The recovery has been marked by the presence of mega projects like one on infrastructure construction and business at the Nhuan Trach Industrial Park in northern Hoa Binh province worth nearly 2.4 trillion VND (104.7 million USD).

Others include a similar project at the Tam Thang Industrial Park in central Quang Nam province with an investment of more than 768 billion VND, and those by Phat Dat Industrial Park Investment and Development JSC (PDI) at the Cao Lanh Industrial Park in the Mekong Delta province of Dong Thap with a combined capital of over 14.72 trillion VND.

Meanwhile, five industrial zones in Ho Chi Minh City, covering some 4,200ha, are expected to join the market this year, including four in Binh Chanh district.

In Hanoi, notable industrial real estate projects for this year and 2023 include Quang Minh II, Thanh My-Xuan Son, Soc Son, Soc Son II, HANSSIP and Phung Xa industrial parks.

Headquartered in Singapore, SLP International officially commenced the construction of the first phase of the SLP Park Xuyen A in My Hanh Bac commune in Long An province's Duc Hoa district on February 24.

Colliers Vietnam, which provides a complete range of proactive integrated property services, forecasts that Binh Duong, Binh Phuoc and Dong Nai provinces will be “hot spots” of the real estate market this year thanks to their advantages in transport infrastructure and economic dynamism.

Vietnamese Embassy in Italy supports settlement of suspected cashew nut export scam

The Vietnamese Embassy in Italy is actively seeking ways to support the settlement of a suspected scam related to 100 containers of cashew nuts exported the European country.

Vietnamese Ambassador to Italy Nguyen Thi Bich Hue said after receiving official information from the Vietnam Cashew Association (Vinacas), the embassy got in touch with ship owners, verified information, and contacted banks to find ways to protect the legitimate interests of Vietnamese exporters.

According to the latest news from Vinacas, only 34 containers of five businesses have not been able to verify the original documents, she said, adding it will continue to coordinate with the Vietnamese Trade Office in Italy to assist these enterprises.

Vietnamese Trade Counselor in Italy Nguyen Duc Thanh said upon receiving the requests from companies and Vinacas, the Vietnam Trade Office asked relevant agencies to contact the International Economic Court and the International Commercial Arbitration Centre in Vietnam to talk with shipping lines so that they do not deliver the goods to consignees with original bills of lading in Italy.

On March 8, the representative of the office visited the COSCO shipping company in the port city of Genoa, western Italy. COSCO agreed not to deliver the shipments to the buyer in the suspect scam, even though they have the original bills of lading and have paid the port fee. The company has given the Vietnamese side several days to solve the incident, Thanh said.

He suggested that similar actions should be done with shipping lines in Vietnam, adding that it’s the only way to minimise the damage for Vietnamese enterprises.

Thanh also said that the Vietnamese Embassy in Italy has sent a diplomatic note to the Italian Ministry of Foreign Affairs, the Ministry of Economic Development, relevant agencies, as well as chambers of commerce, banks, and partners who can assist in the case that might have a big impact on many Vietnamese enterprises.

Meanwhile, Bach Khanh Nhut, vice president of Vinacas said at a press conference on March 9 that Vietnamese sellers noticed signs of fraud and immediately stopped shipping in Vietnam when the first container arrived in Italy and someone came to carry out the procedures to receive the goods, but they have not received the payment. They also intervened to keep the other containers in transit in Singapore.

All Vietnamese enterprises involved in the incident have signed contracts to export cashew nuts to customers in Italy through Kim Hanh Viet company and by documents against payment method.

As of March 9, Vietnamese firms have lost control bills of lading for 36 containers valued at 162 billion VND (7.1 million USD).

Vinacas have contacted the COSCO shipping company headquartered in China, requesting it to temporarily hold all the containers of Vietnamese cashews at the port while waiting for confirmation from the Vietnamese sellers. It is also seeking legal support from the Vietnam Chamber of Commerce and Industry (VCCI) and the International Commercial Arbitration Centre.

