VIETNAM BUSINESS NEWS OCTOBER 7
The three-day event provided an excellent platform for Vietnamese enterprises to gain greater insights into the cutting-edge production technologies from other places throughout the world, while helping them introduce their products, seek new partners, and further participate in the global value chain.
Vietnamese pavilions captured great attention of foreign visitors, and many of them showed their interest in Vietnamese products.
According to statistics, the revenue of the supporting industry’s products accounts for roughly 5% of total Vietnamese export turnover to Japan.
M-Tech Osaka makes up one of the largest annual exhibitions which specialises in mechanical engineering and supporting industries in Japan.
The event attracted the participation of many manufacturers from various industrial powers around the world such as the UK, Germany, France, the US, the Republic of Korea, and China.
Vietnam attends 6th Selangor International Business Summit 2022 in Malaysia
Vietnam's key agricultural products such as coffee, tea, pepper, cashew nuts and fruit are being introduced at eight out of the 421 pavilions of the ongoing Selangor International Food and Beverage Exhibition in Kuala Lumpur, Malaysia.
The exhibition is one of six main events at the 6th Selangor International Business Summit (SIBS) 2022 that opened in Kuala Lumpur, Malaysia, on October 6.
The four-day business summit comprises Selangor ASEAN Business Conference (SABC), Selangor International Expo (F&B), Selangor Industrial Park Expo (Spark), Selangor International Expo (Medic), Selangor R&D and Innovation Expo, and Selangor Smart City and Digital Economy Convention (Sidec).
To date, it is the largest business summit ever held in the region with a total of 906 booths from 24 countries, attracting nearly 30,000 investors.
VinaCapital: Vietnam's stock markets always attractive to foreign investors
Foreign investors have always been interested in Vietnam’s stock market, Don Lam, general director of the VinaCapital Group, said on October 6 at a press briefing on the 2022 Investors Conference which is being hosted by VinaCapital in Ho Chi Minh City.
Noting that nearly 100 investors from countries around the world have gathered at the conference this year amid a market slump, he said it is proof of investors' interest in Vietnam.
Since the previous conference was held three years ago, the world has changed a lot, but one thing remain unchanged which is Vietnam's attractiveness to investors, Lam said.
According to Andy Ho, Chief Investment Officer, Managing Director of VinaCapital, said that the volatility of the stock market has made many investors uneasy. However, it should be noted that Vietnam's listed and private companies are still performing well thanks to the strong recovery of the domestic market.
According to him, the companies in which VinaCapital invest, especially those involved in consumer goods, still recorded stable revenue, even higher than the pre-pandemic period.
The businessman said he believes that these businesses will continue to grow and generate sustainable returns for investors in the long term.
Experts of VinaCapital said that Vietnam is still very attractive in the eyes of foreign investors despite the current difficulties. They attribute the country’s attractiveness to its high economic growth and well-controlled inflation. The strong recovery of the domestic market is also a factor that stimulates the development of domestic retail chains in line with the diverse needs of the Vietnamese people.
Australian expert optimistic about Vietnam’s economic outlook
Along with the self-recovery of businesses and people, economic achievements that Vietnam has gained so far this year have shown the efficiency of the Government’s economic management and the bright prospect of the country’s economy this year, held Associate Prof. Dr. Chu Hoang Long from Crawford School of Public Policy, the Australian National University.
Long cited the General Statistics Office data showing that the Vietnamese economy expanded 8.8% year on year in the third quarter of 2022, the highest in 10 years.
The country’s exports in the first nine months of this year grew over 17%, while the disbursement of foreign direct investment (FDI) increased 16%, a record rate in the recent five years, ensuring major economic balances. A number of reputation credit rankers in the world such as S&P and Moody’s has raised Vietnam’s credit ranking, he noted.
The expert underlined that economic results of the country has manifested the effective management of the Vietnamese Government in 2022. This has a significant meaning in the context as many countries are struggling with macro-economic instability, record inflation.
Dr. Long highlighted Vietnam’s efforts in controlling the COVID-19 pandemic, restructuring its economy, improving business environment and removing difficulties for production and business activities, as well as speeding up economic recovery and development and reining in inflation.
