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VIETNAM BUSINESS NEWS MAY 25

Mekong Delta eyes larger premium-quality rice areas to boost exports
Mekong Delta eyes larger premium-quality rice areas to boost exports hinh anh 1

Mekong Delta localities are enlarging areas for the cultivation of premium-quality and fragrant rice varieties highly favoured by major markets in an effort to sustainably boost exports.

Soc Trang plans to raise the revenue of agricultural cultivation to over 250 million VND (10,770 USD) per hectare in average by 2025 and increase the share of specialty and premium-quality rice to more than 80 percent of the total output.

To this end, the province is taking measures to improve the effectiveness of rice branding and upgrade the value chain of specialty rice products, including the widely-known ST24 and ST25. It will also promote clean and environmentally-friendly cultivation of rice to enhance the sustainability of the sector.

Soc Trang has zoned off farming areas of specialty rice varieties for export, established production cooperatives, and accelerated use of advanced technology into cultivation.

Last year, agribusinesses and traders cooperated with growers to distribute rice cultivated on a total area of over 61,900 hectares, up 68 percent from 2020. This will lay a foundation for sustainably heightening rice values and promote a win-win partnership among the stakeholders, said Director of the provincial Department of Agriculture and Rural Development Huynh Ngoc Nha.

In Tra Vinh, farmers have received support from authorities to produce and distribute high-quality rice cultivated from more than 1,650 hectares and those farmed under organic standards of the EU, USDA and JAS.

Vietnam flying high on improved tourism development index

Vietnam ranks 52nd among a total of 117 countries and territories in the recently-released Travel & Tourism Development Index (TTDI) 2021, jumping up eight places compared to the 2019 rankings.
      
According to the report announced by the World Economic Forum (WEF) on May 24, Vietnam experienced the greatest improvement in score, rising by 4.7% to leap from 60th to 52nd, on the overall index.

Elsewhere, Indonesia had a 3.4% boost to climb from 44th to 32nd and Saudi Arabia went up by 2.3% from 43rd to 33rd to record the greatest improvements in the rankings. 

The WEF report also shows Vietnam’s improved rankings were resulted from its achievements in pandemic prevention, safe and flexible adaptation, as well as continuous efforts to develop safe tourism.

Japan holds the top spot in the rankings, followed by the United States, Spain, France, and Germany.

Covering a total of 117 economies, the TTDI measures an array of factors and policies that enable the sustainable and resilient development of the Travel and Tourism (T&T) sector, which in turn contributes to the development of a country.

The Ministry of Culture, Sports and Tourism of Vietnam has announced a national tourism development action programme for 2021-2025, aiming to see the country rank among the top 50 by 2025. Digital technology will be applied to transform tourism into a spearhead economic sector.

The tourism industry will seek to develop a national database system and digitalise its resources, including establishing a digital information system at various tourist sites and service establishments.

The plan of action will also give priority to developing high-quality human resources, as well as a sustainable tourism labour market, while simultaneously providing post-pandemic support to related businesses.

Projects on smart factory development launched in Vinh Phuc

A smart factory development project was kicked off on May 24 in the northern province of Vinh Phuc.

The project, which is jointly developed by the Ministry of Industry and Trade (MoIT), the People’s Committee of Vinh Phuc province and Samsung Electronics Co. Ltd, aims to train 100 Vietnamese experts and provide consultation to help 50 businesses set up smart factories in 2022 and 2023.

Participating in the programme, the consultants will be trained for 12 weeks to improve their knowledge and skills in setting up smart factories.

The smart factory cooperation project is the latest programme in a series of innovative consulting activities for Vietnamese businesses and training Vietnamese experts to effectively replicate, strengthen synergy and continue to strengthen supporting industry development activities.

It is expected to help businesses enhance their competitiveness by improving their productivity, product quality, and reducing production cost. The project is also supposed to strengthen the connection between enterprises and local authorities, and between FDI enterprises and domestic investment enterprises.

Southeast Asia’s women world’s most resilient entrepreneurs
     
Despite the COVID-19 pandemic having a disproportionate impact on women entrepreneurs worldwide, especially those in the developing economies, women are demonstrating the resilience to succeed against the odds, according to a recent Mastercard study.

