Mining coal at Vinacomin's at Hà Tu Coal JSC. The group will produce 8.5 million tonnes of coal in the fourth quarter 2023 to complete the whole year's production target of 37.2 million tonnes. —VNA/VNS Photo Trần Việt

Việt Nam Industry - Coal and Mineral Industries Group (Vinacomin) will promote production in the last quarter of this year to complete production and business targets for 2023.

According to the yearly plan, Vinacomin will produce 8.5 million tonnes of coal in the fourth quarter 2023 to complete the whole year's production target of 37.2 million tonnes. It would also import 3.6 million tonnes of coal and sell 11.5 million tonnes of its coal to reach 48 million tonnes of consumed coal this year.

Vinacomin general director Đặng Thanh Hải said in 2024, the coal output that Vinacomin supplies to electricity producers is estimated to reach 44-45 million tonnes, while the output of raw coal has not increased due to limitations in mining volume set by exploitation licences.

Therefore, Vinacomin will increase coal imports in the fourth quarter of 2023 by 700,000 tonnes to ensure the group's coal reserve level of at least 6 million tonnes, as well as meet the coal demand of thermal power plants from the beginning of 2024.

The group also continues to report to ministries and branches on problems in performing production and business activities, including exploitation licence, compensation for site clearance of Nam Cầu Trắng Factory, and business cooperation contract with Vietmindo.

Vinacomin chairman Ngô Hoàng Ngân has also required member companies to be proactive in removing difficulties, reviewing plan targets, and completing production and business plans. They need to promote investment in production development and key projects.

In the fourth quarter of 2023, member companies will boost production, increase output, meet coal needs for the economy and contribute to the economic growth of Quảng Ninh province and the country.

Regarding Vinacomin's production and business in the first nine months of 2023, Vinacomin general director Đặng Thanh Hải said the group made many efforts and basically completed the assigned plans and tasks. In particular, some member companies achieved high output and revenue, and workers' income increased over the same period.

According to Vinacomin's report, in September, the group produced 2.75 million tonnes of coal, imported 560,000 tonnes and consumed 3.5 million tonnes. 

At the same time, the group produced 120,000 tonnes of alumina and sold 137,100 tonnes. Besides that, it also produced 5,500 tonnes of copper; and produced and sold 616 million kWh of electricity.

The group's September revenue reached VNĐ13.69 trillion, including VNĐ8.7 trillion from coal.

During the first nine months this year, Vinacomin achieved a total coal mining output of 28.68 million tonnes, reaching 73 per cent of the year plan, equal to 94 per cent compared to the same period in 2022. 

At the same time, the group sold 36.09 million tonnes of coal, a slight increase of 1 per cent year on year. Of which, the domestic consumption was 35.66 million tonnes, including 30.02 million tonnes for the electricity industry; 1.62 million tonnes for the fertiliser and alumina industries; 831,000 tonnes for the cement industry; and 3.2 million tonnes for other sectors.

The group's total revenue in nine months was estimated at VNĐ127 trillion, unchanged against the same period in 2022, including VNĐ79.4 trillion from coal revenue, a slight reduction of 2 per cent against the same period. 

The group has paid about VNĐ23.44 trillion for the State budget, an increase of 42 per cent over the same period. 

Liquidity of banking system forecast to be abundant in Q4 2023

Credit institutions expect liquidity of the banking system will be abundant in the fourth quarter of 2023, and deposit and lending interest rates will continue to decrease.

The forecast was based on a survey of business trends among credit institutions in the fourth quarter of 2023 released recently by the State Bank of Vietnam’s Department of Forecasting and Statistics.

According to credit institutions, the liquidity of the banking system in the third quarter of 2023 continued to maintain a good and improved status compared to the second quarter of 2023. Credit institutions predict that the liquidity situation will continue to be abundant in the fourth quarter of 2023 and for the whole year 2023 compared to 2022.

Credit institutions also expect the average deposit and lending interest rates in the banking system to continue to decrease by 0.26-0.35 percentage points in the fourth quarter of 2023.

As expected in the June 2023 survey, at this survey period, credit institutions said they continued to adjust and reduce the average price of their products and services. In general, compared to 2022, the average price of products and services in 2023 is forecast to decrease significantly, but may increase slightly in 2024 because service fees are expected to slightly increase while marginal interest rates are expected to continually decline.

The survey also showed capital mobilisation across the entire banking system is expected to increase by an average of 3.2 per cent in the fourth quarter of 2023 and increase by 8.7 per cent in the whole year, adjusted down compared to the 10.6 per cent expectation recorded in the previous survey. Outstanding loans of the banking system are expected to increase by 4.6 per cent in the fourth quarter of 2023 and increase by 12.3 per cent in 2023, adjusted down by 0.2 percentage points compared to the 12.5 per cent forecast in the previous survey.

According to the survey, credit institutions predict that customer demand for banking services may further improve in the fourth quarter of 2023 due to expectations of a more positive economic situation, and a gradual rebound of manufacturing and export sectors, in which loan demand is expected to improve more than deposit and payment demand.

For the whole of 2023, customer demand for banking services is forecast to increase at a slower rate compared to 2022. 

Legal barriers still shackling innovation developments

Vietnam has made big strides in innovation, but there are still many barriers that are shackling local development and keeping innovative companies on the ground.
PM Pham Minh Chinh gives directions on the functions and tasks of the National Innovation Centre, Photo: Nhat Bac
In the recent 2023 Global Innovation Index (GII), Vietnam ranked 46th among 132 listed countries and economies, up two places from 2022. The index, created by the World Intellectual Property Organization, also lists Vietnam as one of the top seven middle-income countries showing the most progress in innovation over the last decade.

Vietnam’s dynamic innovation ecosystem is thanks to the rapid development of its digital economy and its strong growth in the technology sector. In the GII, Vietnam’s main innovation strengths are listed as high-tech exports and imports, as well as labour growth.

This is reflected by the country’s position at 57th in terms of the innovation input sub-index and 40th in the innovation output sub-index, both marginal improvements on last year. However, the GII also noted a poor performance in institutional indicators.

