The Ministry of Transport has allocated nearly 8.6 trillion VND (359.3 million USD) for the second phase (2021-2025) of the North-South Expressway’s eastern section.

Specifically, investment in the North-South Expressway project - phase 2 totals 120 trillion VND (5 billion USD), of which 47.2 trillion VND (1.97 billion USD) is taken from the State budget for the medium-term public investment plan of the 2021-2025 period and 72.5 trillion VND (3.04 billion USD) is from the State budget for infrastructure investment development under the National Assembly’s Resolution on fiscal and monetary assistance for the socio-economic recovery and development programme.

Up to now, the Government has allocated to the Ministry of Transport 47.2 trillion VND (1.97 billion USD) for 2021-2025 medium-term public investment capital and it will be disbursed in 2023.

Currently, the ministry has allocated 257 billion VND (10.8 million USD) for investment preparation and more than 8.33 trillion VND (349 million USD) for site clearance in 2022.

The second phase of the expressway project consists of 12 component projects with a total length of 723.7km, of which the Ha Tinh-Quang Tri section is 260.9km, Quang Ngai-Nha Trang is 352.1km and Can Tho-Ca Mau is 110.9km.

Temporary shortage of fuel needs more practical solutions

The domestic fuel market for the last two months has become rather unstable, provoking uneasiness among the public. That results from disrupted supplying sources and fluctuating fuel prices. It is high time the State adopted feasible measures to stop this worrying situation.

The core reason of a temporary fuel shortage in the country lately is because after storing a large amount for speculation purposes, certain wholesalers are now facing profit loss as the retail prices continuously drop. They have decided to sell their merchandise in small volumes, with priority to gas stations in their system, in hope of reducing this loss as much as possible.

It is also believed that the shortage in the Southern region is due to smuggled and fake gasoline lines having been effectively eliminated. Formerly, even with a zero percent discount, fuel retailers still somehow obtain certain profit amounts. However, when smuggled gasoline lines are stopped, these sellers encounter profit loss, and thus feeling discouraged.

Another reason for this profit loss is the miscalculation of all expenses when identifying the base price for fuel. Therefore, the Ministry of Industry and Trade has worked with the Finance Ministry to adjust this base price, counting all possible surcharges, costs, and premiums in the upcoming price regulation on October 11, in hope of helping wholesaler businesses to increase the discount rate for retailers.

In a long term, the management responsibility of the Ministry of Industry and Trade should be better clarified. At the time detecting signals of hoarding fuel to wait for price rise, this Ministry has already formed inspection teams. Nevertheless, these teams just checked 17,000 retailers, not 33 wholesalers, and therefore cannot clearly address the problem one and for all.

Minister of Finance Ho Duc Phoc yesterday stated that the Ministry of Industry and Trade is in charge of monitoring both wholesaling and retailing activities for this merchandise, or in short, the maintenance of a stable petroleum supply, logical intermediary and administrative costs of fuel businesses. More importantly, it is necessary to establish a flexible and effective apparatus to reduce intermediary expenses.

In addition, it is advisable to strengthen data connection with the customs in order to monitor imported fuel volumes as requested by the Government, to control the petroleum distribution flow for more effective governance. The Fuel Price Stabilization Fund should be eliminated. When the international fuel prices go down, the corresponding domestic prices fall disproportionately due to the need to increase the setting up of this fund or to compensate for the previous negative amount.

Food processing companies face raw material shortages

Food processing enterprises have to import some 90% of food materials despite the country’s plentiful resources, placing Vietnamese food products at a disadvantage against their rivals in the domestic market.

Data from the HCMC Statistics Office showed Vietnam’s and HCMC’s industrial production index of the food processing industry grew 9% and 11.9% over the same period last year, respectively.

Vietnam spent US$13.2 billion on imports of materials like seafood, vegetables, corn, cashews and ingredients from foreign markets such as China and the European Union, the General Department of Vietnam Customs reported.

Vietnam still struggled to sustainably expand and develop markets for its agricultural commodities, and faced problems such as guiding farmers through applying science and technology. These have posed challenges to processing and manufacturing companies as they require a large volume of materials, according to Nguyen Dang Nghia, former director of the Southern Center for Soil, Fertilizer and Environmental Research.

