VIETNAM'S BUSINESS NEWS HEADLINES JULY 5
Agriculture ministry bullish on export targets despite pandemic
|More chickens are needed to help meet the local demand for meat. — Photo nongnghiep.vn|
Though export turnover of agriculture products in the first half of this year fell 3.4 per cent from the same period in 2019, leaders of the industry still hope to meet targets for the year set before the COVID-19 pandemic struck.
Minister of Agriculture and Rural Development Nguyen Xuan Cuong told a conference on the agriculture industry in Ha Noi on Monday that export turnover in the first six months was estimated at US$18.81 billion, more than 3 per cent lower than the same term last year due to the pandemic.
However, Cuong said though export turnover in the first half decreased, the ministry was still determined to reach the target of total export turnover of $41 billion for 2020.
According to the report from the Ministry of Agriculture and Rural Development (MARD), the first half turnover included $8.94 billion from main agricultural products, $3.56 billion from fisheries, $5.3 billion from main forest products and $190 million from livestock products.
Except for exports of forest products, the other segments reported decreases of between 2.7 per cent and 19.4 per cent, said the report.
Of the exports, commodities with great export turnover decreases included rubber, tea, pepper, pangasius and shrimp. The four largest markets for agriculture and forest products of Viet Nam were still China, the US, Japan and South Korea.
Deputy Minister of MARD Ha Cong Tuan said the agriculture industry still gained 1 per cent in GDP growth, adding the trade surplus reached $4.5 billion, up $339 million from the first half of 2019.
Tuan said the lower growth of export turnover was mostly due to lower export prices of key agricultural products and decreased export turnover to China amid the pandemic.
As MARD targeted to export $20 billion in agriculture products, $11 billion in forest products and wooden furniture, $9 billion in fisheries and another $1 billion from other products this year, it would focus on solutions to boost export value, Tuan said, telling producers and exporters to concentrate on products with higher export value.
At the conference, leaders of the ministry said though the country was in the post-COVID-19 period with re-organising trade promotion activities to promote the consumption of agricultural products, it was still difficult to remove all obstacles due to travel restrictions.
Minister Cuong said: “Though there are innovating and developing forms of production chains in the industry, they can not yet meet the demand. The innovation progress in many agricultural and forestry companies is still behind schedule.”
He added: "The rate of implementation and disbursement of the ministry's investment capital is still slow, especially for Government bond and ODA projects."
“Despite the drastic direction from MARD and the participation of localities, the task of increasing the pig herd to feed the country and lower the pork prices could only take place on large-scale farms and be carried out slowly in the small-scale breeding farms, which account for the majority of farming in Viet Nam," he added.
“Reaching the planned target of 2020 is a very heavy and difficult task. To achieve a growth rate of 2.5 – 3 per cent for the whole year, it is necessary to continue all attention, guidance and drastic support of the Government, the Prime Minister and the synchronous co-ordination of ministries and localities.”
Cuong said the ministry would focus on directing and managing in a timely and flexible manner, promoting the development of areas with room for growth.
At the same time, MARD proposed appropriate pork imports to benefit farmers and consumers, said the minister.
“It is key to ensure the production of about 43.5 million tonnes of rice for the food security for 100 million Vietnamese people and for the export of between 6.5 million to 6.7 million tones of rice," he said.
The minister said the pandemic and the existing natural disasters added more challenges to the agriculture production of Viet Nam.
“With more difficulty, we must try two or three times harder to do all the tasks," he said.
Dong Nai’s footwear export up in H1
The southern province of Dong Nai in the first half of this year gained growth of nearly 7 per cent in footwear export value to US$2.14 billion compared to the same period last year.
This was the largest export value among key export products of Dong Nai. At the same time, the footwear industry had the highest trade surplus with over $1.7 billion.
According to the Dong Nai Statistics Office, the footwear export value in June was about $411 million, a surge of $80 million month on month and 12 per cent year on year.
