VIETNAM BUSINESS NEWS OCTOBER 4
The city is now home to 833 valid FDI projects with total registered capital of nearly 23.9 billion USD.
Czech Republic’s geology, mining technology introduced
The Ministry of Natural Resources and Environment’s General Department of Geology and Minerals held a workshop in Hanoi on October 3 to introduce the Czech Republic’s advanced technology in basic survey of geology and mining.
Speaking at the event, Deputy General Director of the department Nguyen Van Nguyen said Vietnam has so far received the Czech Republic’s assistance in making a map at scale of 1/50.000 and mineral survey.
The event affords both sides a chance to discuss the use of Vietnamese and Czech technologies in mineral mining and processing, he added.
Pavel Kaniva, Director of the Department of Raw Materials under the Czech Republic’s Ministry of Industry and Trade, said his country targets upgrading ties with Vietnam to a strategic partnership and expanding cooperation in various areas, including mining and geology survey technology.
Representatives from the European nation also shared experience in surveying and processing mineral resources in the world and suggested measures to deal with post-exploitation environment pollution.
Foreign newspapers highlight Vietnam’s economic outlook
Foreign newspapers have highlighted Vietnam’s impressive success after the World Bank (WB) forecast that its economy will lead Asia with a growth rate of 7.2% this year, up from the previous forecast of 5.3% in April.
Meanwhile, growth in Asia-Pacific was predicted at 3.2%.
According to WB experts, Vietnam’s success is the result of effective COVID-19 prevention measures, demographical advantages and a privileged position in the regional and global economic structure.
Japan’s Nikkei Asia said Vietnam’s GDP in the third quarter expanded by 13.67% year-on-year as exports to the US soared and personal consumption recovered. However, it also warned of falling exports to key markets and continued disruption of global supply chain as risks. Moreover, Vietnam also began producing semiconductor chips at home.
Reuters reported that FPT Semiconductor, a unit of Vietnam's leading tech company FPT, launched its first line of semiconductor chips used for Internet-of-Things in medical devices. The company aims to supply 25 million chips globally by 2023.
Lexology also described Vietnam as an ideal destination to carry out semiconductor manufacturing. The Vietnamese semiconductor market is expected to grow by 6.52% during 2021 – 2025 as more foreign enterprises shifted production to Vietnam due to its strategic location and advantages in shipping, competitive labour and production costs. Vietnam can now benefit from 13 free trade agreements the country is a signatory to.
In tourism, The Star wrote that in the first nine months of this year, foreign tourist arrivals in Vietnam neared 1.87 million, marking a 16.4-fold rise from the same period last year.
Data from the Vietnam National Administration of Tourism showed that from January-September, the total number of domestic visitors hit around 87 million, which underpinned the sector’s growth.
Green Economy Forum & Exhibition 2022 to open in HCM City
The Green Economy Forum & Exhibition (GEFE) 2022 will take place in Ho Chi Minh City from November 28 to 30 to promote sustainable development cooperation between Vietnam and the EU via comprehensive dialogues, investment, transfer of expertise and technology, Deputy Minister of Industry and Trade Do Thang Hai told a press conference in Hanoi on October 3.
The event also aims to support Vietnam’s commitments at the 26th United Nations Climate Change Conference of the Parties (COP26) and the socio-economic development goals specified in its National Green Growth Strategy for the 2021-2030 period.
GEFE 2022 will bring together experts across sustainable business and governance for three days of conferences, exhibitions, and high-level B2B and B2G dialogue sessions, along with EuroCham Vietnam's Green Business Awards and annual Gala Dinner.
The first day of GEFE 2022 will include a plenary conference, which will function as a forum for high-level dialogue between European and Vietnamese government representatives and business stakeholders to coordinate and hold discussions on green policy frameworks, national energy plans, and climate risks.
GEFE 2022's three days will entail panel discussions and seminars on a broad theme, including energy and green financing on the first day, waste and sustainability on the second day, followed by innovation and entrepreneurship on the third and final day. Each day will be further divided into subtopics, covering more than 20 green sector subjects.