VCCI proposes changes to tax policies

The Vietnam Chamber of Commerce and Industry (VCCI) recently sent an official dispatch to the Ministry of Finance, suggesting changes to tax policies.

Regarding value-added tax (VAT) cuts that expire at year-end, the VCCI proposed extending the tax cuts on industries most hard-hit by the pandemic, notably tourism and airlines. The extension is recommended to go beyond 2022 to help industries recover.

The VCCI also urged the ministry to revise tax policies on VAT-exempt products, including products in agriculture and fishery industries.

The chamber said current tax policies do not hold some products liable for VAT, so the manufacturers of those products are not entitled to input VAT deductions.

Meanwhile, the manufacturers still have to incur VAT on various input materials, including fuels and energy.

The VCCI also believe that these policies would cause disincentives to the division of labour and specialisation.

New venture capital fund to pour 60 million USD in Vietnam’s tech startups

With a total committed investment of up to 60 million USD, ThinkZone Fund II is the largest venture capital fund in tech startups founded by Vietnamese entrepreneurs and notable conglomerate owners.

It was founded by large Vietnamese conglomerates in many fields such as IPA Investments, Phu Thai Holdings and Stavian Group, aiming to provide support to accelerate the growth of startups in Vietnam.

ThinkZone Ventures will invest in tech startups in various verticals from pre-seed to series A (up to 3 million USD per startup).

ThinkZone Fund II is ready to accompany founders who have great vision, passion, and ambition to create products that have positive impacts on society, said its CEO Bui Thanh Do.

Chances for Vietnam farm produce to strengthen position in global market

Vietnam’s farm exports posted positive growth in the first two months of this year and are hoped to maintain an upward trend in the coming time.

Agro-forestry-fishery exports fetched about 8 billion USD in the two months, posting a year-on-year surge of 20.9 percent.

Shipments of key farm produce surpassed 3.2 billion USD, up 10.2 percent. Of note, export values of pepper soared 43.8 percent, coffee 35.5 percent, and rice 22.3 percent. Vietnamese rice’s export prices have been on the increase thanks to growing demand.

According to the Vietnam Food Association, rice exports to members of the European Union (EU) are likely to surge in the coming time. In 2021, Vietnam did not exceed the tariff quota of 80,000 tonnes in which the import duty will be zero under the EU-Vietnam Free Trade Agreement (EVFTA), amid a rising demand for the grain in Europe.

The Ministry of Industry and Trade predicts that the export of rice, coffee, cashew nuts, rubber and vegetables will greatly contribute to the total farm export revenues to the EU this year.

Insiders urge shift to export through official channels to China

A meeting held by the Ministry of Agriculture and Rural Development (MARD) on March 9 pointed out the urgent need to shift from unofficial and small-scale shipment to export through official channels to China.

Minister Le Minh Hoan stressed that shifting from unofficial to official export is a revolution needing persistence, willingness, and readiness of the entire production and trading systems.

Nguyen Quoc Toan, Director of the MARD’s Agro Processing and Market Development Authority, said China, one of the largest importers of Vietnamese products, is tightening control over the commodities not exported via official channels. Given this, some agricultural products of Vietnam like durian and passion fruit, which have long been shipped through border crossings by border residents, are now unable to enter this market.

Director of the Huy Long An Co. Ltd Vo Quan Huy pointed out that China has been standardising imports, but Vietnamese businesses seem to be not ready yet.

Dinh Cao Khue, Chairman of the Dong Giao Foodstuff Export JSC (DOVECO), underlined the need to shift to official export as soon as possible since every trading issue will become transparent at that time.

Meanwhile, Vice Secretary General of the Vietnam Association of Seafood Exporters and Producers (VASEP) Nguyen Hoai Nam noted China is a large market with strict requirements, so the management of export quality should be systematic like the way Vietnam is exporting goods to such markets as the EU and Japan.