Le Nguyen Doan Duy, business development director of AIG ASIA Ingredients Corporation, said that building a processing plant with output of 100,000 tons requires at least 200,000-300,000 tons of inputs. “It is tough to ensure such a material input volume, as raw material areas cannot meet the demand,” he added.

Many food processing companies said they were operating at 70-80% capacity due to a shortage of raw materials. Meanwhile, some were at risk of making losses and compensating contracts as production costs soared.

Given the current situation, many enterprises were developing their raw material areas to control and guarantee input quality and orient toward self-sufficiency in the raw material supply, Duy said.

Meanwhile, the Government should develop policies to support farmers and build linkages between farmers and food processing businesses so that regions could develop sustainably, he suggested.

Hanoi: hi-tech farm produce to account for 70% by 2025

The capital city of Hanoi has targeted that by 2025, hi-tech farm produce will account for 70% of the total agricultural products.

Of which, hi-tech cultivated products will make up at least 45% while animal farming products will account for 80% and aquatic products 60%.

To such end, Hanoi will form and develop at least 44 hi-tech agriculture firms, one hi-tech agriculture centre and one hi-tech farming zone.

The city will also pilot 10 hi-tech agriculture cooperatives, assist in digital transformation for One Commune, One Product products this year, and develop 30 hi-tech agriculture cooperatives, among others.

Realty estate benefits from credit limit adjustment for banks

The State Bank of Vietnam (SBV) extends the credit limit in 2022 for a number of credit institutions. Accordingly, the credit room limit is adjusted from 0.7 percent – 4 percent for different commercial banks.

Although just several commercial banks were approved credit room extension, according to experts, real estate businesses are excited about VND457,000 billion, which will pump into the market according to the 2022 credit growth target of 14 percent.

This is a positive move, which has a strong impact on customers’ psychology, helping the market get more transactions from real home buyers and the real estate market is expected to heat up.

Previously, the SBV had tightened credit resulting in limited supply of houses in the past eight months; worse, most of high quality housing projects were invested by reputable companies with good financial background. Therefore, the move to loosen the room will help businesses develop new supply and free up inventories in the near future.

Hanoi develops key industrial products

Hanoi is looking to drive the sustainable development of the capital’s economy by taking a series of measures that include developing its industrial sector and product competitiveness in order to play an ever evolving role as it integrates with the global supply chain.

Under a 2021-2025 programme set out by the municipal Party Committee, Hanoi is targeting a new growth model to effectively promote its potential and strengths in economic development; effectively tapping available resources; taking advantage of the achievements made in the fourth industrial revolution, and improving the production value of key industrial products.

To that end, the municipal People’s Committee has issued directions and projects for the development of key industrial products till 2025. The city has so far recognised 117 products at 81 enterprises, 22 of which have earned a revenue of over 1 trillion VND. Of those, 12 are among the top 500 Vietnamese businesses and 10 have global trademarks.

The city has set up eight key industrial sectors with thousands of products, mostly in priority and core industries such as new materials, mould production, electricity and electronics. Several firms have recorded annual revenues of over 1 trillion VND, including Son Ha Group, and Rang Dong Light Source & Vacuum Flask JSC. Others have broken the 4 trillion VND annual barrier, including Vicostone, Garment 10 Corporation and Sunhouse Group. They contribute trillions to the municipal State budget every year.

Vietnam-Australia trade up over 33% in nine months

Trade between Vietnam and Australia rose 33.4% to nearly 12 billion USD in the first nine months of this year after reaching a record in 2021, according to the Vietnam Trade Office in Australia.

In the period, export revenue generated in the Australian market hit 4.2 billion USD, up nearly 34%, while Vietnam’s total exports increased 17.2%.

Notably, strong growth was seen in the export of many products, including footwear (30.83%), garment (29.8%), seafood (52%), steel (205%), wood and furniture (26%), and coffee (102%).

In the first eight months of this year, Vietnam was the 10th biggest trade partner of Australia, while Australia is the seventh greatest of Vietnam.