One example is Sky Mavis, a startup that became a unicorn within three years and eight months, and is valued at $3 billion. The company was founded and is managed by Vietnamese, but its offices are located in Singapore.

“In Singapore, legal frameworks for overseas enterprises are better and easier, especially in transferring capital overseas. If we expand operations and markets to other countries, Vietnam’s regulations are too difficult. That is why a lot of technology startups have chosen Singapore as a destination,” Nguyen Thanh Trung, founder of Sky Mavis said.

In addition to Sky Mavis, numerous technology and innovation firms have already started their business in Singapore, including DotGears Co., Ltd. –­­ the company behind the breakout game Flappy Bird, among others.

“Amid the increasing competition among countries, a clear and up-to-date business environment is the most important factor,” said Le Han Tue Lam, general partner of Nextrans.

“If businesses cannot open up new markets or cannot find new ways to expand from the Vietnamese market, they will surely not choose Vietnam as a destination. How long does it take to build a more attractive policy and institutional framework? Investors can wait for a few years, but 10-20 years will be too long for their patience, and they will opt out of Vietnam,” he questioned.

Cao Anh Tuan, CEO of Genetica, a leading gene decoding centre, agreed that it is easier for companies located in overseas countries to mobilise capital, and investors often look at that country to count the number of unicorns, to understand the mechanism for investing and withdrawing capital, and how much the profit rate is.

“In Singapore and the United States, there are specific examples of businesses boasting huge profits, many thousands of times higher if a startup is successful, but in Vietnam, there are no such cases,” Tuan said.

In response to these roadblocks, policies calling for investment in innovation and incentives have been issued in recent years to the Law on Investment (2020) and the Law on Enterprises (2020), establishment and development of investment funds, small and medium-sized enterprises support fund.

“Additionally, the government has assigned the Ministry of Science and Technology to build new policies for technology and innovation firms, while the Ministry of Planning and Investment (MPI) is considering amendments to the decree on functions and tasks of the National Innovation Centre (NIC), including more effective policies to call for innovation in Vietnam,” said Minister of Planning and Investment Nguyen Chi Dung.

The NIC, an initiative of the MPI, started construction in 2021 at Hanoi’s Hoa Lac High-Tech Park, forming an innovation ecosystem with the three main pillars of the state - institutes - businesses, and connected to many international and local large corporations, R&D centres, 200 investment funds, and many Vietnamese experts and intellectuals around the world.

“We hope the NIC and its two headquarters on Ton That Thuyet street and at Hoa Lac High-Tech Park will become regional innovation hubs – high-class destinations of the innovation ecosystem,” Minister Dung said.

In particular, the Politburo has recently added innovation as a concept for Vietnam’s strategic strategy for the 2021-2025 period. The idea of innovation is also clarified in the country’s socioeconomic development direction and goals in all fields of society.

Promoting innovation and entrepreneurship is one of the key tasks stated in the government’s Resolution No.01/NQ-CP released early this year to strengthen socioeconomic development and improve national competitiveness by developing an innovation ecosystem. Ministries and agencies have proposed specific strategies and action programmes, formed numerous new production and business models and established various methods of mobilising resources for innovation.

“Seizing the opportunity of Industry 4.0 is a good chance for Vietnam to grow rapidly, catch up, and surpass, so it is necessary to realise this opportunity,” Minister Dung added.

Having seen the efforts of the Vietnamese government after a discussion with Minister Dung, in 2018, Cao Anh Tuan, who is CEO of Genetica, chose Vietnam as the location of the company after a lot of consideration.

“Our decision to base ourselves in Vietnam was our best decision ever. The youth in the Vietnamese workforce has contributed significantly to the success of Genetica in decoding the genes of not only Vietnam, but also regional economies such as Singapore, Taiwan, South Korea, and Indonesia. This is meaningful for human healthcare and treatment,” Tuan said, noting his appreciation for the support of the MPI and other Vietnamese ministries and agencies.

“With the current innovation ecosystem, I feel that Genetica does not go alone, we - the whole ecosystem - are going ahead together, educating and exploring the market together. We are delivering products and services to the market faster than ever, much faster than five years ago when we began,” Tuan said. He also placed plenty of expectations on the innovation ecosystem of Vietnam and called for more trust in other technology and innovation businesses.

In the US two weeks ago, the MPI and the NIC teamed up with American businesses and universities to create a leap forward in semiconductor manufacturing in Vietnam. What is more, they called for investment in new sectors like science-technology, digital transformation, green economy, and the circular economy.

Vietnam works with Apple on above-threshold electromagnetic waves levels

Vietnam’s Ministry of Information and Communications (MIC) has worked with Apple on the iPhone 12's emission of more electromagnetic waves than is permitted.

A representative of Apple in Vietnam said that the iPhone 12 was released in 2020 and met the specific absorption rate (SAR) requirements upon import.

On September 12, France's Agence Française Nationale des Fréquences (ANFR) released a statement about the iPhone 12 exceeding set SAR limits, and on September 13, it asked Apple to halt selling the product in France.

A representative of the Department of Science and Technology under the MIC said that SAR is a gauge of the rate of radio frequency energy absorbed by the human body from a piece of equipment.

The World Health Organization has pointed out that when people use mobile phones, tissues in the body experience a heating effect due to the influence of electromagnetic radio wave energy. Long-term continuous exposure can adversely affect human health. In addition, the International Telecommunication Union has reported the same findings.

At the meeting with the MIC, the representative of Apple in Vietnam stated that this issue is related to how the SAR testing was performed.

Currently, Apple is continuing to work with the ANFR and has provided it with measurement results from both Apple and a third-party independent testing laboratory to prove the compliance of the iPhone 12.

Units of the MIC, including the Department of Science and Technology, the Authority of Telecommunications, and the Authority of Radio Frequency Management will continue to monitor and update the case to provide timely advice on the safe management of exposure to electromagnetic radio wave energy.

