Four State-owned banks have further cut deposit interest rates by 0.2-0.3 percentage points to reach around 7 per cent for 12-month deposits.

Agribank, BIDV, Vietcombank, and Vietinbank continue to pay the lowest rates in the market, around 6 per cent for six to less than 12 months and around 7 per cent for 12 months.

Meanwhile, larger private banks have cut their 12-month rates to below 8 per cent.

MB, SHB, Techcombank, ACB, VBBank and TPBank pay between 7.3 per cent and 7.9 per cent for 12 months.

Smaller banks have also cut deposit interest rates significantly since last month.

For 12 months deposits, National Citizen Bank’s (NCB) rate has fallen to 7.8 per cent from 7.9 per cent; Kienlong Bank to 8 per cent from 8.2 per cent; and Saigon Bank to 7.8 per cent from 8 per cent.

Deposit interest rates have been plummeting, especially after the central bank cut the operating interest rate in March and April.

At the end of 2022, almost all private banks offered more than 9 per cent for 12-month deposits.

Smaller banks even paid more than 10 per cent.

The high deposit interest rates pushed up lending rates to 13-14 per cent, putting huge pressure on enterprises.

According to VNDirect Securities Company, deposit interest rates will keep falling until the end of 2023, tracking sluggish credit demand due to an economic recession and the sluggish real estate market.

While deposit interest rates keep falling, most firms are complaining high loan interest rates of more than 10 per cent are causing difficulties for them to maintain operations.

The State Bank of Viet Nam (SBV) has attributed the high rates to high inflation and potentially increasing non-performing debt in the coming time.

Speaking at a recent meeting, Nguyen Thi Hong, SBV’s governor, said Viet Nam has a high level of economic openness, so that domestic interest and exchange rates are hugely affected by global financial and monetary changes.

Interest rates globally were high last year and earlier this year as central banks around the world continued to tighten monetary policies, making it more challenging for Viet Nam’s central bank to cut the rates.

While the yearly inflation target was under 4.5 per cent, core inflation in the first four months reached 4.9 per cent.

A circular issued last month allowing lenders to extend loan repayments for businesses facing financial hardships has caused difficulties for banks to ensure they can pay back depositors.

A number of smaller banks have been maintaining deposit interest rates high to attract and retain depositors, contributing to the issue.

According to the central bank, the economy depends on bank loans too much, which has caused interest rates to be too high.

The credit-to-GDP ratio was over 125 per cent last year, the central bank said in a report.

Most banks have been mobilising short-term deposits to give out long-term loans while many borrowers are currently struggling to pay back loans, putting pressure on lending interest rates.

Nearly 90 per cent of the deposits are short-term while more than 50 per cent of credit is mid- to long-term, imposing a risk to the banking system, said the report. 

G-bond value raised in April exceeds 34.8 trillion VND

The State Treasury raised 34.81 trillion VND (1.48 billion USD) worth of Government bonds, or 84.39% of the total G-bonds on offer, via 14 auctions on the Hanoi Stock Exchange (HNX) in April.

Most of the total volume offered in the month was 15-year and five-year bonds, accounted for 40.40% and 32.76%, respectively.

On the secondary market, the trading worth of G-bonds reached over 130.7 trillion VND, up 6.13% month-on-month, with outright transaction value making up 60.85%. The remainder were those traded via repurchase agreements.

In the first four months, the State Treasury raised more than 139.68 trillion VND from G-bonds, fulfilling 34.92% of the yearly plan.

Marvell Technology launches IC design centre in HCM City

US’s Marvell Technology, Inc., on May 16 announced the establishment of a world-leading IC design centre in Ho Chi Minh City by upgrading its Marvell Vietnam Technology Company Limited in the city’s District 7.

Le Quang Dam, General Director of Marvell Vietnam said that the Marvell Technology is operating 20 development research (RD) centres in regions across the world.

With the launching of the centre in Vietnam, Marvell Vietnam will be one of the four world-standard RD centres, along with those in the US, India and Israel.

The centre will focus on developing and researching the most advanced IC technologies. It also doubles as a venue for Vietnamese technology engineers to hone their professional skills, opening up many career development opportunities in the field of microchips and semiconductors. Marvell Vietnam currently has about 300 employees, of whom 97% are engineers.

VinES to receive technical assistance package from Australia

The Australian government on May 16 through its Australian Climate Finance Partnership (ACFP), administered by the Asian Development Bank (ADB), granted a technical assistance package to the VinES Energy Solutions JSC (VinES).

