VIETNAM BUSINESS NEWS MAY 16
Vietnamese exporters urged to respond to trade remedies
Local enterprises should enhance their manufacturing activities to create high value-added products for export.
Vietnamese honey products will likely bear an anti-dumping investigation by the US International Trade Commission, along with those originating from Argentina, Brazil, India and Ukraine, according to the latest information from the Ministry of Industry and Trade (MoIT)'s Trade Protection Department.
Honey is one of many Vietnamese products being subject to trade remedy investigation in foreign markets that would cause serious damage to Vietnamese businesses and producers.
Statistics from the MoIT showed that in the 2017-20 period, there were more than 200 trade remedy cases related to Vietnamese products, including shrimp, tra fish and steel, making total loss of US$12 billion. The number of cases in 2020 was 39, 2.5 times higher than the total number in 2019.
Insiders have said that Vietnam is expanding its export market after having signed many new-generation FTAs, in which non-tariff barriers for exporters have made Vietnamese products more competitive in many foreign markets.
However, many Vietnamese businesses have become subject to trade remedies, which are actions taken in response to subsidies (countervailing duties), sales at less than fair value (antidumping) and import surges (safeguards).
Explaining the reason for the increase of the cases, Nguyen Phuong Nam, Deputy Director of the Trade Protection Department, said the US and EU sides suspect that Vietnam is a production base of Chinese enterprises who send materials and parts to Vietnam, where they are made into complete products and shipped to foreign countries.
It is believed as the form of avoiding tariffs in the US and EU after changing the origin of products, which will then benefit tax policy under the free trade agreements (FTAs) that Vietnam signed, Nam said.
According to Dr. Pham Tat Thang from the MoIT’s Institute of Industry and Trade Policy and Strategy, during the US-China trade war, the US has imposed additional duties of US$200 billion on many Chinese export product, in which wooden products have been imposed high duty rate.
“It will be an opportunity for Vietnam's export wood processing industry because orders and investment activities will gradually shift from China to Vietnam,” Thang added.
“However, if Vietnam was a place for Chinese enterprises to change the origin of their products, our wood and wooden products will be levied anti-evasion tax," he said.
Although Vietnamese enterprises have won many lawsuits in recent time, their capacity to handle the similar cases remains modest. They haven't taken initiative against trade remedies in foreign markets, especially in the context of trade tensions between the US and China, according to Le Anh Van, Director of the Centre for Legal Assistance and Human Resource Development under the Vietnam Association of Small and Medium Enterprises.
“The legal system, implementation mechanism and coordination among relevant agencies in dealing with trade defense cases are still inadequate. This has made some businesses lose export market share,” he told Hanoitimes.
To avoid damages from lawsuits, Nguyen Thi Thu Trang, Director of the WTO and Integration Trade Center under the Vietnam Chamber of Commerce and Industry (VCCI), said that businesses should regularly contact the MoIT to update the newly-revised laws of foreign markets, thereby ensuring stability and long-term development for their trade.
Director of the Trade Protection Department under the MoIT Le Trieu Dung said that, to avoid lawsuits, local businesses need to equip themselves with basic knowledge of trade protection regulations, strictly comply with rules of origin certification, and not abet origin frauds.
Dung said his department has stepped up early warning system, proactively updating information to businesses who are subject to trade remedies.
“We will this year coordinate with relevant agencies to build up projects on enhancing trade defense-related capacity and coordination,” he said.
Vietnam has won 65 out of 201 trade remedy cases, accounting for more than 30% so far.
COVID-19 puts paid to HCM City tourism firms’ summer hopes
HCM City travel companies are reporting cancellation and rescheduling of bookings for summer amid the recent resurgence of COVID-19 across the country.
Since the fourth wave began in late April tour operators have become flexible to avoid mass cancellations as happened during previous outbreaks.
Nguyen Minh Man, head of TSTtourist’s communication and marketing department, said only one booking for a group tour to Nghe An Province this month has been cancelled while all the others have been rescheduled.
Most choose to reschedule their trips until it is safe to travel again, he said.
The safety of tourists and staff is a top priority, and his company would resume tours to safe destinations when the pandemic is brought under control, he said.
Company and incentive trips to the north-east, north-west and south-central regions and Phu Quoc Island are expected to boom when travel is allowed to resume, he added.
Doan Thi Thanh Tra, head of communication and marketing at Saigontourist Travel Service Company, said her company works closely with customers and business partners to implement COVID-19 prevention and control measures.
Tours to places that have community transmissions have been suspended until the time they manage to curb them, she said.
Customers are informed of the company’s change and cancellation policies right when they book tours, making it easier for both sides to deal with cancellations and rescheduling, she said.
Some large group tours have been rescheduled and there have not been many cancellations, she added.
Nguyen Nguyet Van Khanh, deputy marketing director of Vietravel, said her company had been hoping for a busy summer season after there was a surge in bookings.
But it has suspended tours to localities with infections and is now focusing on individual tourists and small groups with products and services like caravan tours, leisure and wellness tours and combinations of airline and car services and hotel bookings, she added.
The Viet Nam International Travel Mart in Ha Noi and the Travel Fair in HCM City, both scheduled to take place this month, have been postponed.
