VIETNAM BUSINESS NEWS OCTOBER 6
The COVID-19 pandemic has put the brake on Vietnam’s economic growth over the last two years but, on the other hand, it has also fueled a significant uptick in e-commerce which recorded a 16% growth to 13.7 billion USD in retail revenue in 2021, according to the White Book on Vietnamese E-business 2022.
Last year, the economic growth hit the lowest in 30 years, at just 2.58%, with key services sub-sectors experiencing downturn.
Data from the General Statistics Office showed that retailing and wholesaling declined 0.21% year-on-year, causing the economy to decrease 0.02 percentage point. Warehouse and logistics plunged 5.02% and lodging and catering services 20.81%, leading to a drop of 0.3% and 0.51%, respectively, to the GDP growth.
Meanwhile, the share of turnover from e-retailing to last year’s total retail sales of goods and services was 7%, a year-on-year rise of 27% from 2020.
E-retailing is forecast to surge 20% this year to 16.4 billion USD, compared to 5 billion USD in 2015. A 2022 study by big data analysis company Metric.vn indicated that Vietnam is emerging as the second largest e-commerce market in Southeast Asia, only after Indonesia.
The White Book on Vietnamese E-business 2022 also reported that with online marketplaces now a vital distribution channel in the era of digitalisation, Vietnamese enterprises are investing more on expanding their presence on these platforms.
MAERSK opens shipping route to Quang Ninh
MAERSK, the world’s largest container shipping company, has launched a new shipping route leading to the Cai Lan international container terminal in Halong City, Quang Ninh Province.
The launch followed the trial operation of a series of MAERSK vessels to the terminal, the local media reported.
A representative from the terminal said today, October 5, that the first MAERSK ship plying the route arrived at the terminal in late September. The route connecting China with Vietnam will see a MAERSK ship visit the Cai Lan terminal on a weekly basis.
MAERSK container vessels will depart from Hong Kong, China, arrive in Quang Ninh, run through the Tan Vu port in Haiphong, Yantian international container terminal, Ningbo and Shanghai, and return to Hong Kong.
MAERSK vessels will mainly transport dried items, machines and materials.
In addition, another international container shipping company, SITC, has operated a route on a trial basis with the Cai Lan terminal since August. The route links the Cat Lai port in HCMC, Jakarta in Indonesia, Bintulu in Malaysia, Xiamen in China, Incheon in South Korea, Shanghai in China and Quang Ninh.
In 2021, the Cai Lan international container terminal and two other ports in Vietnam were listed among 50 global terminals with the most effective operation by the World Bank and IHS Markit.
Deposit interest rates continue to rise
Viet Capital Bank has unveiled a certificate of deposit for individual and institutional customers with an interest rate of up to 8.4 per cent depending on the tenor.
Customers can buy CoDs for just VND10 million (US$417) and receive interest of 7.5 per cent, 7.8 per cent, 8 per cent, and 8.2 per cent for terms of six, nine, 12, and 15 months.
For 18-month term they can get 8.4 per cent.
After six months they can freely transfer the CoDs and still enjoy higher interest rates than ordinary savings deposits, a bank spokesperson said.
After the State Bank of Viet Nam raised its policy rate, many banks, including State-owned ones, have raised interest rates for dong deposits.
ABBANK has the highest rate of 8.8 per cent for 13-month deposits of VND500 billion ($20.8 million) and above.
Banks are also offering promotions to attract deposits.
For instance, from October 3 to December 30, customers who make deposits of VND25 million ($1,040) and above at Vietbank can receive gifts such as multi-function electric cooker, steam iron, vacuum cleaner, umbrella, kitchen cutting board, and others depending on the amount and term.
They can also participate in a lucky pin on the Vietbank digital app with prizes of thousands of e-vouchers worth from VND20,000 to VND1 million, and a lucky draw at the end of the programme with prizes worth a total of VND6.5 billion, including a cash prize of VND1 billion, nine first prizes of 0.6 tael of gold each and 18 second prizes of VND20 million each.