At the press conference, the Vietnamese Ministry of Industry and Trade’s Vietnam Trade Promotion Agency signed a Memorandum of Understanding on cooperation in trade promotion and investment in industry with the European Chamber of Commerce (EuroCham) to enhance links between Vietnamese and EU firms.
Additionally, EuroCham is cooperating with Schoolab to launch a Sustainable Innovation Lab at GEFF 2022.
Credit growth cap remains indispensable for macroeconomic stability
Businesses have faced difficulties in access to capital and commercial banks want to be able to lend freely to meet market demand. However, experts said the imposition of the credit growth cap is still necessary to keep the country’s macro economy stable in the short run.
The credit growth quota regime was officially deployed in 2011 when Vietnam’s economy was experiencing hyperinflation stemming from excessive money supply. The credit growth quota regime, putting a cap on the banking industry’s credit expansion, was announced by the State Bank of Vietnam (SBV) at the beginning of each year.
Based on the credit growth quota for the entire banking industry, the SBV will determine the credit growth for each commercial bank depending on its financial health, with indicators including capital, asset quality, governance, business performance results, liquidity and sensitivity to market risks. The SBV will consider other criteria related to its implementation in meeting policies and orientations of the Government and the SBV to give credit growth priority, such as reducing lending interest rates to support firms and people, focusing loans on business and production, and participating in supporting the handling of weak banks.
The SBV in early September raised the credit cap for 15 banks for the second time in 2022, of which Sacombank got a rise of 4%; Agribank, 3.5%; SHB, OCB and MBB, 3.2%; VIB, 3% and Vietcombank, 2.7%.
VNDirect Securities Company’s analysis division said the 15 banks account for about 80% of total outstanding loans of the whole banking industry. With an additional credit growth rate of 1-4%, VNDirect’s analysts estimate about 279 trillion VND was injected into the economy, compared to the end of August 2022.
However, not all banks were satisfied with the SBV’s credit growth quota allocation. Some banks said they ran out of the allocated quota from the end of June and applied for an expansion many times, but weren’t on the SBV’s approved list. They were concerned as the credit growth quota regime can mirror the subjective imposition by the SBV without properly attending to the development plan of each commercial bank, which doesn’t conform to the market-oriented economy and results in ‘ask-and-give’ deals. Meanwhile, commercial banks can map out their own credit growth targets based on their financial power and management capacity.
Businesses also disagreed with the tightening of the credit growth quota, saying it is unreasonable as the regime has been causing great difficulties for them in accessing loans and leading to the loss of opportunities for the country’s economic recovery and development.
Despite the latest credit growth quota extension, firms said it isn’t still easy to get bank loans as the capital remains restricted. Banks also said the SBV’s credit growth adjustment in September is still quite low compared to their expectations.
As most banks ran out of the credit growth quota allocated by the SBV at the beginning of the year for more than three months, the waiting list of customers to get loans is very long. Meanwhile, the additional quota is very limited so it will be difficult to finance all the loan borrowing applications dated before September. With the new profile, banks said they may still approve, but are not sure about the disbursement. Many customers have met all loan criteria and have been approved, but customers still have to queue to get loans as banks have no credit quota to disburse.
The SBV’s data showed by the end of August, credit increased by 9.91% against the end of 2021, much higher than the 7.42% rate in the same period last year. The surge proved that the capital demand of the economy was very large and will continue to rise, especially at the end of the year.
However, experts said the credit growth quota is designed to boost lending for some banks without encouraging excessive credit growth so the measure is necessary and effective in the short term to stabilise the macroeconomy and control inflation.
Binh Phuoc posts trade surplus of 1.16 billion USD
The southern province of Binh Phuoc enjoyed a trade surplus of 1.16 billion USD in the first nine months of this year, thanks to its effective implementation of socio-economic recovery and development measures post COVID-19.
The provincial People’s Committee said that the locality earned 3.14 billion USD from exports in January-September, up 9.53% year-on-year, and equal to 81.6% of the yearly plan.
In the period, the import turnover reached 1.98 billion USD, up 4% year-on-year and equivalent to 81.7% of the yearly target.
Binh Phuoc’s gross regional develop product (GRDP) grew by 9.01%, and budget revenue hit 11.5 trillion VND (481.2 million USD), up 27.5% year-on-year.
