The manufacturing sector is a driving force behind economic growth, but  manufacturers are still outcompeted by foreign rivals when it comes to core technologies, according to insiders.

Pham Tuan Anh, Deputy Director General of the Industry Agency, Ministry of Industry and Trade (MoIT), attributed the technological inferiority to domestic firms' limited resources and an inadequate labour force.

He said the manufacturing sector has been developing asymmetrically with an over-dependence on FDI firms. The economic over-representation of the firms can be observed visibly in the heavy industrial subsector.

The sector's reliance on imported materials compounds the situation, resulting in low value-added domestic products. Industrial transition over the past few years, undoubtedly, has been fueled largely by FDI firms rather than domestic ones.

The official called for favourable policies to keep firms well-informed about advanced technologies and facilitate the emergence of big firms, which act as a catalyst for an industrial leap forward.

He also said not only should the manufacturing sector be heavily invested but so should supporting industries, which supply the former with fuels, components and materials.

Nguyen Huu Tu, member of the Vietnam Chemical Corporation's Board of Directors, revealed that the chemical industry is up to domestic demand in terms of basic products, but it is not the case for high-tech ones.

He took technical rubber as an example, which domestic firms have a limited capability for mass-production. Imported rubber, accordingly, have to come in to fill the demand gap.

Tu called for Governmental Decision 726 to be implemented to accelerate the growth of the chemical industry. He also suggested a revision to tax policies to level the playing field for both domestic and imported fertilisers.

Lastly, he called for favourable policies on land rental in industrial parks and preferential loans for chemical producers to improve their competitive positions.

Dinh Quoc Thai, Secretary General of the Vietnam Steel Association, revealed that the steel industry produces up to 30 million tonnes of steel per year. However, 90% of the steel caters for building works, whereas just 10% goes to other industries.

The disproportion can be attributed to the fact that some industries cannot find certain types of domestically-made high-quality steel. They have to rely on imported steel to feed their production.

The secretary general urged MoIT to draw up the Strategy for the Development of the Steel Industry until 2030 with a vision to 2050, which is expected to nurture the sustainable growth of domestic steel.

Request for car registration fee cut extension turned down

The Ministry of Finance (MOF) has rejected a request to extend the 50% registration fee reduction for domestically manufactured and assembled automobiles until December 31, 2022.

On November 26 last year, the Government issued Decree 103/2021/ND-CP halving the registration fee for locally assembled and made automobiles, with effect until May 31, 2022. The fee cut came after the fourth wave of Covid-19 inflections had inflicted heavy damage on almost all sectors of the economy, including the automotive industry.

Just one month after the decree came out, December auto sales in the country soared 21% against the previous month at 46,759 units, according to data from the Vietnam Automobile Manufacturers’ Association (VAMA).

Auto sales growth continued into the first five months of this year, reaching 176,681 units, up 39% year on year. This means that during the six months of Decree 103 being in force, 223,440 autos benefited from the lower fee.

Regarding the proposal for a fee cut extension until the end of this year, the MOF said the fee reduction, if extended, would not be in line with the National Treatment Rules in the framework of the World Trade Organization, and with the free trade agreements (FTA) to which Vietnam is a signatory. Vietnam would be required to give an explanation by the member countries of the trade deals which do not have their companies making and assembling autos in the nation.

Covid has been brought under control and daily life has returned to normal. Therefore, the request for an extension of the auto registration fee cut is no longer appropriate, according to the MOF.

Banks speed up disbursement of VNĐ40 trillion interest subsidy package

Through credit packages with preferential interest rates, and products and services customised to each customer group’s needs, banks focus on helping enterprises access capital to restore production and business.

In May the Government issued Decree 31/2022/NĐ-CP on interest rate subsidies for loans given to enterprises, co-operatives and business households.

The 2 per cent subsidy offered under the decree and the State Bank of Vietnam’s Circular 03/2022/TT-NHNN is one of the most anticipated policies this year.