Particularly, despite impacts of the pandemic, Vietnam has actively engaged in joint efforts of the world in climate change response and natural disaster prevention and control, while giving strong commitments at the 26th UN Climate Change Conference (COP26).
Regarding the Vietnamese economic outlook, Dr. Long expressed his belief that the Vietnamese Government will further promote the achievements to secure higher development in the future. the growth model.
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% depending on the tenor.
Customers can buy CoDs for just 10 million VND (417 USD) and receive interest of 7.5%, 7.8%, 8%, and 8.2% for terms of 6, 9, 12, and 15 months. For 18-month term they can get 8.4%.
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 Vietnam raised its policy rate, many banks, including State-owned ones, have raised interest rates for VND deposits.
Banks are also offering promotions to attract deposits.
For instance, from October 3 to December 30, customers who make deposits of 25 million VND (1,040 USD) 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 20,000 VND to 1 million VND, and a lucky draw at the end of the programme with prizes worth a total of 6.5 billion VND, including a cash prize of 1 billion VND, nine first prizes of 0.6 tael of gold each and 18 second prizes of 20 million VND each.
As of September 20 this year, deposit mobilisation by credit institutions increased by 4.04% while credit growth was 10.54%.
The rapid increase in credit has put pressure on banks’ liquidity.
Exports of forestry waste products likely to rake in billions of USD
Wood pellets, made from compressed sawdust and forestry wastes, have become a key currency earner of the wood industry, having the great potential to rank in the group of export staples with turnover of over 1 billion USD.
Vietnam’s wood pellet export value was just about 145 million USD in 2017 and surged to 413 million USD in 2021.
Close to 2.4 million tonnes of the product were shipped overseas in the first half of 2022 for approximately 354 million USD. If the growth is maintained at the current rate, the export turnover may hit around 700 million USD for the entire year.
In particular, the product’s export price increased sharply between January and June to an average of nearly 150 USD per tonne, more than 27% higher than the average price in 2021.
The use of by-products to make the pellets helps wood factories raise incomes, offsetting the high price of imported raw materials. Currently, Vietnam houses about 300 pellet production facilities,which have solely exported to Japan and the Republic of Korea (RoK).
Five ASEAN countries to connect to payment system in 2023
A cross-border payment system between the five ASEAN countries of Thailand, Singapore, Malaysia, the Philippines, and Indonesia will be fully connected next year, according to Bank Indonesia (BI) Governor Perry Warjiyo.
Perry said on October 5 that Indonesia has linked the payment system with Thailand and will soon link it with Malaysia and Singapore. But he did not provide details about the deal with the Philippines.
In late August, BI and the Monetary Authority of Singapore (MAS) agreed to cooperate on QR code payments between the two countries to encourage payment connectivity in ASEAN.
This initiative marked an important milestone in strengthening financial collaboration between the two nations.
Da Lat vegetables exported to Singapore, RoK
Lettuce cultivated in the Central Highlands province of Lam Dong’s Da Lat city has been exported to Singapore and the Republic of Korea (RoK), according to the municipal People’s Committee.
Lettuce cultivated in the Central Highlands province of Lam Dong’s Da Lat city has been exported to Singapore and the Republic of Korea (RoK), according to the municipal People’s Committee.
About 24 tonnes of the vegetable and others from the city's Langbiang Farm were shipped to Singapore at the beginning of October.
Tran Huy Duong, the farm’s owner, said the exported vegetables are cultivated with the application of hi-tech farming methods, adding that they must meet the food safety standards of both Vietnam and importing countries.
The local administration also said that up to 50 tonnes of the vegetable are ordered per week by enterprises from RoK and Japan.
New Zealand remains promising market for Vietnam's exports: Insiders
Vietnam is trying to tap great potential to increase exports to New Zealand, a promising market where it has won only 1.7% of the local market share, held insiders.
In the first eight months of this year, two-way trade between reached 1.7 billion NZD (963.81 million USD), up 21.4% year on year.
Upturn was seen in the revenue of many Vietnamese exports, including tea and coffee (52%), pottery and ceramics products (108%), paper and paper products (48%), steel (36.8%), and garment, footwear and accessories (22.8%).
According to the Vietnamese trade office in New Zealand, revenue of the majority of the exports has recorded double-digit growth, especially construction materials. It explained that along with an increase in export volume, the prices of products in New Zealand has also risen.