The study revealed that women in Southeast Asia, such as the Philippines and Viet Nam, have fared particularly well in making entrepreneurial progress, despite significant social-cultural and infrastructural barriers threatening to impede their growth.

Lack of government SME support, poor access to entrepreneurial finances, and a severe lack of education opportunities remain the major constraints to advancing women’s entrepreneurship in Asia’s lower-middle-income economies.

MIWE’s 2021 index has also revealed an encouraging trend for women’s entrepreneurship in Southeast Asian economies such as Thailand, Indonesia, Viet Nam, and the Philippines. Women in these economies were seen engaging in high levels of entrepreneurship, sometimes at parity with men, even though the environment in which they operate remains entrenched with challenges.

The resilience of women in the Philippines is noted to be particularly outstanding. Despite the comparatively lower participation of women in the workforce, the Philippines remained a global leader for the third consecutive year in component A of the report (women’s advancement outcomes) and are just as driven by opportunity as women in highly business conducive environments. Women in the Philipinnes are joined by women in Thailand and Viet Nam, who also performed strongly in component A, ranking 4 and 11, respectively.

Transport sector beseeches support amid soaring fuel costs
     
The HCM City transport industry has sought Government support to help recover from the double whammy of the COVID-19 pandemic and skyrocketing fuel prices.

Le Trung Tinh, chairman of the city Intercity Passenger Transport and Tourism Association, said the high prices of petroleum products have made it difficult for transport businesses, leading to a fresh crisis post-pandemic.

Fuel prices account for 30-50 per cent of transport costs, and so the hike in prices has created massive challenges for the industry, he said.

The Government and National Assembly should consider reducing tariffs on petroleum products such as environmental protection, special consumption and value-added taxes, he said.

A spokesperson for Tu Vien, a firm that operates on the HCM City – Ha Noi route, said with the current price of diesel at more than VND30,000 per litre, the cost of a trip has reached some VND50 million (US$2,100).

The firm has already sold two 45-seat buses at below market prices and the remaining one is parked in Binh Duong Province due to a lack of business, he claimed.

Dao Ngoc Tuan, owner of Tuan Duyen, a bus service that operates on the HCM City – Ha Noi route, said the fuel cost per trip has doubled to more than VND30 million.

The number of passengers has fallen to 40 per cent of pre-pandemic levels, he said.

Pham Thanh Duyen, owner of Duyen Ha bus service (HCM City - Gia Nghia city in Dak Nong Province) said while fuel costs have increased, taxes and fees remain high.

During the 210-km trip from HCM City to Gia Nghia, a bus has to pass through three toll stations and pay VND540,000, he said.

He said he planned to sell all of his five vehicles and wind up a 30 –year-old business.

Nguyen Lam Hai, head of the transport planning department at HCM City’s Mien Dong Bus Station, said since March the number of passengers a day has been 10,000-10,500, or 52 per cent of pre-pandemic levels.

Almost a third of bus operators have ceased operations, he added.

The station has supported businesses by reducing rentals of counters by up to 40 per cent, but it has not helped much since the high fuel prices now account for 30-50 per cent of costs.

Tran Nhan Hau, head of operations at the Mien Tay Bus Station, too said the number of passengers is currently only half compared to before the pandemic.

He said the collection of environmental protection tax should be temporarily suspended.

Experts said the reduction of special consumption tax on fuels would help lower their costs, reducing inflationary pressure and the impact on businesses and people's lives.

On Monday, the authority adjusted up the retail prices of oil and petrol. This was the ninth time that the petrol prices have been adjusted this year but only three of them was downward.

Accordingly, the price of RON95 bio-fuel RON95 was raised by VND670 per litre to VND30,650 ($1.32) per litre, while that of E5 RON92 rose by VND680 per litre to VND29,630 ($1.28) per litre.

Meanwhile, the price of diesel oil was down by VND1,100 per litre to VND25,550 per litre. A decrease of VND660 per litre was also seen in the price of kerosene to VND24,400.

Steel prices cool down as input costs drop
     
Steel prices have been steadily on the decline in the last few weeks as prices for raw materials dropped on the global market, according to the Vietnam Steel Association (VSA).

