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The economy rebounded strongly from COVID-19-related lockdowns in the third quarter of 2021, expanding by 6.4% in the first half of 2022, the report said.
The WB attributed the rebound to a recovery of exports and the release of pent-up demand following the removal of COVID-19-related mobility restrictions and, more recently, the gradual return of foreign tourists.
In the medium to long term, achieving Vietnam’s goal to become an upper-middle income economy will depend on transitioning to a productivity and innovation-led growth model based on a more efficient use of productive, human, and natural capital, the bank said.
Vietnam - A hub for Indian investors to expand into other parts of Asia
Vietnam was praised as a hub for Indian investors to expand their business into other parts of Asia during the 2022 Horasis India Meeting, the foremost annual meeting of India business leaders and their global counterparts that convened on September 26 in the southern province of Binh Duong.
With the theme “Dynamic Vietnam - Its New Vision”, the meeting was attended by Deputy Prime Minister Vu Duc Dam, Minister of State at the Indian Foreign Ministry Rajkumar Ranjan Singh, leaders of Horasis, and delegates from the Confederation of Indian Industry (CII) and Vietnamese ministries and localities.
The meeting comprised six plenary sessions and 26 discussion sessions, with 700 delegates debating issues of common concern such as global transition, economic development issues arising from the digital transformation process, artificial intelligence, and smart energy. Participants also debated how to use Vietnam as hub for expansion into Southeast Asia, with the country playing an important role in connecting India with other parts of the region.
Mr. Vo Van Minh, Chairman of the Binh Duong Provincial People’s Committee, said that with 29 industrial parks and 12 industrial clusters, the province has attracted more than 4,000 foreign direct investment projects with total capital of nearly 40 billion USD from 65 countries and territories. The province has become the second-largest locality in the country in terms of foreign investment attraction, just behind Ho Chi Minh City.
The 2022 Horasis India Meeting continued on from the success of the Horasis Binh Duong Asia Economic Cooperation Forum 2018 and 2019.
On this occasion, the Becamex Corporation and the Confederation of Indian Industry signed a Memorandum of Understanding on cooperation in innovation and sustainable development.
Horasis - a global visions community committed to inspiring the future - provides a unique platform for companies from emerging and developed markets to globalise their organisations. In addition to the Horasis India Meeting, Horasis also hosts the annual Horasis Global Meeting, the Horasis USA Meeting, the Horasis China Meeting, the Horasis Asia Meeting, and annual gatherings of the Horasis Visionary Circle.
Low input material price to support profit margins of plastic businesses
Viet Nam is currently heavily dependent on the import of PVC resins - input materials in the construction plastic production chain. In the second half of this year and 2023, Vietcombank Securities Co (VCBS) forecasts that a low PVC price will support profit margins of businesses.
According to VCBS, PVC prices in the second half of 2022 and in 2023 will remain at a low price level in the range of US$800-1000 per tonne, helping the profit margin of plastic enterprises to stay positive.
The supply shortage in the US has recovered and the global supply has increased sharply due to the expansion plan of large enterprises. In the short term, major manufacturers in India, the US and China have invested in expanding PVC production with a capacity of millions of tonnes. From now to 2026, PVC capacity will increase by 17 per cent to 70 million tonnes per year.
The demand for PVC dropped sharply in China due to the sluggish real estate market, in which the demand for PVC for construction in this country accounted for 62 per cent. Until the end of 2023, VCBS believes that the demand for PVC will continue to stay low when the number of projects starting in China at present stays very low.
PVC prices have a strong correlation with coking coal because most of the production now depends on China. Production costs of coking coal are forecast to drop sharply to $280 per tonne in 2023, according to Fitch Solutions, helping PVC manufacturers in China maintain competitive prices with the EU and the US as these countries are facing a severe energy shortage and high input prices.
In the second and third quarter of 2021, the profit margins of enterprises such as The Binh Minh Plastic Joint Stock Company (BMP) and Tien Phong Plastic Joint Stock Company (NTP) were heavily affected due to the galloping increase in PVC input prices and the impact of the social distancing measures in key areas, reducing output and increasing costs.