The package aims to support the study towards promoting the growth of lithium ion battery technology and sustainable production of batteries for electric vehicle in Vietnam as well as job creation opportunities along the supply chain.

The technical assistance package is a part of the strategic support of the ADB and the Australian government for Vietnam's transition to a low-carbon economy. Accordingly, VinES will receive 500,000 USD from the Australian Department of Foreign Affairs and Trade to help Vietnam achieve its net-zero transition goals by 2050.

The bank and the Australian government, as a part of the ACFP, with VinES, are conducting a study to propose solutions to such topics of developing sustainable and diversified supply chains for production of batteries in Vietnam aligned with anticipated demand from domestic EV manufactures for such batteries; identifying best practices for environmentally responsible repurposing/recycling of EV used batteries; and mapping opportunities for job creation and upskilling of workers along the supply chain for EVs.

Previously, the Australian government invested 50 million USD and ADB provided 950,000 USD technical assistance to VinFast in last June to promote e-mobility in Vietnam.

Hanoi supporting industry moves to join global supply chains

Supporting industry enterprises in Hanoi will implement various programmes and projects to bring Vietnamese products into global supply chains, according to the Hanoi Supporting Industry Association (HANSIBA).

Most recently, HANSIBA just signed a cooperation agreement with China’s Association for the Promotion of Small and Medium Enterprises in Suzhou city (SITC) in May.

HANSIBA Chairman Nguyen Hoang said that the association has available industrial parks for supporting and hi-tech industries with sufficient facilities, factories, trade centres, healthcare centres, housing for workers, and schools.

He said that HANSIBA member enterprises have qualifications and hi-tech production lines.

Under the agreement, HANSIBA and SITC will promote activities to support their members in production and business, and in joining the global production chain. They will focus on connecting trade and markets, and cooperating in new-generation production technologies which use renewable energy and minimise environmental pollution.

The sides will also work together in recruiting and training high-tech staff and qualified engineers meeting global standards.

In the past time, Hanoi has implemented many mechanisms and policies to stimulate the development of the supporting industry which have generated positive results.

The number, size and quality of local supporting enterprises have grown constantly, particularly those serving garment, footwear, hi-tech, and manufacturing industries.

160 Vietnamese firms to showcase products at Asia’s largest F&B fair

As many as 160 Vietnamese food and beverage (F&B) businesses will display and promote their products at Asia’s largest F&B trade show to be held in Bangkok next week.

Slated for May 23 to 27, Thaifex - Anuga Asia 2023 features some 3,000 exhibitors from 43 countries, including East Asia, ASEAN, the EU, the US, Australia, Latin America and the Middle East.

Top Vietnamese firms, including Vietnam Dairy Products Joint-Stock Company (Vinamilk), Dan On Foods Corporation, Acecook Vietnam, Rita Food & Drinks Co Ltd, and Vinh Hoan Corporation, have participated in the fair for many years.

The Investment and Trade Promotion Center of Ho Chi Minh City (ITPC) will take part in the fair for the first time.

The expo features six specialised shows with a focus on innovative blueprints, bold ideas, and cutting-edge solutions.

A variety of food and beverage products will be on display at the fair, including coffee and tea, drinks, fine food, food service, food technology, frozen food, fruits and vegetables, meat, rice, seafood, and sweets and confectionery.

There will be a virtual trade show to cater to the needs of trade visitors who are unable to travel.

The virtual show allows visitors to browse and choose product categories of interest, while viewing 3D models, videos, product catalogues, and product images. They can also negotiate trade deals via video calls, chat, or messaging.

The fair will present innovative and environmentally conscious production methods, including carbon footprint and eco score labelling, while highlighting zero waste and food waste products to promote sustainable practices across the value chain.

There will be conferences to open knowledge-sharing platforms among experts, decision-makers, and enthusiasts in the industry.

Fine art ceramics exports up after three-month decline

Vietnamese exports of fine art ceramics reached US$13.5 million in April, showing an increase following three consecutive months of decline, according to the General Department of Vietnam Customs.

The January to April period alone witnessed the export value of the products gross US$52.95 million, marking a fall of 48% year on year.

The United States was the largest importer of Vietnamese fine art ceramics, accounting for 38.2% of Vietnam’s total export value of the products. Statistics show the US spent US$15.06 million purchasing the Vietnamese products in the first quarter this year, a drop of 51.1% year on year.

