The US Food Safety and Inspection Service (FSIS) recently conducted a thorough review of the food hygiene and safety management system pertaining to Vietnamese tra fish exports to the US, according to Deputy Minister of Agriculture and Rural Development Phung Duc Tien.

The review, which took place from August 7 to 22, focused on six key components to determine the system’s equivalence.

These components encompassed the supervision of competent authorities, food safety and consumer protection regulations, microbial analysis programmes, hygiene oversight and Hazard Analysis and Critical Control Point System (HACCP) testing, chemical residue control programmes, and laboratory testing

In addition to these assessments, the inspection team visited 10 processing and export facilities among the 26 enterprises engaged in catfish exports to the US. They also inspected five tra fish farming facilities that supply raw materials to processing ones in the Mekong Delta localities of Can Tho, Soc Trang, Tien Giang, and Dong Thap.

The initial findings of the inspection have garnered favourable responses from US authorities, with only minor technical discrepancies detected at some farms and businesses.

Amid the subdued conditions prevailing in the export market, the Vietnam Association of Seafood Exporters and Producers forecast a 15% year-on-year decline in tra fish export revenue to around 2 billion USD.

Vietjet Air announces Hanoi – Jakarta direct service

Vietnamese budget airline Vietjet Air on September 4 announced its direct air route connecting Hanoi of Vietnam and Jakarta of Indonesia.

The new air route, due to start this September, will use modern aircraft to fly four times a week between the two capital cities. This will be Vietjet Air’s fourth direct route between Vietnam and Indonesia, and this will help increase the number of weekly flights between the two countries to 92 this December.

Vietnamese Prime Minister Pham Minh Chinh, who is in Jakarta to attend the 43rd ASEAN Summit and related meetings, attended the ceremony along with other officials of the high-ranking Vietnamese delegation.

PM Chinh congratulated Vietjet Air on its expansion plan with the new air route linking Hanoi and Jakarta, which he said would help promote trade and investment between the two countries.

He reminded that Indonesia is one of Vietnam’s most important trading partners in Southeast Asia. It is a large market of approximately 280 million consumers that houses the megacity of Jakarta inhabited by more than 10 million.

Vietjet Air aims to transport 1 million passengers per year between Indonesia and Vietnam, contributing to enhancing their strategic partnership, and serving as a bridge for cultural and economic exchanges between the two countries’ people./.

Energy sector plans to cut greenhouse gas emissions by 17-26%

Vietnam's energy sector plans to reduce greenhouse gas emissions by 17-26% by 2030 and around 90% by 2050 compared to the normal development scenario.

The targets have been set in the freshly approved National Energy Master Plan for the 2021-2030 period with a vision to 2050.

The overall goal of the plan is to firmly ensure national energy security and defence-security; meet the requirements of socio-economic development, industrialisation, and modernisation of the country; improve people's lives; and protect the ecological environment. It also aims to successfully implement energy transition, thus meeting the net-zero gas emission target by 2050.

The scheme also sets goals for energy savings of about 8-10% by 2030 and approximately 15-20% by 2050 compared to the normal development scenario.

Amazon Global Selling offers consultancy at VIFA ASEAN 2023

A series of consultancy presentations from Amazon experts were offered at the Vietnam - ASEAN International Furniture & Home Accessories Fair 2023 (VIFA ASEAN 2023) held in Ho Chi Minh City.

The consultancy, Amazon said, supported and provided an overview of cross-border e-commerce, and showcases how Amazon resources, tools and solutions can help small and medium enterprises (SMEs) traverse the international market.

Joining the four-day exhibition from August 29 to September 1, Amazon provided on-site information and guidance, advancing Vietnamese home decor and furniture to the next level of global integration by leveraging cross-border e-commerce exports.

With industry insights and consultancy, Amazon Global Selling aimed to empower local businesses in the home decor and furniture industry to expand and accelerate their footprint in the globe.

In addition, the “Selling on Amazon” workshop, with a focus on the rising trend of cross-border e-commerce on a global scale, offered a wellspring of information, insights, and educational resources, arming local enterprises with knowledge about e-commerce export.