Paper, packaging firms see bright prospects ahead
Paper and packaging enterprises are optimistic about their prospects this year thanks to Viet Nam's stable business situation.
An Phat Bioplastics JSC (AAA) aims to achieve consolidated revenue of VND9.5 trillion (US$412.8 million), up 28 per cent. Post-tax profit is expected at VND550 billion, nearly double that of 2020.
Dong Hai Joint Stock Company of Bentre (DHC) aims to achieve VND3.5 trillion in revenue and VND399 billion in post-tax profit.
At the end of 2020, DHC had very impressive business results when it recorded a profit after tax 2.15 times higher than the previous year, reaching nearly VND392 billion.
In addition, Thuan Duc JSC (TDP) has set a revenue target of VND1.97 trillion and a post-tax profit goal of VND88 billion.
TDP is one of the leading enterprises in manufacturing environmentally friendly polypropylene (PP plastic) packaging products in Viet Nam, with revenue and profit increasing in recent years.
The enterprise has a product line of shopping bags, mainly for export, accounting for half of the company's annual revenue, besides animal feed packaging product line and packaging agricultural products and the fertiliser packaging line.
The enterprise's 1A factory and 1B factory have a combined capacity of 25,000 tonnes of seeds per year and 8,000 tonnes of packages per year.
Its No 2 factory has an export capacity of 150 million packages per year, while its No 3 factory has a capacity of 8,000 tonnes of packages per year.
An Phat Bioplastics JSC (AAA) announced its Q1 revenue at VND2.28 trillion, up 45.04 per cent over the same period last year, an increase of VND708 billion. Post-tax profit reached VND89 billion, up 41.27 per cent from the same period last year.
Dong Hai Joint Stock Company of Bentre (DHC) had net revenue of VND1 trillion in Q1, up 51.7 per cent year-on-year. This was also the first time DHC hit the milestone of VND1 trillion in quarterly revenue.
DHC reported a post-tax profit of nearly VND173 billion, up 138 per cent over the same period last year, equivalent to earnings per share of VND3,027.
Thuan Duc JSC (TDP) achieved Q1 net revenue of VND467 billion, up 52 per cent compared to the first quarter of 2020. Its post-tax profit reached more than VND30 billion, more than two times higher than that of the first quarter of 2020.
TDP said in the first quarter of 2021, the domestic business market had stable and high revenue growth and domestic packaging sales of animal feed and agricultural products grew. The export market of supermarket shopping bags has recovered quite well from the same period of 2020.
According to SSI Securities Joint Stock Company (SSI), paper packaging consumption in Viet Nam is expected to increase by 12 per cent in 2021-2025 thanks to continuing urbanisation.
SSI forecasts the urbanisation rate, the proportion of the urban population to the total population, in the country will hit 40 per cent in 2024 compared to 37 per cent in 2019. The paper packaging segment also benefits from the rapid growth of Viet Nam's e-commerce.
Analysts forecast that the growth of the plastic packaging segment in 2021 in Viet Nam will depend on spending on food and non-alcoholic beverages.
As for the Asian market, according to analysts, the demand for packaging products will continue to grow and be the main growth driver for the packaging segment in Viet Nam when it comes to exports.
Although packaging is an auxiliary industry for many manufacturing industries, it plays an important role and contributes significantly to the development of the economy.
Trade ministry to draft Covid-19 safe living map at manufacturing plants
The Covid-19 safe living map system at the website address of www.antoancovid.vn is designed to show real-time the pandemic evolution in Vietnam.
The Ministry of Industry and Trade (MoIT) is set to draw up a Covid-19 safe living map in which the pandemic data on manufacturing plants, super markets, shopping malls and restaurants nationwide will be updated.
Minister of Industry and Trade Nguyen Hong Dien made the request in a directive issued on May 12 on measures to ensure supply-demand balance for market stabilization and combat trade frauds amid serious Covid-19 situation.
Under the plan, the MoIT requested provincial trade departments to update data on local manufacturing plants on the Covid-19 safe living map at the website address of www.antoancovid.vn.
Meanwhile, the Domestic Market Department is responsible for updating the map with latest data of infection risks at super markets, shopping malls and restaurants.
Minister Dien also urged provincial trade departments to ensure sufficient supplies of goods to meet customers’ demands and prevent price gouging in any circumstances.
The MoIT is expected to work with related ministries and localities in price regulation to keep inflation under control.
Dien also stressed the importance of keeping smooth movements of goods during the pandemic to minimize negative impacts on businesses.
The Vietnamese government last October launched the Covid-19 safe living map system at the website address of www.antoancovid.vn to show real-time safety situation in the context of the pandemic.
Each criterion in the safety assessment for public facilities corresponds to a certain number of points. By analyzing updated data, the system will calculate and make an assessment by color: Green - Safe; Gold - Risky; Red - Unsafe.
Few markets in the world offer greater potential than Vietnam: UK Minister
Vietnam is now ideally placed to attract additional foreign investment from the UK, the fifth largest global investor, said Tim Evans, CEO of HSBC Vietnam.
It is estimated that two-thirds of the world’s middle-class will be in the Asia-Pacific region by the end of this decade. In this context, there are few markets around the world that offer greater potential than Vietnam.