As of September 20 this year deposit mobilisation by credit institutions increased by 4.04 per cent while credit growth was 10.54 per cent.
The rapid increase in credit has put pressure on banks’ liquidity.
ACB Securities said the credit cap would be increased by 2 per cent in the last quarter, while the SBV would continue to sell US dollars to keep the exchange rate in check, which would also put pressure on dong liquidity.
Public spending is expected to spurt in the remaining months of the year, meaning the money held by the State Treasury in banks will be drawn.
Due to these factors, ACBS said, banks would probably increase deposit interest rates by another 0.5 percentage points this year to ensure liquidity.
FLC appoints two new deputy general directors
Le Doan Linh and Nguyen Chi Cong have been named as new deputy general directors at FLC Group, with effect from today, October 5.
The two have been working and contributing to the development of FLC over the years, according to the group.
Before taking up the new post, Le Doan Linh served as head of investment division No.2 at FLC, while Nguyen Chi Cong was head of the FLC’s finance division. These two divisions play a crucial role in the strategic planning and project development, as well as ensuring adequate resources for FLC in its business operations, said the group.
Besides, Linh and Cong had worked as top executives in investment, finance, project management and development at many Vietnamese enterprises.
FLC has chosen them as the new deputy general directors at a time when three FLC deputy general directors resigned in 80 days. Among them, Vu Dang Hai Yen quit the post on July 14, La Quy Hien resigned on September 15, and the most recent one, Vo Thi Thuy Duong, on October 1.
EuroCham Vietnam to host GEFE next month
The European Chamber of Commerce in Vietnam (EuroCham Vietnam) is hosting the Green Economy Forum & Exhibition (GEFE) 2022 in HCMC from November 28 to 30.
The event is expected to advance EU-Vietnam sustainable development cooperation through comprehensive dialogue, investment coordination, knowledge sharing and technology transfer.
GEFE 2022’s primary goal is to help Vietnam meet its COP26 commitments and accomplish the development goals outlined in its National Green Growth Strategy for the 2021-2030 period.
Academics, innovators, students and policymakers from Europe, Vietnam and Southeast Asia will participate in the three-day event that will feature panel discussions, an exhibition, and business-to-business and business-to-government discussions.
GEFE 2022’s first day will feature a plenary session where high-level representatives of the European and Vietnamese governments and business stakeholders will discuss sustainable development, energy policy and climate risk management. Representatives of EU member states, diplomatic and trade promotion officials and international organizations such as the World Bank have confirmed to attend.
On the second and third days of the event, panel discussions linked to waste and sustainability, innovation and entrepreneurship will be held.
Yeah1 set to transfer 85% stake in YAG Entertainment
Yeah1 Group Corporation (YEG) plans to transfer 1,564,000 shares at YAG Entertainment JSC, which is 85% owned by Yeah1.
Yeah1 is expected to transfer the amount of shares this month, the local media reported.
If the deal is done, YAG Entertainment will no longer be Yeah1’s subsidiary.
As of June 30 this year, Yeah1 was holding a 99.7% stake in YAG Entertainment, which is headquartered in HCMC and operates in marketing.
YAG Entertainment was established on July 18, 2018, with Luu Anh Khoa being the legal representative.
Yeah1 in the first half of this year saw its revenue tumbling nearly 77% year-on-year at over VND139 billion. Its after-tax profit in the six-month period reached VND8.09 billion, compared to its losses of VND196.77 billion in the year-ago period.
Yeah1 looks to earn VND588 billion in revenue and VND24.7 billion in after-tax profit in 2022.
Jan-Sept farm trade surplus hits US$6.9 billion
Vietnam’s agro-forestry-fishery trade surplus in January-September doubled year-on-year to US$6.9 billion, according to the Ministry of Agriculture and Rural Development.