The US was followed by the EU market which make up one third of Vietnam’s total export earnings. In the first quarter this year, the EU’s fine art ceramics imports from Vietnam dropped by 48.5% year on year to US$13.18 million.

Vietnam is home to famous ceramic villages which offer a variety of products and sophisticated processing techniques. Many of their products have been exported worldwide, including Japan, the US, the EU, Russia, and the Middle East.

VSIP to develop 600-hectare industrial park in Lang Son

The Government has green-lit a nearly-600-hectare industrial park in the northern province of Lang Son, which will be developed by Vietnam Singapore Industrial Park J.V. Co. (VSIP).
The VSIP Lang Son Industrial Park will be developed in three phases in Huu Lung District.

In the first phase, VSIP will have an area of 200 hectares and be expanded to around 250 hectares in the second phase. The remaining area is set to be developed in phase three.

The cost of the entire project is estimated at around US$275 million, equivalent to VND6,360 billion.

VSIP is a joint venture between Binh Duong-based Becamex IDC Corporation and Sembcorp Development Ltd., a subsidiary of Singapore’s Sembcorp Industries, a leading energy and urban solution provider.

Until now, VSIP has developed 13 industrial parks in nine provinces and cities nationwide.

VSIP has signed deals with nine provinces to develop smart and sustainable industrial parks, namely Binh Phuoc, Tay Ninh and Binh Thuan in southern Vietnam; Khanh Hoa and Thua Thien Hue in central Vietnam; Ha Tinh and Thanh Hoa in north-central Vietnam; and Thai Binh and Nam Dinh in northern Vietnam.

Vietnam sees FDI as integral part of economy

Vietnam has seen foreign direct investment (FDI) as an integral part of its economy, said Deputy Minister of Planning and Investment Do Thanh Trung at a conference on FDI in Vietnam held yesterday.

Over the past 35 years, the investment environment has improved steadily, so the country has made great achievements in attracting capital from abroad, he said.

Total foreign capital pledges in Vietnam had reached nearly US$446 billion as of April this year, with about US$280 billion already disbursed, he added.

Between January and April, new foreign investment approvals in the nation were US$8.9 billion, down 17.9% over the same period in 2022. Still, foreign investors got involved in 1,044 mergers and acquisitions worth US$3.1 billion, increasing by 70.4% year-on-year.

Trung said the FDI sector has for three decades and a half contributed significantly to the nation’s social and economic development, economic restructuring, strong import-export growth, job creation, and State budget revenue rise.

Despite the Covid-19 impact, Vietnam was among the top 20 host economies of FDI inflows between 2019 and 2020, according to the United Nations Conference on Trade and Development.

Rising power prices strike cement makers

The recent increase in electricity prices has eaten into cement producers’ profits as it has driven up input costs amid the low market demand.

Data from securities firm Mirae Asset showed that electricity bills account for around 15% of cement manufacturers’ production costs while the percentage is lower at steel mills using rotary kilns, at 10%.

A 3% increase in electricity tariffs would lead to higher production costs and thus lower gross profit margins by 13%. That, coupled with weak demand for construction from the struggling real estate sector, has put more pressure on cement production companies.

According to the Vietnam National Cement Association, the current consumer demand for cement in the domestic market stands at 64-65.5 million tons, while production capacity surpasses 110 million tons, leading to an oversupply.

Weak demand is also seen in overseas markets, with revenue from cement and clinker exports to China having plummeted over 90% this year.

In addition, the Philippines recently slammed an anti-dumping duty on cement imports from Vietnam.

In their first-quarter financial statements, local cement maker Bim Son Cement JSC reported a net loss of VND48.6 billion, while Vicem Ha Tien Cement JSC posted VND86 billion losses after tax.

Gia Lai eyes branding for coffee

The Central Highlands province of Gia Lai is focusing on improving the quality and value of its coffee produce and building brands but without expanding the coffee farming area until 2025.

The province has nearly 99,000 hectares under coffee and an annual output of over 267,000 tonnes.

The bean accounts of nearly 71 per cent of Gia Lai’s agriculture exports, and was worth US$490 million in 2022.

Gia Lai has ideal soil and weather conditions for coffee, which plays an important economic role, providing hundreds of thousands of jobs and improving the livelihoods of people, especially ethnic minorities.