Agro-forestry-fishery trade between Vietnam and China reached 12.6 billion USD in 2021, up 18.39 percent year on year. It stood at over 1.83 billion USD in the first two months of 2022, down 1.7 percent, including 1.3 billion USD in Vietnam’s exports (down 7.4 percent) and 515 million USD in imports from China (up 16.6 percent), according to the MARD.

MoIT keen to bolster economic cooperation with US firms

The Ministry of Industry and Trade (MoIT) will focus on some cooperation fields with the US this year and hopes to receive support from businesses of the country, Deputy Minister of Industry and Trade Do Thang Hai has said when meeting a delegation of the US-ASEAN Business Council (USABC) in Hanoi.

At a working session, the MoIT informed more than 40 leading firms of the US operating in Vietnam about its priorities this year.

The ministry is to ensure material supplies to meet demand for production recovery and development, and address bottlenecks in important industrial projects, Hai added.

It will facilitate recovery of factories to build supply chains and maintain orders by firms of other countries, including the US.

Priorities will be given to major public investment projects, notably in energy, infrastructure, and industry and trade development, so as to boost consumption and trade, along with expanding markets for spearhead manufacturing industries of steel, mechanics, building materials and automobiles.

Vietnam's wood industry seeks to ensure self-sufficiency in domestic materials

During a webinar on Russia-Ukraine conflict and latent impact on Vietnam's wood industry held by the Vietnam Timber and Forest Products Association and Forest Trends on March 9, participants said the supply of wood materials from Russia to Vietnam is small, and the future fall of the supply source would not have a direct impact on the Vietnamese wood sector.

Besides, Russia is not a large importer of Vietnam's wood products, so the decrease in demand in this market in the future will not create considerable negative impacts for Vietnam, they said.

Participants, however, said that the Russia-Ukraine tension will likely cause a shrink in terms of wood material supply from Russia, triggering a global shortage of wood materials in the future.

The shortage can make a competition between countries importing wood materials, including Vietnam because the Southeast Asian country depends on imported wood materials.

The Government should have policies to promote the planting of large-timber forests, and encourage wood processing enterprises to invest in plantation areas, experts said. 

500 fastest-growing companies in Vietnam announced

Hung Thinh Land JSC, MB AGEAS Life Insurance Company Limited and Tin Viet Finance JSC are among the top 10 in the 500 fastest-growing companies in Vietnam (FAST500) this year as announced by the Vietnam Report JSC and the VietNamNet e-newspaper on March 9.

Other names in the top 10 include Thang Loi Real Estate JSC, Hoang Mai Production Trade and Service Co., Ltd, Pha Le Plastics Manufacturing & Technology JSC, Sao Mai Group Corporation, Nam Hoa Trading & Production Corporation, Tan Viet Securities Joint Stock Company and KB Securities Vietnam Joint Stock Company.

Vietnam Report General Director Vu Dang Vinh said a total of 186 businesses joined this year’s survey, of which 75.8 percent said they maintained their revenue growth in 2021 and 72.6 percent reported pre-tax profits up from 2020. Notably, one third of the interviewed firms said their revenue increased over 75 percent.

They attributed the results to good management, timely measures to cope with the COVID-19 pandemic, advantages in workforce, the introduction of new products and the utilisation of digital transformation in operations. 

Japan’s coffee imports from Vietnam increase

Vietnamese coffee firms are advised to capitalise on chances offered by free trade agreements (FTAs) to bolster shipments to Japan, as Vietnamese coffee is being favoured by local consumers amid an increasing demand for instant type, according to the Vietnam Trade Office in Japan.

Vietnam is now the second largest coffee supplier for Japan.

It is noteworthy that Japan’s coffee import from Brazil and Vietnam increased in 2021 but declines were seen in that from other key suppliers.