However, the recent downward trend in input prices will be the driving force for expanding profit margins for BMP and NTP in the second half of 2022 and 2023.
European enterprises optimistic about Vietnam’s economy: EuroCham
European firms have shown their optimism about the Vietnamese economy, which is recovering strongly after the COVID-19 pandemic, Vice Chairman of the European Chamber of Commerce in Vietnam (EuroCham) Nguyen Hai Minh has said.
According to Minh, despite the global supply disruptions induced by the pandemic, Vietnam still exported more than 35.1 billion USD worth of goods to the EU in 2020 and over 40 billion USD last year.
Meanwhile, the Southeast Asian nation imported 14.6 billion USD and 16.7 billion USD worth of commodities to the bloc in the two years, respectively.
In the first eight months of this year, Vietnam’s export revenue to the EU was valued at 31.9 billion USD, up 23.6%, resulting in a trade surplus of up to 21.6 billion USD, a rise of 46.4%.
The figures have reflected positive impacts of the EU-Vietnam Free Trade Agreement (EVFTA), he noted.
However, Minh said, European enterprises in Vietnam said they have benefited more from the EVFTA as the country’s export to the EU mainly came from FDI firms.
EuroCham member businesses and even those that have yet to invest in Vietnam expressed their hope that the EU-Vietnam Investment Protection Agreement (EVIPA) will soon be approved and take effect, paving way for European firms to expand investments in the Southeast Asian nation.
Minh also cited the Business Climate Index (BCI) released by EuroCham showing that European business stakeholders' confidence in Vietnam's investment environment declined slightly in the second quarter of this year to 68.8% due to external factors.
Up to 60% of respondents predicted that the Vietnamese economy would stabilise or improve in the third quarter of 2022, 45% were significantly or moderately satisfied with Vietnam's efforts to attract and retain foreign direct investment (FDI), and 76% expected to increase FDI in the country before the end of the third quarter.
Vinfast expands cooperation with Japanese electronics company in EV manufacturing
VinFast and Renesas Electronics Corporation, Japan’s premier supplier of advanced semiconductor solutions, announced on September 26 that they are expanding their collaboration agreement to include automotive technology development of electric vehicles (EVs) and delivery of system components.
The signing ceremony of the strategic collaboration was held at VinFast’s factory in the northern port city of Hai Phong earlier this month, which was attended by VinFast’s CEO Le Thi Thu Thuy and Renesas’ CEO Hidetoshi Shibata, the Japanese company said in its press release.
As part of the newly expanded agreement, Renesas will provide a broader range of products to VinFast, including SoCs (System on Chips), microcontrollers, analog and power semiconductors. It will also provide technical support to assist VinFast in developing future automotive applications and mobility services.
VinFast and Renesas have previously collaborated on automotive infotainment systems, and Renesas’ SoCs (System-on-Chips), R-Car, and analog products have already been implemented in VinFast's new VF8 and VF9 EV models.
Green building aims to facilitate green practices in construction sector
The Vietnam Green Building Week 2022, slated for October 13 - 14, is set to promote dialogue and multidimensional cooperation to facilitate green practices in the construction sector.
The event in Ho Chi Minh City will be held by the Ministry of Construction (MoC) in coordination with the UN Development Programme, the International Finance Corporation (IFC), the Vietnam Green Building Council, and IEC Consulting.
The MoC said the open forum will see the participation of more than 1,200 representatives of ministries, sectors, localities, international organisations, research and training establishments, developers, project managers, investors, consulting and design firms, architects, and suppliers of building materials, equipment and technology.
Binh Phuoc province lures investment into 62 projects
The southern province of Binh Phuoc is calling for investment in 62 projects worth more than 23.5 billion USD until 2030 following a decision signed recently by its chairman.
