The demand for warehousing space is increasing dramatically as consumers' purchasing power is hiking up as the year comes to a close. 

Cushman & Wakefield, a global commercial real estate services company, reported that the occupancy rates for warehouses in HCM City and Hanoi reached 90% in the first two quarters of 2022.

The rates are expected to hit 100% in the following months as retailers have begun to fill their warehouses ahead of late-year peak sales. 

A representative from the ecommerce platform Lazada said that it is normal for an ecommerce platform to have their warehouses stretched at the end of the year.

He said Lazada has leveraged technology edges to enhance its warehouse efficiency, easing the pressure on its logistics management.

A representative from the ecommerce platform Shopee revealed they recently launched 10 new storehouses and upgraded its existing ones to expand their warehousing capacity.

TikiNOW Smart Logistics, a logistics firm affiliated with the ecommerce platform Tiki, went so far as to deploy robots to execute tasks. The robotic automation improves its warehouse efficiency significantly.

Le Thi Ngoc Diep, Commercial Director of the SLP Vietnam, remarked that warehouses in Vietnam are not of high standards and scattered unevenly throughout the country.

She said the under-representation of warehouses in the North has been a major hindrance to the movement of goods nationwide, adding costs to supply chain management.

A report of the Ministry of Industry and Trade showed that more than 70% of warehouses in Vietnam cluster tightly around economic centres in the south. 

As the demand for warehousing space is on the rise amid tight supply, rental rates are soaring. Some firms have had to use townhouses as a substitute for warehouses even though the former are not cut out for cold storage.

Trang Bui said the deployment of robots, drones and sensor systems would considerably improve inventory management and fire safety in warehouses.

She also underscored the tight supply of professional warehouses as a great opportunity for firms to invest in ready-built warehouses to pick up the slack.

A CBRE study showed that every 1 billion USD of ecommerce revenues in Vietnam requires 93,000 ha of warehousing space. That means the country will need over 2 million ha of warehousing space by 2025 for the focast revenues of 39 billion USD.

Vietnam - US Trade Forum 2022 to get underway in mid-November

The Vietnam – United States Trade Forum 2022 will be held in Ho Chi Minh City on November 17 to help further promote trade and investment ties between the two countries.

The event will be co-organised by the Ministry of Industry and Trade, the American Chamber of Commerce in Vietnam (Amcham Hanoi), the US-ASEAN Business Council (USABC), and the Oregon State government.

Leading experts from Vietnam and the US are expected to update participants on trade and investment policies of both countries amid a period of global supply chains shifting trends, post-COVID-19 economic recovery, and the future development of digital trade and services.

Experts will also seek ways to boost connectivity and engagement of Vietnamese businesses in the global supply chain, help them devise effective, long-term business plans and create further investment co-operation opportunities.

HCM City’s October CPI rises 0.45%

Ho Chi Minh City’s Consumer Price Index (CPI) increased by 0.45% in October, with eight of the 11 groups of goods and services witnessing an increase in prices, the municipal Statistics Office reported on October 31.

Prices in the education bracket recorded the highest growth, at 4.95%, followed by beverages and cigarettes (1.34%); home repair services (1.18%); and housing, electricity, water, fuel and construction materials (0.64%).

Prices of food and catering services rose 0.31% during the month, with food and processed food going up 0.28% and 0.88%, respectively.

The textiles, hats and footwear group also saw prices picking up by 0.27%.

Prices in the traffic group posted the highest decrease at 1.89%, mainly because of lower costs in its sub-groups of fuel and public transport services.

Vietnam-RoK business week opens in HCM City

The Consulate General of the Republic of Korea (RoK) in Ho Chi Minh City and the municipal Department of External Affairs on October 31 launched a Vietnam-RoK business week targeting sustainable development.

The programme will focus on B2B trade promotions in areas spheres as environmentally friendly technologies, smart farms and smart medicine, along with workshops and field trips to industrial parks near HCM City, he said.