Network helps connect Vietnamese, German experts in automobile sector

The Vietnam Germany Innovation Network (VGI Network) has held a conference in Wolfsburg, Germany, to foster connectivity among Vietnamese experts and businesses as well as those of the Vietnamese origin in automobile industry and relevant technical sectors.

The VGI-Automobile conference aimed to link experts with Vietnamese businesses operating in the European market in technical sectors to support the firms in approaching and partnering with German enterprises where Vietnamese and Vietnamese-origin experts are working.

It also offered a chance for the experts to meet diplomatic officials and representatives from Vietnamese ministries and sectors to explore the demand of Vietnamese businesses at home, and introduce their capacity and possibility to bring German technologies to the firms.

Vietnam Medi-pharm Expo to be held in Hanoi

The 28th Vietnam Medi-pharm Expo will take place from December 1-3 in Hanoi, giving a chance for businesses to seek partners and popularise their products and technologies.

This year, the exhibition will feature about 200 booths by 150 businesses from various countries.

According to the organiser, the Vietnam National Trade Fair & Advertising Company (VINEXAD), covering 5.000 sq.m, the exhibition will offer a diversity of products.

Along with big domestic players, the exhibition also expects reputable firms from other countries, including Meditech Systems, Narang Medical, Opsonin Pharma, Crystal Optic, Biofaktor, StarPharma, and Moscow Export Centre.

VINEXAD highlighted that Vietnam is an attractive and promising medical market. The IQVIA Institute placed Vietnam among the 17 countries with the most rapidly growing pharmaceutical industry in the world.

The pharmaceutical industry’s revenue is expected to hit 7.5 billion USD in 2025, accounting for 1.78% of the country’s GDP and 32.25 of spending on healthcare services, it noted.

Vietnamese pangasius exports to ASEAN market surge

Vietnam’s pangasius exports to the ASEAN market during the opening nine months of the year soared, reaching an estimated US$152 million and accounting for roughly 8% of total pangasius exports to foreign markets.

Major markets which make up a large proportion of exports of the item in ASEAN include Thailand, the Philippines, and Singapore. Thailand accounts for 3.6% of Vietnamese pangasius export value with pangasius exports to this market by the end of the third quarter of the year exceeding US$70 million, up 81% against the same period from last year.

Most notably, September alone saw the Philippines market record the strongest growth with a five-fold rise against the same period from last year.

By the end of the third quarter, pangasius exports to this market soared by 92%, duly reaching over US$25 million and accounting for 1.3% of total pangasius exports.

HCMC to break ground on three key traffic projects in late 2022

Three key traffic projects in HCMC will get off the ground in December to ease traffic congestion in the city.

Luong Minh Phuc, director of the HCMC Management Board of Investment and Construction of Traffic Projects, told Phap Luat newspaper that the board was enhancing its efforts to complete all relevant procedures to break ground on the three projects in late 2022.

These strategic projects include expanding National Highway 50 and building the An Phu intersection and a road linking Tran Quoc Hoan Street and Cong Hoa Street.

The An Phu intersection project in Thu Duc City will help reduce traffic congestion facing a road leading to the Cat Lai port and facilitate traffic connectivity with the Long Thanh international airport in Dong Nai Province, which is under construction.

Meanwhile, the project to build a road connecting Tran Quoc Hoan Street with Cong Hoa Street in Tan Binh District is expected to ease traffic congestion around the Tan Son Nhat International Airport and enhance the connectivity of the third terminal of the airport.

The road will be completed in August 2024, so its opening can be synced with the opening of the third terminal in September 2024, said Phuc.

National Highway 50 in the city’s outlying district of Binh Chanh frequently faces traffic congestion, posing a high risk of traffic accidents. As such, expanding the highway is a necessity, according to the management board.

The project’s site clearance is over 80% complete. After the expansion project is completed, the road will help roads connecting HCMC with Long An Province and other Mekong Delta provinces work effectively.

The three projects are being designed, so their construction and installation packages will soon be tendered, said Phuc.

Firms change capital-raising plans amid bearish sentiment

Many firms have begun to change their capital-raising plans amid the recent decline in the stock market, according to experts.

Sao Mai Group Corporation (HOSE: ASM) initially planned to issue roughly 168 million shares to raise over 2 trillion VND.