The office forecast that Vietnam’s exports to the market will continue to grow as the two countries have been members of many common trade deals which provide many tariff advantages in the market, thus increasing the competitiveness of Vietnamese products.
Hanoi remains bright spot in FDI attraction
Thanks to the development of a network of industrial parks and clusters as well as efforts to accompany investors, Hanoi has remained one of the bright spots of the country in foreign direct investment (FDI) attraction.
According to the municipal Department of Planning and Investment, so far this year, the city has attracted about 992.4 million USD in FDI, up 15% year on year, including 141.3 million USD invested in new projects.
The result helps the capital city remain among the top localities in FDI attraction.
Nguyen Ngoc Tu, Vice Director of the department, said that the FDI projects are mostly in the fields of import-export, goods distribution, construction, information technology, telecommunications, processing and manufacturing.
The majority of investment in the city is from Japan, the Republic of Korea and Singapore, while that from Europe and the US accounts for only 10% of total FDI capital, he said.
Seafood exports surge 33% in eight months
Vietnamese seafood exports during the opening eight months of the year surged by 33% to US$2.8 billion against the same period from last year, according to details given by the Vietnam Association of Seafood Exporters and Producers (VASEP).
Most notably, August alone witnessed the country’s total export of seafood products skyrocket by 80% to reach US$405 million on-year.
This robust growth can largely be attributed to the fact that export processing enterprises had been forced to reduce their capacity or had to suspend operations due to the COVID-19 pandemic last year.
At present, aquatic exports make up 37% of the country's total seafood export value. In line with this, Vietnamese seafood exports include other marine fish, tuna, squid, octopus, crabs, crabs and other crustaceans at 5%, bivalve molluscs at 4%, and the other molluscs.
Most notably, tuna exports during the eight-month period recorded the strongest growth rate of 55% to reach US$730 million.
Exports of crabs, other crustaceans, as well as squid and octopus increased by 37% and 36%, respectively, while exports of bivalve molluscs and other marine fish rose by 135% and 23%, respectively. Only mollusk exports decreased by 20%, which only accounts for a small proportion of the overall figure.
Processing activities of seafood products for exports are primarily concentrated in provinces such as Ho Chi Minh City, Khanh Hoa, Ba Ria - Vung Tau, Long An, and Kien Giang.
Experts assessed that firms are expected to face a shortage of raw materials during the remainder of the year due to the ongoing Ukraine-Russia conflict causing high costs of exploitation.
Industrial park approved for Vinh Phuc Province
Vinh Phuc Province has announced an investment project for the Dong Soc Industrial Park, which will cover 207ha with a total investment of nearly VND2.23 trillion (US$96.9 million).
Deputy Prime Minister Le Van Thanh signed a decision approving the investment policy and its investor as Vinh Phuc Commercial Investment Joint Stock Company.
Based in Vinh Tuong District, the project implementation progress shall not exceed 36 months from the date of land allocation, according to the plan.
The Ministry of Planning and Investment is responsible for the contents of the report on the results of appraisal of project investment policies and performs the responsibility for State management in monitoring and directing industrial parks to operate in accordance with regulations.
Regarding the current status of farm land in the project implementation area, Vinh Phuc Provincial People's Committee is not allowed to transfer the remaining area of Dong Soc Industrial Park Development Planning approved by the Prime Minister to other uses without being approved by a competent authority according to regulations.
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 95-100% of the target set by the Prime Minister. Of which, at least 50% of the Socio-Economic Recovery and Development Programme must be delivered in 2022.
KBSV projected public investment to accelerate and reach around 90-95% of the target this year, equivalent to roughly 200 trillion VND (8.4 billion USD) 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.
PLC (Petrolimex Petrochemical JSC) is a stock worth monitoring in the sub-industry since the company holds roughly 30% of the market shares. The company produces around 350,000 tonnes of bitumen annually, outpacing all rivals.
Construction firms, undoubtedly, would find themselves at an advantage amid higher delivery of public money on construction projects. Stocks to monitor include HHV (Deo Ca Traffic Infrastructure Investment JSC), C4G (CIENCO4 Group JSC), and VCG (Vietnam Construction and Import-Export JSC).