UK Minister for Exports Graham Stuart made the view in a recent webinar for corporates in the UK to promote trade opportunities between the two countries, while referring to Vietnam as “an historic friend and trusted trading partner with an ever-growing digital economy and unparalleled levels of opportunity for British businesses.”
“Our trading relationship is going from strength to strength, including Vietnam’s support for our accession to the Trans-Pacific Partnership and the recent signing of our Free Trade Agreement [UKVFTA].”
“This landmark deal will bring continuity for trade between our nations, which has tripled over a decade to £5.8 billion [US$8.3 billion] in 2019,” Stuart suggested.
On this regard, Minister of Planning and Investment Nguyen Chi Dung noted the UKVFTA, kicked off in May, opens a new chapter for both Vietnam and the UK, promoting and enhancing the relationship between the two countries on the basis of economic, trade and investment relations.
“For investment and trade activities from the UK, we appreciate our partners from the UK in terms of financial capacity, technology, market and management skills. And we look forward to more cooperation with British businesses to harness opportunities for Vietnam and leverage the most from the UKVFTA,” Dung said.
Dung, however, said while both countries have enjoyed a tight diplomatic relation, “the trade and investment on the other hand has not developed proportionally compared with both sides’ potential and expectations.”
The Vietnamese minister added in 2020, the country’s economy grew by nearly 3%, among the top growing economies in the world. It is expected that Vietnam's economic growth will reach from 6.5% to 7% in 2021.
“Given Vietnam's existing conditions such as strongly reformed dynamic market, administrative procedures, investment environment, infrastructure and human resources, our country can become an ideal destination for young people, intellectuals and UK businesses to live, work and invest,” Dung continued.
Tim Evans, CEO of HSBC Vietnam, echoing Dung’s view by saying there is a huge potential for further growth in Vietnam in coming years, especially with the UKVFTA.
“Vietnam is now ideally placed to attract additional foreign investment from the UK, the fifth largest global investor. The fact that the country is currently only the 15th biggest investor into Vietnam – while actively pursuing its ‘Global Britain’ strategy – highlights the immense potential that the two countries can explore,” said Evans.
In the context of a post-COVID-19 economic recovery, the UKVFTA is a huge boost to both countries, encouraging UK businesses in a range of sectors, such as finance, insurance, education, consulting, high tech, renewable energy, and pharmaceuticals to enter the Vietnamese market.
Going in the other direction, manufacturers in Vietnam stand to gain from the export of products such as electronics, footwear, garments and textiles, woodwork, amongst others. Besides encouraging bilateral trade flows, the UKVFTA is expected to contribute to a more favorable environment for investors in Vietnam.
In the first quarter of the year, bilateral trade turnover stood at US$1.62 billion, of which Vietnam exported goods worth US$1.46 billion to the UK and imports of US$164 million.
As of present, the UK is the 15th largest investor in Vietnam with a combined investment capital of US$3.87 billion in 411 ongoing projects.
Inflationary pressure still present: GSO official
The average consumer price index (CPI) in the first four months of this year inched up 0.89 percent from the same period last year, the lowest rise for the first four months of a year since 2016 and clearing the way for the country to achieve its goal of keeping inflation at below 4 percent for the year as a whole, according to an official from the General Statistics Office (GSO).
“However, we should not be too optimistic about this since inflationary pressure remains and is likely to build up in the months to come,” GSO Deputy Director General Nguyen Trung Tien told the Vietnam News Agency.
The CPI, he said, will tick up on account of the global economy’s positive outlook, as noted by international organisations, and rising global COVID-19 vaccination rates.
In Vietnam, domestic businesses are becoming more adaptive to the “new normal”, with the gradual revival of production, trade, and services and growing demand for capital, fuel, and materials. This will drive up prices and add pressure to overall inflation, he explained.
Increases in the global prices of fuel and materials is another factor behind rising domestic prices, he continued, citing the fact that the average Brent crude price in the first four months increased nearly 24 percent compared to the end of last year and over 49 percent year-on-year.
The average price for Brent crude in 2021 is forecast to reach 60 USD per barrel, up about 40 percent compared to 2020, which is likely to push up domestic fuel prices by roughly 25 percent, adding 0.9 percentage points to the CPI.
He urged authorities not to loosen inflation control measures, saying they should maintain a close watch on local supply and demand and the price of essential goods, and take proactive and timely action. The Ministries of Industry and Trade and Finance, meanwhile, must effectively use the petrol price stabilisation fund to minimise the impact of fuel on overall CPI, he added.
“We believe the inflation target of around 4 percent, set by the National Assembly, is attainable,” Tien affirmed.
He further noted that International Monetary Fund (IMF) experts have been sent to Vietnam annually to review and assess sources of data, methods, and representative items Vietnam uses to calculate the CPI. Vietnam’s CPI has been used in reports from other international organisations, such as the UN Statistics Division (UNSD), the World Bank (WB), and the Asian Development Bank (ADB), and the method the country uses to calculate the index is regarded as being in line with international practices./.
MoIT helping farmers distribute produce amid pandemic
Departments of Industry and Trade around the country have been directed to join hands with their local agriculture sector to promote the distribution of products both in domestic and foreign markets amid the fourth wave of COVID-19 in Vietnam.
They have also been urged to work with major retailers such as the Central Group, AEON, VinCommerce, and Lotte, while helping farmers with transportation.