Statistics showed that Japan purchased about 101,000 tonnes of coffee from Vietnam in 2021, up 0.2 percent in volume and 7.7 percent in value from the previous year.

The share of Vietnamese coffee in Japan saw a slight drop to 24.62 percent last year from 25.25 percent in 2020.

Kien Giang pours 51 billion VND in key tourism projects

The Mekong Delta province of Kien Giang plans to invest 51 trillion VND (2.2 million USD) in tourism projects to revive its tourism sector which has been severely hit by the COVID-19 pandemic.

Bui Quoc Thai, Director of the provincial Department of Tourism said the projects that will receive capital injection include upgrading roads to Ba Hon tourist site, the tomb of Su Sister (a female hero in the resistance war), building infrastructure for Mo So historical relic and scenic spot in Kien Luong district as well as Hoa Mai Lake in U Minh Thuong district.

The province will set up a website for tourism promotion, and develop an online ticketing system, a mobile application and other activities to promote the images of Kien Giang.

Currently, Kien Giang is calling for investment in Ba Tau historical-cultural tourist site in Vinh Phuoc A commune, Go Quao district, which needs an estimated investment of 70 billion VND. The project will be implemented in 2021-2025 period.

Russia-Ukraine conflict adversely impacts Vietnamese wood industry

Making up 10% of the global supply of wood materials, the ongoing Russia-Ukraine conflict along with the sanctions on embargoes imposed on Russia by the United States and the EU will have a strong impact on the global wood processing and export industry, including Vietnam.

Identifying the disadvantages and proposing solutions relating to mechanisms and policies to help wood enterprises reduce negative the impact from the conflict took centre stage of an online seminar held on March 9 in Hanoi by the Vietnam Timber and Forest Product Association (VIETFOREST) in co-ordination with the General Department of Forestry and the Ministry of Agriculture and Rural Development (MARD).

The General Department of Forestry and the MARD is ready to review all opinions, then produce a joint report featuring specific proposals and recommendations regarding the adaptation in the new context.

The report will then be summited to competent agencies, the Government, and the Prime Minister, with solutions then being worked out to remove difficulties for the wood industry moving forward. 

Vietnam becoming key market for big-thinking logistics groups

Logistics firms are pinning high hopes on the recovery of Vietnam's supply chains, following their scheme to scale up business activities.

Kevin Burrell, managing director of Maersk for Vietnam, Cambodia, and Myanmar, expects current market conditions to continue into the second quarter, leading to a strong first half of the year with normalisation to occur early in the second half.

Maersk will continue to invest in its logistics services to facilitate its vision of becoming a global integrator for logistics. This is approached from the two angles of organic expansion and acquisitions. The acquisition of Senator International, for instance, will strengthen its air freight capabilities, with strong uplift from Hanoi and Ho Chi Minh City to European destinations.

Meanwhile, CapitaLand Development (CLD), the development arm of CapitaLand Group, has inked an MoU with Bac Giang People’s Committee to develop its first industrial and logistics park with township development. The complex is expected to cost over $1 billion in total.

SEA Logistic Partners has commenced construction of SLP Park Xuyen A to supply warehouses to the Mekong Delta province of Long An. The project, which will cover an area of 84,000 square metres, is slated to be completed in the first quarter of 2023.

Lineage Logistics, one of the world’s top providers of temperature-controlled supply chain and logistics solutions, has announced that it is more than doubling the capacity of its Vietnam facility in the northern region. The facility will be extended from 8,000 to 20,000 pallet positions to satisfy rising demand from companies serving Vietnam’s burgeoning perishable food sector.

Over the last two years, nearly $3 billion has been poured into Vietnam’s logistics industry. The large influx of capital into the industry reflects the potential of Vietnam to become a logistics centre in the region and wider world, according to a report by the Ministry of Industry and Trade.

Japanese mainstays diversify investments

Instead of investing in manufacturing, capital flows from Japan to Vietnam in recent years have been shifting towards new fields such as retail, consultancy, and services.