Extension proposed for pilot permission of Vietnamese at Phu Quoc casino
The Mekong Delta province of Kien Giang has agreed to propose the Finance Ministry consider extending the pilot permission of Vietnamese people to play games at a casino in the island city of Phu Quoc for another three years.
The proposed extension, until January 7, 2025, aims to help make more precise assessment of the effectiveness of the complex of ecotourism, entertainment, hotel, commercial, and goods transportation services, resorts, convention centres and related facilities in Ganh Dau commune, along with the pilot programme, local authorities said.
They noted the complex, operating since January 2019, has contributed to local socio-economic development. In particular, the casino has created jobs for 1,122 Vietnamese and 32 foreigners; attracted 240,560 visitors, including 156,533 Vietnamese; and paid 1.73 trillion VND (72.5 million USD) to the local budget.
Kien Giang authorities held that this could be viewed as a tourism product helping Phu Quoc attract more domestic and foreign tourists in the time ahead.
Its investor, the Phu Quoc Tourism Development and Investment JSC, has ensured strict and effective management of Vietnamese players at the casino along with demand for this service, they added.
Nguyen Thanh Nhan, Vice Chairman of the Kien Giang People’s Committee, said casino activities and the pilot permission of Vietnamese to enter the casino have been carried out in line with the Politburo and Government’s guideline and policy.
Part of casino entry fees has been allocated for delivering social welfare to the community and safeguarding security and order in Phu Quoc, he added.
Vietnam among top Asian exporters to Spain
Vietnam has become one of the top Asian exporter to Spain, only behind China, on par with Hong Kong (China) and above Japan, Taiwan, the Republic of Korea which are strategic markets of Spain.
It was revealed by the Vietnam Trade Office in Spain at a teleconference on trade promotion with Vietnam trade offices abroad in September.
The latest statistics by the Spain Customs showed that two-way trade between Vietnam and Spain hit 2.19 billion EUR in the first half of this year. Of the figure, Vietnam’s export revenue hit 1.95 billion USD, up 56.41%. It continued to enjoy a high trade surplus worth 1.71 billion EUR, up 12.21%.
Its major exports include mobile phones and spare parts, machinery and equipment, garment and textile, footwear, coffee, aquatic products, wood and wooden furniture, bamboo and rattan products.
The Vietnam Trade Office in Spain asked for collaboration from localities and trade associations to hold online and offline workshops to introduce business opportunities to exporters, as well as hold more trips to Spain to connect Vietnamese importers, distributors and major supermarkets with Spanish partners.
HCM City’s production, trade maintain growth in Q3
Production and trade activities in the manufacturing and processing sector in Ho Chi Minh City remained stable in the third quarter this year, according to the municipal Department of Industry and Trade.
The department’s survey showed that 32.6% of the local enterprises saw better performance in the period, 34.7% remained stable, and 32.7% still met difficulties compared to the previous quarter.
About outlook in the fourth quarter, 41.5% of respondents expressed their optimism, 36.3% expected stability, while 22.2% foresaw more challenges.
Up to 88.9% of the State-owned enterprises were upbeat about their operation in the fourth quarter. This rate in non-State and foreign-invested sectors were 78.7% and 72.7%, respectively.
Several enterprises pointed out positive signals in markets and drop in fuel prices recently which enabled them to effectively cash in on promising customers and reform governance.
According to statistics, the city’s industrial production index in September rose by 1% month-on-month and 89.6% year-on-year.
In the period, the figure surged by 19.6% year-on-year.
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.
Vietnam’s veggie, fruit imports from China surge
Vietnam spent some US$473 million importing vegetables and fruits from China between January and August, surging by 74% year-on-year and accounting for 38% of the country’s total veggie and fruit imports.
The country’s stronger vegetable and fruit imports from China were attributed to lower prices, improved quality and geographical proximity.
Many Chinese fruits such as pomegranates, grapes, pears, jujubes and apples, and vegetables, including carrots, onions and garlic, are dominating the local market, mainly in HCMC, the local media reported.
The United States came second among Vietnam’s largest vegetable and fruit exporters in January-August, with a value of US$213.5 million, up 5.8% year-on-year, followed by Australia with over US$104 million.
During the period, Vietnam spent US$89 million importing vegetables and fruits from New Zealand, according to data from the General Department of Vietnam Customs.