The projects cover infrastructure at industrial parks and residential areas; fruit, cashew, wood and rubber processing; support industries; manufacturing; services for agricultural export; market and mall construction; healthcare; education; residential-commercial-service-tourism areas; agriculture; high technology; renewable energy; and solid waste treatment.
They include the Dong Phu residential and industrial complex worth 5 billion USD, the 2 billion USD resort and golf course in Dong Xoai city, and the 1.3 billion USD Suoi Giai golf course, urban area and shopping centre in Dong Phu district, among others.
Zhejiang Int’l Trade Exhibition, Export Fair to take place in Hanoi
The 2022 Zhejiang International Trade Exhibition and the 10th Zhejiang Export Fair, the largest and oldest expo independently held by China’s Zhejiang authority in ASEAN, will open at Hanoi’s International Convention Centre on September 28.
The 4,000sqm expo will comprise 130 booths run by more than 100 exhibitors, displaying products in hardware and machinery, textiles and inputs, interior and exterior furniture, electronics and household appliances.
Celebrating its 10th anniversary in Hanoi, the three-day event will feature various side events, such as a seminar on e-commerce from China’s perspective: lessons and practices; a symposium on international trade promotion in the era of the Fourth Industrial Revolution, and a Vietnam-China business matching model in the new context; and a bicycle test tour.
Launched in 2011, the expo has been a platform not only for product exhibition and promotion but also for Vietnam and China to strengthen economic and cultural exchange and multifaceted cooperation between their localities.
Drastic measures needed to speed up public investment capital disbursement: PM
Prime Minister Pham Minh Chinh stressed the need for drastic measures to speed up the disbursement of public investment capital and the implementation of the socio-economic recovery and development programme as well as three national target programmes, while chairing a meeting with ministries, sectors and localities on September 26.
The Government leader ordered ministries, sectors and localities to define particular difficulties and obstacles hindering the work and to deal with them by all means, for the benefit of the state, nation and people.
According to the ministry of Planning and Investment, over 542.1 trillion VND (22.85 billion USD) of public investment capital from the State budget is expected to be disbursed this year.
As of September 23, over 508.36 trillion VND, or 93.8% of the total, had been allocated to particular projects and as of September 30, more than 253.14 trillion VND, or 46.7% of the total, will have been disbursed, representing a slight fall compared to the same period last year.
To date, two central agencies and 10 localities have recorded disbursement rate of over 70%, while 39 ministries and central agencies as well as 22 localities have reported lower disbursement rates compared to the country’s average, and 14 others have completed only less than 20% of the plan assigned by the PM.
One of the reasons cited by ministries, sectors and localities for the situation is obstacles related to mechanism and policy as well as poor implementation capacity.
Credit growth stands at nearly 10.5% as of mid-Sept
As of September 16, credit grew 10.47% against the end of 2021 and 17.19% against the same period last year, according to Deputy Governor of the State Bank of Vietnam (SBV) Dao Minh Tu.
He revealed the figures at a routine press conference for the third quarter of 2022 recently held in Hanoi.
The majority of the credit was poured into business and production and priority areas in an effort to revive the economy hard hit by the COVID-19 pandemic.
The SBV aims to maintain credit growth at around 14% to support the economic recovery but it will not lower guard against inflationary risks, Tu said, adding that the central bank has requested lenders to give priority to borrowers in business and production, and limit the credit into high-risk sectors, providing a sustainable engine for growth.
Tu held that the bank will continue keeping a close watch on the developments of both domestic and global markets; and flexibly but cautiously adopting monetary policies alongside fiscal and macro-economic ones to keep inflation under control and stabilise the economy.
Top 10 reputable F&B firms in 2022 announced
Vietnam Report JSC has announced the top 10 reputable companies in the food-beverage sector in Vietnam in 2022.
They are Vietnam Dairy Products Joint Stock Company (Vinamilk), Frieslandcampina Vietnam, International Dairy Products (IDP) JSC, NutiFood Nutrition Food JSC, VitaDairy Vietnam JSC, Moc Chau Dairy Cattle Corporation JSC, KIDO Group Corporation (KIDO), Mead Johnson Nutrition Vietnam, Nutricare Nutritrion JSC, and Zott Vietnam JSC.