About 1.6 trillion VND of the proceeds would be used to add to its operating capital, 253 billion VND to invest in An Giang Tourism Development JSC, and 69 billion VND to invest in Dong Thap Tourist JSC.

However, the firm later announced the cancellation of the plan on grounds of global uncertainties and unfavourable market conditions.

Louis Capital JSC (HOSE: TGG) followed suit by shelving its plan to issue 54.6 million shares, of which one half was offered to existing shareholders and the other to investors via private placement.

Kien Giang Construction Investment Consultancy Group (HOSE: CKG) did likewise by suspending its registration for the private placement of 13.4 million shares.

Approved in August, CKG's plan aimed to offer the shares, 15,000 VND apiece, to professional investors to raise 201 billion VND, which would be used for debt settlement and wage payments.

Experts attributed the cancellation of the capital-raising plans to a bearish market, which saw many stocks fall off peaks by between 50 and 70% in prices.

Price drops make the share offerings less attractive to investors, leaving many issuers with no choice but to cancel their plans to avert unsuccessful issuances.

However, some issuers stayed the course by lowering their offering prices amid bearish sentiment.

Development Investment Construction JSC (HOSE: DIG) drew up a new plan to offer 100 million shares at most to its existing shareholders to mobilise 1.5 trillion VND for the Long Tan Tourism Urban Project.

Under the plan, DIG new offering price (15,000 VND per share) was set at half the offering price set in late May (30,000 VND per share).

Thu Duc Housing Development Corporation (HOSE: TDH) initially approved the plan to offer 120 million privately-placed shares at a price of 12,000 VND apiece in its general meeting early in the year.

However, the firm later adjusted the plan by cutting the offering volume to 58 million shares and the offering price to 10,000 VND apiece, down 20%.

The purpose of issuance was changed as well, from financing Dong Trung Residential Project in Binh Duong province to financing Nha Dat Residential Project in Long An province.

Although share offerings were not so successful for some firms, total capital raised by the channel in the first nine months of 2022 stood at tens of trillions of dong.

Securities firms and banks took the lead in terms of volume and success rates. Remarkably, NamA Bank, SEABank, VNDirect and SSI managed to raise trillions of dong through share offerings to existing shareholders.

BIDV Securities JSC (BSC) successfully raised nearly 2.7 trillion VND from offering privately-placed shares to its Korean shareholder Hana Securities with a price of 41,000 VND apiece, about 37% higher than their market price.

Vietnam Container Shipping JSC said it took them up to 11 months to raise capital via public offerings. In the capital-raising plan in mid-September, it switched to private placement to not "pass up the opportunity to competitors".

Public offerings allow issuers to distribute shares to more than 100 investors. However, this means of issuance sets the bar high on issuers' financial health and incurs a lengthy procedural process.

Vietnam Wood 2022 to take place in mid-October in HCM City

The 2022 Vietnam International Woodworking Industry Fair (Vietnam Wood 2022) will be held in Ho Chi Minh City from October 18-21, aiming to promote technological transformation of Vietnam’s wood processing industry.

Taking place in both virtual and face-to-face forms, the event will be held alongside the Vietnam International Furniture Accessories, Hardware & Tool (Furnitec 2022) exhibition.

According to Nguyen Chanh Phuong, Vice President of the Ho Chi Minh City Handicraft and Woodworking Association (HAWA), Vietnam Wood 2022 will gather 250 exhibitors from 24 countries and territories.

Canada, France, Germany and Russia are expected to run pavilions at the fair, which showcases the global value chain of the woodworking industry.

Binh Duong encourages enterprises to invest in social housing
     
The southern province of Binh Duong has called for investment in the development of social housing projects due to a shortage of supply.

Mai Hung Dung, standing vice chairman of the People's Committee of Binh Duong, said the development of social housing in the province has not yet met the demand, nor has it attracted much investment.

Therefore, Binh Duong will prioritise several companies with available land funds and investment for social housing development.

The province also calls for economic sectors to invest in social housing construction and incentivise investors in existing social housing projects. For example, social housing projects for industrial park workers would be exempted from land use levies and face exempted or reduced value-added tax and corporate income tax.