According to the Ministry of Industry and Trade (MoIT), it is keeping a close watch on market developments in order to address demand-supply uncertainties in a timely fashion.
The ministry said the production and transportation of products must ensure safety and be in line with pandemic prevention measures introduced by the Ministry of Health and the Ministry of Transport.
Localities have been kept updated on the pandemic situation and market developments, and have outlined specific response measures.
Farmers in Hai Duong province are attending training courses on origin traceability and engaging in the national programme on trade promotion via e-commerce platforms so as to seek markets for local lychee as the harvest season of the fruit will soon begin.
The MoIT’s Trade Promotion Agency said it will provide Hai Duong farmers with technical support and help them find markets via online and in-person channels.
Meanwhile, the Department of Industry and Trade in Bac Giang province said the province’s lychee output this year is estimated at around 180,000 tonnes, 50 percent of which will be exported.
Nearly 300 Chinese traders have registered to come and buy the local Luc Ngan lychees. They must follow quarantine regulations, test negative for COVID-19, and obey pandemic prevention measures.
Some 95,000 tonnes of lychee will be set aside for the Chinese market, around 1,860 tonnes for Japan, and 1,860 tonnes for the US, EU, and Australia.
Experts said that proper direction on the purchase and sale of farm produce and the engagement of local authorities will contribute to realising the country’s dual tasks of pandemic prevention and economic development./.
Thanh Ha lychees now available on Lazada
Thanh Ha lychees from the northern province of Hai Duong are now officially on sale on one of Vietnam’s leading online marketplaces, Lazada, according to the Ministry of Industry and Trade’s Vietnam Trade Promotion Agency (Vietrade).
Its May 14 debut on Lazada Vietnam was supported by Vietrade in partnership with the Hai Duong Departments of Agriculture and Rural Development and Industry and Trade, and the Red Dragon Co., Ltd.
Since early April, Vietrade has helped a number of domestic e-commerce platforms connect with lychee growers and traders in Hai Duong that use quality management systems, a representative from the agency said. Lazada is the first unit to bring the fruit to an e-marketplace.
James Dong, CEO of Lazada Vietnam, said the company’s top goal is to support local enterprises and sellers build a successful e-commerce business and it has cooperated with Vietrade to promote and sell the province’s specialty fruit.
The lychees will be delivered to online shoppers in Hanoi and HCM City within four hours to ensure their freshness.
Lazada also plans to work with Vietrade and other partners and provinces to sell a wider range of Vietnamese specialties online.
The Red Dragon Co., meanwhile, will provide logistics, cold storage, packaging, and transportation services to guarantee top-quality lychees are delivered to consumers.
Vietrade Director General Vu Ba Phu said selling agricultural products on e-commerce sites is developing as a new and sustainable way of distributing local signature products. It will also facilitate digital transformation in domestic businesses and producers and further popularise the campaign calling on Vietnamese people to prioritise using domestic products.
The lychee harvest in Hai Duong is fast approaching. The province has 9,186 ha growing the fruit this year, of which 1,000 ha has been granted VietGap certification and 50 ha GlobalGap certification.
Thanh Ha district, dubbed the “lychee capital” of Hai Duong, has 3,328 ha of the fruit with total output estimated at 50,000-55,000 tonnes. Some 155 ha have received area codes for export to the US, Australia, the EU, Japan, and Singapore./.
Vietnam ready to monitor lychee exports to Japan
Japan has authorised Vietnamese quarantine officers to replace their Japanese counterparts and directly supervise batches of lychee exports, which must be sterilised prior to being exported to the country, Hoang Trung, Director of the Plant Protection Department at the Ministry of Agriculture and Rural Development, has said.
Everything is in place to carry out the task immediately, he affirmed.
Vietnam will take the initiative in related technical processes and working schedules.
Together with localities and businesses, the department can immediately agree on working schedules, reducing time and cost and enabling them to determine working hours, Trung explained.
He underscored that this is a foundation for Vietnam not having to depend on Japanese experts in the future, in regard to not only lychees but also other fruit.
The department has arranged for sub-departments to monitor the two northern provinces of Bac Giang and Hai Duong - both lychee-growing areas - and provide the resources needed to support the localities and their businesses at all times.
Bac Giang is home to 219.45 ha of lychee orchards serving export to Japan that produce about 1,860 tonnes annually. Five businesses are involved in purchasing and exporting local lychees to the north Asian country.
Meanwhile, the harvest from 500 ha of lychee orchards in Hai Duong is designated for export to the US, Australia, and Japan.
The department will send experts to supervise the work on-site as well as quarantine forces to issue papers and seal the batches on the spot./.
RoK firms leasing more office space in Hanoi than in HCM City
Enterprises from the Republic of Korea (RoK) have been paying due attention to leasing office space in Hanoi, according to a recent survey by real estate consultants Savills Vietnam.
Office space leased by RoK enterprises in Hanoi is 60 percent higher than in Ho Chi Minh City. Samsung is the largest investor in Vietnam, primarily in the northern provinces of Bac Ninh and Thai Nguyen.
Japanese investors, meanwhile, lease the same amount of office space in the two cities.