HDBank was one of the first banks to deploy the Government’s 2 per cent interest rate subsidy programme worth VNĐ40 trillion (US$1.69 billion).

Additional Vietnamese rice certified five-star

​In addition to its globally-renowned ST25 fragrant rice, Vietnam’s ST24 rice line has also received 5-star certification.

The Ministry of Agricultural and Rural Development has presented national “One commune, One product”, or OCOP, certification to 20 high-quality Vietnamese products, including ST24 fragrant rice.

Three years after winning second prize at the World’s Best Rice Contest, ST24 fragrant rice has now secured 5-star certification.

This provides motivation for relevant units and businesses to promote local specialties while attracting more investors and generating jobs in rural areas.

HCMC steps up extensive publicity program to woo tourists
 
Tourism agencies and district authorities in HCMC are launching multiple publicity programs to renew the city’s images to visitors with an aim to revive the hospitality industry post pandemic.

Districts across the city have been participating in the tourism promotion program titled Welcome to HCMC, each with its own peculiar attraction.

After a field trip to Go Vap District with the HCMC Department of Tourism, Phan Thi Thang, vice chairwoman of the HCMC government, noted the initiative in the district to woo tourists. Go Vap has announced its program “Go Vap – Looking for Age-old Vestiges.”

The vice chairwoman, however, said that districts have good potential to develop tourism, and what is needed is to find the right solutions to tap the potential.

Half of the districts have painstakingly created their own tourism programs with specific attractions, so the remaining districts should draw experiences to introduce other tourism products, she said.

As part of the city’s publicity program, several special products have been launched, including Hoc Mon District – Historical Land, District 5 – Memories of Saigon-Cholon, and District 12 – New Things to Explore, to name but a few.

Nguyen Thi Anh Hoa, director of the HCMC Department of Tourism, said the department would join hands with the relevant agencies, districts and Thu Duc City to design tours.

The department will also cooperate with businesses and localities to reinvent tourist programs in HCMC for explorers to delve into the local culture and culinary delights.

Lately, HCMC has organized many events as part of the “Welcome to HCMC” program. These include the eighth Ao dai festival, the 18th HCMC tourism festival, and the international travel fair 2022.

Bui Thi Ngoc Hieu, deputy director of the HCMC Department of Tourism, said the city is now focusing on digital marketing, alongside enhancing quality content and client interaction on social media such as Facebook, YouTube and Instagram.

Besides, 3D technology has been used to re-create the city view, as seen from above, to promote tourism in the city.

HCMC is forecast to receive 25 million travelers this year, including some two million international visitors.

Spiking coal price creates mixed sentiment

The rising coal price is causing multiple hardships to a host of diverse sectors yet bringing advantages to several others.

Globally, the price of coke (used in steel production) in Australia, after a decline for nearly two months and falling to a one-year bottom of $190 per tonne in the first week of August, reached $270 per tonne on September 6, a more than 40 per cent jump, nearly approaching its historic peak of $275 per tonne on February 28.

According to CoalMint, a coal price reporting agency, the price is forecast to touch $300-330 per tonne. For heat coal (used in power and fertiliser production), its price on September 6 set a new record of $457 per tonne.

According to US Energy Information Administration, a gas shortage in Europe has bolstered demand for coal-fired thermo-power and pushed up coal prices.

In Vietnam, according to SSI Research, the price of mixed coal from the Vietnam National Coal and Mineral Industries Group (Vinacomin) rose 30-35 per cent in the first half and will rise further amid soaring coal prices in the global market.

As coal is the key input material of many major production sectors, its skyrocketing price has badly affected many firms' operations, particularly coal-fired power units.

Coal-fired thermal power currently accounts for 30 per cent of Vietnam’s total power production capacity.