Logistics providers in Hong Kong eye Vietnamese market

Logistics service providers from Hong Kong are looking to strengthen partnerships with their Vietnamese counterparts to tap into the nation's logistics market.
A delegation of more than 10 members of the Hong Kong Logistics Development Council (LOGSCOUNCIL) paid a four-day visit to Vietnam on October 10 to explore partnership opportunities. The delegation was led by the Secretary for Transport and Logistics, Lam Sai-hung.

Hong Kong and Vietnam continue to benefit from thriving bilateral trade, attributable to their shared geographical proximity and economic development. Last year, bilateral trade in goods between Vietnam and Hong Kong amounted to around $33 billion, with an impressive annual growth rate of about 15 per cent from 2018 to 2022.

Hong Kong and Vietnam are each other's seventh-largest trading partner, with Vietnam positioned second among the 10 ASEAN member states in this regard. The bilateral trade ties between Hong Kong and Vietnam have become closer since the Free Trade Agreement and Investment Agreement between Hong Kong and ASEAN came into force in 2021.

Sai-hung said, "As the doorstep to Mainland China, we are optimistic that the bilateral ties between us will continue to flourish with the Belt and Road Initiative and the development of the Guangdong-Hong Kong-Macao Greater Bay Area. Hong Kong is bestowed with strong support and long-standing global connections under the unique one country, two systems principle. The city is, and will continue to be, an important conduit between Mainland China and the world."

"We are expanding our cooperation with Belt and Road partners in a wide range of areas. With Vietnam as one of the major economies along the Belt and Road and a founding member of the Asian Infrastructure Investment Bank, there should be enormous room for further collaboration between Vietnam and Hong Kong – of course, including trading and logistics," he noted.

"We look forward to fostering a closer partnership with Vietnam. Our LOGSCOUNCIL members are happy to share their insights and experiences of doing business with Mainland China, including the advantages of routing goods through Hong Kong," added Sai-hung.

As an international trade and logistics centre, Hong Kong continues to serve as the ideal gateway between Mainland China and the world. Last year, around $23 billion's worth of trade between Mainland China and Vietnam routed through Hong Kong, amounting to around 9 per cent of the total trade between the two countries.

The laden container throughput between Vietnam and Hong Kong totalled around 800,000 TEUs last year. Of this, over a quarter were transhipments relating to Vietnam-Mainland China trade. Meanwhile, the air cargo throughput between Vietnam and Hong Kong totalled around 130,000 tonnes in 2022, of which nearly half were transhipments.

Foreign groups keen on transport projects

While international companies are increasingly interested in Vietnam’s transport infrastructure, there remain barriers to successful market entry.

Hong Kong’s HAECO Group on September 27 worked with authorities of Vietnam’s northeastern province of Quang Ninh on the possibilities of investing in cargo terminal items, aircraft repair hangars, and more.

HAECO has over 50 years of experience, owning 16 member companies and undertaking technical services, maintenance, and repair of aircraft for more than 300 airlines around the world. The company is among several international businesses that are keen in Vietnam’s transport sector, which is working on policies to create a more favourable environment in order attract more investment in its green transition path.

Also in September, Chinese companies have been showing their interest in some transport infrastructure project in the Southeast Asian nation. In particular, China Railway Engineering Corporation (CREC) is seeking opportunities in infrastructure projects in Vietnam, anticipating growing local demand.

CREC’s chairman Chen Yun said at a meeting with PM Pham Minh Chinh in mid-September that his corporation is keen on railway projects in the development planning approved by the Vietnamese government.

CREC is the general contractor for construction projects including railways, roads, hydropower, airports, seaports, and more. The group now has over 380 branches in 105 countries, with approximately 290,000 employees.

In Vietnam, the company is the general contractor of the Cat Linh-Ha Dong rail line with a contract value of $640 million; the Dak Nong wind power project valued at over $18 million; a factory in the Mekong Delta province of Tien Giang worth $5 million; and several others. Now, it eyes the possibility of studying options for building a 388km Hanoi-Lao Cai-Haiphong railway line.

Like CREC, PowerChina is also keen on large-scale infrastructure projects in Vietnam, including high-speed railway component projects and in energy.

PowerChina has expertise in providing investment and financing, planning design, and engineering construction for clean and low-carbon energy, water resources, environment, and infrastructure. The group ranked 100th on the Fortune Global 500 list and ranked 29th of the 500 top enterprises in China last year.

The company has been present in the Vietnamese market since 2000, joining the construction of Lai Chau and Son La hydropower projects, the Vinh Tan Coastal thermal power centre, and as the general contractor for wind power and solar power projects with a total capacity of 7GW. The total contract value of these projects has reached more than $6.5 billion.

At the Global Sustainable Transport Forum 2023 in China last month with PowerChina and CREC, many international businesses expressed their strong interest in Vietnam’s infrastructure development potential, including the development of the North-South Expressway, high-speed railway projects, and more.

Vietnamese Minister of Transport Nguyen Van The said that Vietnam agrees with the notion that countries need to strengthen connectivity and jointly promote hardware-connected transportation to create greener transportation corridors.

“Vietnam is ready to negotiate, sign, and implement bilateral and multilateral transport facilitation agreements to create smooth traffic connections for a stable global logistics supply chain,” he said.

The country’s infrastructure development will create better conditions for businesses and investors, experts have said. However, while the government has taken strong steps to develop infrastructure, many issues remain in the way.

“In order for foreign investors to finance large-scale infrastructure projects, most must turn to lenders who, unlike investors, are much less risk tolerant. This is an issue that hampers successful implementation of many public-private partnership (PPP) projects in Vietnam. The key issues here are well known, and include protections around termination risk, change in law, and others,” said Duong Bao Trung from Freshfields Bruckhaus Deringer LLP.

“Several other countries have demonstrated the effectiveness of the PPP model in Asia, namely China and India. There are also numerous development finance agencies in Vietnam supporting the development of bankable PPPs,” he added.

Vietnam Railways (VNR), operator of the country’s railway system, is one example. Legal barriers have so far hindered VNR from making its next steps with potential partners, including Saigon Newport Corporation, Lotte E&C, Toyota, and others.