Dong Nai has more than 50 export goods, of which major export products include footwear, garments, wood, yarn, and the group of machinery, equipment and spare parts. Those major export products account for nearly 60 per cent of the province's total export value. The export value reached nearly $4.94 billion in the first six months of the year.
Luc Van Thuy, head of the Trade Management Department under the Dong Nai Department of Industry and Trade, told the Dong Nai newspaper that the footwear industry has brought the biggest export value to the province and seen a growth in export value every year. The footwear production enterprises have improved the quality of products to meet the high demand of export orders.
Phan Thi Thanh Xuan, general secretary of the Vietnam Leather and Footwear Association, said the COVID-19 pandemic has caused export orders for Vietnamese footwear and bags enterprises to plummet. Many export orders under negotiation have not yet been finalised because the US and European markets still have very weak consumption. This greatly affects production plans, jobs and income of businesses and employees in the domestic leather and footwear industry.
According to the General Department of Customs, Viet Nam's footwear export turnover in the first five months of this year was $6.69 billion, a year on year reduction of $310 million.
Meanwhile, Dong Nai still maintained growth of 7 per cent in the first five months. This province was one of the four leading localities in producing and exporting footwear. Dong Nai's footwear export value accounted for more than 20 per cent of the national total export value.
Shoes manufactured in Dong Nai are exported to about 80 markets worldwide, of which the US and the EU being the two largest markets, according to the provincial statistics office.
Thai Binh builds nest to attract investors
Along with the general policy line of the state, investors are offered unique incentives and support if they decide to invest in a new project or start a business in the economic zone of the coastal eastern province of Thai Binh.
Thai Binh has issued a decision on incentives offered for enterprises investing in the province’s economic zone. Notably, in the 2020-2030 period, enterprises registering operations according to the Law on Investment will receive six incentives to implement their plans.
Accordingly, they will enjoy incentives in land access, support in technical infrastructure, land clearance, an exemption from fees for building the wastewater treatment system of the EZ, training human resources, and support in completing administrative procedures.
The province particularly welcomes large-scale industrial projects, industrial zone infrastructure business, commerce and service (hotels and resorts, entertainment), and high-tech agricultural projects, among others.
In October 2019, the prime minister has approved the Thai Binh economic zone master plan till 2040, with visions toward 2050.
The 30,600-hectare Thai Binh Economic Zone includes 30 communes and one town in the districts of Thai Thuy and Tien Hai.
The plan aims to maximise the province's natural endowments and location by connecting the local economy as well as trade and service with neighboring areas, develop the economy while ensuring national defense and security, as well as preserving the marine ecosystem and historical and cultural relics in the region.
Thai Binh Economic Zone lies nearby key transport systems of the northern provinces, including Cat Bi International Airport and Haiphong seaport. Besides, it is located in the economic growth triangle of Hanoi-Haiphong-Quang Ninh.
Policy review crucial to set up for new funding wave
Aside from strong determination, Vietnam needs to make great strides before it can grow into a trustworthy venue for foreign investors, especially in the context that fresh opportunities are on the horizon, promising a new wave of investment.
With that, the Politburo’s Resolution No.50/NQ-TW on orientations to perfect institutions and policies, as well as raise quality and efficiency of co-operation through 2030, has attested to the strong commitment of the Party and the entire political system in building a wholesome and lucrative business climate to attract foreign investment flows.
At the first-ever Vietnam Investment Forum in 1991, with the presence of late Party General Secretary Nguyen Van Linh, the Vietnamese Party and state sent a substantial message to the overseas investor community that the country is renovating, opening the doors, and pushing up foreign investment attraction to motivate economic development.
Nearly three decades later, the Politburo for the first time gave birth to a specific resolution on foreign investment attraction – last year’s Resolution 50. This indicates that Vietnam acknowledges foreign investment as an important part of the local economy and will be making further endeavours to push up foreign investment attraction to drive socio-economic development.