Muira Shota, CFO at Uniqlo Vietnam, said, “On February 25, we announced that we will open a new store in a major shopping centre in Ho Chi Minh City in the spring-summer season of this year, as well as plan to continue our active business activities in the future.”

Uniqlo established its company in Vietnam in 2018, and opened its first store in Ho Chi Minh City in 2019. In March 2020, Uniqlo opened its second business in Hanoi’s Dong Da district. The fashion chain boasts 10 stores in the country and an e-commerce presence.

Entering Vietnam in 2009, so far AEON Vietnam has six stores and general merchandise stores, 25 supermarkets, 41 specialised outlets, one e-commerce channel and one distribution centre.

Furusawa Yasuyuki, general director of AEON Vietnam, said the country would have a much higher growth rate than Japan.

Meanwhile, real estate developers from Japan are expanding their portfolios into Vietnam. Among them are Mitsubishi, Nomura Real Estate, Takashimaya, and many more.

Hirai Shinji, chief representative of the Japan External Trade Organisation (JETRO) in Ho Chi Minh City, said that in the past few years, the investment fields of Japanese enterprises in Vietnam have become more diversified. “In the past, most were mainly export processing companies, but now, capital flows to domestic consumption such as retail and real estate increased besides other areas. The main focus is shifting from manufacturing to non-manufacturing,” Shinji said.

All factors to consider in power tariffs

As Vietnam’s central electricity company has been assigned with the creation of a new average retail price for power, experts demand a more inclusive approach to its calculation as previous models had not considered certain factors.

The Ministry of Industry and Trade (MoIT) last week assigned Electricity of Vietnam (EVN) to develop a retail tariff for average electricity rates in 2022. On February 25, EVN announced it would publish an annual average retail electricity price based on calculations from 2020.

According to the MoIT’s policy, the average retail price in 2022 should also be based on EVN’s business results from last year; the estimated costs in electricity generation, transmission, and distribution; and other expenses such as retail and ancillary services.

Local lenders struggle to match major M&A

The local tie-up scene among domestic lenders is paling in comparison with wealthy multinational institutions, as many partnerships have turned sour, particularly with weak bank involvement.

Numerous local institutions are proactively endeavouring to expand their international presence in order to compete at an astonishing pace. In contrast to the burgeoning world-class engagement, Viet Capital Securities (VCSC) claimed that local bank mergers and acquisitions (M&As) have been comparatively idle in recent years.

Last April, HDBank officially withdrew from a potential M&A deal to acquire PGBank, a plan which HDBank had pursued for years, despite the State Bank of Vietnam’s (SBV) approval of the merger in principle in 2018.

A PGBank representative said that the lengthy merger phase had an adverse influence on its business activities, while Nguyen Huu Dang, vice chairman of HDBank’s Board of Directors elaborated, “HDBank places a strong emphasis on close-knit collaboration with Petrolimex – the major shareholder of PGBank. However, as Petrolimex intends to divest from the banking sector, HDBank no longer considers a merger with PGBank a feasible option.”

Prior to HDBank, VietinBank was the appropriate acquirer of PGBank, but the deal turned sour as the two parties were unable to create a unified consensus. HDBank, meanwhile, is currently deemed as one of the few lenders that is being examined to extend the foreign ownership ratio to 49 per cent in accordance with the EU-Vietnam Free Trade Agreement (EVFTA) pledge, stated Mirae Asset Securities.

VCSC assessed that it was no longer a thrilling phase for domestically-involved M&A accords in the banking industry since 2015, with a succession of mergers like MHB and BIDV, Mekongbank with MSB, Southernbank and Sacombank, and several more.

In addition, Vietcombank, VietinBank, and BIDV also helped to reorganise other weak lenders including CBBank, OceanBank, and GPBank. A regulated bank such as DongA Bank has its own set of rules.