Hoang Nguyet Minh, commercial leasing director at Savills Hanoi, said the capital welcomed three Grade A office projects in the fourth quarter of 2020 and first quarter in 2021 - Capital Place, with 93,000 sq.m, Thaiholdings Tower with 23,000 sq.m, and Leadvisors Tower with 18,000 sq.m.
Occupancy at Grade A buildings stood at over 80 percent in the period, she added.
As of the end of the first quarter of this year, the total office space available for lease in the market amounted to more than 2 million sq.m, a 10 percent increase year-on-year.
Grade A posted the highest growth, of 24 percent, while the figure for Grade B was 9 percent.
Meanwhile, Districts 2 and 7 and Thu Duc district in HCM City hold potential in office space.
Foreign direct investment (FDI) directly influences the number of foreign tenants and has been on the rise in recent years, except in 2020.
Vietnam attracted 38 billion USD in FDI in 2019 - the highest in a decade - then 28.5 billion USD last year. The figure for the first quarter was 10.13 billion USD, up 18.5 percent year-on-year.
Over 70 percent of tenants in Hanoi are local businesses and those from Japan, the Republic of Korea, the US, and Singapore, and the figure is predicted to continue to increase in the time to come./.
Viettel’s patent number increases by 142 percent a year
The number of patents granted to Viettel has increased by 142 percent a year which is nearly eight times higher than the country’s average increase of 18 percent.
According to Viettel, in the past four years, the group has had 37 patents granted in Vietnam. At the same time, Viettel also has four patents protected exclusively in the US - the most demanding market in the world.
Viettel also has 339 patent applications waiting for approval from the intellectual property protection agencies.
Products and technologies registered by Viettel for intellectual property protection have high applicability and value, and can compete in the global market.
Viettel has promoted intellectual property as part of its strategy to become the core in building Viet Nam's high-tech complex. Viettel has built a team of about 2,600 employees who are engineers and workers with high qualifications and skills in this field. To encourage employees to register inventions, Viettel has a reward policy of 20-100 million VND for each recognised patent.
Major General Hoang Son, Deputy General Director of Viettel Group, said: “The strategy of mastering the high-tech industry in parallel with the world level demonstrates Viettel's responsibility and aspiration in contributing to the construction of a powerful, strong and peaceful Vietnam. Viettel will continue to invest heavily to protect intellectual property by registering national and international patents to apply research activities at the group and bring more value in the future."
Viettel aims to have between 50 and 100 new intellectual property patents registered domestically and internationally each year in the future./.
EU investors confident in Vietnam’s business climate: Vietnam Briefing
The foreign investment consulting firm Dezan Shira & Associates’ Vietnam Briefing website, on May 13, published an analysis on a trend of increasing EU investment in Vietnam and the reasons why the nation has became a formidable competitor in attracting foreign investment in Southeast Asia.
According to the article, with a foreign trade volume of about 41.3 billion USD, the EU is currently among Vietnam’s largest trading partners. Meanwhile, Vietnam is the EU’s 16th and 2nd world largest trade partner in ASEAN, respectively, according to the European Commission.
The EU’s main exports to Vietnam are high tech products, including electrical machinery and equipment, aircraft, vehicles, and pharmaceutical products, while Vietnam’s main exports to the EU are telephone sets, electronic products, footwear, textiles and clothing, coffee, rice, seafood, and furniture.
The article said the in-effect EU-Vietnam Free Trade Agreement (EVFTA) with its liberalisation of customs duties and the deepening of trade and business relations, represents a great opportunity for EU companies. It will provide greater access to an emerging market with almost 100 million people, including about 55 million workers. In addition, the agreement opens opportunities for partnership, dialogue, and cooperation and creates stronger relations with the Southeast Asian region.
Thanks to the current ratified investment agreement EU-Vietnam Investment Protection Agreement (EVIPA), it should be easier for EU companies to invest in the previously highly restricted sector, the article added. It cited an example that the maximum foreign shareholding in commercial banks has been increased from 30 percent to 49 percent.
It also mentioned that the EuroCham’s Business Climate Index (BCI) Q1 2021 in a survey revealed that European business leaders remain confident in Vietnam’s economy, anticipating that Q2 performance will further improve. Apart from international travel restrictions, it’s business as usual in Vietnam. The BCI Index hit 73.9 points in Q1 2021 – the highest since Q3 2019. The business leaders also see benefits of the EVFTA, with more than 60 percent benefitting from the agreement.
On the same day, an international trade research institute under the Korea International Trade Association (KITA) released a report saying that Vietnam has been noticed as an attractive investment destination in Southeast Asia. The Republic of Korea's direct investment in the nation reached 8.3 billion USD in 2019, accounting for 21.4 percent of its total direct investment overseas./.
Hitachi SE buys over 35 percent of stake in Trung Nam Group's wind farm
Hitachi SE's renewable energy business expanded its market to Vietnam by signing a strategic cooperation agreement with Trung Nam Wind Power Joint Stock Company of Trung Nam Group (TNG) in Ho Chi Minh City on May 14.
The event also marked a new step for TNG in attracting foreign investors to the firm's renewable energy projects.
Currently, Trung Nam Wind Power Joint Stock Company is operating a 151.95 MW wind farm in Ninh Thuan province worth 4 trillion VND (172.4 million USD), with an estimated output of 432,000,000 kWh per year.