At the annual Vietnam Business Forum held in January, Minister of Planning and Investment Nguyen Chi Dung reviewed the laudable achievements of foreign-invested enterprises (FIEs) as the total disbursed foreign direct investment touched $20.4 billion, the highest-ever recorded, while the committed capital volume surpassed $38 billion, setting a 10-year record.
At the event, the business associations of many countries based in Vietnam such as the United States, South Korea, Japan, the United Kingdom, Australia, and India confirmed their commitments for long-term development in Vietnam, and trying their best to push up the country’s development in the regulatory environment and infrastructure as well as human resources development, for a more innovative and sustainable growth for the country.
Since the start of 2020, the coronavirus has left a sweeping impact on the global economy. Most forecasts point to a gloomy picture with negative growth for many world powers. According to a first-quarter report on global development perspectives by the International Monetary Fund, the global economy would contract by 3 per cent this year in the wake of COVID-19 implications, even more serious than what was seen with the financial turmoil in 2008.
Notwithstanding, the pandemic has brought valuable lessons of experience to many countries and global conglomerates. One of the lessons is the necessity to diversify supply sources, avoiding reliance on a single economy to mitigate supply chain disruptions.
This provides rare opportunities to up-and-coming developing nations like Vietnam. The country’s success in pandemic containment and its active policies for development reconstruction has secured appeal from international investors and global companies. Does Vietnam stand ready to hail a new wave of investment capital?
Aside from having eminent advantages compared to regional peers such as political stability, a vast consumer market, innovative government, and an abundant workforce at a competitive cost, investors doing business in Vietnam are facing concerns over unstable policies and lack of clarity and transparency in the regulatory system, causing difficulties for them.
Other hindrances involve unsynchronised development of logistics services or limited workforce of professional expertise. Some challenges are objective, demanding time and financial resources, while some others are subjective that can be radically tackled if having in place a close co-operation and strong commitment from the part of authorised agencies and FIEs.
For instance, financiers are uneasy about the stability of tax policies, compliance of Vietnamese accounting standards over international standards, and transparency in implementing regulations on tax and accounting, as well as funding safeguard measures.
At the annual government-business community policy dialogue Vietnam Business Forum last year, Takahisa Onose, representative of the Tax and Customs Working Group, said investors need to trust that Vietnam’s tax authorities will apply fair and reasonable policy based on the application of core principles in tax and accounting.
“The principle of the right to an independent appeal of tax assessments, initially outside of the courts, is fundamental to nearly all tax jurisdictions and should be developed in Vietnam, and the timing and severity of destructive enforcement measures like freezing bank accounts should occur only after all reasonable remedies have been explored and only after such appeals process has run its course,” he said.
Onose also stressed the need to have in place a mechanism for dispute settlement in the interpretation and enforcement of the law, as well as in the inspection process at businesses.
Businesses almost have no opportunities to lodge claims against decisions or conclusions of tax inspectors before local tax authorities apply coercive measures such as blocking accounts or neutralising VAT invoices. Major FIEs such as Unilever or Sabeco had once cried for help to the prime minister for halting coercive measures from tax or auditing authorities to avoid facing detrimental impacts on their business operations.
The right to lodge claims and having their claims settled with engagement of independent professional agencies and having opportunities to communicate with relevant management agencies at different level must be regarded a legitimate right of businesses, helping to secure the trust of investors and businesses into a wholesome and transparent investment environment in Vietnam and the accountability of local authorised agencies.
Banks step up bad debt resolution
Some banks are speeding up the recovery of non-performing loans (NPLs) this year despite the impacts of the COVID-19 pandemic.
An Binh Commercial Joint Stock Bank (ABBank) said the bank aimed to reach VND1.3 trillion (US$56.52 million) in pre-tax profit and clear all bad debt kept at Viet Nam Asset Management Company (VAMC) this year. It also expected to increase the provision for risky loans this year by 69 per cent against 2019 to some VND837 billion, tinnhanhchungkhoan.vn reported.
