Vietnam and India have substantial opportunities to cooperate in the automobile industry as Vietnam is accelerating FDI attraction in the sector, an official has said.

Nguyen Anh Tuan, Deputy Director of the Foreign Investment Agency (FIA) at the Ministry of Planning and Investment (MPI), pointed out that investment ties between Vietnam and India have yet to match their potential.

India’s investment accounts for only 0.2% of the total FDI in the Southeast Asian nation, he told the India-Vietnam Business Meet on Auto Sector held recently in Hanoi.

Indian Ambassador Pranay Verma said the 800-member Automotive Component Manufacturers Association of India (ACMA) wanted to explore investment opportunities in Vietnam.

Nguyen Thi Thu Ha, General Director of Invest Global, which offers consulting services, stressed that Vietnam has great potential to boost the auto industry, which is expected to significantly contribute to the national economy.

However, the number of Vietnamese suppliers in the sector remains limited, and only a few of them are part of the country’s supply chain for producers and assemblers.

A deal between the Vietnamese and Indian auto sectors would be reciprocal, Ha said, adding that a number of Indian firms are already operating effectively in Vietnam, such as Minda, Spark Minda and Star Engineering.

Dang Hoang Mai from the Vietnam Institute of Strategy and Policy for Industry and Trade said Vietnam has the potential to expand the market for electric vehicles as its car ownership is just 2.3%, equivalent to one tenth and one twentieth of Thailand and Malaysia, respectively.  

Vietnam aims to attract major businesses and groups, with priority given to high-tech, support industries, innovation and digital economy, Tuan said, emphasising that it is suitable time for Indian investors to join the Vietnamese auto sector and its support industry.

Domestic cement consumption expected to rise as exports fall

The cement production industry expects to promote domestic consumption because it is finding difficult to boost exports.

Many cement companies with popular brands have programmes to stimulate consumption in the domestic market, including discount programmes. 

In addition, from January 1, 2023, the export tariff for clinker products will be increased by between 5% and 10% to limit exports. This factor also forces domestic manufacturers to find ways to reduce selling prices and support customers to increase domestic clinker consumption.

The Department of Building Materials reported that the domestic cement selling price increased from 60,000 VND to 80,000 VND per tonne at the end of June 2022 due to the high cost of coal.

According to the Vietnam National Cement Association, the production cost of cement skyrocketed, but the export price of cement products did not increase, with cement exporters facing fierce competition.

In the third quarter of 2022, domestic cement consumption tended to increase, especially in the southern market. Cement prices keep stable, and they could reduce slightly.

The association said a series of expressway projects built in the 2022-2025 period are expected to be leverage to partially support the cement industry in reducing pressure on consuming cement products.

Forecasting the domestic cement market in the last months of 2022, experts say there is a positive signal of a significant increase in domestic cement demand, together with the Government's requirement for strong disbursement for many public projects. 

Vietnam's garment exports to the UK increase
     
Viet Nam's garment exports to the UK increased in August as Vietnamese enterprises take advantage of the UK-Viet Nam Free Trade Agreement (UKVFTA) to expand their presence in this market.

The latest data of the General Department of Vietnam Customs shows Viet Nam shipped US$92.4 million worth of garment products to the UK in August, up 3 per cent month-on-month and up 88.6 per cent over the same month in 2021.

Ending August, the country's garment export reached $560.4 million, registering a year-on-year growth of 45 per cent.

The figure for the whole industry was $26.3 billion in the past eight months, up 24.3 per cent over the same period of last year.

According to Vietnam Textile and Apparel Association's vice chairman Truong Van Cam, despite challenges in some main exporting markets, Viet Nam's textile and garment industry is set to earn $45 billion in exports in 2022 compared to $40.3 billion last year.

Viet Nam is currently the world's third largest exporter in this sector. Its main markets include the US, the Republic of Korea, Japan and Europe.

Supporting industry businesses, foreign buyers meet at sourcing fair
     
Local supporting industry companies should promote themselves and their products to foreign-owned manufacturing companies in Viet Nam seeking to source components within the country.