There are 905 newly-registered enterprises, and 272 resuming operations in the province.
Symposium seeks to foster Vietnam-RoK cooperation in digital banking
The Republic of Korea’s digital transformation policy and implications for Vietnam, Vietnam’s digital banking transformation policy, the importance of credit information system in digital transformation, the leap towards digitisation and the recent trend of digital banking and payments in Asia were discussed at a recent symposium in Hanoi.
Organised by Shinhan Bank Vietnam to mark the 30th anniversary of Vietnam - Korea diplomatic relations, the event discussed the vision for and direction of Vietnam's digital bank, and sought to foster collaboration between the two countries in investment and development of a secure financial framework.
Attendees included senior officials from the State Bank of Vietnam, the prime minister's economic advisory group, the Korean embassy in Vietnam, the Korean Financial Services Commission, the Korea Credit Information Service, Shinhan Bank Korea, Shinhan Bank Vietnam, Korean financial companies, and major local banks and fintech companies.
Shinhan Bank Vietnam established a ‘future bank group’ last May to strengthen internal digital capabilities and respond immediately to the rapidly changing digital financial environment.
Since its inception, the future bank group has effectively promoted its capabilities by cooperating with digital enterprises in various industries to provide innovative, safe, and convenient digital banking services.
Vietnam Manufacturing PMI keeps growth momentum in third quarter
S&P Global’s latest report on the Purchasing Managers’ Index (PMI) indicates that the Vietnamese manufacturing industry continued to maintain its growth momentum during the third quarter of the year.
The nation’s PMI declined to 52.5 in September from 52.7 recorded in the previous month, but still pointed to a solid improvement in terms of business conditions across the sector, S&P Global said in its PMI report for the country released on October 3.
This marked the 12th consecutive month that operating conditions have strengthened on the back of the COVID-19 pandemic being brought under control across the country, according to the report based on the results of a survey conducted by S&P Global during the second half of September.
The financial company noted new orders continued to rise, thereby fueling growth of output, employment, and purchasing activities. The current sequence of new order growth also extended to a year as new business expanded solidly in September amid reports of improving customer demand, though the rate of increase softened from August.
With new orders continuing to increase, manufacturers have moved to expand their production in a solid manner. The rate of growth was broadly in line with that seen in the previous month. Similarly, employment and purchasing activities each rose solidly again at the end of the third quarter.
Planting area codes key for Viet Nam's farm produce exports
The Ministry of Agriculture and Rural Development (MARD) is promoting the granting and management of planting area codes to meet traceability regulations for import and export goods on the world market.
Traceability is a must-have requirement for every product, especially in export markets. One of the key factors in traceability is the planting area of materials to be assigned a code. Each planting area with a code will create more confidence for consumers.
Hoang Trung, director of MARD's Plant Protection Department, said the granting of codes and management of coded planting areas and packing facilities are the department's top priorities in developing agricultural production and farm produce exports.
Viet Nam has about 4,000 planting areas and 2,000 packing facilities for farm produce in 50 provinces and cities that have been coded. The agricultural products include fruits, rice, coffee, pepper, cashew and wood.
According to the ministry, in the first eight months of 2022, the export value of agriculture, forestry and fishery reached US$36.3 billion, up 13.1 per cent over the same period in 2021.
With this growth in the export value of agricultural products, the agricultural sector must increase the number of new planting regions being granted codes and maintain the management quality of the coded planting areas.
The ministry has assigned about 90 per cent of the coded planting regions to the localities managing their quality of them since 2021.
Localities are responsible for granting the code to the new planting areas and reviewing the areas with codes. Then it would report this issue to the Plant Protection Department.
The department will review all dossiers requiring granting codes for planting areas before sending the procedures to countries importing local agricultural products to confirm the codes.
Mekong Delta seeks to develop agriculture-related tourism
Agriculture and agri-tourism are key to the development of the Mekong Delta, experts have said.
Speaking at a workshop in Can Tho City late last week, Nguyen Van Hong, deputy chairman of the city People's Committee, said the delta is a key agricultural area of the country, accounting for 32 per cent of the sector’s output and enabling food security and exports.