In the first nine months, the total import-export value of agricultural, forestry and fishery products was about US$74.7 billion. Exports rose 15.2% to US$40.8 billion, while imports grew 5.7% to US$33.9 billion, resulting in a US$6.9 billion trade surplus.
In September alone, the sector’s total export value hit US$4.2 billion, a year-on-year increase of 28.7%.
In the period, farm exports brought in US$16.8 billion, forestry exports US$13.3 billion and fishery exports over US$8.5 billion.
The U.S. was the largest buyer of Vietnam’s agro-forestry and fishery products with US$10.5 billion, or 25.8% of the total, followed by China with a share of 18.2%, and Japan and South Korea with 7.6% and 4.7%, respectively.
Danang sees strong economic rebound
Danang City’s gross regional domestic product (GRDP) in the January-September period was 16.76% higher than in the same period in 2021, with services spearheading growth.
Danang’s economy is now valued at VND92,238 billion, increasing by VND14,808 billion year-on-year. The city’s growth was robust in the first three quarters of 2022, hitting about 1.0%, 12.3% and 39.2%, respectively.
Tourism and travel-related services have been the key pillar of Danang’s economy to overcome obstacles, according to Tran Van Vu, director of the Danang Statistic Office. The growth of the service sector was 21.69% in the first nine months of the year, compared to the same period in 2021.
Transport Ministry okays plan to upgrade road linking Dong Thap, Can Tho
The Ministry of Transport has passed a plan to upgrade the Cao Lanh-Lo Te road, which links Dong Thap Province and Can Tho City in the Mekong Delta region, at a total cost of VND950 billion.
The 28.8-kilometer-long road upgrading project will be executed from this year until 2025.
The road starts at the An Binh intersection in An Binh Commune in Dong Thap Province’s Cao Lanh District and ends at an intersection with the Lo Te-Rach Soi route in Can Tho City.
The project will keep the the width of the main road unchanged at 20 meters for six lanes, but the road will have a tack coat, asphalt concrete surface and frontage road systems. In addition, numerous bridges will be built on frontage roads.
Bamboo Airways has new deputy general director
Bamboo Airways has named Dao Duc Vu as deputy general director and director of flight operations, with effect from October 1.
Vu has 35 years of experience in aviation and has held several senior posts at aviation agencies and airlines, including the Civil Aviation Authority of Vietnam, Vietnam Airlines, Cambodia Angkor Air, Vietjet Air and Vietravel Airlines.
He served as deputy general director of flight operations at Vietravel Airlines from 2020 before the new appointment, the local media reported.
Another FLC Group deputy general director tenders resignation
FLC Group has announced approving Vo Thi Thuy Duong’s request to quit her post as deputy general director at FLC, with effect from October 1.
Duong, aged 45, had served as deputy general director at FLC for more than five years. She was appointed to the post on May 11, 2017.
She is the third FLC deputy general director to resign this year. Prior to her, Vu Dang Hai Yen and La Quy Hien quit the post on July 14 and September 15, respectively. Most of them cited personal reasons for their resignation, the local media reported.
After Duong quit her post, the FLC management board is now left with six members, comprising general director Bui Hai Huyen and five deputy general directors.
Ba Ria-Vung Tau ramps up hi-tech aquaculture
The southern province of Ba Ria-Vung Tau is now home to 5,913 hectares of aquaculture, with 409 hectares dedicated to hi-tech aquaculture.
The Ba Ria-Vung Tau Fisheries Sub-Department reported that aquaculture covered over 5,913 hectares, with 19 organizations and individuals applying hi-tech on 409 hectares in the districts of Long Dien, Dat Do, Xuyen Moc and Ba Ria City.
Technology-based production has allowed farmers to increase their crops from three to five times a year with a total volume of 20-30 tons.
Moreover, pests and input agricultural materials are better controlled in accordance with a number of safety standards. Therefore, the production value has greatly increased compared to conventional production.
As of September, the total seafood volume reached 14,507 tons, completing 71% of the plan for the year, according to the provincial Fisheries Sub-Department.