“Only when the legal framework for the railway industry becomes more favourable will we be able to attract investment in future development,” said a VNR official.

Expert Bui Xuan Phong added that the state must have a supporting policy, spending more resources on rail transport. “Investing in railways not only looks at economic benefits, but also looks at the way that railway development eases pressure on other modes of transport,” he noted.

Bank stocks remain lucrative

Despite the recent market uncertainty, bank stocks remain appealling to investors as several lenders promise upbeat returns in the forthcoming period.

Nguyen Huu Huan, lecturer at the University of Economics in Ho Chi Minh City, said, "The finance and banking sector seems to be outperforming several other sectors, however this might just be the tip of the iceberg."

Huan argues that the current valuation of bank stocks reflects the difficulties the sector has faced, including slow credit growth and sliding non-interest income, particularly from corporate bonds and bancassurance.

The quality of sector assets, a prime factor when choosing which bank stocks to invest in, is falling due to difficulties in the real estate market. “These factors, however, will gradually improve when the economic rebound intensifies,” said Huan.

Yang Seung Won, deputy general directpr of Shinhan Vietnam Securities JSC, said, "Even though the sector has encountered numerous hardships, a raft of supportive measures taken recently by the governement to help the real estate market and ease capital flow could yield more positive outcomes and relieve pressure on the banking system."

The overall capital adequacy ratio of the banking system remained at a relatively high level of 11.58 per cent in July
The overall capital adequacy ratio of the banking system remained at a relatively high level of 11.58 per cent in July.

In addition, banks listed on the Ho Chi Minh Stock Exchange are forecast to offer better value for investors compared to several other sectors this year and even into 2024, with pretax profit estimated to surge 8 per cent and 17 per cent on-year, respectively.

“The price-to-book ratio of banking stocks will move to a lucrative range of 1.5x-1.6x next year, 15-25 per cent lower compared to the previouis five-year average. Therefore, we expect banks to offer upbeat investment prospects for the foreseeable time,” said Yang.

According to Dao Minh Tu, deputy governor of the State Bank of Vietnam (SBV), "By September 29, credit volume of the whole system had reached close to $536 billion, up 6.9 per cent since the start of the year and higher than the SBV’s top estimate of 6.2 per cent."

Lending activities have improved gradually amid the peak year-end business season while remaining lower in volume compared to one year ago, while a fourth quarter survey on credit institution trends conducted by the SBV suggests that most lenders underestimated the third-quarter performance and profitability of the banking sector.

Programme launched to help Hanoi, Nghe An businesses further connection, cooperation

Hanoi Promotion Agency (HPA) will hold a programme to promote Hanoi’s investment, trade and tourism in the central province of Nghe An from October 27-29.

According to the HPA, the event will take place at Ho Tung Mau pedestrian street in Vinh city with about 50-60 booths introducing products and services of businesses from Hanoi, Nghe An and other localities.

There will be a space dedicating to Hanoi’s tourism and a trade promotion conference between Hanoi and Nghe An with the participation of about 200 delegates from the two localities and businesses.

Nguyen Anh Duong, HPA director said that the conference offers an opportunity for Hanoi and Nghe An to introduce their investment and business environment and connect their businesses.

The promotion programme is expected to be a place to connect producers, suppliers and buyers from Hanoi, Nghe An and other localities nationwide, which helps meet people's consumption needs, stabilise prices, and effectively implement the campaign "Vietnamese people use Vietnamese goods", Duong said.

Earlier, from September 28 to October 2, 2023, HPA also organised a similar programme to promote trade, investment and tourism cooperation ties between Hanoi and the northern mountainous province of Yen Bai.

Dong Nai calls for investment in areas surrounding Long Thanh Airport

The People’s Committee of Dong Nai Province has launched a plan to organize a conference to call for investment in the areas surrounding Long Thanh Airport on November 21.

Under the plan, the event aims to seek investment from domestic and foreign enterprises in the sectors of trade, services, healthcare, education, tourism, and logistics to contribute to sustainable development and create a synchronized ecological zone in the areas surrounding Long Thanh Airport.

Dong Nai Province will provide information on planning and development orientation of service, trade, healthcare, education, tourism, logistics, airport's ancillary facilities (aircraft Support Industries, high technology, warehousing, and logistics), and urban areas (resettlement areas, residential areas, new urban areas).

Located 40km east of HCMC, Long Thanh International Airport covering an area of around 5,000 hectares is designed to serve 100 million passengers and 5 tons of cargo a year. It is one of the key national projects, aiming at developing the aviation industry and connecting Vietnam with the world. Construction of the airfield was kicked off at the beginning of 2021 and is expected to be finished in late 2026. The total investment for the project is set to cost US$16 billion.

Businesses in HCMC enjoying positive signals of economic recovery

Many companies in HCMC reported an order increase, thus allowing overtime sessions among their workers for an income rise. They even plan to hire more laborers for next year’s operation.

34-year-old Ho Thi Kim Cuc from Binh Thuan Province, now living in Binh Tan District of HCMC, shared that she has been an employee in PouYuen Vietnam Co. Ltd. for over 9 years while her husband is a motorbike taxi driver for a living. From the end of 2022, due to a temporary halt in overtime sessions in her company, she could only receive VND8 million (US$327) per month. The couple’s earnings can only cover basic needs. Since September, she has been able to work overtime again, and the surplus money makes them more comfortable in life.

Similarly, 36-year-old Nguyen Van Mau from Tien Giang Province has been working in PouYuen Vietnam Co. Ltd. for more than 10 years. Due to his disease, he has to change to another department, leading to a salary drop to only around VND5 million ($205) a month. Lately, thanks to overtime working, his earnings have reached more than VND6 million ($245) per month. Small rise as it is, his income now helps him to afford disease treatment.