It accounts for 50 per cent or more of the country’s rice, aquaculture and fruit production, 95 per cent of rice exports and 60 per cent of fish exports.
Besides, it has been favoured by nature with a network of rivers and canals running more than 28,000km, a diverse range of eco-systems comprising the sea, islands – both in the sea and rivers – national parks, coastal mangrove forests, and unique wetlands, he said.
The rich combination of nature and culture enables the region to develop a variety of tourism types, with agri-tourism having the greatest potential, he said.
But the average income in the delta is still low, especially for farmers since the agricultural products are mainly simple products, the product packaging has not attracted tourists, post-harvest losses are high, and tourism remains underdeveloped and lacks variety, he said.
For years now farmers there have developed agri-tourism models that not only increase their incomes but also the sustainability of agriculture and rural development.
According to the city Department of Tourism, the number of tourists seeking hands-on experiences has increased sharply in recent years.
Across the region, investment is pouring into agri-tourism.
Rising public investment to lift various stocks
Public investment is expected to soar in the last months of 2022, giving a big push to various sub-industries.
Based on the regular pattern of public disbursement, which moves slowly in early year but much faster later, KB Securities Vietnam JSC (KBSV) has forecast higher public spending for Q4.
In fact, recent governmental moves have borne out the forecast.
The Ministry of Transport gave the go-ahead to 12 sub-projects in the North-South Expressway Project, second phase, in mid-July. All sub-projects in landing areas of the Long Thanh International Airport Project were planned to begin construction in December.
Three decrees were issued and six working groups were dispatched to speed up the process.
The Government's Resolution No 124 promulgated in mid-September stipulates that public disbursement reach around 95 to 100 per cent of the target set by the Prime Minister. Of which, at least 50 per cent of the Socio-Economic Recovery and Development Programme must be delivered in 2022.
KBSV projected public investment to accelerate and reach around 90 to 95 per cent of the target this year, equivalent to roughly VND200 trillion (US$8.4 billion) spent in the last four months.
KBSV said the rising public expenditure is expected to give a major boost to the steel sub-industry as higher construction demand drives steel consumption.
The same goes for the stone sub-industry. Major beneficiaries include Hoa An JSC (HOSE: DHA) and Bien Hoa Building Materials Production and Construction JSC, which own Tan Cang and Thien Tan quarries.
Cement is the next sub-industry to benefit from higher public spending. However, the boost from the public sector would be of minor effect as it is absorbed by the supply-demand imbalance in the sub-industry.
Specifically, cement producers oversupply about 50 million tonnes annually and the figures are expected to climb to 58 million tonnes by 2023. For investors, it is advisable to monitor HT1 stock (VICEM Ha Tien Cement JSC) and BCC stock (VICEM Bim Son Cement JSC).
The situation is much better for the plastic pipe sub-industry thanks to the fiscal stimulus and the falling prices of PVC, an input material. Tien Phong Plastic JSC (HNX: NTP) is expected to be the largest beneficiary as it operates in an economic zone targeted by public investments.
Higher public spending would be equally beneficial to bitumen sub-industry but the benefit is believed to come late as bitumen surfacing only begins in the last phase of the projects.
Stockbuilding seen in manufacturing sector
Stockbuilding has occurred in both inputs and finished goods in the Vietnamese manufacturing sector at the end of the third quarter of the year, S&P Global said in its latest report.
As the S&P Global Vietnam Manufacturing Purchasing Managers’ Index (PMI) registered 52.5 in September, a fraction lower than the figure in August at 52.7, business conditions in the sector show signs of improvement.
According to the report, released on October 3, rising new orders have fueled the growth of output and purchasing activity.
Operating conditions have strengthened over the past 12 months and new order growth has also extended to a year as the number of new orders grew strongly in September amid reports of improving customer demand.
“The Vietnamese manufacturing sector continued to tick along nicely at the end of the third quarter, with the PMI now having signaled overall expansion throughout the past year. A much more benign price and supply environment is providing support, while demand also improved again in September,” said Andrew Harker, Economics Director at S&P Global Market Intelligence.
With total new orders continuing to rise, manufacturers expanded their production and boosted their buying activities at the end of the third quarter.