Speaking at a sourcing fair in HCM City last week, Vo Van Hoan, vice chairman of the city People’s Committee, said foreign firms in Viet Nam are increasingly looking to source components and parts locally, offering Vietnamese enterprises an opportunity to enter global supply chains.

But to grab that opportunity, they need to improve quality and offer competitive prices, he said.

The COVID-19 pandemic has severely disrupted global supply chains, leading to a slump in production activities, and this underlines the importance of having strong supply chains that do not depend too much on any one country, experts said.

Viet Nam is now attracting great attention from global buyers, including foreign firms operating locally.

Sam Hui, general manager of Global Sources, an international B2B sourcing platform company based in Hong Kong, told Viet Nam News recently that Viet Nam has the potential to be one of the most sought-after sourcing destinations for buyers world-wide.

A 2021 survey by the company found Viet Nam ranked the number one destination from where buyers plan to source from Asia, outside China, in the next 12 months, followed by India, Cambodia and Bangladesh.

Buyers said their top three pain points in sourcing from the country are product quality, choice of suppliers and delivery time.

Another 2021 survey by JETRO on Japanese investment in Asia and Oceania found that 55.3 per cent of Japanese businesses in Viet Nam wanted to expand their operations in the country in the next one to two years, the highest rate in Southeast Asia.

Le Nguyen Duy Oanh, deputy director of the HCM City Centre for Supporting Industries Development, said more and more buyers from the US and EU have come to the country to look for new sources of supply.

Experts said suppliers should also meet the requirements of buyers if they want to enter the global supply chain.

Buyers expect them to have good supply chain management, with a resource management system in place, they said. They must also develop their own supply system rather than relying entirely on China, they added.

Taiwanese investors ready to invest in Vietnam

A delegation of nine Taiwanese investors made a business trip to Vietnam to survey investment opportunities in many cities and provinces and intensify bilateral cooperation.

In the first trip of Taiwanese businesses to Vietnam since pandemic-induced lockdowns, a delegation from the island looked for investment opportunities across the country. They operate in semiconductors and electronic production for aviation, batteries, finance and several other sectors.

The business trip ran from September 4 to 10 and covered Hanoi, Bac Ninh, Quang Ninh, Haiphong, Nam Dinh, Thai Binh, and Ho Chi Minh City. Along with meeting local leaders, they also visited several industrial zones (IZs) to conduct field surveys.

The leaders of the localities are committed to creating favourable conditions for Taiwanese investors to invest in Vietnam.

In the first eight months, Taiwan was the seventh-largest foreign investor in Vietnam, with a total registered investment capital of over $780 million.

Last month, Taiwan-based Hon Hai Precision Industry, better known as Foxconn, issued plans to lease 50.5ha of land in Quang Chau Industrial Park in the northern province of Bac Giang to develop a new project, with an investment of $300 million.

Localities race to complete infrastructure for big gains

Many localities around the country are in a race to attract foreign direct investment via various channels including boosting infrastructure development.

Secretary of Binh Duong Party Committee Nguyen Van Loi and representatives of provincial authorities on August 24 surveyed the implementation of compensation and site clearance at a project on upgrading and expanding DT746 road. The road plays an important role in connecting Vietnam-Singapore Industrial Park III (VSIP3) with Ring Road 4, not only facilitating traffic but also opening up development space in the region.

The road goes through North Tan Uyen district and Tan Uyen town, which has impacted over 1,100 households. To date, the localities completed the land acquisition of almost 980 households.

Work on the factory is scheduled to begin this year and it will become operational in 2024 to help Danish-backed Lego Group expand its global supply chain. Its new facility has a total investment of more than $1 billion, rendering it one of the largest foreign-invested projects in Vietnam.

The other localities that have attracted the largest foreign-invested capital so far this year were Ho Chi Minh City ($2.7 billion), Bac Ninh ($1.75 billion), Thai Nguyen ($1.53 billion), and Haiphong ($1.21 billion). Some large-scale projects invested in these localities include the expanded Samsung projects in Ho Chi Minh City and Thai Nguyen, among others.

Building sufficient transport infrastructure has been a key factor in attracting new ventures. In the northern province of Bac Ninh, the People’s Committee issued a list of related projects to be developed by 2025, such as Kenh Vang Bridge at $69.1 million, Ring Road 4 passing through the province at $242.6 million, and Chi Bridge at $82.17 million.