The Amazon Handbook, a comprehensive guide packed with essential success know-how about online exports for domestic brands, was published, helping domestic suppliers thoroughly leverage their competitive edge in manufacturing home decor and furniture to accelerate their global export progress.

“Home decor and furniture has huge advantages based on local unlocked potential and global market demand. We are delighted to present at the VIFA ASEAN 2023 as a chance to connect with local sellers and prospects, as well as a window for accelerating Vietnam as a global manufacturing hub for home furnishings and quality products in general,” said Gijae Seong, head of Amazon Global Selling Vietnam.

Vietnam's annual wood industry exports average over 10 billion USD, making Vietnam the fifth-largest wood manufacturer and exporter in the world.

VIFA ASEAN 2023 was an one-stop event for thousands of local and international visitors, featuring industry insights and practical experience in global exports.

PM orders speeding up national important transport projects

Prime Minister Pham Minh Chinh has asked ministries and localities to speed up the progress of  national important transport projects.

In an official dispatch issued on September 3, the PM said the Government and steering boards for national projects have given directions to remove difficulties and obstacles, speed up the progress of key transport projects, especially expressway projects nationwide.

Investors, contractors and consulting units have actively worked even during holidays, thus up to now, the country has 1,832km of expressways in use.

The remaining sections of the eastern North-South Expressway, ring roads of Hanoi, Ho Chi Minh City and expressways connecting the Northwestern, Central Highlands, Southwestern and Mekong Delta regions are being actively built, he said.

On behalf of the Government, PM Chinh lauded ministries and localities for their efforts and determination to complete the works on schedule with high quality.

To have about 3,000km of expressways by 2025 and 5,000km of expressways by 2030 as set in the 13th National Party Congress’s Resolution, the PM requested concerned agencies and local authorities at all levels to exert more efforts, remove difficulties, handle existing problems relating to site clearance, technical infrastructure works, exploitation and supply of construction materials so as to accelerate construction progress and put into operation the projects on schedule and ensure their quality.

They are also responsible for reviewing connections between different expressways to promote efficiency and socio-economic development of regions, localities and the whole country.

PM Chinh asked the Minister of Transport, Chairman of the Commission for the Management of State Capital at Enterprises and Chairpersons of the provincial/municipal People’s Committees to have appropriate and timely encouragement and reward organisations and individuals, aiming to further enhance the emulation spirit at important national transport projects.

The PM requested the Minister of Planning and Investment to coordinate with the Minister of Finance to urgently issue documents guiding ministries, central agencies and localities on capital adjustments for tasks and projects of the socio-economic recovery and development programme and the medium-term public investment plan for the 2021-25 period.

The adjustments must ensure maximum disbursement of allocated capital and immediately resolve problems related to capital sources for the Eastern North-South Expressway project and other key projects. It should be completed before September 9.

The Government Office will regularly monitor and inspect the implementation of the official dispatch and report to the PM monthly.

Vietnam-Indonesia trade expected to exceed 15 billion USD soon

The attendance of Prime Minister Pham Minh Chinh and a high-ranking delegation of Vietnam at the 43rd ASEAN Summit and Related Meetings in Jakarta, Indonesia, from September 4-7 is expected to open up cooperation opportunities, thus helping the two countries to raise the bilateral trade turnover to 15 billion USD in a more balanced direction.

Since Vietnam and Indonesia established their diplomatic ties in 1955, the bilateral relations have been developing strongly in all fields.

According to the Department of Asia-Africa Markets under the Ministry of Industry and Trade, economic and trade ties between Vietnam and Indonesia have recorded strong development in the past time as both economies have a lot of potential and are emerging and developing rapidly.

Indonesia is the 16th biggest economy in the world, the biggest economy in the Association of Southeast Asian Nations (ASEAN) and also the largest market in ASEAN with more than 270 million consumers with its middle class growing in size.

Furthermore, Indonesia is also a market with a lot of room for Vietnamese products. Meanwhile, Vietnam is a market with great potential for Indonesia to promote cooperation in both trade and investment.

The trade turnover between the two countries recorded positive growth in the past tine. In 2013, the bilateral trade reached only 4.8 billion USD. In 2022, it was nearly triple, reaching 14.1 billion USD.