Under a province plan for restructuring agriculture, the focus will be on improving quality and value and building brands to boost exports.

While the area under coffee will not be increased, around 9,500ha will be regrown.

Many local coffee processors have been improving their quality and investing in large production and processing facilities to take their products all over the country and to picky foreign markets such as the US, Japan and the EU.

Their high-quality coffee brands include Thu Ha, BaKa, Thuy Dung, and L'amant.

Farmers have been tying up with businesses to be a part of their supply chains, getting training in organic agricultural practices and changing their methods to improve yields and incomes.

Gia Lai is also growing its own unique specialty coffee on around 200ha, and hopes to increase it to 1,200ha by 2025 and have more supportive policies to build brands for it.

Authorities are considering policies to facilitate the development, and encouraging businesses and farmers to adopt technology and increase their rate of processing.

Many businesses taste sweet success due to high price of sugar cane

Closing the third quarter of the 2022 - 2023 crop year, the sugar industry achieved brighter business results than expected because the global sugar price rose to the highest level in more than a decade.

With concerns about tightened supply affecting global food security, global sugar prices have skyrocketed.

Specifically, global raw sugar prices have recorded an increase from the beginning of April, touching 24.67 US cents per pound on April 19, the highest level since Q1/2012.

In addition, the impact of domestic trade remedies has also limited a large amount of imported sugar, so supply and demand are more balanced. Domestic sugar prices are expected to remain at a high level.

The Securities Corporation of Vietnam Joint Stock Commercial Bank for Foreign Trade (VCBS) said in its sugar industry report for the first quarter of 2023 that the protection measures for the domestic sugar industry had made imported sugar volume decline. The sugar imports from Thailand, Laos and Cambodia in the first quarter decreased by more than 12 per cent year on year.

Viet Nam imposes an anti-dumping levy on some sugar products imported from five Southeast Asian countries but originating from Thailand.

The purchasing price of sugarcane has also recovered to an average of VND1.05-VND1.1 million per tonne due to the scarcity of supply, creating favourable conditions for farmers to expand the raw material area.

Sugar price is forecast to increase by around VND18,000-18,500 per kilo thanks to increased domestic demand. Less competitive price of imported sugar after being taxed has also boosted demand for domestic sugar.

The above information brought a positive business outlook to sugarcane enterprises in the third quarter of the 2022 - 2023 crop from January 1 to March 31, 2023.

Leading was Kon Tum Sugar (KTS) with a net profit of more than VND12 billion, 3.2 times higher than in the same period last year. This is a business that regularly maintains a profit of less than VND4 billion per quarter, but in the third quarter of the 2022 - 2023 crop, the company had strong growth thanks to high sugar consumption in the domestic market.

Meanwhile, Son La Sugar (SLS) had a second consecutive quarter of net profit of over a hundred billion Vietnamese dong. Specifically, the third quarter's net profit reached more than VND109 billion, up 90 per cent. It was a record high in its profit for a quarter.

One of the advantages that helped SLS achieve this result was that the company is exempt from corporate income tax due to its agricultural product processing activities carried out in Son La Province, a locality with extremely difficult socio-economic conditions.

In addition, income from financial activities in this period increased by 100 per cent to nearly VND11 billion, including VND8 billion being the interest on loans for investment in raw material areas.

Lam Son Sugarcane (LSS)'s net profit increased by 22 per cent, reaching more than VND7 billion because all expenses were significantly reduced over the same period, although net revenue decreased by more than 15 per cent.

A major player in the industry is Quang Ngai Sugar (QNS), the owner of the Vinasoy brand, whose financial year normally ends on December 31 of each year.

At present, the company has announced the consolidated financial statements of the third quarter of 2023 with net revenue of nearly VND2.13 trillion and net profit of nearly VND317 billion, up 17 per cent and 80 per cent, respectively, over the same period of last year.

Regarding each business segment, Quang Ngai Sugar said there were some products with high growth such as sugar products with growth in sales volume at 90 per cent and revenue at 80 per cent, thereby contributing VND746 billion to total revenue.

However, the soy milk segment still played a key role with VND817 billion in revenue, a reduction of more than 8 per cent.

While most businesses received positive results, Thanh Thanh Cong - Bien Hoa (TTC AgriS, Hose: SBT) announced the third quarter financial statements of the year 2022 - 2023 with weaker results.