The departments of planning and investment in Ho Chi Minh City, Ba Ria-Vung Tau, Dong Nai, Binh Duong, and Long An are working together to develop Ring Road 4. Covering 198km with 6-8 lanes, the road is expected to cost $4.35 billion and will be allocated by the localities’ budgets. In the first phase of the project, localities will deploy independent bidding packages for site clearance.

In March 2023, the local authorities will approve the related reports, and construction is expected to start in 2024 with a proposed 2028 completion, according to Lam.

Khanh Hoa to develop world-class urban area

Cam Lam in Khanh Hoa Province will be developed into a world-class urban area connecting with the Cam Ranh International Airport, according to the Khanh Hoa authority.

Deputy Prime Minister Le Van Thanh approved a plan for developing the Cam Lam urban area in the south-central province on September 7, aimed at forming a world-class urban area together with Nha Trang, Cam Ranh and Van Phong.

This project will encompass 13 communes and one town in Cam Lam District with a total area of nearly 55 hectares.

Khanh Hoa plans to develop international science and technology centers, world-class educational centers and medical institutions in the area, as well as improve infrastructure and logistics services with the Cam Ranh International Airport.

Cam Lam District will have a smart sustainable urban area connected with the ecosystem of the Thuy Trieu lagoon, the Northern Cam Ranh Peninsula tourist attraction and the Nha Trang Bay.

Vietravel Airlines enters cargo transport market

Vietravel Airlines has cut a deal with ASEAN Cargo Gateway, which specializes in logistics, to expand into the air cargo transport market.

The two will run the VUAir Cargo brand, with 51% of its capital contributed by Vietravel Airlines and the rest by ASEAN Cargo Gateway. The cooperation is aimed at boosting the outbound sales of goods and air cargo transport.

During its first year of operation, VUAir Cargo will focus on transporting goods from Vietnam to China, Malaysia, Indonesia and Thailand, operating two or four B737-800F aircraft. The number of planes will double one year later.

The partnership will contribute to making the dream of establishing a cargo airline in Vietnam come true, according to ASEAN Cargo Gateway.

Vietnam currently has no local cargo airlines, but as many as 27 international cargo airlines are active in the country such as China Central Longhao Airlines, China Southern Cargo Airlines, Air Incheon, India’s SpiceJet, Kalitta Airlines LLC and Western Global Airlines LLC, the local media reported.

Tan Son Nhat handles 22 million air passengers in Jan-Aug

Some 22 million passengers traveled through the Tan Son Nhat International Airport in HCMC in January-August, a drop of six million from the pre-pandemic levels.

There were around 19 million domestic and three million international arrivals at the airport in the first eight months, according to Nguyen Nam Tien, deputy director of the Tan Son Nhat International Airport.

The airport handled over 150,000 flights during the same period, including 30,959 international and 118,906 domestic ones.

The number of domestic passengers has increased sharply in the past few months, occasionally exceeding the airport’s handling capacity of 6,500 passengers per hour, the local media reported.

Huawei Vietnam provides training for Vietnam’s ICT human resource development

Huawei Vietnam Technology Company (Huawei) officially signed a memorandum of understanding (MOU) with the University of Transport and Communications (UTC) and the University of Economics and Technology Industry (UNETI) on ICT human resource development for Vietnam.

This event is within the framework of activities of Huawei's ICT Academy with the goal of building a bridge between supply and demand for talents, promoting the transformation and upgrading of human resources in the industry, and improving working efficiency. jobs and improve employment rates in the ICT industry in countries around the world and in Vietnam.

Specifically, under the MOU, Huawei and UCT will cooperate in providing training in the fields of networking, cloud computing, and security to faculty at the campuses. Through the partnership program, UTC University and Huawei also provide industry-level ICT training courses for their students to equip future generations of young workers with skills before entering the real world.

Vietnam leads top choice for global investors: Cushman & Wakefield

Vietnam has been the top choice for global investors in terms of office and industrial sectors in the Asia Pacific, according to Cushman & Wakefield.