In the first four months of 2023, the two-way trade hit more than 4.2 billion USD with Vietnam’s exports to Indonesia reaching 1.6 billion USD, 9% higher than the same period in 2022. It is expected that in 2023, the bilateral trade turnover can reach or exceed 15 billion USD.

In Southeast Asia, Indonesia is currently Vietnam's 3rd largest trading partner, while Vietnam is Indonesia's 4th largest trading partner.

Notably, Vietnam is a reputable and high-quality supplier of many products to the Indonesian market such as rice, coffee, rubber, seafood, textiles, footwear, mobile phones and components, iron and steel, construction materials, and plastic products.

On the other hand, many of Indonesia's key products such as coal, auto parts, palm oil, plastic raw materials, animal feed and raw materials, chemicals, and metals are preferred by Vietnamese businesses.

In addition to bilateral cooperation, the two countries have also closely coordinated and supported each other in multilateral economic cooperation frameworks such as ASEAN, the World Trade Organisation (WTO), Asia-Pacific Economic Cooperation (APEC), Asia-Europe Meeting (ASEM), and Regional Comprehensive Economic Partnership (RCEP).

Pham The Cuong, Vietnamese Trade Counsellor in Indonesia, said that in the first four months of 2023, Vietnam’s rice exports to the Indonesia brought home 149 million USD, a sharp increase of 2,514% compared to the same period in 2022. Besides importing rice, Indonesia is also a very potential market for Vietnamese food.

With a population of 275 million people, Indonesia spends about 16 billion USD importing food, foodstuffs and beverages, accounting for 6.5% of the country's total imports.

According to Cuong, Vietnam can expand the exports of instant noodle, vermicelli, frozen dumplings, canned fruits (lychee and longan), milk, dairy products, honey, instant coffee, and passion fruit juice.

Cuong said that as the majority of Indonesia’s population are Islams, Indonesia is a market with the largest demand for Halal certified products in the world. Therefore, export businesses should proactively learn and apply for Halal certification from Indonesia.

Meanwhile, to promote deep processing and increase product values, Indonesia plans to ban the export of 21 groups of goods in the form of unprocessed raw materials from now until 2040. Particularly, the export of raw bauxite has been banned from June 2023, followed by copper and tin products.

In the list of the 21 commodity groups, there are some products whose export bans will affect Vietnam such as coal, shrimp, aquatic products, crabs, seaweed, and sawn timber.

On the sidelines of the 55th ASEAN Economic Ministers Meeting (AEM 55), Indonesian Minister of Trade Zulkifli Hasan said that Indonesia always considers Vietnam as one of Indonesia's important economic and trade partners in Southeast Asia.

Hasan suggested Vietnam consider and soon resume the exchange of delegations, especially the cooperation mechanism and annual forum between the Indonesian Ministry of Trade and the Vietnamese Ministry of Industry and Trade.

Indonesia hopes to learn Vietnam’s experience in aquaculture production and exports, he said.

Indonesia also called for Vietnamese businesses to invest and cooperate with Indonesian businesses to develop the electric vehicle industry.

Vietnamese Minister of Industry and Trade Nguyen Hong Dien agreed with Hasan's proposals on the early resumption of the cooperation mechanism, information exchange and annual forum between the two ministries, which was interrupted in the last two years due to the COVID-19 pandemic.

Dien proposed that Hasan encourage Indonesian seafood businesses to participate in fairs, trade promotion activities, and business forums held in Vietnam to connect the business communities of the two countries.

Lang Son pushes for global recognition and export of Chi Lang custard apples

Farmers markets are buzzing with activity due to the commencement of the custard apple harvest season in Chi Lăng District, located in the northern mountainous province of Lạng Sơn, which began nearly a fortnight ago.

Trịnh Quốc Huy, a fruit merchant who has been buying Chi Lăng custard apples from local farmers and selling them in Hà Nội for close to twenty years, mentioned that these custard apples are highly sought after by Hanoians owing to their naturally juicy texture and assured food safety.

Furthermore, he commented that the Chi Lăng custard apples are noticeably fresher, larger, and more attractive than those from other areas.

