cashew processing industry would continue to encounter numerous difficulties amid a slump in global consumption demand and low prices.

Furthermore, cashew production and supply chain are anticipated to face a number of challenges due to ongoing global uncertainties, US$/VND exchange rate volatility, and high processing costs.

Local businesses are therefore advised to seek new clients, invest in the deep processing of cashew-related products, and strive to diversify products to boost exports in the time ahead.

Thua Thien - Hue grants licenses to 9 projects

Since the beginning of the year, nine new projects have been granted investment approval by Thua Thien - Hue Province with a total investment of more than VND2 trillion (US$85 million), according to a report by the Department of Planning and Investment.

Of the total investment, five are FDI ​​projects with registered capital of US$28.5 million.

The growth rate of the province’s GRDP in the first quarter is estimated at 6.61 per cent, higher than the national average of 3.32 per cent, and is expected to increase from 7.5 per cent to 8.5 per cent in the second quarter, a representative of the department said at the recent regular meeting.

Import and export turnover in May rose month-on-month but decreased over last year.

Many industrial production sectors, such as textiles, garments, cement, wood chips, and power generation, have slowed down. Especially, imported textile materials and accessories shrank due to a decline in export orders from garment companies.

Traditional markets, like Japan and China, are temporarily suspending imports or lowering product prices. Therefore, enterprises with large inventories have to cut down production and wait for consumption.

The report also showed that as of May 25, this province disbursed nearly VND1.4 trillion, reaching 22.9 per cent of the plan assigned by the Prime Minister. In addition, more than VND238.8 trillion from increased budget revenue in 2021 and 2022 was allocated during the period.

Nguyen Van Phuong, Chairman of Thua Thien - Hue Provincial People's Committee, said that departments and localities need to focus on accelerating projects that will soon be in operation to create a breakthrough for industries.

He added that authorities have to find solutions to develop the business environment and create favourable conditions for implementing projects.

The province has set a state budget revenue target of VND8.45 trillion by the end of the second quarter. 

Eco-industrial park development targets net zero emissions

The development of eco-industrial parks is considered an effective solution to contribute to completing the net zero emission target by 2050 in Viet Nam. However, there are still many problems with the mechanism.

In a report on the development of industrial parks and economic zones conducted by the Ministry of Planning and Investment, by 2030, 40-50 per cent of localities will have plans to convert existing industrial parks to eco-industrial parks, and 8-10 per cent of localities have orientations to build new ecological industrial parks.

This will contribute to the concretisation of the net zero commitment by 2050. However, many experts and businesses believe that it is necessary to have the determination of the businesses to achieve this goal, along with preferential policies and mechanisms.

Now, Viet Nam has more than 400 industrial parks, but few of those industrial parks have strategies to convert to ecological industrial parks.

According to economic expert Mai Van Sy, there are many difficulties in the development of eco-industrial parks. There is still no specific incentive mechanism for developing eco-industrial parks, and the investment in eco-industrial parks requires much more significant capital. This makes the businesses have to make reasonable calculations in terms of profit.

Besides that, while developing an ecological industrial park, planning areas for trees and landscapes from the beginning is essential, he said.

Hoang Tuan Anh, general director of Shinec Joint Stock Company, the investor of Nam Cau Kien Eco-Industrial Park in Hai Phong, said the increase in investment is one of the difficulties. The development cannot be done if there is no synchronisation from the beginning.

Building an eco-industrial park must meet a lot of criteria. Of which, there are some criteria that are difficult to carry out, such as building a circular economy chain in industry. Because in order to form the chain, many investors and businesses must be gathered with a consensus in developing the chain.

In the future, the company will invest in more ecological industrial parks in Hau Giang, Quang Ninh and Gia Lai. The theory of circular economy will be included in planning the project and choosing investors in production, Tuan Anh said.

According to many businesses, in order to convert to a green industrial park in production, it not only needs to change the thinking and implementation method of investors and businesses but also have more favourable mechanisms.

Pham Hong Diep, Shinec chairman, said that Nam Cau Kien industrial zone faces many difficulties in converting to an ecological industrial park because the regulations on eco-industrial parks of the Law on Planning, Law on Land, Environment and decrees have not been synchronised.

In order to have the fastest conversion from a synthetic industrial park to an ecological one, the State needs to review the laws and create synchronisation in the regulations. If there is a lack of supportive mechanisms, it will make the businesses falter in carrying out this conversion.

At present, there are still obstacles in administrative procedures in the process of implementing eco-industrial park development, circular production and biodiversity, Diep said.

To promote the development of eco-industrial parks and green growth, the Government has issued Decree No. 35/2022/ND-CP regulating the management of industrial parks and economic zones.

This decree is expected to create a premise and motivation for the eco-industrial park model playing a positive role in green growth, towards sustainable development goals.

According to Deputy Minister of Planning and Investment Nguyen Thi Bich Ngoc, the eco-industrial park model can only really play a positive role in the national sustainable development strategy with support in policy, technology, finance and information, and close connection between domestic agencies and international organisations.

According to Dao Phan Long, an expert in the mechanical engineering industry, in order to accelerate the process of gaining net zero emission in industrial parks, it is necessary to soon concretise preferential policies for eco-industrial parks in Decree 35/2022/ND-CP. At the same time, the State should have some special incentives for the enterprises or investors who develop or convert eco-industrial parks successfully.