Meanwhile, the top companies in the field of sugar confectionery and food include Nestlé Vietnam Co., Ltd., Orion Food Vina Co., Ltd., Mondelez Kinh Do Vietnam JSC, Herbalife Vietnam Single Member Limited Liability Company, Quang Ngai Sugar JSC, Thanh Thanh Cong-Bien Hoa JSC, Bibica JSC, Hoang Mai P&T Co, Ltd., Perfetti Van Melle Vietnam Ltd., and Huu Nghi Food JSC.
The selection was based on the firms’ financial capacity, media reputation and results of a survey among consumers and experts.
Along with the socio-economic recovery of the country, the food and beverage sector has recovered strongly. A survey conducted by Vietnam Report in August showed that nearly 90% of the businesses in the sector saw productivity equivalent to 80% of the level recorded before the COVID-19 pandemic broke out, and 60% even surpassed the level they made before that. It said that 85.7% of the firms enjoyed rise in revenue, up 62.65% year on year.
Algeria looks to promote trade, economic cooperation with Vietnam
Algeria is committed to developing economic cooperation and trade with Vietnam by establishing a strategic partnership mechanism capable of fully exploiting the economic potential of the two countries on the ground of mutual benefit, acting director general of the National Agency for the Promotion of Foreign Trade (ALGEX) Abdelatif El Houari has said.
He made the statement on September 26 at a virtual conference organised by the Vietnam Trade Promotion Agency (VIETRADE) under the Ministry of Industry and Trade (MoIT) and the National Agency for the Promotion of Foreign Trade (ALGEX) to promote Vietnam-Algeria trade and business cooperation.
The two-day event attracted the participation of 88 enterprises from Vietnam and Algeria.
Algeria exports scrap paper, poultry meat, medicines and rubber products to Vietnam; and imports coffee, footwear, raw aluminum and aluminum alloys, printing machinery and equipment from the country.
However, the bilateral trade value remained modest, and ALGEX suggested setting up appropriate mechanisms to identify prospects for economic cooperation and trade as well as to strengthen institutional collaboration between the two trade promotion agencies. Memorandums of Understanding in the field of export promotion should be signed and businesses encouraged to learn more about the other market, it said.
Swiss Bank Executives’ Training Programme formally launched
More than 80 senior bank executives from Vietnamese banks will join the Swiss Bank Executives’ Training Programme over the next 18 months which covers key topics related to bank management, banking strategy and operational concepts as well as regulatory matters, relevant for bankers in an emerging market setting.
The first module will start on Monday. The other modules will follow at approximately monthly intervals over the next 18 months.
The Swiss BET programme in Viet Nam, which started in 2010, is a joint programme of State Bank of Viet Nam (SBV) and the Swiss State Secretariat for Economic Affairs (SECO), financed by the Swiss economic cooperation programme for Viet Nam. This is the third phase of the Swiss BET programme in Viet Nam.
Ha Tinh approves $270 million investment in second Vingroup battery factory
Ha Tinh Economic Zone Management Authority has approved the investment planning of the second battery factory invested by VinES Energy Solutions JSC, a subsidiary of the conglomerate Vingroup.
According to the investment plan approved on September 25, VinES Energy Solutions is set to develop a lithium battery factory with the total investment capital of VND6.3 trillion ($273.9 million).
Covering 14 hectares in Vung Ang Economic Zone, the project will be invested in by VinES Energy Solutions in collaboration with Gotion Inc. The two parties will contribute VND2.4 trillion (38 per cent) to the project, and the remaining capital VND3.92 trillion will be mobilised from other sources. The construction of the first battery factory is 97 per cent finished.
The construction of the first battery factory is 97 per cent finished. In early July, Vung Ang Economic Zone Management Authority sent documents to relevant authorities to consult on and appraise the project.