At present, traders are buying Chi Lăng custard apples at a wholesale price ranging from VNĐ35,000-50,000 (US$1.4-2) per kilo, based on their size.

The retail price for these custard apples stands between VNĐ55,000-60,000 ($2.2-2.4) per kilogramme. This reflects an uptick of VNĐ10,000-15,000 ($0.4-0.6) per kilogramme from the previous year, as reported by the Nhân dân (People) online newspaper.

Mã Văn Lét, who owns a custard apple orchard in Quán Thanh Village, situated in the district’s Chi Lăng Commune, stated that his harvest this year surpassed last year's yield.

He went on to share that he makes approximately VNĐ400 million ($16,440) annually from cultivating custard apples.

Chi Lăng District is renowned as the "kingdom" of custard apple trees, boasting a vast cultivation area of over 2,200ha. Notably, most Chi Lăng custard apple trees grow atop imposing limestone cliffs.

Each year, from August to early September, and more recently with an added harvest in October and November, local cultivators throughout the district find themselves particularly occupied during the harvest season.

Baskets filled with these custard apples, each weighing close to 50 kilos, are typically transported down the mountains via motorbikes or pulleys, navigating winding roads and sheer cliffs.

In earlier times, due to a lack of electricity, local cultivators had to resort to manual winches to move the custard apples to the lower regions. Nowadays, electric winches have alleviated much of the manual labour, making it easier for growers to transport their harvest from the mountainous terrains to the foothills.

The district's unique climate, coupled with the nutrient-dense soil of the limestone mountains, produces Chi Lăng custard apples that have a thin, soft skin and a thick, white, seed-scarce flesh. The skin of these custard apples peels away effortlessly. They offer a uniquely delightful taste, and their texture is noticeably firmer when consumed.

Since 2013, the district has adopted the cultivation of custard apples in line with the Vietnamese Good Agricultural Practices (VietGAP) standards.

As of now, nearly 700ha in the district are dedicated to growing custard apples in compliance with VietGAP standards.

In 2017, Chi Lăng custard apples were recognised among the top 50 speciality fruits of Việt Nam. Additionally, they were awarded the Việt Nam Agricultural Golden Brand in 2017 and the Gold Cup by the Việt Nam General Association of Agriculture and Rural Development in 2018.

To combat brand imitation, a specific planting area code has been assigned to the Chi Lăng custard apple across 40ha in both Lũng Than Village and Giáp Thượng 2 Village.

Lately, recognising the custard apple as a key agricultural product of the province, the local administration has decided to extend the cultivation areas to other districts.

This year's custard apple yield across the province is projected to achieve 105 tonnes per hectare.

Provided the price of the custard apple remains consistent with the start of the season, the province anticipates a total revenue from this fruit to be in the ballpark of VNĐ1.2-1.4 trillion ($49.3 -57.5 million), based on an estimated harvest of roughly 39,000 tonnes.

Lăng Văn Thức, Secretary of the Chi Lăng Commune Youth Union, pointed out that yellow flies are detrimental insects that inflict harm on the custard apples.

In response, the union collaborated with the local agricultural department to host training sessions. These courses imparted knowledge about crop care, combating the detrimental yellow flies, and instructed local farmers on the use of modern techniques to ease farming tasks, and enhance both the yield and quality of custard apples, he mentioned.

Furthermore, the union has been instrumental in supporting the sale of custard apples by advertising them on social media platforms like Zalo and Facebook, and e-commerce sites such as voso.vn and postmart.vn.

Vũ Thị Viên, a member of the district’s Thanh Niên Cooperative, revealed plans to set up a channel on TikTok to engage a broader audience in the future.

Additionally, the district's People’s Committee has collaborated with several major supermarkets across the country to introduce custard apples to consumers via these supermarket distribution networks.

Moreover, on August 19, the district held an event to champion both the custard apples and the district's One Commune-One Product (OCOP) offerings within the province.

On August 24, a trade fair showcasing custard apples and other agricultural produce from Lạng Sơn Province took place in Hà Nội. This event was organised by the Trade Promotion Centre for Agriculture under the Ministry of Agriculture and Rural Development in collaboration with the provincial Agriculture and Rural Development Department.