The latest survey conducted by the global real estate services firm showed India was ranked by just over 60% of respondents as their preferred emerging market (excluding mainland China) in which to invest. On a first- and second-place preferred basis, Vietnam was the emerging market of choice, taking almost 80% of the votes, just ahead of India’s 75%.

Trang Bui, CEO of Cushman & Wakefield Vietnam, said: “To attract more FDI [foreign direct investment] into the country, Vietnam is focusing investments in upgrading important transportation facilities like highways and seaports and increasing competition index ranking. These upgrades are contributing to robust growth in the economy and especially in the logistics and industrial sector.”

She added, that the Ministry of Transport has planned to complete the North-South Expressway, the 1st phase of Long Thanh International Airport, Quang Ninh - Kien Giang coastal road, and metro lines in both the North and the South. Thanks to the efforts over the years, Vietnam is considered an attractive investment destination and a dynamic, open economy with a high growth rate in the world.

Investors are having to “look laterally” to find opportunities for growth in the current market but can still successfully deploy capital, experts say, as ongoing uncertainty in the macroeconomic environment slows early-year momentum.

Representatives from leading investment houses said rising interest rates and an inflationary environment had caused a ‘pause’ in the market as investors re-weighted their portfolios within the current conditions. 

“Despite the slowdown, investor sentiment was leaning towards a cautious resumption of deal flow to the Asia Pacific later in 2022 once global players from the US and Europe had adjusted to the current conditions,” said Regional Director, APAC Capital Markets at Cushman & Wakefield Gordon Marsden. 

Petrolimex worries about partial short supply, cost overruns

The Vietnam National Petroleum Group (Petrolimex) has written to the Ministries of Industry-Trade and Finance over the risk of a partial petrol shortage and proposed the authorities make a due cost adjustment to compensate overruns.

The global oil market volatility and the surge in domestic consumption have put pressure on fuel trading businesses as inventories are running thin quickly.

The company’s daily fuel sales average 17,000 cubic meters, but it has recently increased to above 21,000 meters. The amount even hit 27,000 cubic meters on August 31, up 60% compared to normal days.

According to Petrolimex, a partial fuel shortage likely occurs due to the lack of efficient coordination in inventory management and transportation, especially in remote areas.

The cost of transport and factors included in the base price have not been calculated sufficiently since the July 11 price review and have brought about financial difficulties for the primary wholesalers in paying commissions to retailers. Cost overruns have led to huge losses for the primary petrol wholesalers including Petrolimex.

The above explains why the primary wholesale enterprises had to pay a zero commission to retail stations recently, causing the petrol retail stations to suspend their business due to losses and call for help in the past few days.

To avoid the partial disruption of supply, Petrolimex proposed the ministries make a due adjustment of the cost of transport, including international shipping, in the upcoming price review on September 12 to ease hardships for the wholesalers.

The authorities should accelerate an inspection into the responsibilities of these primary traders and distributors in ensuring the petrol supply and satisfying the sale demand of the distribution system, according to Petrolimex, an enterprise that currently holds a share of 49% of the domestic petrol market.

Farm produce exports to EU subject to new regulations on pesticide residues 

Vietnamese exporters of agro-forestry products should take note of the recent revisions made by the European Union (EU) on Regulation 396/2005 relating to pesticide residues in and on several types of processed food shipped to this market.

The EU has issued Regulations (EU) 2022/1346 and 2022/1343 to amend Annexes II and III of Regulation (EC) 396/2005 relating to the levels of pesticide residues for certain substances in and on specific products.

The provisions apply to products such as fresh and frozen fruits, seeds, fresh and frozen vegetables, oil and oil fruits, cereals, tea, coffee, herbs, and animal origin products among others.

The provisions will take effect as of February 22, 2023, and Regulation 396/2005 remains effective for products manufactured in the EU or imported to the EU prior to February 22, 2023.

Ministry proposes removing four toll stations

The Ministry of Transport has proposed the Government spend over VND8 trillion buying four controversial toll stations and then removing them.

These comprise the Bim Son toll station in Thanh Hoa Province, the La Son-Tuy Loan toll station, the National Highway 3 toll station in Thai Nguyen and the National Highway 91 toll station, the local media reported.