The investors of these projects would also get preferential credit loans from policy banks and commercial credit institutions and receive financial support in constructing technical infrastructure systems.

At the same time, the province has proposed the Government pump capital from the State budget to the Bank for Social Policies for eligible workers taking the loans to buy or rent social housing products with preferential interest rates.

The province has also requested the Government issue a separate mechanism for social housing projects to attract investors.

Deloitte Vietnam releases retail report for Vietnam

Deloitte Vietnam published the Retail in Vietnam 2022: Omnichannel Takes Off report, exploring some of the transformative trends in the country’s retail sector, as well as opportunities for retailers to innovate and develop multi-fold strategies.

Vietnam’s economy looks set for a rapid rebound in 2022. This promising outlook is expected to have positive knock-on effects on its retail sector – which is itself in the midst of several significant transformations.

To help retailers better understand Vietnam’s retail sector in the new context, Deloitte Vietnam releases the Retail in Vietnam 2022: Omnichannel Takes Off report, which explores some of these transformative trends and opportunities that they present for retailers to innovate and develop multi-fold strategies.

One trend that stood out was the accelerated normalisation of omnichannel retail on the back of the pandemic. Today, most Vietnamese consumers in urban areas are used to omnichannel purchasing, making purchases via brick-and-mortar stores, brand websites, and third-party instant messaging platforms and food delivery apps – toggling between them to find the right delivery slot or promotional deals.

The report also explores the impacts of COVID-19 on non-grocery and grocery retail segments in Vietnam and the ways in which their market dynamics have evolved over the last two years. While the report highlights the sales by type and how the locations of retail stores and shopping malls affect purchasing behaviours in the non-grocery retail segment, Deloitte experts have an in-depth analysis of the grocery retail segment.

Vietnam should use intellectual property as tool for economic growth: experts

Intellectual property (IP) does not merely belong to the technical or legal aspects but also an effective tool for national economic development and businesses’ profit growth. It has become one popular property to be used by the public nowadays.

In his latest visit to Vietnam, Deputy General Director Hasan Kleib of World Intellectual Property Organization (WIPO) stated that the use of IP to develop a business is critical all over the world, including Vietnam, which needs to consider it as a tool to promote its own national economic growth.

Sadly, Vice Chairman of the Intellectual Property Office of Vietnam Tran Le Hong informed that although in developed countries, IP accounts for 90-95 percent of the production performance of a company, this proportion in Vietnam is rather low. Therefore, without breakthrough approaches in investment, manufacturing, and trading activities related to IP, it is difficult for the country to achieve the goals set by the Central Party and the State.

Many domestic and foreign experts in the IP field commented that Vietnamese businesses still do not pay proper attention to IP in their operation. As many of them are not truly aware of the importance of IP rights protection, the value of IP is not fully exploited in their manufacturing and trading activities.

Luckily, a large number of enterprises are gradually putting more attention to policies and financial mechanisms in the IP field. They wish to learn from international experience and to receive support from WIPO in improving their specialized skills and commercializing, valuating IPs.

WIPO shared that it now has various tools and programs to help businesses to better manage their IP rights. In particular, it offers guidebooks and books, software to evaluate the current IP status of a company (IP Diagnostic), a consultation program for IP management (IP Management Clinics). These are available on its official website.

Vietnam is planning to organize some IP-related events and programs in the upcoming time such as developing intermediary organizations to support enterprises in managing IPs, hosting training sessions and offering consultation sessions on IP.

Indian-based financiers eager to pour further investment into the country

Prominent Indian investors are eager to pump money into Vietnam in sectors such as IT, energy, healthcare, and car components, as shown in a recent round of senior business meetings.

Over the last two months, Indian investors have organised events and field surveys across the country to look for opportunities.

The Confederation of Indian Industries led a delegation of 15 leading companies to Vietnam on September 25-28 to participate in the India-Vietnam Business Forums held in the southern province of Binh Duong and Hanoi.

Indian investors are looking for local partners to enhance bilateral cooperation in various sectors, such as energy, electric vehicles, IT, petrochemicals, healthcare, water treatment, food and beverages, fertilisers, and food processing.