After the deal, Hitachi SE will own a 35.1 percent stake in the wind farm.
According to the representatives, Hitachi highly valued the quality of the wind farm as well as its long-term and effective development in the future.
The cooperation will give TNG additional funds from partners and increase its capital to continue implementing renewable energy projects.
Besides the wind farm, TNG also runs two solar power projects in Ninh Thuan and Tra Vinh provinces with a total capacity of more than 360MW. Last year, the group became the first private investor in Vietnam to build and put a 500kV substation and 220/500kV transmission line combined with the 450 MW Trung Nam Thuan Nam Solar Power Plant into operation.
The group is working on other projects in Dak Lak, Gia Lai, Tra Vinh and Ninh Thuan, aiming to connect 10GW to the national grid by 2027.
National energy demand grows at a rate of 9-10 percent annually, so Vietnam is implementing many policies to encourage the development of renewable energy projects, not only to meet rising energy demand but also to reduce greenhouse gas emissions.
Vietnam has set a target of producing 11.8GW of electricity from wind power by 2030.
Hitachi SE, along with its member companies, operates 30 wind power companies with a total installed capacity of 248MW in Japan./.
Aviation authority proposes removal of airfares’ ceiling rates
The Civil Aviation Authority of Vietnam (CAAV) has recently proposed the removal of the cap for airfares on domestic routes operated by at least three carriers.
It made the request in a draft report reviewing the implementation of the 2006 Law on Civil Aviation of Vietnam and the revised edition in 2014.
In such domestic air routes, carriers will be able to set their prices.
At present, the ceiling rates of domestic air tickets are decided based on distance in accordance with State regulations.
The basic economy fares, applied since 2015 for five groups of air routes, stand between 1.6 million VND and 3.75 million VND (70 USD - 163 USD), depending on distance and excluding additional costs.
The application of the ceiling rates is believed to restrict quality improvement, the CAAV explained.
Echoing its views, experts noted that the removal of the caps will help airlines become more flexible in adjusting airfares during peak time and maximise their revenues.
Vietnam is now home to six domestic airlines of national flag carrier Vietnam Airlines, Pacific Airlines, Vasco, Vietjet Air, Bamboo Airways and Vietravel Airlines./.
COVID-19 makes nearly 10 pct of domestic firms lack capital: official
Nearly 10 percent of Vietnamese firms lack capital and money for their business, especially micro-, small- and medium-sized enterprises (MSMEs), because of the lingering COVID-19 pandemic, General Secretary of the Vietnam Chamber of Commerce and Industry (VCCI) Nguyen Quang Vinh has said.
In addition, they face also market and material shortage due to the adverse impact of the pandemic.
To offset losses triggered by the pandemic, the Government rolled out various policies last year to help firms reduce operation costs and maintain finances.
A recent VCCI report with more than 12,000 respondents, however, showed that a large number of Vietnamese firms have difficulty in getting access to aid packages.
Insiders have voiced their opinions in favour of companies' capital mobilisation via the stock market, in an attempt to ensure the sustainable development of the financial market and stabilise the macro-economy, as well as sharpen businesses’ competitive edge./.
Vietnam looks to expand aquatic exports amid COVID-19 pandemic
Vietnam is expected to make breakthroughs in exporting aquatic products in the coming time thanks to its good performance of biological safety, and benefits brought by free trade agreements (FTAs), according to the Ministry of Agriculture and Rural Development.
The ministry reported that Vietnam’s agro-forestry-aquatic product export turnover hit about 17.15 billion USD in the first four months of 2021, up 24.2 percent year-on-year. Of which, earnings from seafood exports reached 2.39 billion USD, up 6.1 percent.
Deputy Minister of Agriculture and Rural Development Phung Duc Tien attributed the positive results to Vietnam’s sustainable agricultural ecosystem and strict management of biosecurity.
Vietnam has 815 shrimp enterprises, 200 tra fish businesses and 125 other companies operating the fishery sector. Vietnamese aquatic products have been exported to many major markets such as the European Union (EU) and the US. Recently, the US has re-inspected Vietnamese tra fish and the results showed that the product still meets the criteria set by the US.
The country is also exerting efforts to fully tap opportunities to further promote its agro-aquatic product exports to the EU.
If the COVID-19 pandemic is controlled, the ministry will kick start export of aquatic products to the UK within the framework of the UK – Vietnam FTA (UKVFTA), which officially took effect from May 1, and expand exports to the Middle East, and the Republic of Korea (RoK), Tien said.
Vietnam’s aquatic exports are projected to post a year-on-year rise of 10 percent to 2.1 billion USD in the second quarter of 2021.
The country aims to earn 980 million USD and 816 million USD from exporting shrimps and seafood products in the period, up 10 percent and 9.6 percent, respectively.
The growths of shrimp and tra fish exports will depend mainly on market fluctuations, Tien noted, affirming that more positive signals are projected for Vietnam’s shrimp industry because the demand for shrimps in key markets such as the US and the EU continues to increase.
Tien stressed that the global health crisis has caused difficulties for foreign shrimp exporters, while value chains of Vietnam’s “rival" countries are broken, offering great opportunities for Vietnamese exporters.
Vietnam has expanded its shrimp farming area to over 74,000 ha, Tien said, adding that the country is working hard on farming, exploiting and processing in order to improve the value and brand of the sector.