SBT's net revenue was about VND5.71 trillion, up 62 per cent. Of which, the sugar business accounted for nearly 91 per cent, reaching more than VND5.174 trillion, up 76 per cent.

However, SBT's net profit dropped 27 per cent to more than VND149 billion because financial expenses doubled in the same period, while selling and administrative expenses also increased significantly.

In general, the profit of most sugarcane enterprises in the third quarter increased sharply compared to the same period last year. The high price of sugar is one of the main factors improving the profitability of sugarcane producers.

In the agricultural industry report published at the beginning of April, VNDirect Securities Company said that companies mainly using domestic sugarcane materials, such as SLS and LSS, will benefit more from the upward trend in sugar prices.

For enterprises importing raw sugar to produce refined sugar such as QNS or SBT, the high selling price of sugar in 2023 will partly offset the increase in imported raw sugar prices.

In line with business results, stocks of the sugar industry boomed in both market price and liquidity recently. This industry was one of the few industries that attracted cash flow during the quiet period of the market.

LSS shares hit the ceiling at VND12,150 per share on May 8, increasing by 90 per cent compared to the beginning of the year.

During the same period, KTS shares reached VND26,300 each share, up 79 per cent, and QNS shares rose by 32 per cent to VND44,500 per share. The "big firm" SBT gained the lowest growth at 14 per cent to VND16,600 per share.

Especially, SLS became a phenomenon on the stock exchange when continuously conquering its historical peak. It set a new peak of VND175,000 per share on April 25, an increase of 43 per cent compared to the beginning of the year. It is one of the most "expensive" stocks on the stock exchange at the moment.

LienVietPostBank changes its name

Lien Viet Post Joint Stock Commercial Bank was officially given approval from the State Bank of Viet Nam to change its abbreviated name from LienVietPostBank to LPBank.

The change aims to grasp the general trend of banks today in which the abbreviation is as short as possible, easy to read and remember.

The LPBank’s change of name and brand identity marks a period of transformation, comprehensive and drastic change to a new stage with the goal of becoming the leading retail bank in Viet Nam. LPBank will continue to make comprehensive changes to the LPBank logo and brand identity system to synchronise services and products as well as improve customer experience.

At the end of the first quarter of 2023, LPBank's business activities still achieved some positive highlights thanks to the optimal implementation of capital efficiency due to flexible capital adjustment in line with credit growth.

The bank’s capital mobilisation reached more than VND272.5 trillion (US$11.6 billion), outstanding loans VND242.1 trillion. LPBank was in the top 10 banks with the lowest bad debt ratio in the first quarter of 2023. 

Mekong Delta provinces strengthen connection for sustainable development

The People’s Committees of the Mekong Delta provinces of Tien Giang, Ben Tre, Vinh Long, and Tra Vinh co-organized a conference on connectivity for sustainable development in the eastern coastal sub-region of the Mekong Delta on May 16.

According to the People’s Committee of Tien Giang Province, the conference aims to develop potentials and strong points of the eastern coastal sub-region of the Mekong Delta and each locality in the area, mobilize and effectively use investment resources, strengthen fast and sustainable socio-economic development, enhance competitiveness, create new jobs, increase income and improve the quality of life of local people, and protect the ecological environment.

Chairman of the People’s Committee of Tien Giang Province Nguyen Van Vinh suggested that the conference needs unity, equality, voluntariness, publicity, and transparency on the basis of the principles of respect, precedence harmony of interests, belief maintenance, guarantee of disciplines, and administrative rules. The cooperation will be implemented in the order of precedence in accordance with the resources, natural conditions, culture, and society of each locality.

The participating provinces should encourage economic sectors to participate in the cooperative plan and organizations to support the programs and promote the role of connection and public-private collaboration as well as identify the responsibility of each locality, unit, and organization.
 
In addition, the four provinces need to cooperate to ensure traffic safety and order and prevent traffic congestion, especially the bottlenecks in Rach Mieu Bridge in Ben Tre Province and National Highway 1A connecting Tien Giang and Vinh Long provinces.

Deputy Directors of the Departments of Culture, Sports, and Tourism of Ben Tre and Tra Vinh provinces Nguyen Thi Ngoc Dung and Lam Huu Phuc noted that the localities need to strengthen tourism linkage to promote local tourist products, tours to attractions of provinces to attract more visitors.