Formerly, Freetrend Industrial Vietnam Co. Ltd. (sited in Linh Trung 1 Export Processing Zone in Thu Duc City) had to rotate temporary days off work for their employees owing to fewer orders. At present, the normal operation and even overtime sessions can resume. Nguyen Thi Cuc from Ha Tinh Province, its worker for over 10 years, cannot contain her joy receiving the news. She appreciates these overtime sessions more than ever as they can allow her to increase her income to pay for daily expenses and the tuition of her two children.

In reality, many manual workers depend on both their base salary as well as overtime wage to pay for daily expenses. No matter how hard they have to work from early morning to late night, they still opt for overtime sessions in hope of living more comfortably.

Right now, several businesses in HCMC are planning to hire more laborers. Statistics from the HCMC Employment Service Center on 45 enterprises reveal that till the end of this year, there are more than 4,300 job openings in various fields of commerce, accounting and auditing, finance, securities, real estate, hospitality, footwear, garments, and unskilled work.

District 11 has just cooperated with the HCMC Employment Service Center to hold a job fair, attracting the participation of 25 businesses to offer nearly 1,500 job openings in many positions from manager to technician, manual worker.

Head Tran Thao Chi of the Recruitment and Training Department of Family Mart Co. Ltd. informed that until the end of 2023, her company hires 100-200 new employees each month for trading activities in HCMC, Ba Ria – Vung Tau Province, Binh Duong Province, and Dong Nai Province.

Le Thi Kim Lien from the HR Department of Cholimex Food JSC. also shared that her company needs 150 unskilled laborers for manufacturing activities at the end of the year. Next year, it will hire another 300 unskilled workers and 50 professional positions.

The HCMC Center for Human Resource Demand Forecasting and Labor Market Information (under the municipal Department of Labor, Invalids and Social Affairs) said that HCMC is entering its economic recovery time with businesses receiving more orders, and the labor market will enjoy even more positive changes in the last few months of the year. There are 75,500 – 81,500 job vacancies for the manufacturing peak to prepare for Tet holiday.

Director of the HCMC Department of Labor, Invalids and Social Affairs Le Van Thinh said that during the first 9 months of 2023, businesses in HCMC offered jobs for 242,000 people, including 107,000 new positions. 128,000 laborers resigned from their work and received unemployment support. In September, there was a drop in registration for this financial support by 28.4 percent after 6 consecutive months of increase.

Statistics from the HCMC Department of Labor, Invalids and Social Affairs on employment status in more than 2,500 businesses show that just over half of them can maintain operation in the third quarter of 2023 whereas 21 percent reported laborer layoff.

Therefore, this Department is going to implement measures to help both employees and employers to keep their current work status. It is planning to hold 12 job fairs, including 2 for the disabled and 1 online, to connect to 13 Mekong Delta provinces to introduce more job vacancies to those in need.

FDI sector affirms key role in Vietnamese economy

With thousands of projects undertaken nationwide, the foreign direct investment (FDI) sector has increasingly affirmed its important role as part of the Vietnamese economy.      

Since the Foreign Investment Law was promulgated, foreign invested enterprises (FIEs) have continuously developed to make a significant contribution to transforming the country’s economic growth model and move towards the orientations for industrialisation and modernisation, thereby accelerating the economic integration process and enhancing the country’s position in the international arena.

In fact, the FDI sector’s boost to economic growth has increased from 21.52% in the 2011 - 2015 period to 25.1% in the 2016 - 2020 period. In 2021, due to the impact of the COVID-19 pandemic, the sector’s contribution witnessed a downward trajectory, accounting for 14% of the national economy.

The proportion of FDI contributions to the country’s total export turnover has increased rapidly over the years, from just 30% in 1997 to 65% in the 2011 - 2015 period, and 71% in the 2016 - 2020 period.

FIEs have served to accelerate the transition from an economy slipping into a continuous trade deficit to one recording a trade surplus for many consecutive years, racking up a trade surplus of US$33.845 billion, US$28.5 billion, and US$41.9 billion in 2020, 2021, and 2022, respectively. Its major exports have made inroads into demanding markets such as the United States and the European Union.

These important gains have helped create a driving force in promoting domestic production and gradually turning Vietnam into one of the world's leading exporters with an export scale ranking 20th globally, according to the 2022 report by the United Nations Conference on Trade and Development (UNCTAD).

The country ranked second in ASEAN, behind Singapore, and 17th in terms of export of processed and manufactured industrial goods in 2019. It was listed among the group of the top 10 exporting countries in the world for many products such as textiles, footwear, rice, and mobile phones. Notably, up to 95% of industrial and electronics exports are sourced from FIEs.

The sector’s export activities have diversified products, changing the structure of export goods towards modernity, as well as expanding export markets to more than 200 countries and territories.

Furthermore, it has also contributed positively to the state budget, with a ratio of 12.65% in the 2011 - 2015 period and 13.8% in the 2016 - 2022 period.

In addition, the FDI sector has generated jobs, improving the quality of human resources, and bringing a positive income to workers. statistics show FIEs created 2.1 million jobs, 3.2 million in 2015 and 4.59 million in 2021.

In recent times, through FDI projects, several industries such as post and telecommunications, banking, oil and gas, construction, and transportation have all absorbed advanced technologies from the world.

FIEs have enabled the creation of many high-quality products, thereby better meeting the market demand and rapidly raising export turnover of products such as computers, smartphones, and household electronics and mechanical engineering.

Most notably, in the field of high technology, FIEs developed a greater presence at high-tech parks across the country. Among them, after 15 years of establishment the Saigon High-Tech Park boasts about 130 investment projects with a total registered capital of nearly US$7 billion, attracting the presence of several of the world's leading giants such as Intel, Microsoft, Nidec, Sanofi, Nipro, and Samsung.

According to the latest preliminary statistics compiled by the General Department of Vietnam Customs, during the nine-month period the FDI sector’s total import-export turnover reached more than US$341 billion, down 11.9%.Despite enduring a sharp decline, FIEs still account for a larger proportion to the country's total import-export turnover at 68.8%.

Cooperatives relinquish trademark amid fierce competition

Cooperatives normally sell their products through distributors, but harsh competition has driven many to relinquish their trademarks and act as suppliers to the latter.