According to the General Department of Customs, in the year to mid-July, despite a drop of 2.9 million tonnes of imported coal compared to one year ago, the coal import value was estimated at $4.7 billion, averaging $252 per tonne, nearly triple compared to one year ago.

Coal-fired thermal power currently accounts for 30 per cent of Vietnam’s total power production capacity.
The steel sector is also affected due by the soaring coal price.

According to WorldSteel, a major industry association, an average of 780kg of coal is required to produce one tonne of steel.

The Ministry of Industry and Trade forecasts that Vietnam will need to import about 6.5 million tonnes of coke to serve steel production in 2022.

More costly coal has badly affected leading steel makers like Hoa Phat Group and Thai Nguyen Iron and Steel JSC, which need to import coal to feed production.

The escalating coal price has also dampened cement production as coal often makes up 40-45 per cent of cement’s input material cost, leaving profits volatile.

The Building Materials Department under the Ministry of Construction reported that around 8.86 million tonnes of cement were sold in the domestic market and exported in August, up 3 million tonnes compared to July, but down 7 per cent on-year.

The stockpiled volume is around 5.9 million tonnes at present, equal to 25-30 days of production, mainly clinker.

Amid dwindling consumption, high inventory and soaring coal prices, cement makers have lowered production to avoid bigger losses.

SSI Research said that soaring coal prices had shortened the average selling price between gas-fired and coal-fired power plants, helping to boost the competitiveness of gas-fired power plants.

Ho Chi Minh City: Many infrastructure works soon to receive cleared space for execution

The construction of a string of important infrastructure works which have been trapped by space woes in the southern growth engine of Ho Chi Minh City will resume pace in the fourth quarter of this year and in early 2023 after acquiring cleared land.

According to the Ho Chi Minh City Transportation Works Construction Investment Project Management Authority, late this year and early next, a series of transport infrastructure works across the city that temporarily suspended construction due to space issues will restart after the associated obstacles were resolved.

These projects include Tang Long, Ong Nhieu, Nam Ly, and Ong Bon bridges, Luong Dinh Cua Road (Thu Duc city), Vam Sat 2 Bridge (Can Gio district), Ten Lua Road, Tan Ky-Tan Quy Road (Binh Tan district), and renovating Hoang Hoa Tham Road and Cong Hoa Road in Tan Binh district.

The local authorities noted that delayed construction at many such projects has negatively impacted progress and triggered cost overruns.

In July, Ho Chi Minh City People’s Council greenlit a resolution revising the investment proposals for eight transport infrastructure works with the total investment value surging by more than $213 million.

Among these eight projects were the aforementioned Ong Nhieu and Tang Long Bridge building projects.

Green building week to promote realisation of Vietnam’s COP26 commitments

The Vietnam Green Building Week 2022 is scheduled to take place in Ho Chi Minh City from October 13 - 14 with a focus on measures for realising Vietnam’s commitments made at the 26th UN Climate Change Conference (COP26).

The event, to be held by the Ministry of Construction and IEC Group, aims to boost dialogue and multidimensional cooperation, with the participation of more than 1,200 policymakers, representatives of project developers, investors, consulting and design firms, architects, and suppliers of building materials, equipment, and technology.

Its plenary session will be co-chaired by officials of the ministries of construction, natural resources and environment, and industry and trade, along with international organisations in Vietnam. It will look into the promotion of green building towards implementing the country’s commitments made at COP26.

Meanwhile, the three panel discussions will discuss eco-friendly structures and quality of life, green construction materials, measures for ensuring the living environment and building quality, and green and energy-saving solutions for buildings.

Apart from workshops, more than 30 suppliers from Vietnam and the region will also exhibit building technology, construction materials, and energy-saving and low-emission solutions.

Hai Phong hosts technology networking event for Vietnamese, Japanese firms

More than 60 Japanese and Vietnamese enterprises based in the northern port city of Hai Phong and neighbouring localities attended a technology networking event hosted by Hai Phong’s Department of Science and Technology on September 13.