With regards to this problem, VCSC states that the absence of large-scale banking M&A deals since Sacombank combined with Phuong Nam Commercial Joint Stock Bank in 2015 demonstrates that local banks are reluctant to engage in such agreements.

On the other hand, experts believe zero-VND banks are not prime targets for foreign institutions under the EVFTA obligations due to their lack of financial soundness.

PetroVietnam pumps 1.78 million tonnes of oil in 2 months

The Vietnam Oil and Gas Group (PetroVietnam) has reported that its oil output reached 1.78 million tonnes in the first two months of this year, surpassing the set target by 24 per cent.

The group’s revenue in January and February was estimated at VND118.73 trillion (US$5.19 billion), exceeding the two-month target by 34 per cent, and up 46 per cent from the same period last year.

It contributed some VND18.05 trillion to the State budget, surpassing the two-month target by 52 per cent, and up 48 per cent year on year.

The achievements are attributable to the group's good market forecasting work, flexible management and the ability to optimise opportunities despite uncertainties in the global oil and gas market.

Risk insurance proposed for homebuyers

The HCMC Real Estate Association (HoREA) has proposed issuing regulations on risk insurance for homebuyers to ensure customers benefit.

The association said in its proposal sent on March 8 to the Standing Committee of the National Assembly as part of feedback to a draft amended Law on Insurance Business, stressing that it was necessary to add regulations on property investors’ financial obligations.

Insured customers might be paid if real estate investors fail to hand over homes as scheduled and committed, the local media reported.

Clause 1 of Article 56 in the 2014 Law on Property Business stipulates that before selling or leasing a home project, investors must guarantee their financial obligations to customers via capable commercial banks.

This is a mandatory regulation. HoREA, however, said that guaranteeing financial obligations is not enough, so it is vital to provide homebuyers with risk insurance, meaning that insurers must cover risks facing insured customers if investors fail to hand over homes as committed.

Besides, HoREA also proposed reinstating a regulation allowing insurers to purchase corporate stocks and bonds and exchange-traded funds, contribute capital to other firms and invest in real estate projects in line with the Government’s regulations as stipulated in Clause 2 of Article 98 of the 2000 Law on Insurance Business.

Seafood exports surge in two months

Vietnam earned US$1.5 billion from seafood export between January and February, surging by 51% year-on-year, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).

In the first two months of the year, tra fish exports contributed US$384 million to the total seafood export value, rocketing by 93% year-on-year, while shrimp export revenue amounted to US$550 million, up 46% against the same period last year.

The country also saw a 30%-90% surge in export of many other fishery products such as tuna and octopus in the first two months.

During the two-month period, the United States was Vietnam’s biggest seafood buyer, with a value of US$346 million, up 84% year-on-year, followed by Japan with US$209 million.

China was the third biggest importer of Vietnam’s fishery products, with a value of US$168 million, skyrocketing by 91% year-on-year.

Given a surge in seafood exports in the first two months of 2022, VASEP predicts that the country’s seafood export will continue to soar due to rising demand.

Resolution on pilot bad debt management proposed for 3 more years

Resolution No.42, scheduled to end in August, has been seen as an effective instrument to curb bad debts in the banking sector since it was launched five years ago.

The State Bank of Vietnam (SBV), the country’s central bank, is drafting a resolution on extending the validity period of resolution No.42 on piloting bad debt management at credit institutions for three more years.

Resolution No.42, scheduled to end in August, has been seen as an effective instrument to curb bad debts in the banking sector since it was launched five years ago.

According to the SBV, once resolution No.42 expires, all priority mechanisms to deal with bad debts would be suspended.

Meanwhile, the bad debt ratio in the banking sector has been on the rise due to the severe Covid-19 impacts, estimated at 6.31%.

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

VIETNAM BUSINESS NEWS MARCH 9

Vietnam offers 0% tariff for 300,000 tons of Cambodian rice