The rationale behind the practice is simple: giving up trademarks allows cooperatives to offload the cost of marketing and advertising, and focus more on what they do best - manufacturing high-quality products.

Distributors, by registering their own trademarks for the no-brand products, can enjoy a huge cost advantage over other producers because they have a warehousing system in place.

Phạm Thị Út, Director of the DiLin Cooperative in Lâm Đồng Province, said taking the role of suppliers would enable cooperatives to optimise their equipment, maintain a stable workforce, and avoid the risks associated with distributing and retailing.

But everything comes at a cost. When cooperatives let go of their trademarks, they lose control over a crucial aspect of their image and put themselves at the mercy of distributors.

Nguyễn Minh Thái from the Mào Gà Cooperative in Cà Mau Province revealed that when his cooperative discussed cooperation with certain distributors, they requested the cooperative to cease the production of some product lines and shift focus to processing.     

As limited capital and technical resources often impede cooperatives' ability to develop their own trademarks and distribution networks, they have no choice but to accept the deal and act as suppliers to the distributors.

"For many producers, seeing their sales double in a distributor's supermarket cannot relieve the pain of seeing their products' packages, logos, and labels changed by the distributor," said Trần Đăng Đạt, founder of Đạt Butter.

Nguyễn Thị Thu Liên from the Transparent Food Association viewed distributors as "heavyweights" that were trying to dominate the market with their cost-efficient products. She said cooperatives might not be able to rival them in terms of cost, so they should focus on quality to hold ground. 

A cake producer in Đồng Nai Province viewed cooperatives as "lightweights" that were not financially well-positioned to build their own trademarks. He said their limited financial capability comes from the high discount rate at which supermarkets purchase their products, up to 40 per cent.

Experts said cooperatives are the real producers of the products, so they deserve a slice of the trademark pie. They urged cooperatives to have a long-term vision for their products and not to trade their brand names off for short-term stable revenues. 

They suggested cooperatives frequently refresh product designs, improve product quality, and infuse a sense of uniqueness into their products to attract more customers and strengthen competitive positions.

Producers that own large machinery capacity, meanwhile, can focus on processing to optimise equipment and pass trademarks to distributors, said the experts.

Đồng Nai plans to build four large logistic centres

In the draft planning of Đồng Nai Province for the period 2021-30, with a vision to 2050, the consulting unit has proposed the construction of four large-scale logistics centres.

The will consist of the eastern warehouse centre Trảng Bom covering 620 hectares, Phước An port logistics centre (234 hectares), the north centre of Long Thành airport (100 hectares) and the southern centre of the airport, from the perspective of a logistics center.

All these logistics centres are planned near traffic hubs of Long Thành Airport, Phước An Port and Trảng Bom railway station, which facilitate the transportation of goods and reduce logistic costs. 

Đồng Nai aims to have a top-notch infrastructure system to serve as a transportation gateway for the South by 2023. The logistics industry will grow at the fastest rate among all service sectors.

By 2023, the draft set the growth rate of Đồng Nai's logistic services will reach about 30 to 35 per cent each year, contributing 20 - 25 per cent to the province's GDP of the service sector.

New logistics centres are planned to handle 60 to 70 per cent of the province's total goods volume, with the remaining traditional logistics service centres and areas responsible for 30 - 40 per cent. 

Many firms in Đồng Nai Province currently still use the Cát Lái port in HCM City for their import-export services despite having access to efficient river systems and port infrastructure in the local area. 

Therefore, Đồng Nai's key goal is to attract import-export firms in the region to provide import-export services. 

Construction steel sales rise despite economic woes

Sales of construction steel in September grew 9% against the month earlier and 4% year-on-year to 958,560 tons, according to the Vietnam Steel Association.

This construction steel sales growth is meaningful given the tough economic conditions at home and abroad. It is ascriable to the Government’s boost in public spending.

While the overall market demand for steel products remains lackluster, September saw the highest sales level of 2023. Multiple big-ticket infrastructure projects have got off the ground, such as the North-South Expressway and new airports.

In terms of construction steel production in September, it stood at 876,043 tons, a 6% decrease compared to August and a substantial 20% drop when compared to September 2022.

In the first nine months of this year, construction steel production totaled 7.72 million tons, up 21.6% versus the same period in 2022. Sales during this period reached 7.74 million tons, dropping by 20% year-on-year.

As for crude steel production in September, it reached 1.66 million tons, down 6.2% from August but a 3.3% increase versus the same period last year. Consumption figures reached 1.72 million tons, up 11% over August and 17% against September 2022.

HiteJinro to build a $100 million soju plant in Thai Binh

South Korean soju maker HiteJinro will spend $100 million building a manufacturing plant in the northern province of Thai Binh, turning Vietnam into its first overseas manufacturing base.
HiteJinro signed an agreement with Green i-Park JSC to rent an 8.4-hectare site in Lien Ha Thai Industrial Park, Thai Binh province on October 12.

Last September, HiteJinro announced the opening of a corporation in Singapore to serve as a base for the global expansion of soju production and sales. The new soju manufacturing plant in Thai Binh is HiteJinro's flagship project under this inititaitve.

The company's expansion aims to take advantage of the robust growth trajectory in the overseas soju market. In addition, the company will take advantage of the lower labour costs here to increase its competitiveness. The new manufacturing plant will also serve as a launchpad for local brands and products tailored to the Vietnamese market.

NIC ready for the inauguration next two weeks

The inauguration week of the NIC (the National Innovation Centre) as well as many exhibitions and seminars will take place during October 28 - November 1, 2023.
After nearly three years of construction, the new NIC headquarters in Hoa Lac High-Tech Park (NIC Hoa Lac) is going to be launched. With a total working floor area of nearly 20,000 sq.m, which includes two office blocks and 1 international conference.

This is a regional and world-class ecosystem to attract domestic and foreign partners and technology enterprises to set up research, training, research and development (R&D) facilities. Up to date, partners have registered to fill all the exhibition booths across all three floors of NIC Hoa Lac.