Beyond their domestic market achievements, there have been efforts to introduce Chi Lăng custard apples to international markets.

The provincial authorities have been motivating local growers to bolster the use of science and technology. They've been urged to establish a systematic approach to monitor the cultivation and care of the custard apple trees, ensuring safety and enhancing product quality to meet international standards. Emphasis has also been laid on packaging, preservation, and the incorporation of origin traceability stamps.

The overarching objective is to pave the way for these custard apples to be officially exported to rigorous international markets, including countries like Japan, South Korea, Australia, and the United States. 

Military-run telecom group to attend Defense Industry Exhibition MSPO

The Military Industry and Telecoms Group Viettel has announced that it will attend the 31st International Defense Industry Exhibition (MSPO) in Kielce, Poland, from September 5 to 8.

The group will introduce 60 products that demonstrate its research-manufacturing capacity. The products to be exhibited have features equivalent to high-tech industrial products in the world, meeting international standards.

Viettel holds that MSPO 2023 will help the group to expand business opportunities and promote multinational partnerships. At the same time, the expo is an opportunity to promote the capacity and popularize the image of Vietnam’s defense industry to the world.

Nguyen Vu Ha, general director of Viettel High Tech, says Viettel aims to acquire core technology when it reaches global markets.

This is the first time that a Vietnamese enterprise has attended and promoted business at MSPO. The expo also brings together the world’s leading brands such as WB Group, Thales, and Lockheed Martin.

Sóc Trăng plans to establish Trần Đề coastal economic zone by 2030

Sóc Trăng Province will study the establishment of the Trần Đề coastal economic zone along Trần Đề estuary and the coastal area of ​​the locality by 2030.

The move was part of the new master plan of Sóc Trăng Province for the period of 2021 - 2030, with a vision to 2050, recently approved by Deputy Prime Minister Trần Hồng Hà.

Accordingly, the province will research, develop and establish the Trần Đề coastal economic zone and the coastal area, with an estimated scale of about 40,000ha. The zone will be developed to become an integrated, multi-sectoral, multi-functional economic zone in order to exploit and promote synchronously and effectively Trần Đề deep-water seaport when it meets conditions following the current regulations on the management of industrial parks and economic zones.

The master plan sets out a goal to turn Sóc Trăng into one of the most well-developed provinces of the Mekong Delta by 2030 and form a Trần Đề offshore seaport with a comprehensive and modern infrastructure system. Sóc Trăng will have an urban system developing towards green, smart and sustainable development with an ability to adapt to climate change.

The master plan aims to achieve an average gross domestic product (GRDP) growth rate of 8.5 per cent yearly, with GRDP per capita reaching about VNĐ124 million. The proportion in the GRDP of agriculture, forestry and fishery will be about 27 per cent; industry-construction about 35 per cent; services about 30 per cent; and product tax minus product subsidies about 8 per cent. State budget revenue in the area is expected to reach about VNĐ14 trillion by 2030.

The master plan also aims to develop and establish three new industrial parks and expand one industrial park at convenient locations in terms of road, waterway, and seaport traffic connections and with a system of technical and social infrastructure, with a total scale suitable to the planning targets and land use plans for the period 2021-30.

Industrial parks will be developed in a multi-sectoral direction, with emphasis on processing and manufacturing, high-tech applications, supporting and environmentally friendly industries.

Industrial clusters will be developed in the direction where each district-level unit will have at least one industrial cluster, except for Cù Lao Dung District. Sóc Trăng will also plan eight new industrial clusters, bringing the total number of industrial clusters in the province to 18 clusters. 

Low credit growth, reducing profit put pressure on bank prospects in 2023

The outlook for the banking industry this year will not be as bright as previous years due to low credit growth and reducing profit, experts forecast.

In a recent report, VPBank Securities Company (VPBankS) forecast that pre-tax profits of the entire banking industry will slow in 2023 with a growth rate of about 10-12 per cent.