Foreign enterprises in dire need for high-quality human resources in Vietnam
It is essential for Vietnam to promote investment in training for high-quality human resources, especially in hi-tech industries. This is the recommendation from foreign enterprises to the Government in the recent meeting between the Prime Minister and foreign-invested businesses.
Representative of Panasonic Vietnam Co. Ltd Marukawa stated that many companies are now facing a serious shortage of human resources, particularly engineers in the IT/AI field and designing, or those who can fluently use 3D designing software. These laborers are the key to increase the competitiveness of Panasonic and of Vietnam in general in the future. However, businesses alone cannot decrease this shortage.
He, therefore, submit a polite request to the Prime Minister for a strong and quick strategic response from the Government to train sufficient human resources for the IT/AI field, which would truly aid the expansion plan of Panasonic in Vietnam.
This proposal has received support from many other foreign-invested enterprises as well as domestic companies participating in the meeting. They are all thirsty for international-standard human resources that can compete with the region and the world. These workers can thrive positively in the labor markers of Vietnam and ASEAN.
Deputy Minister of Education and Training Hoang Minh Son shared in the meeting that his ministry has just worked with related ministries and localities regarding demands and policies on human resources training to serve the development of high technologies in the country.
This human-resources project will focus on training and re-training of laborers, with the core being curricula in prestigious universities and research centers for each field. Simultaneously, there will be adjustments in mechanisms and financial-aid policies to boost these high-quality training activities in higher education level.
Essential as it is, the project needs a detailed plan for its success, ranging from identifying demands and focuses for specific fields. It is also necessary to take advantage of existing training programs for the talented, advanced programs, and high-quality programs in leading universities like Hanoi University of Science and Technology, Ho Chi Minh City University of Technology to establish competitive training programs in the future.
The support of the State via the mechanism of ordering high-quality human resources training for the development of high technologies is essential as well. This training must be feasible and suitable for the economic conditions and national budget, while forming a trend in high-quality human training among all high educational institutes in the country.
More importantly, measures must be applied to attract the participation of stakeholders such as outstanding scientists, businesses, universities, sponsors for teaching and researching.
Having been applied properly, these solutions will allow Vietnam to satisfy the thirst for high-quality human resources, especially in hi-tech industries.
Transport Ministry, Quang Nam asked to complete Chu Lai Airport project
A delegation of officials of the competent department led by Deputy Minister of Transport Le Anh Tuan on October 3 had a working session on the planning, socialization project of investment, and exploitation of Chu Lai Airport with the People’s Committee of the central coastal province of Quang Nam.
According to decision No.236 issued on February 23, 2018, signed by the Prime Minister, Chu Lai Airport will be developed into a 4F standard international airport with a capacity of 5 million passengers per year by 2030, an international air freight hub, and a center of aviation maintenance, repair, and overhaul services.
Under a master plan for airport development in the 2021-2030 period with a vision to 2050 that the Ministry of Transport submitted to the Prime Minister in 2019, the airport will greet 10 million arrivals per year by 2030 and 30 million passengers per year by 2050, become an international air freight hub, and a center of aviation maintenance, repair, and overhaul services in the region.
Exports to Spain: Vietnam ranks second
Viet Nam has risen to be one of the countries with the most significant market share and export turnover in Asia to the Spanish market, only second to China, on par with Hong Kong and ahead of Japan, Taiwan, the Republic of Korea and India - countries Spain identifies as strategic markets.
The Viet Nam Trade Office in Spain gave the information at the "Online conference on trade promotion with the overseas Vietnamese trading system in September 2022".
According to the latest statistics of Spanish Customs, trade value between Viet Nam and Spain reached €2.19 billion in the first six months of 2022.
Of the above figure, Viet Nam's export turnover to Spain surged by 56.4 percent to €1.95 billion, helping Viet Nam to enjoy a trade surplus of approximately €1.71 billion, a year-on-year increase of 12.21 percent.