According to Sungil Kwak, Director of the Economic and Security Strategy Department at the Korea Institute for International Economic Policy, Korean firms will continue to look for optimal solutions to cope with new challenges like green growth and smart technologies.

He suggested the two sides step up institutional cooperation, better utilise free trade agreements, increase transparency in intellectual property rights, work to create a fair investment environment, cooperate to form regional value chains, and enhance collaboration in new industries such as digital economy and energy.

More favourable mechanisms needed to attract firms’ engagement in e-commerce

Economists attending an October 31 seminar said the Vietnamese Government has created favourable mechanisms to facilitate businesses’ engagement in e-commerce, along with ideal legal infrastructure related to the sector.

Nguyen Thanh Hung, from the Vietnam E-commerce Association (VECOM), said that Vietnam’s e-commerce sector has enjoyed impressive growth in recent years, with the market scale projected to increase to 49 billion USD, even 57 billion USD by Google, by 2025, from only 4 billion USD in 2015.

However, the sector is facing several major barriers related to online payments, foreign investment attraction, human resource development, the development gap between regions and localities, and policies and laws, he noted.

Nguyen Thi Minh Thao, head of the CIEM’s business environment and competitiveness research department, agreed that the biggest barrier to Vietnam’s e-commerce sector remains the policy and legal environment.

Experts also stressed the need to seek ways to minimise the use of the cash on delivery payments for digital transactions, as it still accounts for 11% of the total.

The Vietnamese internet economy is forecast to grow 28% in 2022 – the highest in Southeast Asia.

CATL, VinFast reach strategic cooperation to promote global e-mobility

Contemporary Amperex Technology Co. Ltd. (CATL) and Vietnamese automaker VinFast on October 31 signed a Memorandum of Understanding on global strategic cooperation to expand collaboration in developing electric vehicles.

The MOU signing ceremony was witnessed by Robin Zeng, Founder and Chairman of CATL, and Pham Nhat Vuong, Chairman of Vingroup and VinFast

Under the agreement, CATL and VinFast will explore various forms of cooperation on CIIC skateboard chassis on top of the current cooperation on battery supply with CTP (cell-to-pack) technology between the two companies, which will provide VinFast rapid access to the global market.

CATL and VinFast will cooperate to jointly develop new technology, in which the battery and many important components are integrated into the vehicle's chassis, helping to reduce weight, increase the vehicle's travel distance and reduce cost. It is expected that VinFast will be the pioneer car manufacturer to bring this technology to the global market with a strategic cooperation with CATL.

IMF expert highlights policies motivating Vietnam’s economic growth

Effective policies applied by the Vietnamese Government have contributed to the country's positive good economic results so far this year, according to Era Dabla-Norris, Mission Chief to Vietnam and Division Chief in the International Monetary Fund (IMF)'s Asia and Pacific Department.

The first nine months of 2022 saw the fast recovery of the Vietnamese economy when COVID-19-related restrictions were removed.

The gross domestic product (GDP) in the first three quarters of this year expanded 8.83%, motivated by strong production and exports as well as the growth of retail and tourism.

Highlighting some policies that have contributed to the economic results so far this year, she mentioned the Vietnamese Government’s switching of the COVID-19 control strategy and the complete reopening of the country’s economy in March thanks to the super-fast vaccination campaign. This was the key for the resumption of economic motivations, she held.

The expert also underlined the country’s low interest rate and responsive monetary policies that have allowed businesses to return to operation, along with tax cuts to support labourers including income and environmental taxes to minimise the impacts of the global petrol price hike, and price freezes for some services, including power, healthcare and education, which have contributed to keeping inflation under control.

However, Pemba pointed to a number of challenges that Vietnam is facing, and gave a number of recommendations, especially on monetary and fiscal policies. She also welcomed the expansion of the trading band for the exchange rate recently, and advised Vietnam to maintain inflation at around 4% in 2023.