According to the experts, there will be a significant difference in profit prospects among groups of banks. In which, the group of small-sized banks may experience a sharp decline in profit growth in 2023. In fact, this slowdown is also reflected in the banks’ 2023 business plans. Most of them set a profit growth target of only 10-15 per cent in 2023, much lower than the growth rate of 32-35 per cent in the 2021-22 period.

Under the report, the experts forecast credit growth of the entire banking industry in 2023 will be at 12-14 per cent.

In the first half of 2023, credit growth of the industry was lower than the same period last year due to high lending interest rates. The experts expect in the second half of the year, the move from the State Bank of Vietnam will help lower lending rates and improve credit growth of the industry.

The experts said net interest margin (NIM) of all banks, except Sacombank, declined in the first half of 2023 due to high cost of fund (COF) and reducing current account savings account (CASA). However, the experts forecast NIM will improve in the third and fourth quarters of 2023 thanks to supportive policies from the Government.

The report also showed banks’ bad debt in the first half of 2023 increased due to the freezing of the real estate market and the poor financial health of corporate and individual borrowers under a high interest rate context.

Bad debts of most listed banks increased sharply in the first half of the year while the loan loss reserve (LLR) decreased from 143 per cent to 99.4 per cent.

Experts believe the profit growth prospects of listed banks depend greatly on asset quality control.

With the expectation that the macroeconomic situation will start to get brighter in the last quarter of 2023, the experts believe that the bad debt of the whole banking industry in the third quarter of 2023 will be equivalent to the second quarter and will have an improvement in the fourth quarter of this year.

With the Government’s policy support, including the issuance of Circular 02, the bad debt rising pressure will be postponed until the end of the first half of 2024 to give both banks and borrowers time to restructure and gradually handle the debts, according to the experts. 

Rosier price prospects for steel products set for Q4

Slow consumption continues to pull domestic iron and steel prices down deeply, particularly as the Q3 low consumption season has not yet ended.

On the domestic market, as of August 31, the domestic steel price had been adjusted down 17 times in a row since the beginning of the year, now below VND15 million ($630) per tonne and creating a new price base, according to the Mercantile Exchange of Vietnam (MXV).

On the metal market price list at the close on August 30, the bright spot belonged to the iron ore market as iron price recovered around 2 per cent fetching $114.4 per tonne.

As iron and steel is deemed a particularly sensitive commodity in terms of the Chinese government’s stimulus, the prospect of China being about to issue a series of new policies has given a firm lift to iron ore prices.

According to MXV, this data is of particular interest to the market as it is an indicator of either a contraction or expansion in China's manufacturing activity, which uses a large volume of base metals as input materials.

In addition, in the face of China's economy weakening, Chinese authorities are trying to revive the economy. Therefore, iron ore and steel prices may receive support if China continues to issue economic support policies next week.

Not only the Chinese market, the rising prospect of iron ore consumption, the main input material in the steel industry in Japan, the world's third-largest steel producer, is also a supportive factor for ore prices to maintain its upward momentum.

Despite these hidden pressure, MXV believes that demand is expected to get better in the fourth quarter (Q4) when real estate supply is expected to slightly recover, and from there boosting steel consumption.

In Dispatch No. 749 issued on August 18, Prime Minister Pham Minh Chinh requested to speed up the disbursement of public investment sources in the rest of 2023.

Accelerated construction of works, bridges, roads, and social housing systems would contribute to pushing up consumption of building materials, helping to remove difficulties for domestic steel businesses.

According to Do Duy Thai, chairman of southern leading steel maker Pomina Steel JSC, from now until the end of 2023, the real estate market is likely to remain quiet, before regaining growth momentum from mid-2024.

Steel consumption for the rest of this yeariwill be mainly driven by public investment.

According to the Vietnam Steel Association, in the first half of this year, construction steel production approximated 5 million tonnes, down 25.5 per cent; and consumption came to nearly 5.1 million tonnes, down 22.7 per cent, of which exports were 831,000 tonnes, down 38 per cent on-year.

New power bill could cover EVN's losses

The Ministry of Industry and Trade (MoIT) plans to assess a range of relevant factors associated with power production and the business landscape within its average retail power price calculation.