Bamboo Capital has new name

Bamboo Capital JSC, whose BCG shares are listed on the Hochiminh Stock Exchange, has been renamed as Bamboo Capital Group.

The real estate developer owns several subsidiaries active in the renewable energy, property, construction, production, financial and insurance fields. As of June 30, Bamboo Capital had had over 50 subsidiaries and affiliates.

Focusing on the energy and real estate fields, the group is preparing to launch the initial public offerings of two subsidiaries, BCG Land and BCG Energy, in late 2022 and early 2023.

Bamboo Capital will issue over 266.7 million shares to its current shareholders at a ratio of 2:1, meaning that for every two shares held, stakeholders can buy one new share. The starting price of the shares will be VND10,000 each.

In 2022, Bamboo Capital looks to book VND7.25 trillion in net revenue, up 280% year-on-year, and VND2.2 trillion in after-tax profit, up 220%.

Rice export price falls for fourth straight time

Vietnam’s 5% broken rice price last month dropped by US$25 over the previous month to US$390-393 per ton, marking the fourth straight price decrease.

According to the Center for Informatics and Statistics at the Ministry of Agriculture and Rural Development, in the first eight months of this year, rice exports reached 4.73 million tons worth US$2.3 billion. This volume represents an 18.6% year-over-year rise.

Currently, Vietnam’s rice is priced lower than that of Thailand due to the low demand and the bumper summer-autumn rice crop.

The average export price of rice in the first eight months slid 8.8% year-on-year at US$487 per ton.

The Philippines is the largest importer of Vietnam’s rice, accounting for 46.4% of the Vietnamese rice exports.

In the first seven months of this year, Vietnam exported 1.98 million tons of rice to the Philippines, with a total value of over US$924 million. This volume is up 56.9% year-on-year.

Dong Thap to bring 1,225 hectares of tra fish up to GAP standards

The Mekong Delta province of Dong Thap plans to apply the Good Agricultural Practices (GAP) standards to 1,225 hectares of tra fish culturing areas with an expected annual export turnover of US$980 million.

As part of the plan, the area for culturing tra fish will cover 2,450 hectares with a yield expected to hit 555,000 tons. About 1,225 hectares of the total will meet the GAP standards.

From now to the year 2025, the annual export turnover is expected to reach US$980 million.

Moreover, the fish farms will see investments in technology transfers to better control the quality of breeding and supplies.

Tax exemption, reduction policies gain 56.9pct of plan in first eight months

According to the Ministry of Finance, by the end of August, the policies of tax exemption and reduction under the socio-economic recovery program have been implemented around VND34,970 billion (US$1.5 billion), equaling 56.9 percent of the plan being VND61,500 billion (US$2.6 billion).

Accordingly, the value-added tax (VAT) has been cut from ten percent to eight percent for commodities and services with the tax rate of ten percent, excluding some commodities and services. The VAT tax reduction amount approximated VND25,685 billion (US$1.1 billion). In addition, the program also reduced 50 percent of registration fees on automobiles, trailers or semi-trailers towed by automobiles and similar vehicles domestically manufactured or assembled with a total amount of around VND6,555 billion (US$280 million).

A 50 percent reduction has also been applied to environmental protection tax on jet fuel with a total amount of around VND737 billion (US$31.5 million). Import-export taxes were adjusted down for several commodity groups with around VND1,093 billion (US$46.5 million).

Regarding tax exemption and reduction on land and water surface rent cut for subjects affected by the Covid-19 pandemic in 2022, the Ministry of Finance has submitted a draft decision to the Prime Minister. Currently, Government Office is receiving opinions cabinet members about the decision. It is expected that this policy implementation would need a total capital of VND3,500 billion (US$149 million).

Regarding the rent support policy for contracted workers, the Ministry of Finance has announced to additionally allocate VND4,125 billion (US$176 million) for 20 localities to implement the policy.

Concerning tax extension policies with an expected scale of VND135,000 billion (US$176 million), by the end of August, around VND52,000 billion (US$2.2 billion) of due taxes has been extended, equaling around 38.5 percent of the plan.

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