Under a State Bank of Viet Nam (SBV) policy, the SBV-controlled VAMC agreed to buy bad debts of commercial banks and recover the debts to reduce the bad debt ratio of the entire banking system in 2015. At that time, many banks had to sell bad debts to VAMC so they could take the debts off their balance sheet to have a bad debt ratio of below 3 per cent as required by the central bank.
After buying the bad debts, the VAMC tried to recover the debt, but some debts haven't been settled to date. Banks, therefore, would have to receive the debts from the VAMC in 2020, according to the SBV's policy.
Sai Gon Thuong Tin Commercial Joint Stock Bank (Sacombank) general director Nguyen Duc Thach Diem said that Sacombank still had NPLs worth more than VND25 trillion at the VAMC, so the bank was trying to handle and recover all the debts.
Diem said Sacombank aimed to handle VND11 trillion of bad debts this year. As the bank successfully auctioned VND9.7 trillion of debt in the first five months of this year, it expected to meet the target by the end of this year.
However, Sacombank’s representative said the pandemic had hampered the bank’s handling of bad debts.
At Vietnam Export Import Commercial Joint Stock Bank (Eximbank), the bank’s bad debt ratio was at 1.62 per cent by the end of 2019 and it is speeding up the settlement of bad debts to soon clear all its bad debts kept at the VAMC.
Eximbank still held VAMC’s special bonds worth about VND3.2 trillion by the end of 2019. With a provision of nearly VND2.1 trillion for the bonds to date, the bank will need an addition of VND1.1 trillion to clear all debts at the VAMC.
Though Eximbank planned to settle all the debts kept at the VAMC this year, the target might be affected due to the COVID-19 pandemic.
In a report on impacts of the COVID-19 pandemic released recently, financial database platform FiinPro estimated the ratio of new bad debt arisen in the first quarter this year of 18 banks listed on stock exchanges was 0.23 per cent, increasing from the previous seven quarters and equivalent to the rate of the first quarter of 2018.
By the end of the first quarter this year, the bad debt ratio of the banks was 1.65 per cent, up 1.44 per cent compared to the end of 2019. However, the rise didn’t reflect all the impacts of the COVID-19 pandemic as the central bank in Q1 issued new regulations on allowing commercial banks to restructure the debts of pandemic-affected borrowers.
Masan seeks to become leading retail-consumer conglomerate
Masan Group Corporation (HOSE: MSN) targets net revenues of VND75-85 trillion (US$3.2-3.64 billion) this year, a year-on-year increase of 101- 128 per cent.
Net profit is expected to top VND1- 3 trillion (($42.9 – 128.7 million) as profitability increases in the second half of the year.
MSN and two of its key publicly listed subsidiaries (Masan Consumer (HNX_UpCoM: MCH) and Masan MEATLife (HNX_UpCoM: MML) jointly held their annual general meeting in HCM City on June 30 under a shared theme, ‘Our journey is the consumers’ journey, to mark the company’s next phase of transformation.
Of its subsidiaries, VinCommerce (VCM) is expected to deliver full-year earnings before interest, taxes, depreciation, and amortisation (EBITDA) of 3 per cent below breakeven but achieve breakeven in the second half of 2020.
MCH targets over 15 per cent revenue growth and double-digit profit growth.
Masan MEATLife expects its meat business to contribute 20 per cent of net consolidated revenues and build a processed meat platform to increase the value generated per pig.
The feed business is expected to grow moderately, with a potential upside if pig replenishment accelerates to match domestic demand.
Masan High-Tech Materials (formerly known as Masan Resources) will focus on the integration of H.C. Starck’s tungsten business and becoming a global value-added midstream processor to de-risk commodity price cycles in tungsten.
In 2020 Masan would continue to maximise its liquidity position to ensure there is adequate cash on hand to navigate the COVID-19 pandemic if it should persist longer than expected and be in a position to invest in strategic businesses organically or via M&A.