She underscored the need to maintain flexible policies and the stability of the financial system, along with the improvement of the business environment and the productivity of domestic firms as well as the capacity of labourers, and continuous economic digitalisation. Vietnam should also focus more on implementing reform policies in climate change to complete its target of net-zero emissions in 2050, she added.

In its latest global economic outlook report, the IMF predicted that the world economy will see a fall of 2.7%, while Vietnam will enjoy a growth of about 5.8%.

More efforts to be made for larger coverage of Vietnamese products
     
The Ministry of Industry and Trade (MoIT) will continue to implement the campaign encouraging Vietnamese to prioritise Vietnamese products, while speeding up administrative reform to gain public confidence, according to Deputy Minister Do Thang Hai.

Speaking at the launch of the "Identifying Vietnamese goods" programme in 2022 and a festival themed "Pride of Vietnamese goods - The essence of Vietnamese goods" in Ha Noi last week, Hai said that fluctuations in the global market have seriously affected the production and distribution chains of the world and Viet Nam.

However, he said that Vietnamese products have proved their vitality and played an important role in the domestic market in the period.

Growth in retail goods has been a spotlight of the domestic economy, he said, attributing the result to the campaign calling on Vietnamese people to use Vietnamese products launched by the Politburo 13 years ago.

In the campaign, the MoIT is tasked to implement programmes to strengthen Vietnamese products' identification nationwide, he said.

The official said that this year, the programme will have new features with direct interactions between producers and distributors and between businesses and consumers, as well as activities to honour outstanding products.

VIMC plans to divest from big seaports

Vietnam National Shipping Lines (VMIC) has completed the corporation's restructuring scheme draft for 2021–2025 and sent it to the related ministries and agencies for comments. VIMC proposes reducing the parent company's state ownership rate from 99.4 per cent to 65 per cent.

Specifically, VIMC suggested reducing the capital ownership of the parent company in five ports to 51 per cent. These ports are Can Tho Port (with 99 per cent of the capital), Cam Ranh Port (nearly 81 per cent), Quy Nhon Port (75 per cent), Da Nang port (75 per cent), Cai Lan port (56 per cent).

For Hai Phong port, VIMC proposes to reduce the equity ratio from 92.5 per cent to 65 per cent and divest all capital in Viet Nam Hi-tech Transportation Company Limited, where VIMC is currently holding 56 per cent of the capital.

CMSC said that VIMC's member businesses are holding large, important seaports and doing business effectively. In 2021, the profit before tax of port businesses was nearly VND2.6 trillion (US$104.6 million), accounting for 71 per cent of VIMC's consolidated profit, which was mainly from Sai Gon, Quy Nhon, Hai Phong, and Da Nang Port.

CMSC recommended that VIMC divest capital in seaport enterprises, but only to a 65 per cent ownership rate.

As for VIMC's member businesses in shipping, maritime services, and logistics industries, VIMC proposes to divest all capital the company holds in most of these companies, including Oriental Shipping and Trading JSC, Vietnam Sea Transport and Chartering JSC, and Dong Do Marine JSC.

In the case of Vinaship and VIMC Logistics, VIMC proposed divesting a portion of each company, keeping only 36 per cent of the shares in each.

CMSC agreed with VIMC's proposal on the divestment of member enterprises in the fields of shipping, maritime services, and logistics.

For shipping enterprises, this Committee said that the units mainly operate bulk carriers with a long service life (over 20 years on average), so operating costs are high, and some businesses suffer long-term losses. 

Central Highlands farmers rush to grow durians

People in the Central Highlands region have reduced the area devoted to coffee and pepper cultivation and turned instead to durians after the fruit was licensed for export to China.

Bui Tin, chairman of Krong Bac Organic Agriculture Cooperative, said local farmers previously earned around VND100 million (USD4,032) a year from one hectare of coffee and pepper, meanwhile, the figure is VND500-700 million for the same area of durian. In the coming time, the co-operative will remove unproductive old coffee trees to grow durians.