Chairman of the People’s Committee of Vinh Long Province Lu Quang Ngoi speaks at the meeting. (Photo: SGGP)
Chairman of the People’s Committee of Vinh Long Province Lu Quang Ngoi hoped that the cooperation in the eastern coastal sub-region of the Mekong Delta region will bring practical results contributing to the development of the area.

In 2023, the provinces in the eastern coastal sub-region of the Mekong Delta region continue to carry out the contents of the MoU that was signed by the four localities of Tien Giang, Ben Tre, Tra Vinh, and Vinh Long in 2018. Under the agreement, the sides focus on planning, developing infrastructure, especially traffic infrastructure, and irrigation system, calling investment in trading and tourism projects and building programs and plans for the sub-region.

Vietnam’s sustainable finance market moving forward

ASEAN State of the Market report from Climate Bonds and HSBC paints a positive picture of sustainable finance in ASEAN and in Vietnam.
 
ASEAN’s sustainable finance market, including in Vietnam, has made progress despite a challenging year, according to the ASEAN State of the Market report from Climate Bonds and HSBC.

Regarding green loan issuances, Vietnam has seen an increasing diversification of thematic issuances over recent years, both in terms of instrument types and themes.

According to the report, Thailand and Vietnam have had consistent activity in recent years although volumes are still relatively low and yet to surpass $1 billion annually. Almost all issuances from Vietnam have come under the green theme, mostly from loans. The country has more issuers than Thailand, Indonesia, and Philippines but a considerably lower amount issued, pointing to a wider base of smaller issuers.

Green loans (green and sustainability-linked) were issued during 2022, with five deals all from different issuers.

The largest was a $500 million green loan from automotive company Vinfast Trading and Production (a subsidiary of the larger conglomerate Vingroup JSC), its second transaction following a $400 million green loan in 2021. Another Vingroup subsidiary, Vinpearl JSC, had come to market with a $425 million sustainability bond in 2021, the only one from Vietnam so far.

Supportive efforts and policies on sustainable finance were advocated by the Vietnamese Government, with the release of guidance on environmental risk management in credit extension activities by the State Bank of Vietnam, alongside an announcement of a national program to support private enterprises in sustainable business development to 2025.

Building on the Just Energy Transition Partnership (JETP), which will see an initial $15.5 billion of financing to transition Vietnam’s energy sector, the government is also committed to improving the country’s green finance legal framework to further spur interest in the space.

Mr. Tim Evans, CEO of HSBC Vietnam, said that as economies in ASEAN face the threat from climate change, with both physical as well as transition risks, banks like HSBC have an important role to play in providing thought leadership and funding to mitigate such risks and support clients in their transition plans.

According to the report, 2022 was an active year for policy and market development initiatives in the region, with the release of regional ASEAN Sustainability-Linked Bond Standards as well as stakeholder consultation on the first version of ASEAN Taxonomy conducted throughout the year, alongside a range of national-level sustainable finance initiatives and measures by respective ASEAN Member States, including but not limited to disclosures, transition finance, and taxonomies.

Mr. Kelvin Tan, Managing Director, Head of Sustainable Finance and Investments, ASEAN, at HSBC noted that the sustainable finance market in ASEAN is now at an inflection point. 

He added that greater awareness and stronger business impetus as a result of recent developments in policies and taxonomies sets a very promising tone for the future of sustainable finance in the region. 

$2.7bln in public capital not allocated as yet

The Ministry of Finance (MoF) has reported that more than VND65.4 trillion ($2.74 billion) worth of public investment capital has yet to be allocated, equivalent to 9.26 per cent of the target assigned by the Prime Minister.

As of the end of April, 25 out of 50 ministries and centrally-run agencies and 45 out of 63 localities had yet to allocate all of their assigned capital.

Total capital earmarked for public investment this year is over VND756 trillion ($32 billion).

The MoF recently asked ministries, agencies, and localities to urgently take measures to speed up investment procedures and approve investment projects to allocate all public investment capital in 2023 assigned by the Prime Minister.

HCMC to develop urban railway using specific model

Ho Chi Minh City plans to apply a model of urban development implementing transit-oriented development (TOD) and public-private partnership (PPP) in its urban railway network.

TOD brings together elements of land use and transport planning, urban design, real estate development, financing, land value capture, and infrastructure implementation to achieve more sustainable urban development.

Experience from the urban development process in major cities in the world such as Tokyo, Seoul, Singapore, and London show that TOD linked with the exploitation of the land fund is a basic, long-term solution, especially in creating investment resources for developing the urban railway network.