According to the plan, construction for the second factory will kick off in the fourth quarter this year and take one year. The investor will start to install machinery and manufacturing lines in the first quarter of 2024 so that the factory will officially open in the third quarter of 2024.
The designed capacity of the factory is 5GWh per year, equaling 30 million lithium iron phosphate batteries, which are currently the most used batteries in the global new energy vehicle market.
Banks moving to restructure bad debts
As a circular on debt rescheduling for clients affected by the pandemic has expired, banks will face several scenarios to deal with in terms of debt restructuring.
The reporting season for third-quarter banking results is around the corner, with profits and bad debt the top concerns after credit growth slowed in the past three months.
Meanwhile, Circular No.14/2021/TT-NHNN on the continued extension of debt repayment and debt rescheduling for clients affected by the pandemic expired at the end of the second quarter.
The State Bank of Vietnam's (SBV) circular on debt rescheduling points out that if the restructured debt is not paid on time, it will immediately become bad debt by the end of the grace period. Meanwhile, debts of individual borrowers at the same or different credit institutions will be classified into the lowest debt category. However, if the principal and arising interest for the restructured debt cannot be fully paid for three consecutive months, the debt will be classified as Debt Group 1 after the grace period ends.
As a result, there are many concerns that bad debts will soar in late 2022, which would be detrimental for banks.
However, many experts are not worried. Although bad debts may rise, they are less likely to skyrocket as the asset quality of banks has significantly improved to deal with risk. Bad debts will vary among banks depending on the customer base and macro factors like the recovery of the economy and inflation management.
When the economy started to rebound after the beginning of the year, the restructured debt balance saw improvements. There was a sharp recovery in the production and business activities by both individuals and businesses, which helped them with cash flow to pay debts. Many banks recorded a sharp decrease in restructured debt in the first six months of 2022.
Hanoi to support SMEs' digitalisation
Hanoi has started a programme to raise awareness of the benefits of digitalisation among the capital city's small-to-medium-sized enterprises (SMEs).
The city's objective is to provide some 90,000 newly created SMEs with guidance to access their own digitalisation efforts, as well as technical and financial support by the year 2025. The city considers SMEs' digitalisation a cornerstone for future development and a gateway to access the international market.
Meanwhile, the city aims to complete the transition to digital signatures and digital receipts by 2025. Another objective is to create a thriving ecosystem that facilitates and nurtures the digitalisation process.
According to the city's People Committee, Hanoi is to provide up to 50% (no more than 50 million VND or 2,150 USD) of small businesses' costs to acquire digital services to improve business management, operations and solutions. Medium-sized businesses are entitled to up to 50% of the same costs but with a higher cap at 100 million VND.
In addition, the city is to provide up to 50% (no more than 50 million VND for small businesses and 100 million VND for medium-sized businesses) of purchases made to speed up the digitalisation process.
HCM City’s AI-powered solutions contest opens
The HCM City People’s Committee opened a contest for solutions and products in artificial intelligence (AI) applications until October 15.
The contest is organised by the city’s Department of Information and Communications in collaboration with the Department of Science and Technology, the Vietnam National University-HCM City, the HCM City Computer Association, Vietnam Software and its Services Association, and the Ho Chi Minh Communist Youth Union’s chapter in HCM City.
The contest's two categories are the AI-Challenge and AI-Solution.
AI-Challenge seeks AI-based solutions for event retrieval from visual data.
AI-Solution looks for outstanding solutions and products based on artificial intelligence technologies in key socio-economic sectors such as production, business, transportation, finance, healthcare, education, tourism, agriculture, and serving the community.
A jury of experts and scientists from universities and associations will decide the winners.
All domestic and foreign individuals and organisations can register online by filling out a form at https://aichallenge.hochiminhcity.gov.vn/dang-ky, or at the Department of Information and Communications office No. 59 on Lý Tự Trọng Street in District 1. More information is available at https://aichallenge.hochiminhcity.gov.vn/.
Source: VNA/SGT/VNS/VOV/Dtinews/SGGP/VGP/Hanoitimes
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