VSA reported prices for iron ore have gone down to US$139 per tonne, a $16 decrease from prices at the beginning of April, and a $71-73 decrease from the record-breaking prices reported in May 2021 at $210-212 per tonne. Meanwhile, prices for steel scrap have also seen a significant drop to $530 per tonne, a $94 decrease from early April. Hot-rolled coil has fallen to $797 per tonne, an $81 decrease.

Since the beginning of the year, demand for steel in the domestic market has been high as economic recovery was in full swing. Steelmakers, taking full advantage of robust demand, also raised their prices on the pretext of higher input costs of imported raw materials.

However, a sharp fall in demand in China due to extensive social distancing measures employed by Chinese authorities in recent months has forced Vietnamese steelmakers to lower prices to clear their inventory, bringing steel down to an average of VND18.25-18.50 million per tonne.

Hoa Phat steel has gone down by VND4.6-8.0 million per tonne, Viet Duc steel by VND5.1-7.6 million, Thai Nguyen steel by as much as VND8.1 million per tonne.

According to owners of metal stores in Ha Noi, while steel has gone down from its over-VND20 million per tonne mark in March, it remained quite high compared to the end of 2021. Recent price drops have not managed to bring steel down to the previous price level after four consecutive price hikes since the beginning of the year.

Vietnamese steelmakers together produced more than 11.4 million tonnes of steel during the first four months of 2022, a 2 per cent increase from the same period last year. Of which, 10.6 million tonnes were sold, a 4 per cent increase year-on-year with 2.5 million tonnes exported.

According to the VSA, for the time being, Vietnamese makers were able to meet all domestic demand. However, the country could only supply 20-30 per cent of raw materials, making Vietnamese steel prices largely dependent on the global market.

By the association's estimate, Viet Nam will have to import as much as 18 million tonnes of iron ore, and 6.5 million tonnes of scraps and coking coal in 2022.

Vietnamese lender SeABank to sell up to 15 per cent of its stake to foreign investors

In response to an inquiry from Bloomberg News, SeABank CEO Le Thu Thuy said that the bank may make an offer to sell around 13.78 per cent of its current charter capital. The bank has not as of yet settled on a particular agenda for the potential deal.

According to persons who are familiar with the subject, the bank is working with a financial adviser to try to pique the interest of potential purchasers, which may include private equity firms and other financial institutions.

SeABank could allegedly sell up to 15 per cent.

One of SeABank's former minority owners was the French financial institution Societe Generale SA, which has been a stakeholder in the Vietnamese bank for close to ten years. In 2019, they sold off their stake in this venture.

SBV warns about increasing bad debts, cross-ownership, and risks of BOT projects

The State Bank of Vietnam (SBV) earlier this week reported on the evaluation of the execution of Resolution No.42/2017/QH14 on piloting bad debt settlement of credit organisations at the 15th National Assembly session.

According to the SBV, the COVID-19 outbreak has already posed significant roadblocks to the management of delinquent loans and the integrity of banking operations.

Concerning the matter of cross-ownership in credit institutions, it is nevertheless challenging in the event that significant shareholders and relevant individuals of major shareholders intentionally conceal information, the SBV noted.

A lack of transparency in credit institutions’ activities might be a result of this since these major shareholders have the power to influence and control them.

Additionally, the SBV reaffirmed that it would take a firm hand in dealing with the problem of group interests, as well as financing to build-transfer-operate (BOT) and build-transfer projects.

Furthermore, according to data from the financial statements of the first quarter of 2022 of 27 banks, the total balance of bad debts of banks as of March 31 has increased by 11 per cent compared to December.

In the first three months of 2022, VPBank remained the bank with the highest bad debts, a rise of 11 per cent from the end of last year, with a steep increase of 30 per cent in potential debts. Consequently, the bad debt ratio grew from 4.57 per cent earlier this year to 4.83 per cent as of March 31.

Dong Nai to spend over VND2.6 trillion on expy site clearance

The Dong Nai People’s Council has passed a plan to allocate over VND2.6 trillion for site clearance and compensation of the first phase of the Bien Hoa-Vung Tau expressway project, which will link the province and Ba Ria-Vung Tau, heard a meeting on May 24.

The allocated budget will cover 50% of compensation and land clearance costs of the 34-kilometer section running through the province, the local media reported.

The compensation and site clearance capital will be sourced from the mid-term public investment fund and an increase in budget revenue in the 2021-2025 period.