The country has set to rake in 10 billion USD from shrimp exports in 2025, he said.
According to the deputy minister, more measures will be enhanced to promote aquatic product exports in the time to come, including promoting international cooperation and investment for infrastructure development serving the industry./.
Nearly 200 Chinese dealers allowed to enter and purchase lychees
The Vietnamese Prime Minister has permitted 190 Chinese traders to enter and purchase lychees in Bac Giang province, a locality noted for lychee growing in Vietnam, according to the Bac Giang provincial administration.
Under Bac Giang’s proposal, the Chinese traders are expected to travel to Vietnam’s Lang Son province through Huu Nghi (Friendship International border gate and be then placed in mandatory quarantine in Lao Cai province according to COVID-19 guidelines before travelling further to Bac Giang.
The entrepreneurs must have a certificate granted by Chinese authorities showing they test negative for the virus at least three days before their departure. They will be then tested twice during their mandatory isolation in Lao Cai, and be allowed to leave for trading only when their subsequent test results come back negative.
Sources from the Bac Giang administration say its Luc Ngan district, which has the largest area under lychee cultivation in Bac Giang, has reserved eight hotels and guesthouses to receive the Chinese traders.
This year, Bac Giang has 28,100ha under lychee cultivation, hoping to harvest 180,000 tonnes of the fruit.
Aquatic exports hit US$2.39 billion over first four months
Vietnam raked in US$2.39 billion from aquatic exports during the opening four months of the year, representing an increase of 6.1% compared to the same period last year, according to the Ministry of Agriculture and Rural Development.
April alone saw the country's seafood export value stand at an estimated US$650 million.
The United States, Japan, China, and the Republic of Korea were the leading four consumers of Vietnamese aquatic products in the reviewed period, accounting for 57.2% of Vietnam’s total seafood export value.
Most notably, seafood export value during the first quarter enjoyed a rise in the majority of markets. The strongest growth was recorded in Russia which rose by 55%, followed by the US, Japan, and the EU.
The reviewed period saw the aquatic import value surge by 22.1% to US$679 million against the same period from last year.
In contrast, the country’s seafood imports over recent months have mainly come from the Indian market, accounting for 15%, trailed by the Norwegian and Chinese markets, which made up 11.3% and 9.2%, respectively.
Viet Nam earns $817 mil from rubber exports in four months
Viet Nam exported 486,000 tonnes of rubber worth US$817 million in the first four months of 2021, up 79.6 per cent in volume and 111.6 per cent in value compared to the same period last year, according to the Ministry of Agriculture and Rural Development.
In April alone, the country shipped an estimated 80,000 tonnes of rubber abroad, earning $143 million.
In the same month, Viet Nam's rubber processors imported 90,000 tonnes of rubber valued at $159 million. In the first four months, the country imported a total volume of 594,900 tonnes worth $845 million up 144 per cent in volume and 126 per cent in value over the same period last year.
Viet Nam has the fifth largest rubber cultivation area in the world, but its output ranked third, only after Thailand and Indonesia.
The Vietnam Rubber Association admitted that although Viet Nam ranks third in the world in terms of natural rubber production and export, the country still has to import raw rubber latex for local production
This is because of the low quality of locally-made rubber latex that does not meet international standards for production of high-quality items such as car tyres for export.
It exports mainly raw material of latex, accounting for about 78.4 per cent. The rest (21.6 per cent) has been processed products such as tires, gloves, accessories and soles of shoes.
At present, Viet Nam has exported latex and refined rubber products to 175 territories and countries and this figure is continuing to expand. There are 170 enterprises engaged in processing natural rubber latex (NRL) in Viet Nam with a total capacity of about 1.31 million tonnes per year.
Viet Nam's largest export market for rubber products was China, India and the United States, with a market share of 64.2 per cent, 5.1 per cent and 2.7 per cent respectively, followed by Japan, South Korea and Germany.
Meanwhile, the major rubber suppliers for Viet Nam are Cambodia with 44.1 per cent of market share. It is followed by South Korea with 9.5 per cent and China with 7.4 per cent.
In local market, price of rubber latex slightly rose from VND9,500 to VND10,500 per kg.
Because of COVID-19, the global automobile industry is facing the lack of rubber supplies. The global rubber supply is also affected by the shortage of shipping containers, according to the Agro Processing and Market Development Authority under the Ministry of Agriculture and Rural Development.
Industry insiders forecast that between 2021-2024, the global rubber price can be higher due to the decreasing supply of rubber due to the lack of rubber supplies.
At a webinar to overview the domestic rubber industry recently organised by the Vietnam Rubber Association, To Xuan Phuc, an expert of Forest Trends said Viet Nam's export of processed rubber has been increasing to demanding markets. These markets required processed rubber products to meet many requirements for exports.
To meet market requirements, domestic rubber processors needed to be more transparent about their production supply chains involving in sources of raw materials and chain activities and legal issues as well.
CIMB and Finhay join hands for debit card
CIMB and Finhay have announced a partnership to issue a co-branded debit card on the Finhay app to enable customers to enjoy benefits from the CIMB and Finhay ecosystems.