According to the General Statistics Office, since 2010, there has been a five-fold increase in land devoted to durian cultivation in Vietnam, an increase to 90,000ha by 2022. Over the past two years alone, durian growing has increased by 20,000 hectares. The country sees annual durian productivity of 1.3 million tonnes.

Dang Phuc Nguyen, General Secretary of the Vietnam Fruit and Vegetables Association, said that durian prices had seen a great improvement since being licensed for export to China.

Nguyen, however, added that only durian that met Chinese phytosanitary protocol requirements would be allowed to be exported to China.

Nguyen Nhu Cuong, Deputy Director of Plant Cultivation Department, said that Vietnam was home to 90,000 hectares of durian, but only a small amount fulfilled Chinese import criteria.

To avoid oversupply, such as seen with pepper, people were advised not to just swap over to growing durians.

Travel firms start offering Tet tours

Travel companies in HCM City have started selling tours for the coming Lunar New Year Tet Holiday.

The demand for Tet 2023 tours has been forecasted to sharply rise after the Covid-19 pandemic has been mitigated.

The tours include those linking HCM City with northwestern destinations and Phu Quoc, Hue, Danang and Con Dao.
 
According to travel companies, demand for outbound tours has been on the rise following the removal of travel restrictions.

Currently, trips to Thailand and Japan have sold well. Tours to South Korea have attracted more people, particularly after direct flights between Cam Ranh and Seoul and Busan were put into service.

HCM City has set a goal to welcome a total of 25 million visitors, including two million travellers from abroad.

Vingroup's profit doubles in Q3
     
Vingroup on October 30 released its consolidated financial statements for the third quarter of 2022, with a profit after tax of over VND506.3 billion (US$2 million).

In the third quarter, Vingroup’s net revenue from business activities reached VND28.7 trillion, down 5 per cent over last year, whereas its gross profit halved to nearly VND5.8 trillion.

During the period, the revenue from financial activities was 6.5 times higher than in the same period in 2021, amounting to nearly VND10 trillion. The gains were attributed to the liquidation of financial investments and the transfer of subsidiaries.

The strong increase in financial revenue in the third quarter helped Vingroup record a profit after tax of VND506.3 billion, more than double over 2021.

For the first nine months of 2022, the company’s total consolidated net revenue, including revenue from real estate transfer recognised in financial income in the first nine months of 2022, reached VND88.19 trillion, a 4.7 per cent decrease year-on-year.

As of September 30, Vingroup's total assets advanced by 30 per cent over the end of 2021 to VND555.5 trillion, mainly boosted by the successful launch of new real estate projects.

In capital mobilisation, since the beginning of 2022, Vingroup has successfully raised $760 million from the international capital market.

In October, the Asian Development Bank (ADB) arranged a $135 million climate change financing package for VinFast to support the production of public transport electric buses and a network of Vietnam's first national-scale electric vehicle charging stations.

Vietnam Motor Show 2022 opens
     
New cars from 14 leading brands are being introduced at the Vietnam Motor Show 2022 which officially kicked off at Saigon Exhibition and Convention Center (SECC) in HCM City on Wednesday.

The exhibition, which takes place from October 26th to October 30th, is expected to attract thousands of visitors after a two year absence due to the COVID-19 pandemic.

With the theme “Drive Over The Challenges”, Vietnam Motor Show 2022 showcases the spirit of the attending brands in overcoming difficulties and turning challenges into opportunities with a view to offering consumers the best products.

Vietnam Motor Show 2022 features 14 brands including Audi, Brabus, Honda, Jeep, Lexus, Mercedes-Benz, Mitsubishi Motors, Morgan, MG, RAM, Subaru, Toyota, Volkswagen and Volvo, who are displaying a combined 120 models.