Vu Quoc Huy, NIC director, said that the total cost of building NIC Hoa Lac was nearly VND1 trillion, which does not come from the state budget, but is mobilised by domestic and foreign enterprises in diverse forms like investment socialisation.

The main function of the NIC is to connect all the elements of the innovation ecosystem in accordance with NIC's focus areas and Industrial Revolution 4.0.

NIC focuses on promoting innovation, cooperation, and forming supply chains in eight major areas like smart factories, smart cities, digital content, cybersecurity, environmental technology, medical technology, semiconductor industry, and hydrogen technology.

NIC acts as an intermediary organisation when working and connecting with investment funds, financial institutions, and in supporting capital raising and premises for startups right from the early stages.

Vietnam International Innovation Exhibition 2023 (VIIE 2023) will be held from October 28 to November 1 at NIC Hoa Lac.

The exhibition will introduce new products and technology solutions in eight mentioned-above major areas with the participation of large domestic and international corporations and innovative technology enterprises such as: SpaceX, SK, Samsung, Google, Meta, Signify, Intel, VISA, Viettel, FPT, and VNPT.

Besides this, there are also international specialised seminars, such as the Vietnam Venture Summit; STEAM & Robotics Festival; and Better Choice Awards Gala.

It is expected that more than 40,000 people will directly participate in the exhibition's activities. Among them, more than 2,000 delegates are leaders of central and local agencies; large corporations and technology enterprises; as well as research institutes, universities and innovation support organisations of Vietnam and overseas.

The NIC under the Ministry of Planning and Investment was established in Decision No.1269/QD-TTg of October 2019. However, the NIC has not spent any state budget so far.

The goals, functions and tasks of NIC are to promote the development of Vietnam's innovation ecosystem; support Vietnamese innovative businesses; developing innovative human resources; building and operating the Vietnamese innovation network.

The global Vietnamese innovation network has been formed with 2,000 members, including Vietnamese experts and intellectuals in the country and abroad in 20 countries and territories (including eight component networks in Germany, Japan, Australia, South Korea, Europe, Taiwan, as well as the east and west coasts of the United States.

Offshore power projects lure investors

New investors are eager to prepare for their ambitions to develop offshore power projects in Vietnam.

Local private company Xuan Cau Holding sent an official letter requesting a proposal to the government and ministries to build offshore wind power under the pilot mechanism and apply for a survey permit for its project.

The Con Co offshore wind power plant project was proposed by Xuan Cau Holding, with a capacity of 1,000MW, construction location in the waters off Con Co Island and Gio Linh district in the central province of Quang Tri.

The southern province of Hau Giang also wants to add the Long My 2 wind power plant project to the national power development plan VIII.

The project is invested by Hong Kong-based Envision Energy (Hong Kong) Limited and helps fulfill the power demand of the province and reduce dependence on electricity transmitted from other areas.

Sources from the Ministry of Industry and Trade (MoIT) said that to date, the ministry has received investment proposals for new power plants with a capacity of up to 550,000MW from localities. Notable among these is the proposal to invest in offshore wind power of up to 129,000MW.

Among the localities boldly proposing to build offshore wind power is the central province of Binh Thuan, with proposals for eight projects with a scale of more than 22,000MW. Not to be outdone, the central province of Ninh Thuan has proposed 21,000MW of offshore wind power.

In the north, we must mention the northern port city of Haiphong, with a proposed offshore wind power project of 3,900MW.

The northern province of Quang Ninh proposes 3,000MW of offshore wind power. The northern province of Thai Binh proposes about 8,000MW of offshore wind power from two projects. While the northern province of Nam Dinh proposed adding 12,000MW of offshore wind power in four phases.

Vietnam's Power Development Plan VIII set a target to ease the share of renewable energy to 31-39 per cent by 2030 and 67.5 – 71.5 per cent by 2050, in which onshore wind power to be developed to a capacity of 21,880MW by 2030 and offshore wind power to be developed to a capacity of 6,000MW.

Further development of offshore wind power will rise to a capacity of 70,000 to 91,500MW by 2050 – if technology capabilities and costs allow.

Previously, Bui Van Thinh, chairman of the Binh Thuan Wind Power Association, warned that the characteristics of wind power projects were large investment rates of about $1.8-2 million per MW for projects using equipment of European origin.

“Therefore, the risks of wind power projects are also much higher than other sources. If too much wind power capacity is introduced without a grid to release all the capacity, it will cause great damage to investors and society, especially banks that cannot recover debts,” he said.

Calls to clarify Vietnam's FIT issuance amid fairness concerns

National Assembly members emphasise the urgent need to review the responsibility behind feed-in tariffs (FIT) pricing decisions, aiming to establish principles and guarantee equity for all participating enterprises.
Vietnam's energy sector, in spite of attracting substantial investment interest in recent years, is encountering various challenges, notably in ensuring energy security and efficient management of resources, a session of the National Assembly heard on October 12.

During the session, chaired by National Assembly (NA) Chairman Vuong Dinh Hue, NA Standing Committee reviewed opinions on the special supervision of the "implementation of policies and laws on energy development for 2016-2021."

Chairman of the NA Economic Committee Vu Hong Thanh said that while the Ministry of Industry and Trade's issuance of FiT in a limited timeframe managed to draw numerous investors into the solar and wind energy sector, several questions remained.

"There have been many investment movements in solar and wind energy. Several projects have been completed and put into operation, with some benefiting from FiT, others not, or some receiving partial FiT benefits," he said.

Thanh expressed concerns over the fairness and clarity in the application and distribution of FiT to businesses.

"It's imperative to clarify the responsibility for issuing FiT prices and assess whether it aligns with principles and criteria, ensuring fairness among businesses," he added.

Chairman of the NA Science, Technology and Environment Committee Le Quang Huy outlined the achievements and constraints in the energy sector.

“Despite progress, Vietnam's process of energy development continues to face limitations. Key challenges include sporadic fuel shortages in 2022, power cuts in parts of 2023, and the country's inability to meet energy demands, leading to increased energy imports,” he said.