Key exports to Spain include phones of all kinds and components; machinery, equipment, tools and spare parts; textiles; footwear; coffee; seafood; wood products; rattan, bamboo, sedge and carpet products.
Japanese top retailer notices better quality, supply of Vietnamese products
The quality and supply of Vietnamese products have been improved over years, said Takao Kazaoka, deputy general director in charge of purchasing at AEON Vietnam, a branch of the Japanese conglomerate AEON Group.
Takao was quoted by the Cong Thuong (Industry and Trade) newspaper as saying so while talking about a recent week-long showcase of Vietnamese products in the AEON chain. He said the improvement can be seen in the increasing number of suppliers and products selected for display since the first exhibition to date.
First held in 2018, the annual Vietnamese Product Exhibition Week offers opportunities for Vietnamese firms to have their goods placed on AEON shelves domestically and internationally. It is co-organised by the Investment and Trade Promotion Centre of Ho Chi Minh City (ITPC) and the AEON Vietnam Co. Ltd.
At this year’s edition that lasts from September 27 to October 2 at the AEON shopping mall in Ho Chi Minh City, more than 200 Vietnamese enterprises met representatives of the chain to study the possibility of introducing their products to its system of shopping malls in Vietnam and abroad.
The organising board, meanwhile, selected 36 enterprises to exhibit 374 processed foods and agricultural products, including rice, fruits and vegetables, and organic items.
Currently, about 2,000 Vietnamese firms are supplying goods for AEON outlets, of them over 100 enterprises have been connected with AEON via the similar events in recent years.
Ministry of Transport: Long way to go to fully disburse this year’s public investment
As of the end of September, the Ministry of Transport (MoT) had disbursed 53.7% of total public investment planned for this year, higher than the national average of 47%, according to Luu Quang Thin, deputy head of the MoT’s Planning and Investment Department.
Yet, the figure was lower than that of the same period last year (61%) and the progress was behind the schedule, Thin admitted. There are another 23.3 trillion VND worth of public funding waiting to be spent until the end of this year, he added.
2022 is a challenging year for the sector, given that the government has allocated over 50 trillion VND in investment for various public transport projects managed by the MoT, said Minister Nguyen Van The, adding that it is the largest annual amount ever assigned to the ministry.
As such, to fully realise the yearly plan, the MoT must disburse over 7 trillion VND of public investment monthly until the year end, he continued, noting that it will be an enormous challenge that requires greater efforts from developers, project management authorities and contractors.
This year, the ministry plans to complete 361km of the North-South Expressway and start work on multiple key projects, including the second phase of the North-South Expressway, Tan Son Nhat International Airport’s T3 Terminal and Long Thanh Airport’s runways.
The ministry declared at the beginning of this year that any developer or project management authority failing to fulfill their disbursement plans will not be entrusted with new projects.
Annual export of organic agricultural products reaches 335 mln USD
Vietnam has shipped its organic agricultural products to 180 countries over the world, earning an average of 335 million USD per year.
According to the Ministry of Agriculture and Rural Development, the country’s area of organic cultivation surpasses 174,000 hectares, making it rank ninth out of 10 Asian countries with the largest area of organic agricultural land.
The country now has over 17,000 producers, 555 processors and 60 exporters involved in organic agriculture.
It set targets of organic production accounting for 2.5-3% of the total agricultural land area, and the product value per hectare being 1.5-1.8 times higher than that of non-organic production.
In the coming time, the ministry continues to work with localities to build concentrated organic agricultural production regions, promote origin traceability, and digitalisation of organic products.
2.97 billion USD in FDI poured into HCM City in 9 months
Ho Chi Minh City attracted 2.97 billion USD in foreign direct investment (FDI) this year to September 20, a year-on-year increase of 26.1%, according to the municipal Department of Planning and Investment.
Of the amount, 348 million USD was poured into 567 new projects, down 7.6 percent in value compared to the same period last year.