In late August, 25 automotive component manufacturers from India arrived in Vietnam to look for funding opportunities. The manufacturers are all members of the Automotive Component Manufacturers Association (ACMA), which has over 800 members and accounts for 85 per cent of component production revenue in India.

Developers eager to cultivate funding in industrial real estate

As industrial real estate is considered an attractive investment channel, several enterprises are beginning to focus more funding on the sector.

Vietnam Rubber Group (VRG) is completing its restructuring scheme for 2021-2025 to submit to the Committee for Management of State Capital at Enterprises. One of the highlights is that industrial real estate will be one of three core business sectors, and the company will foster divestment from the rubber sector to mobilise resources for the industrial real estate sector.

VRG general director Le Thanh Hung said that by 2025, the group’s revenue is expected to increase by 30 per cent, and profit will increase by 25 per cent. The group’s consolidated revenue is expected to climb to VND161 trillion ($7 billion), and consolidated pre-tax profit will be $1.49 billion. The after-tax profit of the parent company will be $536.9 million.

Currently, VRG manages nearly 492,000 hectares of rubber plantations, 342,000ha of which are in Vietnam, with the majority in the Southeast region and Central Highlands.

According to the industrial real estate development strategy for 2021-2030, VRG plans to develop 48 industrial parks (IPs) with a total area of 37,400ha and 28 industrial clusters with a total area of 1,800ha, which will be mobilised from converted rubber plantation areas.

VRG is managing 12 IPs with a total area of 6,000 hectares, of which it has filled over 4,000ha of the subleasing land and warehouse. New projects such as the expansion of Nam Tan Uyen IP, An Dien, and Minh Hung III are in the process of implementing legal procedures for investment.

Haiphong-Bac Ninh waterway container transport route proposed

The Vietnam Inland Waterways Administration has proposed a model waterway container transport route in northern Vietnam from Haiphong seaport to ICD Tan Cang Que Vo in Bac Ninh Province, a regional logistics center.

The waterway container transport route, which has a total length of 115km, would be as follows: Lach Huyen port – Cai Trap canal – Cam river – Han river – Kinh Thay river – Thai Binh river – Duong river – ICD Que Vo.

This route was proposed based on the high demand for container transport from Haiphong to Bac Ninh and other neighboring provinces.

In 2021, the total imports of the country’s north reached over 4 million TEUs, an increase of 12% over the year 2020, among which the region of Bac Ninh – Bac Giang – Thai Nguyen amounted to 40%.

This is a potential market for logistics development, in which the transport route from Haiphong port to Bac Ninh and other neighboring provinces is the arterial one.

Vietnam’s economy stands firm in rapid recovery path: AMRO

Vietnam’s economy continues its rapid recovery after the severe Covid-19 impacts during the 2020-2021 period with estimated GDP growth of 7% for this year and then moderate to a more sustainable growth rate of 6.5% in 2023.

The ASEAN+3 Macroeconomic Research Office (AMRO) revealed the findings today [October 6] as part of the launch of its flagship report “ASEAN+3 Regional Economic Outlook” (AREO 2022) for the ASEAN+3 region (comprising ten members of ASEAN and China, Hong Kong (China), Japan and South Korea).

The growth forecast also showed an upward revision from AMRO’s projection in July for the country’s economy at 6.3% for 2022, making it among the top performers behind only Malaysia at 7.3%.

“While the low base effect last year [at 2.6% growth in 2021] has been among factors for Vietnam’s high growth, others have also come into consideration, such as the Government’s approach in easing Covid-19 restriction measures, resilient external demand, recovery of the tourism sector, FDI inflows, and effective State supporting measures,” AMRO Chief Economist Hoe Ee Khor said.

Khor noted that as Vietnam’s economy continues its path of recovery, tremendous inflationary pressure is on the horizon in light of a pickup in domestic demand and rising commodity prices.

However, the country’s inflation rate is projected to expand by 3.5% this year, below the Government’s ceiling target of 4%.

AMRO’s report noted in the time ahead pandemic containment remains the major domestic challenge, with the ongoing recovery in domestic demand and export performance resting crucially on the nature of containment measures.

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