In opening the event, Deputy Director of the municipal Department of Science and Technology Pham Thi Sen Quynh emphasised the urgency of renovating technology and joining in digital transformation for Vietnamese enterprises in order to enhance their competitiveness, production efficiency and join global supply chains.

The department has been organising technology networking events to help local enterprises access modern technology of other countries and territories, particularly Japan, she said.

At the event, experts from the Japan External Trade Organisation (JETRO) in Ho Chi Minh City shared ways to enhance linkages between Japanese and Vietnamese enterprises.

Asian retail giants seize on expansion

Several major international groups are planning to expand operations in Vietnam in a wide range of sectors including retail, consumer goods, and foodstuffs.

The visit to Vietnam of Lotte Group chairman Shin Dong-bin and other executives more than a week ago suggests that the fifth-largest economic group in South Korea is planning a new development strategy in Vietnam, after the completion of its withdrawal from China after 14 years.

Debuting in Vietnam in 2015, Lotte currently owns 12 subsidiaries and operates 270 Lotteria restaurants and 15 Lotte Mart hypermarkets in Vietnam. It has invested nearly $5 billion in Vietnam, according to the Ministry of Planning and Investment.

Lotte Group’s other affiliates are also jointly building large-scale shopping complexes and residential apartments in Hanoi and Ho Chi Minh City. In the latter, it plans to build a large complex called Lotte Eco Smart City Thu Thiem. In Hanoi, the group will complete the construction of the Lotte Mall Hanoi in 2023.

The group also established an investment fund in Vietnam called Lotte Ventures Vietnam last year to promote both local and South Korean startups to venture into the Vietnamese market.

Meanwhile, Japan’s AEON Group plans to open 30 shopping centres, focusing on the country’s largest cities, and then moving to neighbouring localities by 2030.

AEON opened its first Vietnamese shopping centres, AEON Mall Celadon in Ho Chi Minh City and AEON Mall Canary in Binh Duong province, in 2014. Its strategy of partnering with large supermarkets in Vietnam has previously helped the Japanese retail group fulfil its goal of both accelerating development and raising awareness of the AEON brand.

AEON Vietnam boasts 4,000 employees and has expanded its business across six provinces and cities.

Meanwhile, Thai group Central Retail has made progress covering both hypermarkets and shopping centres in 40 cities and provinces nationwide.

In July, it announced a plan to invest nearly $828 million in Vietnam by 2026. Thailand’s largest retail group aims to become the leading omnichannel retail platform in the food and real estate sectors in Vietnam and will expand retail channels to cover all 63 cities and provinces in Vietnam.

Central Retail currently has 340 shopping centres and stores, as well as 10 retail brands in Vietnam including Go!, Nguyen Kim, SuperSports, and TopsMarket.

Olivier Langlet, managing director of Central Retail Vietnam, said that the company will drive sales growth in Vietnam through expanding and consolidating its core businesses, launching its own branded products, and developing mixed projects to strengthen retail real estate.

Vinaconex- Kyeryong consortium to build clean industrial park in Hung Yen

A consortium of Vinaconex and the Republic of Korea’s Kyeryong has just won a bidding package worth over 1 trillion VND (over 42.4 million USD) to build infrastructure for a clean industrial park in the northern province of Hung Yen.

The bidding package covers roads, water supply and drainage, lighting, telecommunications, wastewater treatment, power station and fire protection in the IP.

The clean IP project in Hung Yen has a scale of 143 ha, to be built in Khoai Chau and An Thi districts. The investor of the project is VTK Hung Yen Industrial Park Investment and Development Co Ltd. With a total investment of 1.78 trillion VND, the project will be implemented in 24 months and is expected to be completed in 2024.

$335 million Cam Lo-La Son Expressway set to open in November

Cam Lo-La Son Expressway, a part of the first phase of the North-South Expressway, is targeted to open to traffic in November.