Singapore was the biggest investor in the southern hub with 97 new projects totaling 121.8 million USD, accounting for 35% of the total newly-registered capital. It was followed by Japan and the Republic of Korea with 60 and 81 projects worth 60.2 million USD and 47.1 million USD, respectively.
Meanwhile, nearly 1.49 billion USD was added to 114 existing projects, 2.5 times higher than the same period last year.
Besides, there were 1,797 approved transactions of capital contribution and share purchases by foreign investors in the period with a total value reaching nearly 1.13 billion USD, down 16.2% year-on-year.
The number of valid FDI projects in the city at present is 11,007 with total registered capital of 55.45 billion USD.
Vietnam’s organic units certified by U.S. dwindles
The number of units in Vietnam certified organic by the United States Department of Agriculture (USDA) is down to 164 from 269.
At an online forum to connect and consume organic agricultural and processed products held on September 28, Pham Minh Duc, vice chairman of the Vietnam Organic Agriculture Association, cited data from the Ministry of Agriculture and Rural Development. It indicated that Vietnam used to have 269 units qualified with organic certification accepted by the USDA.
However, the number declined to 164, of which 105 ceased operation, accounting for a 30% loss in certificated units.
Duc estimates that 94% of units certified by the USDA are businesses and 6% are households.
Nguyen Minh Tien, director of the Trade Promotion Centre for Agriculture under the Ministry of Agriculture and Rural Development, said that Vietnam’s organic product market brought some US$30-40 million in 2018. As of now, 174,000 hectares of organic agricultural land generate US$50-60 million.
In Vietnam, seven organizations are authorized to issue certificates accepted by the USDA—Control Union, OneCert, Maya, Ecocert, BioAgri Cert, ACT and Ceres. A majority of certificates in Vietnam are issued by the Control Union, which holds 71% of the market.
US$164 mln proposed for construction of Ho Chi Minh Highway in Mekong Delta
The Ministry of Transport has just submitted to the Vietnamese Prime Minister a pre-feasibility study report on the implementation of the Rach Soi - Ben Nhat, Go Quao - Vinh Thuan sections through the two Mekong Delta provinces of Kien Giang and Bac Lieu under Ho Chi Minh Highway construction and investment project.
Accordingly, the nearly 52-kilometer-long project is divided into two sections, comprising a length of around 11.2-kilometer section of Rach Soi- Ben Nhat and around 40.62-kilometer long section of Go Quao- Vinh Thuan.
Under the Vietnam road network plan for the period 2021 - 2030, with a vision for 2050, these sections have a scale of three to four lanes.
However, based on the transport demand on the route and the allocation of capital in the medium-term public investment plan for the 2021-2025 period, the Ministry of Transport proposed to build the two sections of the highway under level-3 plain road model with a maximum speed of 80 kilometers an hour, total project investment of about VND3.9 trillion (US$164 million) from the state budget.
The site clearance and resettlement for the project are expected to be implemented in 2022-2023, and the project will begin construction in 2023 and finish in 2025.
Export value of aquatic products up 38% in nine months
The export turnover of aquatic products topped 8.5 billion USD in the first nine months of 2022, up 38% year-on-year, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).
In September alone, the export value is estimated at over 850 million USD. Although it is still 36% higher than the same period last year, this is the first time after seven months the exports fall to below 900 million USD.
In the first nine months, the export values of shrimp, tra fish and seafood reached nearly 3.4 billion USD, 2 billion USD, and 3.2 billion USD, up 23%, 82% and 33%, respectively. In September, tra fish exports posted the highest growth rate at 97% to 161 million USD.
The country’s export of aquatic products to China hit 153 million USD last month, up 97% y-o-y, but down 1.4% compared to that of July. Meanwhile, earnings from the US decreased by 11% y-o-y to 140 million USD.
In January-September, the US remained the largest importer of Vietnamese aquatic products, with nearly 1.8 billion USD, up 22% y-o-y.