This latest regulation is an amendment of Decision No.24/2017 from the MoIT on the mechanism to adjust the average retail power price, based on a request from the Government Inspectorate and the State Capital Management Commission at Enterprises.

It stems from the fact that there is currently no mechanism to help the state-owned power authority Vietnam Electricity (EVN) to tackle losses, exchange rate differences, and other costs that are not included within the calculations.

This time, the draft continues to stipulate EVN's authority to increase and decrease power prices, while also shortening the price adjustment period from the current six months to every three months, meaning there will be four price changes per year.

The power prices are set to be updated quarterly to include electricity generation costs and other relevant factors that are currently not included.

Compared with the previous draft, the fresh version allows EVN to recover losses from electricity production and business expenses from the previous year.

Last year, the cost of electricity production skyrocketed amidst the exacerbated geopolitical situation, causing global fuel prices to rise from the middle of the first quarter.

Meanwhile, retail prices remained stable, leading to losses for EVN of more than VND26 trillion ($1.1 billion) in 2022.

This year, fuel prices are causing less stress but are still at a high level, affecting EVN's financial balance. The 3 per cent hike to the average power price that took effect on May 4 only partly resolved EVN's cash flow difficulties.

According to the Pricing Law, the calculations need to sufficiently cover actual costs, while also allowing room for a reasonable profit.

Therefore, the adjustment to the formula aims to better manifest the factors associated with electricity production and business costs.

At a government press conference on the amendment of Decision 24 on August 5, Deputy Minister of Industry and Trade Do Thang Hai noted, "Shortening the adjustment cycle from six to three months will better reflect fluctuations in input parameters and business costs, avoiding a sudden price spike in any one adjustment."

This is also consistent with current regulations requiring EVN to report quarterly power price updates.

Hai added, "The power price is a sensitive issue, directly affecting people and businesses, so the adjustments need to be reported to the Prime Minister to avoid affecting macroeconomic management and socioeconomic development."

Since 2017, power prices have been adjusted three times, rising by 6.08 per cent in 2017, and 8.36 per cent in 2019. Prices then remained stable for four years until May, when they inched up by a further 3 per cent.

Agri-businesses using deep processing to boost exports

Deep processing is making a difference for many industries in Vietnam, both for the domestic market and exports.

GC Food JSC, Vietnam’s major aloe and coconut jelly maker, has been expediting deep processing, with products made from aloe and coconut, leveraging cutting-edge equipment and production lines.

GC Food chairman Nguyen Van Thu said that despite current unpropitious market conditions, the company still managed growth in export markets, growing an average 20-30 per cent.

GC Food currently operates two plants: Canh Dong Viet plant specialised in aloe production with a scale of 150 tonnes of materials per day and an annual aloe production output surpassing 15,000 tonnes, and a coconut jelly production plant with an annual production output approximating 12,000-15,000 tonnes. GC Good’s aloe growing areas span 150ha.

This year, the company is set to develop an additional 50ha, and from 50-100ha more in 2024.

The company has also injected capital into doubling its aloe plant capacity to processing 300 tonnes of materials per day.

In other case, Lu Xuan Nguyen, CEO of Xuan Nguyen Group JSC, revealed that with deep processing, products made from bee honey and saffron are selling much better than in traditional unprocessed forms.

Xuan Nguyen has been teaming up with local farmers on developing more than 400ha material growing areas, ranging from seed provision, soil check, technical skills and consumption of output products.

This goes in parallel to hundreds of bee honey farms in localities across the country.

As of now, all Xuan Nguyen factories have engaged in deep processing, turning out 24 kinds of agricultural produce.

The company sells an average from 500,000-600,000 items of each kind per month.

The cases show that despite export hardships, there are firms making a big push in deep processing, resulting in securing a stable order intake.

The recipe for these firms is to closely attach material growing areas with processing plants, and have their own research and development team to create competitive products.

Pham Dinh Ngai, director of Tra Vinh Farm Co., Ltd. (Sokfarm), said that right from the inception, the company had paid due heed to research and development activities to create products matching market demands, and expedited high-tech investment for deep processing, such as vacuum condensed technology to retain a product’s minerals and original taste while extending shelf-life.