However, new export orders softened from August, while some survey participants said demand in export markets showed signs of weakening.
The rise in new orders from abroad was the slowest in 10 months.
Roads in Mekong Delta provinces require VND3.9 trillion
The Ministry of Transport has sent the prime minister the prefeasibility study for a project to build two sections of Ho Chi Minh Road that run across the two Mekong Delta provinces of Kien Giang and Bac Lieu, with a total investment of over VND3.9 trillion.
The construction of the two sections, Rach Soi-Ben Nhat and Go Quao-Vinh Thuan, with a total length of 52 kilometers, with over 45 kilometers in Kien Giang and 6.6 kilometers in Bac Lieu, will contribute to completing the Ho Chi Minh road project in line with the National Assembly’s resolution.
Of the total capital sourced from the State budget, over VND2.7 trillion will be used for construction and equipment, site clearance and resettlement will cost VND522 billion, while the rest will be used for other costs.
The Rach Soi-Ben Nhat section will start in Chau Thanh District and end in Giong Rieng District in Kien Giang Province.
The Go Quao-Vinh Thuan section will start in Go Quao District in Kien Giang Province and end in Vinh Thuan Town in the province. The two roads will have two lanes each, allowing a maximum speed of 80 kilometers per hour.
Long Hau shares to be put under supervision this week
The Hochiminh Stock Exchange (HOSE) decided on September 29 to put LHG shares of Long Hau Corporation under supervision from October 6, as the industrial park developer missed the deadline to submit its 2022 reviewed semi-annual financial report.
LHG shares were put on the warning list from September 22 this year, following the HOSE’s Decision 663 dated September 15, since over 15 days had passed but the company still failed to submit the 2022 semi-annual financial report.
On September 8, the HCMC bourse announced that it put LHG on a list of stocks not eligible for margin trading for its sluggishness in releasing the 2022 reviewed semi-annual financial report.
The southern bourse on August 31 had written to Long Hau urging the firm to quickly submit the report.
In the first half of this year, Long Hau posted over VND347 billion in revenue and nearly VND90 billion in after-tax profit, falling almost 48% and 64% year-on-year, respectively.
The company looks to earn VND781 billion in revenue and VND110 billion in after-tax profit in 2022.
Agricultural sector aims at export turnover of US$50 billion in 2022
Deputy Minister of Agriculture and Rural Development Phung Duc Tien affirmed that the ministry would focus on market solutions, striving to achieve an export turnover of US$50 billion of agricultural, forestry, and fishery products by the end of the year at a press conference on food supply in the last months of 2022 held on the afternoon of October 3 in Hanoi.
Over the past nine months, the agricultural sector has continued to maintain good growth momentum, with export turnover of agricultural, forestry, and fishery products increasing by 15.2 percent, estimated at around $40.8 billion. Up to now, there have been seven commodities and groups of products with an export value of more than $2 billion.
Meanwhile, Deputy Director of the Department of Livestock Production under the Ministry of Agriculture and Rural Development Tong Xuan Chinh said that it is difficult for imported feed raw materials to reduce prices in the last months of the year. In September, pork prices increased from VND65,000 per kilogram to VND70,000 per kilogram but then decreased slightly.
Outstanding farmers to join trip learning about smart-farming models in Israel
Within the framework of the “Pride of Vietnamese Farmers" program, the organization board plans to organize a trip taking outstanding farmers to visit smart-farming models in Israel at the beginning of next year.
The program aims to give Vietnamese farmers an opportunity to learn about the world's latest technological advancements in agriculture.
The “Pride of Vietnamese Farmers" program and a series of activities will take place on October 13-14 with the participation of Party and State leaders. Highlights of the program are an award ceremony honoring outstanding farmers in 2022, a meeting between National Assembly (NA)’s leaders and farmers, a visit to NA building and the Imperial Citadel of Thang Long, a gala reviewing 10 years of the “Pride of Vietnamese Farmers" program, a launch of a special issue marking 10 years of the “Pride of Vietnamese Farmers" program, an exchange with outstanding farmers of Bac Giang Province.