Speaking at a recent workshop held to discuss the model, Vice Chairman of the Ho Chi Minh City People’s Committee Bui Xuan Cuong said Japan has been successful in implementing TOD. Ho Chi Minh City is proposing a special mechanism to the National Assembly to develop the city, including a proposal to focus on developing urban transport, including Metro No. 1 and 2.

Bui Xuan Nguyen, a representative from the Ho Chi Minh City Urban Railway Management Board, said it is necessary to study and invest in urban railway projects using the PPP model. The city needs total investment capital of around $25.8 billion to complete its urban railway network as planned.

Exploring new markets expected to fuel foreign trade

Vietnam witnessed declines in both exports and imports in the first four months of 2023, and exploring new markets is now considered one of the solutions to foreign trade bottlenecks.

Difficulties facing the world economy continued affecting Vietnam’s foreign trade in April, as trade value totaled 53.57 billion USD, falling 7.7% month on month and 18.8% year on year.

It stood at 210.79 billion USD in the first four months, down 13.6% from a year earlier (compared to an increase of 16.6% recorded in the same period last year), according to the Ministry of Industry and Trade (MoIT).

The MoIT blamed that fact on different causes, including high inflation in many countries and nosediving purchasing power, especially in terms of non-essential goods.

Such sectors as textile - garment, leather - footwear, wood, and fisheries whose main markets are the US and the EU experienced the sharpest decreases in overseas shipments.

Besides, input factors like materials, personnel, and transportation saw surging costs while export prices remained almost unchanged, undermining the competitiveness of products.

Meanwhile, imports were estimated at 26.03 billion USD in April and 102.22 billion USD in the first four months, respectively dropping 8.1% month on month and 15.4% year on year (compared to the growth of 16.1% in the same period last year).

Materials serving domestic production accounted for up to 88 billion USD, or 86% of the four-month import turnover. The import value of this group of commodities fell 18% from a year earlier due to the shortage of orders, the MoIT pointed out.

To address those difficulties, it will connect domestic enterprises and business associations with Vietnam’s trade offices abroad to address their concerns.

The ministry will also reform and step up trade promotion in new and potential markets such as India, Africa, the Middle East, Latin America, and Eastern Europe, as well as those less affected by high inflation and holding positive growth prospects like the ones of the Association of Southeast Asian Nations (ASEAN).

The markets with an expanding middle class, including the Emerging 7 (E7) countries (China, India, Turkey, Russia, Mexico, Indonesia, and Brazil) and Halal markets like the Middle East, Malaysia, and Brunei, will also be tapped into, the MoIT added.

Tea exports fetch US$50 million over four-month period

The first four months witnessed tea exports reach 30,000 tonnes, worth US$50 million, marking a decline of 4.8% in volume and 5.8% in value compared to the same period from last year, according to details given by the Ministry of Agriculture and Rural Development (MARD).

Data compiled by tea exporting countries indicates that export prices of the drink in many countries remained high, although the situation was stagnant in Vietnam due to problems occurring in the quality of input of raw material.

The MARD has therefore recommended that in order to increase tea export value, businesses must seek to strengthen co-operation, develop high-quality raw material areas, change to new tea varieties, while also striving to improve processing steps, thereby ensuring food safety requirements in order to meet market demand.

The nation is now ranked seventh and fifth worldwide in terms of tea production and exports, respectively.

According to information provided by the MARD, the nation has 123,000ha under tea and is capable of producing 1,02 million tonnes of fresh buds.

Vietnamese tea products are exported to 74 countries and territories globally, including Pakistan, China, Russia, and Indonesia, with the shipments to China accounting for 12% to 15% of the country’s total export volume.

Vietnam ETE 2023 and Enertec Expo set for HCM City in July

The 16th International Exhibition of Electrical Technology and Equipment (Vietnam ETE 2023), along with the 13th International Exhibition of Energy Saving and Green Power Products and Technologies (Enertec Expo 2023), are set to be held in Ho Chi Minh City on July 17 and July 19.

At these functions, participating businesses will introduce their typical products in the fields of electrical equipment, energy saving, new energy, green energy, new technology and products in other related fields.

According to details given by the organizing board, the exhibitions will serve to encourage domestic manufacturing enterprises to boost their production and business. In addition, it will also offer opportunity for firms operating in the field of electricity and energy to exchange experience, seek business partners, and strengthen trade promotion and technology transfer.