In addition to popular models to be displayed, many new cars and concept cars are being launched such as Audi e-tron 50 SUV quattro, Brabus G800, Morgan Plus Six, Honda Civic TypeR 7th generation, the all-new Jeep Grand Cherokee L, Lexus LF-Z electrified concept, the all-new electric flagship of Mercedes-EQ–EQS, MG Marvel R and all-new MG4, the all-new Subaru WRX and WRX Wagon, the Subaru’s 6th-generation outback, the Subaru’s 2nd-generation BRZ, the new Subaru Forester, CKD Veloz Cross, Volkswagen Tiguan and Volkswagen Touareg, and the Volvo XC90 Recharge Ultimate.

This year's Vietnam Motor Show can be considered the largest-scale version of the show so far with a total area of up to 40,000sq.m consisting of a nearly 20,000sq.m indoor display area.

Vietnam’s strong economic recovery in 2022 lays foundation for next year’s growth

The Vietnamese economy is recovering swiftly in the final months of 2022, with GDP growth for the full year forecast to reach 8%, laying a strong foundation for a growth rate of 6.5% in 2023.

According to Deputy Minister of Planning and Investment Tran Quoc Phuong, the target of 6.5% GDP growth for next year is based on the assessment that the Vietnamese economy is maintaining its recovery momentum and has a low risk of external shocks.

But as many international and domestic organisations predict 2023 to remain a challenging year, Vietnam’s growth is unlikely to reach the same high level as in 2022. Therefore, the projected growth of 6.5% for 2023 is a reasonable target.

The growth drivers will come from various factors such as domestic consumption, public investment, exports, and especially the continued strong recovery of the services sector. Deputy Minister Phuong said services have made a positive recovery this year but have not reached pre-pandemic levels, with total international arrivals estimated at 1.8 million, compared to 18 million in 2019.

A review of supply suggests that the services sector will recover fully in 2023, requiring measures to diversify tourism products to meet the new requirements of the market.

According to economic experts, Vietnam’s productivity has improved but remains low compared to many countries in the region and risks falling behind. The solution is to enhance productivity in enterprises. To shorten the gap with developed countries in the region and the world, it is necessary for enterprises to incessantly innovate, employ advanced technology, and have an appropriate policy to for the effective use of labour and capital. This process cannot be done without the support of the Government’s mechanisms and policies, especially those regarding research and development activities.

Quang Ninh begins construction of social housing project with nearly 1,000 apartments

The People’s Committee of Ha Long City in Quang Ninh Province commenced construction of a social housing project for nearly 1,000 apartments in Ha Long City’s Hong Hai Ward and Cao Thang Ward on October 30.

The project covers a total area of 25,900m2, including over 7,400m2 of construction land.

The project has three apartment buildings, including two 19-storey buildings and one 17-story building with a total construction floor area of about 125,220.3 m2.

It requires total investment capital of about 1.3 trillion VND (52.3 million USD) and is expected to be completed and put into use by the first quarter of 2026.

Chairman of the People’s Committee of Quang Ninh Province Nguyen Tuong Van emphasised that the social housing project in Ha Long is among the major social housing projects in the province and is located in the province’s most beautiful and prime location with synchronous and modern technical infrastructure.

Upon its completion, the project will provide accommodation for more than 3,880 workers and low-income people.

Rules on temporary CIT payment adjusted

The Government has issued a resolution allowing enterprises to temporarily pay 80% of the corporate income tax (CIT) for all of 2022, with the deadline set for the end of January 2023.

The total CIT amount that enterprises pay in advance must not be lower than 80% of the amount in the tax finalization. In case taxpayers underpay the tax amount, they would be fined.

In the old regulations, businesses were required to pay 75% of the payable CIT for the first three quarters by October 31, 2022. Therefore, those businesses that missed this deadline should now pay 80% of the full-year amount by January 30 next year.

The legal adjustment is intended to remove difficulties for enterprises and help them actively monitor the cash flow in the last two months of the year.

With the old regulations, many enterprises with high growth rates in the fourth quarter were fined for failing to ensure that their temporary payment in the first three quarters was higher than 75% of the payable CIT amount in the whole year.

The new resolution takes effect from the date of signing, October 30, 2022.

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