The award ceremony honoring 100 outstanding farmers in 2022 is scheduled to be held at the Hanoi Opera House on October 14 and broadcast live by Vietnam Television.
New OCOP showrooms launched in Hanoi
Two new showrooms displaying and selling products under the One Commune One Product (OCOP) program are being launched at 59 Hoang Cau Street and B11 Kim Lien convenience store in Dong Da District.
Hoang Cau Super Market Co., Ltd., the owner of the two showrooms, displays 60 OCOP products, including traditional cakes and candies, honey, dry vermicelli, chili sauce, and mountainous agricultural products, from 13 businesses.
The municipal Department of Industry and Trade plans to open two OCOP outlets in the capital city, meeting the Hanoi People's Committee's Plan No. 92 on developing OCOP showrooms associated with craft villages and rural tourism in 2022.
Acting director of the Hanoi Department of Industry and Trade Tran Thi Phuong Lan said Hanoi would accelerate support for businesses to develop trade networks and showrooms to introduce and sell OCOP products in the city.
Hanoi is leading the country in the number of OCOP products, with nearly 1,700 ranked products from 426 enterprises, cooperatives, and business households across the capital city. In addition, the city has collaborated with other towns and provinces in presenting Hanoi's products and sending working groups to localities to exchange the management and operational experience of OCOP showrooms.
JETRO opens showrooms of Japanese products in Hanoi
The opening of two Japanese product sample showrooms in Hanoi is aimed at facilitating cooperation between companies from Vietnam and Japan.
The first showroom, displaying 53 Japanese cosmetics and healthcare products is underway from September 28 to November 28, with the participation of 28 Japanese companies.
According to JETRO Hanoi, this reflects the increase in imports of cosmetic products from Japan into Vietnam over the years, as turnover in 2021 increased 7-fold compared to 2012, while demand for imported nutrition products also tripled during the period.
JETRO noted that Japanese sellers in the showroom have all been nominated by the agency following a rigorous review process regarding their credibility and product quality.
JETRO Hanoi has also launched another showroom for product samples of farming and food products from August 22-October 5, which has become an annual event organized by the agency.
With 225 products on display from 100 Japanese companies, this is seen as the largest showroom to date by JETRO Hanoi.
Vietjet offers promotions every Monday
Budget carrier Vietjet will be offering attractive promotion for all passengers flying internationally every Monday from now to December 19.
In the period, when booking tickets and applying “HELLOVIETNAM” promotion code on Vietjet official website www.vietjetair.com and Vietjet Air mobile app, passengers will get 20% off on tickets in international flights connecting Vietnam and destinations in India, Kazakhstan, Japan, the Republic of Korea, Taiwan (China), Hong Kong, China, Thailand, Singapore, Malaysia, and Indonesia.
With flexible flying time from October 10, 2022 until September 18, 2023, passengers flying with Vietjet can easily to make plans for their vacations, business trips or visiting relatives at economical costs.
PM urges for more effective tax management over e-commerce
Prime Minister Pham Minh Chinh has issued a telegram calling for better tax collection management over e-commerce and business on digital platforms.
The request came amid a boom in e-commerce in Vietnam, which is estimated to have reached 13.7 billion USD in 2021, up 16% from the previous year and accounting for 6.5% of total retail sale revenue.
The rapid growth of e-commerce and business on digital platforms are presenting new challenges to state management, especially in the collection of taxes.
As such, the PM has asked the Ministry of Finance (MOF) to work with the relevant agencies to fine-tune the tax management mechanism for emerging business activities in the digital economy, the sharing economy and cross-border transactions.
The MOF was also required to provide support for individuals doing business on e-commerce platforms to make tax filings and pay taxes, and instruct foreign service providers to comply with Vietnamese law when doing business in Vietnam.
For its part, the Ministry of Industry and Trade was tasked with fine-tuning the legal framework in e-commerce to facilitate tax management regarding the business activities of individuals on e-commerce platforms.
The State Bank of Vietnam is responsible to directing credit institutions and intermediary payment service companies to provide information on foreign providers with no established facilities in Vietnam as well as organisations and individuals with income from cross-border platforms, as required by Vietnamese law and the guidance of tax agencies.