Under the deal, Finhay users will be able to open a virtual account and co-branded debit card on the Finhay app with eKYC solution by CIMB to take control with all-in-one spending, saving, investment and more. With only a bank account and debit card, users can instantly invest, save, transfer and withdraw money free of charge at more than 17,000 ATMs nationwide.
Finhay and CIMB customers will also enjoy smart and modern financial - banking solutions, enabling them to plan and optimise the implementation of financial solutions with small amounts from VND50,000 (US$2.1) or VND100,000.
“Consumers and businesses will no longer see banking as a separate sphere or sector, and will instead come to expect that day-to-day financial tasks will be carried out within their favourite brand ecosystems.
"And if you’re a traditional bank, it’s time to start gearing up for a battle of your own - one that isn’t necessarily going to be on home turf,” said Thomson Fam Siew Kat, CEO of CIMB Vietnam.
Nghiem Xuan Huy, CEO of Finhay, said: “Thanks to the strategic partnership with CIMB Vietnam, we now can provide solutions to open bank accounts, money transfer and withdrawal. We would introduce some new financial services to our customers in the future.
"I think there are relatively attractive changes in the embedded finance in the market. I don’t know how long that trend is going to go on, but it’s something that we’re starting to see demand for.”
Shares end the week higher but foreign investors still flee the market
The market finished higher in the last trading session of the week as large-cap stocks gained points, while foreign investors net sold large values on both exchanges.
On the Ho Chi Minh Stock Exchange (HoSE), the VN-Index climbed 0.35 per cent to 1,266.36 points. However the market breadth was negative as 190 stocks rose while 220 stocks fell.
During the session, local investors poured over VND22.03 trillion into the southern bourse, equivalent to a trading volume of nearly 731 million shares.
The gains in pillar stocks were the main driving force for the market. The VN30-Index rose 0.72 per cent to close Friday’s trade at 1,380.02 points.
Twenty-two of the 30 biggest stocks in the VN30 basket inched higher on Friday while eight stocks declined.
The move was contrary to analysts’ expectations that the market benchmark might fall back to the support zone of 1,250 points in the last session.
“Rising downward pressure at the end of the session when the VN-Index approaches the resistance territory of around 1,275 points might cause it to fall back to the support zone of around 1,250 points in the last trading session of the week,” Bao Viet Securities wrote in a daily report to investors.
The firm also kept their stance that the market will move sideways to create a new base above the level of 1,200 - 1,220 points in the near future.
Bank stocks still dominated the market’s rally as four out of top five stocks influencing the trend were from this sector. These stocks were VPBank (VPB), Southeast Asia Commercial Joint Stock Bank (SSB), Techcombank (TCB) and Vietinbank (CTG) with SSB hitting the maximum daily gain of 7 per cent, while three other stocks all jumped more than 1 per cent.
But the biggest gainer on Friday was Masan Group (MSN) from the material sector.
The index pared some gains as selling pressure persisted in a few big stocks. Vingroup JSC (VIC) posted the biggest loss, down 0.95 per cent. It was followed by PetroVietnam Gas JSC (GAS) and Vietnam Dairy Products JSC (Vinamilk, VNM), dropped 1.75 per cent and 1.1 per cent, respectively.
On the Ha Noi Stock Exchange (HNX), the HNX-Index edged 2.68 per cent higher to 294.82 points. The index also rallied on gains in large-cap stocks. The HNX30-Index, tracking the 30 biggest stocks on HNX, increased 2.68 per cent to 440.03 points.
During the session, over 161.2 million shares were traded on the northern bourse, worth nearly VND3.5 trillion.
Meanwhile, foreign investors kept fleeing the market as they net sold a huge amount of over VND1.65 trillion on both exchanges. Of which, they net sold a value VND1.61 trillion on HoSE and a value of VND41.18 billion on HNX.
HCM City office market spreading to non-business districts: experts
With limited vacancies and high rents in the central business district in HCM City, non-CBD supply will continue to deliver affordable office space and keep a ceiling on rents, according to Savills Viet Nam.
More than 43,300sq.m of new supply entered the non-CBD area, 55 per cent of it in Go Vap District and Thu Duc City.
Decentralisation continues amid limited vacancies and high rents in the downtown area.
The average occupancy was 89 per cent, down 8 percentage points year-on-year, and average monthly rent was US$31 per square metre, down 3 per cent.
The deals were mostly for 100-300sq.m of space, nearly 70 per cent by small and medium-sized local enterprises, with only 4 per cent being for more than 1,000sq.m.
Distribution businesses accounted for 24 per cent, consultancies for 18 per cent and transportation companies for 13 per cent.
As against a negative figure of 8,000sq.m in the previous quarter, the take-up was almost 38,000sq.m.
Small businesses continue to drive demand for office space, Tu Thi Hong An, Savills’ commercial leasing director, said.
The quality of non-CBD buildings is gradually on par with CBD buildings but rents are lower, making them more appealing to potential tenants, she said.
Meanwhile, according to CBRE, new supply of 74,000sq.m will enter the market this year in five grade B buildings, AP Tower, Pearl 5 Tower, Cobi Tower, The Graces, and Saigon First House.
By 2022 two new grade A buildings are expected to come online.
Source: VNA/VNS/VOV/VIR/SGT/Nhan Dan/Hanoitimes
Pork imports from Russia soar ten-fold