Domestic supply sources are lagging on the planning and schedule. Furthermore, infrastructure in the energy sector remains fragmented, competition in the energy market isn't fully synchronised, and energy pricing policies have shortcomings, not entirely aligning with market mechanisms.

Notably, state-owned enterprises have had loss-making energy projects, and some international energy investment projects face potential capital losses. There have also been instances where environmental protection within the energy sector hasn't been adequately prioritised, leading to societal grievances.

Urban office rents fall amid supply glut

A glut of new supply is seeing the vacancy rate of offices for rent in Ho Chi Minh City at their highest in 12 years while rents are falling.

Real estate consultant Knight Frank announced a quarterly decrease in Ho Chi Minh City office rents as new supply has pushes vacancies to 18 per cent.

In its Q3 market update released at the beginning of October, the company reported that Grade A office rents registered a quarterly decrease of 2.2 per cent, with a 0.2 per cent fall for Grade B rents as vacancy rates jumped to 18.2 per cent and 11.6 per cent, respectively.

Alex Crane, managing director of Knight Frank Vietnam, said that the amount of available space today was higher than it has been since when he arrived in Vietnam in 2011.

“While the vacancy rate then was also around 20 per cent, with downward pressure on rents, the market was far smaller and cumulative space available in Grade A was less than half of that available today,” he said.

“What is far different now is the quality of buildings on offer, but the demand side, particularly from multinational companies, should continue to increase in Vietnam, and Ho Chi Minh City in particular.”

The downtrend and the capacity of the market have fluctuated recently as building owners and office rental companies are racing to reduce prices to draw in tenants.

Many affordable office towers with rents ranging from $16.6 to $21 per sq.m per month in Phu Nhuan and Tan Binh districts and on the outskirts of District 1 have recorded a 10-20 per cent decrease in rents.

Many are applying an indirect office rental discounts in the form of “rent two, get one free” promotions or expanding the payment schedule or management fee exemptions.

Hoang Minh, a sale representative for a private office building in Dien Bien Phu street of Ho Chi Minh City, said that his rent was now reduced by 15 per cent compared to September, but there were few tenants as the competition had been tough.

Minh said that some small enterprises in his building had turned their back on spaces that they had leased for years and moved to outskirt areas of Ho Chi Minh City to take advantage of lower rates.

According to the Department of Business Registration Management under the Ministry of Planning and Investment released in the first nine months of 2023, more than 135,100 businesses withdrew from the market, an increase of nearly 20 per cent over the same period in 2022. Of these, the majority of businesses chose to temporarily suspend short-term business (56 per cent) operations to overcome their difficulties.

For the high-end and premium office segment, the push downwards on average is also a result of new buildings arriving in Thu Thiem, which are offered at a more competitive rent to the traditional District 1 core.

Tu Thi Hong An, senior director of Savills Vietnam, said that many tenants were facing financial difficulties, so they are very cautious when making decisions.

“This causes investors to have flexible rental policies while focusing on providing service incentives to support tenants when searching and choosing workspaces,” An said.

The trend of reducing office rents is increasingly clear, with the office rental market showing rapid adaptation to supply and demand fluctuations.

Savills Vietnam recorded a decrease in rental prices in 2022-2023 when investors were flexible in adjusting rental prices to both retain existing tenants and draw in new tenants.

“This shows acumen in adapting to market fluctuations. Tenants are also gradually changing the way they use offices to focus on reducing costs,” An said.

Along with the flexible working trend, the office market is seeing new trends that could change the face of the market.

Many tenants are moving their offices outside the central business district to reduce rental costs and improve working space. New office buildings such as Phu My Hung Tower, CII Tower, and The Hallmark in Thu Duc City are meeting this need with high-end amenities and green office certification.

Along with that, the current office model focuses on providing services and amenities to meet the diverse needs of human resources of different ages and habits. The transformation of the traditional office structure and layout to a modern office not only helps increase work efficiency but also creates opportunities to interact and increase interaction of employees across the company and different generations.

Pricing talks pending for four renewable power projects

Investors of four renewable power projects had not submitted documents to Vietnam Electricity Group (EVN) for pricing talks and power purchase agreements by October 13 this year, according to EVN.

Eighty-one out of 85 renewable power projects that were subject to pricing talks with EVN have a combined capacity of 4,597.86 MW.

Among these, 69 projects with a total capacity of 3,927.41 MW have proposed tentative prices which are equal to 50% of the price ceiling set by the Ministry of Industry and Trade.

EVN has successfully concluded negotiations and approved power purchase agreements with 63 of these projects. The Ministry of Industry and Trade has also endorsed tentative prices for 62 projects with a combined capacity of 3,399.41 MW.

According to EVN, 21 projects with a total capacity of 1,201.42 MW have completed all necessary procedures for commercial operation and are eligible to connect to the national grid.

As of October 12, renewable energy projects in the transitional phase had generated a total of 691 million kWh since the commencement of commercial operations.

Additionally, 24 projects have undergone full or partial reviews and been accepted by the competent authorities. Operating permits have been issued for 30 projects, either covering the entire facility or part of it, while 40 projects have received approval for an extension of their investment policy.

Vietnam- Thailand trade fair opens in An Giang

A Vietnam – Thailand trade and cuisine fair opened in the Mekong Delta province of An Giang on October 20.
About 100 Vietnamese and Thai businesses are running 300 stalls at the event, displaying a wide range of commodities from specialty food, agricultural and forestry products, apparel, household appliances, to electric, automobile, information technology and construction products, among others.

Lam Van Ba, Vice Chairman of Tin Bien town, said the fair is a practical activity to stimulate consumption, serving shopping needs of the locals and people from surrounding areas. The event also aims to respond to the campaign "Vietnamese people prioritise using Vietnamese products".

Ba emphasised that the fair will contribute to helping An Giang enterprises and domestic enterprises nationwide improve production - business capacity and competitiveness, and boosting trade exchanges between businesses inside and outside the province.

The fair will last till October 29.

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