Deputy Prime Minister Le Van Thanh has asked localities, investors and contractors to accelerate the remaining work to ensure the schedule.

According to the report of the Ho Chi Minh City Road Project Management Board, the work is nearly 95 per cent complete and the final touches are being made to ensure the road opens to traffic by the end of October.

Cam Lo-La Son Expressway runs more than 98km between Quang Tri and Thua Thien-Hue provinces in central Vietnam.

Construction kicked off in September 2019. With the total investment capital of VND7.7 trillion ($334.78 million), the section was designed with two lanes of 12m in width to run for 98km for the first phase, allowing a maximum travel speed of 80km per hour.

In the next phase, from 2030-2040, the section will be expanded to 4-6 lanes. The project is divided into 28 packages, of which 11 are civil works.

Along with Cam Lo-La Son, the other sections of the North-South Expressway - Mai Son-National Highway No.45, Vinh Hao-Phan Thiet, and Phan Thiet-Dau Giay expressways - are to be completed by the end of this year.

Lang Son to host Vietnam-China international trade fair

The Vietnam-China international trade fair is scheduled to take place from November 2 to November 9 in the northern border province of Lang Son as part of efforts to promote co-operation and friendship between participating countries.

Alongside businesses from Vietnam and China, the eight-day event is set to feature the participation of firms from Laos, the Republic of Korea, Cambodia, and Thailand.

Over 220 booths from more than 100 Vietnamese and Chinese businesses, as well as enterprises from several countries throughout the region, are anticipated to take part in the trade fair. 

On display at the event will be a range of farming, forestry, and seafood products, handicraft items, machines and equipment, among other items. 

Furthermore, local and foreign businesses will hold exchanges to find out about import-export policies and seek ways in which to promote the export of agro-forestry-fisheries products. 

Vietnam, RoK striving to enhance tourism cooperation

Visitors from the Republic of Korea (RoK) make up the largest proportion among the top 10 tourism markets to Vietnam, according to the Vietnam National Administration of Tourism under the Ministry of Culture, Sports and Tourism.

The Korea Tourism Organisation (KTO) announced that since 2019, around 4.29 million Korean tourists have visited Vietnam, and the country has also welcomed 550,000 holiday-makers from the Southeast Asian nation.

In the first eight months of this year, Vietnam served about 200,000 travellers from the RoK, while around 80,000 Vietnamese visited the East Asian country.

At present, both sides are stepping up communications to popularise their tourist attractions to each other’s travel lovers.

This month, the Vietnam National Administration of Tourism is planning to organise a programme to promote the country's industry in the RoK.

Meanwhile, the KTO has organised a wide range of special activities, including “Travel to Korea Begins Again” - a programme held at its bustling Incheon Airport in June and July to welcome foreign tourists back to the country; a MICE (Meetings, Incentives, Conventions, and Exhibitions) roadshow programme in late June to connect travel agencies of both countries to promote MICE tourism; “Hi Korea” - a tourism campaign on Tik Tok to inspire young Vietnamese people to visit the RoK; and “Korea Days in Hanoi” - an event to be held in November on the occasion of the 30th anniversary of bilateral diplomatic ties.

ABBANK wins ADB’s ‘Trade Deal of the Year’ Award

An Binh Commercial Joint Stock Bank won for ‘Trade Deal of the Year’ given to banks for outstanding achievements in trade finance at the Asian Development Bank Trade and Supply Chain Finance Programme Awards held in Singapore last week.

All banks participating in the ADB’s Trade and Supply Chain Finance Programme (TSCFP) are eligible to be nominated, and the winner was chosen this year from among more than 240 participants based on multiple factors such as how their transactions impacted the country and helped clients improve their business and how TSCFP contributed to the success of the transaction. 

ABBANK, the only Vietnamese representative to win in this category, and its partner DBS (Singapore) won the honours.

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