Ha Noi Southern Supporting Industrial Park (Hanssip) project has been developing towards an eco-industrial park from the first phase, producing biological products, said Pham Quang Khai, general director of N&G Investment Development Joint Stock Company - the investor of Hanssip.

Standard factories are built for lease with flexible conditions and support from financial institutions and banks' branches in the industrial park. In addition, the industrial park also has other convenient services such as logistics centres, schools, medical clinics, trading centres, cinemas and hotels.

However, in order to form an eco-industrial park, besides increasing investment capital, there are also many administrative procedures. The building of a production chain is still the most challenging, because it is very difficult to choose like-minded investors.

It has recommended that besides continuing to reform administrative procedures, the authorities should have programmes to provide technical support and guidance for the businesses in the process of investment and construction of eco-industrial parks, Khai said.

In order to support the businesses in developing the eco-industrial zones and replicate this model, Shinec chairman Diep said, first of all, it is necessary to create a favourable environment.

Accordingly, the legal framework should continue to be improved in the direction of promoting investment for green growth and building a key investment portfolio to shape the attraction of investment resources. It needs to develop preferential policies for investment in green growth and remove difficulties and obstacles in this investment activity. 

Viet Nam seeks to attract ESG-focused investment to achieve ‘inclusive growth’

Viet Nam is seeking to attract ESG (Environmental, Social, and Governance)-focused investment as it embraces ESG practices to unlock opportunities for ‘inclusive growth’.

Speaking at the Viet Nam ESG Investor Conference 2023 last week in HCM City, Daniël Stork, consul general of the Netherlands, said Viet Nam is an attractive country for its ‘incredible natural environment and wonderful people’.

“The Southeast Asian nation is a place where doing business is good and complies with international standards and regulations which are related to the health of our planet,” he said.

Meanwhile, the Netherlands remains the country’s largest EU investor and the second largest EU trade partner, he added.

ESG factors have in recent years become a serious consideration for firms worldwide, according to Stork. They must align with ESG investment standards not only for their growth but survival.

The shift towards sustainable and responsible practices is ‘not a matter of choice but a necessity’ as it is an important driver for companies’ long-term value creation, he noted.

The Netherlands government is working with partners to provide funds for sustainable development projects, such as renewable energy, clean water supply, and food safety in Viet Nam.

Sarah Hooper, consul general of Australia, said high quality foreign direct investment is essential for Viet Nam.

Export Finance Australia (EFA) plans to make an AU$200 million loan for grid upgrades in Viet Nam, she said.

Srini Nagarajan, managing director and head of Asia at British International Investment, said the company wanted to support climate finance projects in priority markets such as Viet Nam to “create sustainable, productive and inclusive economic growth.”

Experts said the transition towards ESG represents both risks and opportunities for businesses. Therefore, companies that embrace ESG principles must prepare for the risks and stand to gain substantial benefits.

Craig Martin, executive chairman of Dynam Capital, said integration of ESG practices can help firms to enhance their reputations, attract investment, drive innovation, and create a positive impact on society and the environment.

Companies embracing the ESG transition can position themselves as leaders in sustainability, ensuring long-term success in an evolving business landscape.

Building a positive brand image aligned with ESG values can also attract socially conscious customers, enhance brand loyalty, and drive long-term business growth, experts noted.

Enterprises will have better access to capital as the growing emphasis on ESG factors has led to a surge in sustainable investing, they said.

Access to this capital resource can support their innovation, expansion, and resilience in the face of evolving market dynamics, they said.

Experts have, however, pointed out several risks to the businesses.

They will face regulatory and compliance risks as governments worldwide tighten regulations, putting pressure on them if they fail to adapt their operations to meet new ESG standards.

Those with poor ESG track records will also risk reputational damage, loss of consumer trust, and diminished market competitiveness.

An ESG transition also requires large financial investments in infrastructure upgrades, technology adoption, talent acquisition, and training. So businesses must carefully manage these costs.

In addition, businesses reliant on sophisticated global supply chains might face challenges in ensuring that ESG standards comply with the entire value chain.

According to a 2022 report by Bloomberg Intelligence, global ESG assets could reach $50 trillion by 2025. The trend toward investing in companies adhering to ESG standards is obvious.

HCM City awards instituted to honour green businesses

The HCM City Union of Business Associations and Saigon Giai Phong newspaper have launched the “Green Business” awards to honour businesses that comply with waste treatment regulations and produce environment-friendly products.

They 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.

Speaking at a ceremony held to announce the institution of the awards in HCM City on Wednesday, Tang Huu Phong, the newspaper’s editor-in-chief, said green growth and circular economy are becoming global trends as part of efforts to reduce greenhouse gas emissions and achieve carbon neutrality and sustainable development.

They are also giving rise to new trade and investment rules, with import markets imposing high taxes on products with large carbon footprints and setting stringent environmental regulations for imports, he said.

Nguyen Ngoc Hoa, HUBA chairman, said: “Developing a green economy and circular economy is a mandatory and vital direction not only for businesses but also the country as a whole.”

But it is “not easy” considering the resources possessed by Vietnamese enterprises, he admitted.

The city People’s Committee had urged HUBA and the newspaper to give away the annual awards this year during the fourth HCM City Economic Forum titled “Green growth - The Journey to Zero Emissions” to be held in September, he said.

The successful conversion to green standards would enable businesses to enter the international market more confidently, he added.

The winners of the awards will be chosen by a panel of judges comprising leading economic and environmental experts.

The awards ceremony will be held in the second week of September. 

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