For instance, with coconut items, their shelf-life is from two to three weeks, yet for processed coconut flower honey, the product can be preserved from 18-24 months.

“Many people assume that building factories and investing in deep processing is very cost-intensive and unsuited to startups. In fact, it has helped Sokfarm to save countless expenses on product quality control, and from there building customer trust and winning customers,” Ngai said.

Processing plays a crucial role in the export agricultural product value chain, which mostly involves older equipment and technological lines.

In the current processed food structure, primarily processed items with low added value account for the lion’s share, from 70-85 per cent, while products with deep processing and high added value make-up from 15-30 per cent, depending on the specific product branches.

The current deep processing rate of many agricultural items remains limited, such as that coffee accounts for about 15 per cent, and fruits 10 per cent.

In rare instances, some products report a higher processing rate, such as 55-60 per cent for rice, 40 per cent for tea, 56 per cent for pepper, and sugarcane at 73 per cent.

During 2017-2022, 76 major projects on agricultural item processing valued more than $3.08 billion were expedited, and many production facilities have now come on production. This has spurred investment in the development of the agricultural processing industry in recent years.

EVNNPT to loan $675 million for Quang Trach-Pho Noi 500kV line

National Power Transmission Corporation will mobilise loans worth $675 million for part of the construction of the Quang Trach-Pho Noi 500kV transmission line project.
 
The corporation (EVNNPT) worked with Vietcombank, VietinBank, BIDV, ACB, VIB, and Bank of China-Ho Chi Minh City branch to arrange the loans.

Vu Tran Nguyen, deputy general director, said the company was completing investment procedures to submit to the authorities for approval, as it is an urgent and key project and it needs to mobilise a large loan.

Bank representatives said that during the past years, they cooperated closely with the electric sector and the National Power Transmission Corporation to arrange capital for power projects. Thus, they are willing to collaborate with the company to provide loans, contributing to ensuring the country’s energy security.

Phase 3 of the Quang Trach-Pho Noi 500kV transmission line project includes 4 projects of 500kV transmission lines with an investment of nearly $1 billion.

These lines combine Quang Trach-Quynh Luu, Quynh Luu-Thanh Hoa, Nam Dinh I-Thanh Hoa, Nam Dinh I-Pho Noi. This is a transmission grid project playing an important and urgent role, which and needs to be implemented promptly and put into operation as soon as possible to contribute to ensuring power supply for the north.

As of August, the Ministry of Planning and Investment sent documents to other ministries and localities to collect opinions about Nam Dinh I – Pho Noi and Nam Dinh I – Thanh Hoa lines, and submit to the prime minister.

The MPI has also reported the appraisal result for approving the investment planning of the Quang Trach-Quynh Luu and Quynh Luu-Thanh Hoa lines.

Draft on new green power pricing structure expected in November

The Ministry of Industry and Trade (MoIT) is currently gathering data for a draft, expected in November, on the best approach to building a new pricing structure for solar and wind power.

According to the draft, the solar power price will be determined based on the intensity of sunlight in each region, with the northern price bracket remaining higher to stimulate investment.

The draft is expected to suggest that the pricing structure be similar to that which has been applied to transitional projects specified in Circular No.15/2022/TT-BCT, but will differ on input parameters.

The parameters will include installed capacity, the economic life of the project, debt repayment periods, the equity to loan ratio, profit margins, and the standard distribution coefficient corresponding to energy output expectations.

(The draft includes) rules for local and foreign currency interest rates to be set.
Other parameters are the investment rate, foreign loan ratio, and operations and maintenance costs, among others.

Parameters for calculating the average long-term energy output of standard solar and wind power plants, based on data from consultants to ensure universality, are also expected from the draft, along with rules for local and foreign currency interest rates to be set.

The MoIT will also propose how to determine capacity scale for solar and wind power plants eligible for investor selection in light of Power Development Plan VIII.

This circular only applies to new solar and wind projects that have signed power purchase contracts, and does not apply to transitional wind and solar power projects as specified in Circular 15.

According to the provisions of the Law on Electricity, Vietnam Electricity (EVN) will take charge of calculating the pricing structure and submit proposals to the MoIT for approval before November each year.

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