The section to be built in the province will cost VND12.6 trillion, including VND5.2 trillion for site clearance and compensation.

Speaking at the meeting, Thai Bao, chairman of the Dong Nai People’s Council, said that the Bien Hoa-Vung Tau expressway is a project of national importance. When in place, the expressway is expected to meet the transport demand, ease traffic congestion and ensure traffic safety on National Highway 51 as an axis route currently linking the two provinces.

Besides, the expressway will enhance connectivity between Dong Nai and other provinces in the Southern Key Economic Zone thanks to its connection with the Long Thanh International Airport and the HCMC-Long Thanh-Dau Giay and Ben Luc-Long Thanh expressways.

The Bien Hoa-Vung Tau expressway project will stretch 54 kilometers in length, have four to six lanes and require a total of nearly VND18 trillion. The project is set to get off the ground in 2023.

Vietnam’s exports and imports up 15.4% by mid-May

As of May 15, Viet Nam’s total export and import value saw a year-on-year increase of 15.4 percent, reaching US$270.56 billion, according to the General Department of Customs.

Since the beginning of this year to mid-May, the country gained nearly US$135.2 billion from exporting, up 15.5 percent and imported US$ 135.39 billion worth of goods, up 15.2 percent. 

Viet Nam's key export items included phones and accessories (up 13.1 percent), garments (up 21.4 percent), machines, equipment and tools (up 13.2 percent) and computers, electronics and spare parts (up 10 percent). 

During the reviewed period, Viet Nam's trade deficit was estimated at US$223 million. 

In the first half of May, the country's exports and imports hit US$28.34 billion, down 15.6 percent compared to the second half of April.

Shrimp exports reach peak, higher value expected in Q2

Vietnamese shrimp exports hit a record high of US$1.4 billion in the opening four months of the year, rising by 45% against the same period from last year, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).

The top five consumers of local shrimp include the United States, Japan, the EU, China, and the Republic of Korea, with their growth rates ranging between 15% and 91%.

The steady growth in shrimp exports can largely be attributed to high market demand and strong export prices, according to local export enterprises.

Most notably, Vietnamese shrimp products received due attention at a number of international aquatic trade fairs, such as the Seafood Expo North America and the Seafood Expo Global held in March and late April.

The US makes up the leading consumer of Vietnamese shrimp, with turnover picking up by 47% to reach US$291 million, while shrimp exports to China surged by 91% in fourth months to more than US$187 million, making China the fourth largest Vietnamese shrimp importer.

Experts pointed out that despite a number of hurdles caused by China’s “Zero-COVID” policy, Vietnamese shrimp exports to this market recorded impressive growth, particularly as export turnover skyrocketed by 128% to US$81 million in April alone.

With this growth momentum, shrimp exports to the Chinese market are anticipated to continue growing strongly moving forward.

According to details given by the VASEP, shrimp exports during the second quarter of the year are projected to see an upward trajectory of approximately 12% to US$1.2 billion.

However, experts have outlined that a number of factors, such as unusual weather, as well as high input costs of gasoline and production materials, are likely to impact the supply source of raw shrimp, thereby eroding any profits made by enterprises.

Can Tho striving to become trade centre in Mekong Delta

Can Tho city expects to become the centre of trade and services in the Mekong Delta, with rapid and sustainable development.

Under a plan on trade development in Can Tho by 2030 with a vision towards 2045 issued by the municipal People’s Committee, the city will serve as a firm launch pad to boost production, build Vietnamese brand names, and protect interests of consumers and businesses.

Can Tho’s total retail sales of goods and services is projected to grow from 8-10 percent between 2021 and 2030, 10-12 percent in 2026-2030, and 12-13 percent in 2031-2045.

The plan targets a strong goods distribution network, supply-demand balance, and e-commerce development with cutting-edge technologies and technical infrastructure.

Revenue from e-commerce is set to rise by at least 10 percent during the 2021-2030 period, with 70 percent of transactions to be conducted online and half of small- and medium-sized enterprises offering services on e-commerce platforms.

In 2031-2045, the retail sales of goods and services via supermarkets, commercial centres and convenience stores will make up 70 percent of the total, and e-commerce will drive the city’s trade.

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

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