The exhibitions will also contribute to raising awareness among both the business community and consumers about the economical and efficient use of energy.

As part of the framework of the events, a conference on solutions for the economical and the efficient use of energy, as well as a talkshow on electricity-saving equipment & Green Power – Investor attraction and economic development efficiency, will also be held.

With a number of popular activities happening across both events, organisers expect to see 20,000 visitors this year.

Vietnam preparing for green energy operation

The Prime Minister has just approved the National Electricity Development Planning in the 2021-2030 Period, with a Vision to 2050 (Electricity Planning 8). This has been wholeheartedly welcomed by investors, especially wind and solar energy ones.

Accordingly, by 2050, the proportion of renewable energy in Vietnam will have accounted for 67.5-71.5 percent. Particularly, greenhouse gas emission from power plants in 2030 and 2050 will reduce to 204-254 million tonnes and 27-31 million tonnes, respectively.

By 2030, haft of office buildings and households in Vietnam will have used self-sufficient solar energy. There will be inter-regional renewable energy industrial and service centers in all three regions of the country. Even better, Vietnam aims at developing surplus renewable energy amounts for exporting purposes (of 5,000-10,000 MW in 2030).

At present, many EU clients of domestic companies are asking for reports on carbon emission during the manufacturing process, and do not accept merchandise from producers that cannot satisfy green requirements. Therefore, Vietnamese companies will be excluded from the supply chain if they do not use green energy.

That is the reason why Electricity Planning 8 is warmly welcomed by a large number of enterprises. In the short term, this planning can address inadequacies related to renewable energy, especially among wind and solar energy projects.

However, to effectively implement this planning, the Industry and Trade Ministry must closely monitor the development of this green energy to avoid insensible growth. In addition, a measure to combine traditional and renewable energy kinds must be devised. The toughest challenge in adopting the planning is to ensure Vietnam’s commitment with the world about green energy operation as well as national energy security, particularly energy cost adjustment to suit the affordability of citizens and attract more investors.

Therefore, the Industry and Trade Ministry must cooperate with related ministries, agencies, and local authorities to urgently complete the draft amended Electricity Law and Renewable Energy Law in order to present to the National Assembly in 2024. Simultaneously, these state units must work with investors to review all commitments and regulations, agreements to address current issues in existing renewable energy projects. Any problems beyond their power should be reported to the Prime Minister for further direction.

The last point to consider is the high capital demand for Electricity Planning 8 (of US$134.7 billion in the 2021-2030 period, and then $400-523 billion in the next 20 years). Thus, the State must encourage all economic sectors to pour resources into this field in a healthily competitive manner. The power price must follow the market mechanism model to ensure a balanced benefit between investors / power businesses and power consumers.

Hanoi to invest in urban infrastructure

Hanoi will invest in developing modern urban infrastructure and promoting rapid and sustainable urbanization as part of measures to boost industrialization and modernization.

This is part of a plan adopted under a decision issued recently by Chairman of the Hanoi People’s Committee Tran Sy Thanh to implement an action plan issued by the Municipal Party Committee in February to carry out a Party Central Committee Resolution on the acceleration of national industrialization and modernization by 2030 with a vision towards 2045.

The capital will invest in building more bridges crossing the Red and Duong Rivers, strive to complete Ring Road No. 4 before 2027, and prepare to build Ring Road No. 5 before 2030.

It will also study the construction of one more international airport and develop new, smart, and ecological urban areas.

Hanoi will develop a modern and environmentally-friendly public transport network and speed up the progress of transport projects.

PPP investment proposed for southern expressway

The Binh Duong Provincial People’s Committee in Vietnam’s southern region has proposed that the government invest in building a 45-km section of the Ho Chi Minh City - Chon Thanh Expressway project under the public-private partnership (PPP) model.

The 70-km expressway will link Ho Chi Minh City and southern Binh Duong province with central highlands’ localities.

The project has two sub-projects, including the Ho Chi Minh City - Thu Dau Mot, Binh Duong province, section and the Thu Dau Mot - Chon Thanh, Binh Phuoc province, section.

Binh Duong province has proposed the government carry out the section passing through the province in the forms of both public investment and PPP with estimated capital of VND16.1 trillion ($679 million). Capital for site clearance, estimated at over VND7.3 trillion ($308 million), will be mobilized from the State budget, and the remaining capital will be used to build the section under the PPP model.

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