From January to August, the country imported vegetables and fruits worth some US$1.3 billion, a year-on-year increase of 33%.
HCMC carpark investor requests project extension
The Underground Space Investment Development Corporation (USI), the investor of the Le Van Tam underground carpark project, has written to the HCMC People’s Committee requesting consideration in the BOT contract termination policy and a two-year extension to find business partners.
The HCMC People’s Committee has recently decided to terminate the contract with the investor as it has violated the contract terms and failed to secure the capacity to implement the project.
USI started work on the Le Van Tam underground parking lot project in 2010, but it had not been realized until it was terminated by the city government.
According to USI, the reasons for the delay consist of preliminary design and construction cost adjustments, changes in scale and technical solutions, apart from other objective issues.
The company, therefore, requested HCMC to extend the project for an additional 24 months, creating conditions for it to seek business partners to develop the project.
Tourism revenue reaches 78% of pre-Covid 2019
Vietnam’s tourism industry has generated VND394.2 trillion in revenue in the year through September, equivalent to 78% of the same period of 2019 when the pre-Covid tourism sector was at its best, the Vietnam National Administration of Tourism (VNAT) reported.
Vietnam saw over 1.8 million international arrivals in the first nine months of the year. In the third quarter alone, 1.2 million foreigners came, a 2.5-fold increase over the second quarter, indicating the tourism industry is bouncing back after the country reopened international tourism on March 15.
Still, the figures show Vietnam has achieved only a third of the full-year target of welcoming five million international visitors, down 85.4% compared to 2019.
According to VNAT, most foreign travelers came from South Korea, with 489,400 visitors, accounting for 26%, followed by guests from the United States and other Asian countries.
Ninh Thuan proposes mobilizing solar power capacity without price mechanism
The south-central province of Ninh Thuan has written to the Ministry of Industry and Trade and Vietnam Electricity (EVN) proposing mobilizing the capacity of the 450MW solar energy plant in Thuan Nam District without an electricity price mechanism.
The investor of the solar energy plant has built a 500KV substation and a 500KV grid stretching from Thuan Nam to Vinh Tan with a total cost of VND2,000 billion, which aim to release the capacity of renewable energy projects in the region.
According to the investor, construction costs will be made up by revenue from exploiting the total capacity of the 450 MW solar energy plant.
However, in the past time, the solar power project has been deflated by the capacity without electricity price mechanism and its compliance with the dispatching order of the National Load Dispatch Center. As a result, the plant’s mobilized capacity could not reach the approved design capacity.
At the same time, the investor has to incur the transmission costs for renewable energy projects in Ninh Thuan province.
The Electric–Power Trading Company under Electricity Vietnam had a dispatch on August 31 to announce ceasing the exploitation of the capacity without electricity price mechanism of the 450MW solar energy plant from September 1.
Work on Khanh Hoa-Buon Ma Thuot expy project set to begin in mid-2023
The construction of an expressway linking the south-central province of Khanh Hoa with the Central Highlands province of Daklak is expected to start on June 1 next year.
The provincial government assigned the Project Management Board and relevant agencies to jointly implement the project as planned.
Under the plan, the survey and the environmental impact assessment report for the project need to be done by October 26 this year, while the report has to be appraised and approved by December 10, 2022. Site clearance work has to be completed by May 11, 2023, to hand over cleared land to the investor to break ground on the project on June 1, 2023.
The Khanh Hoa-Buon Ma Thuot expressway project will have a total length of 117.5 kilometers in phase one. It will cost an estimated VND22,000 billion, backed by public capital.
Vietnam’s exports to Australia surge by 42%
Vietnam’s exports to Australia increased by 42% to US$4.9 billion, according to the Vietnam Trade Office in Australia.
In the first eight months of 2022, bilateral trade between Vietnam and Australia reached US$10.969 billion, up 37.44% year-on-year.
Among Vietnam’s exports to Australia, seafood increased by 49% to US$247.6 million, while wood products increased by 23.99% to US$135.4 million, confectionery by 50% to more than US$50 million, and iron and steel by 232.92% to US$142 million.
Vietnam’s imports from Australia also increased by 34.75%, mainly input materials for domestic products such as coal, iron ore, metals and wheat.