Addressing the AGM, Danny Le, MSN’s CEO, said with the VinCommerce merger Masan had taken a major step towards reinventing itself as a retail-led organisation and strengthening its ability to better serve the essential needs of consumers.
Today Masan operates in business sectors such as fast-moving consumer goods, fresh produce and financial services (through its significant interest in Techcombank), which together represent over 50 per cent of Vietnamese consumers’ wallet share, according to the CEO.
“However, Masan aims for a larger … wallet share by building a more complete consumer-centric platform that can better address additional essential needs such as healthcare, education, entertainment/social, and communication.”
Despite Viet Nam’s rapid economic development and rising middle class, consumers still overpaid for and were underserved in terms of their essential needs due to a lack of innovation and scale (specifically with regard to consumer infrastructure), he said.
“To address these large unmet needs, Masan aims to drive consolidation in categories and markets where it operates to deliver efficiencies across the value chain for the benefit of both consumers and suppliers.”
Masan has been able to drive change and achieve consolidation through innovation and building power brands, according to him. With the VCM merger, Masan is entering its next phase of transformation by owning and expanding both a physical and digital presence to directly reach consumers, with the consumer journey and experience becoming increasingly important.
If successful, Masan believes that by 2025 revenues could reach VND150-250 trillion ($6.45-10.7 billion) with operating margins of 14-15 per cent, driven by growth of its own branded consumer products, higher online sales, exclusive products at its retail locations, and expanded network coverage through its stores and future retail franchises.
To build an integrated retail platform to meet the evolving needs of Vietnamese consumers, Masan has established CrownX, a new subsidiary to own and operate its interests in MCH and VCM, leveraging the respective strengths of these businesses as a branded manufacturer and leading grocery retailer.
Truong Cong Thang, chairman of Masan Consumer, said the key priorities of CrownX are to develop a winning store network and supply chain across the country, develop VCM as a consumer-goods-like business led by power brands to become one of the top 50 retail brands in the world, develop an exclusive portfolio (up to 40 per cent) through strategic partnerships with suppliers, acquire household grocery spending data, and be one of the top 10 companies to work for in Viet Nam.
The meeting also approved a cash dividend of 10 per cent (VND1,000 per share) to be paid within six months to MSN shareholders and a dividend of 45 per cent (VND4,500 per share) for MCH shareholders.
MSR changes name, to go global
Shareholders of Masan Resources (MSR) approved a number of proposals at its annual general meeting in HCM City on Monday, including a change in the company’s name to Masan High-Tech Materials as part of a strategy to go global and take its business to the next level and provide hi-tech and innovative solutions to global customers.
Danny Le, chairman of the board of Masan Resources, said last year the company’s net revenues were down 31 per cent to VND4.706 trillion (US$201.9 million) due to the challenging business environment.
Weakening global demand and a slowdown in global manufacturing, compounded by the trade war between China and US, resulted in a year of lower prices for all its commodities.
Average prices for the year for tungsten, fluorspar, copper, and bismuth were down 22 per cent, 3 per cent, 8 per cent, and 32 per cent.
But despite the difficulties, MSR maintained its throughput in the Nui Phao Mineral Processing facility at 3.78 million tonnes, down by just 2.8 per cent from 2018’s record throughput of 3.89 million tonnes.
MSR were able to offset some of the impact of the lower prices and volumes through focus on cost control, achieving a 12 per cent reduction in cash costs, equivalent to $14 million.
The acquisition of H.C Starck Group’s Tungsten Business, which will provide the company with advanced manufacturing centres in each of the key market geographies of the North American Free Trade Agreement, EU and the Asia Pacific and production sites in Germany, Canada and China.
The transaction was a strategic step in executing MSR’s vision to become a leading vertically-integrated high-tech industrial material platform in the world, Craig Richard Bradshaw, the company’s CEO, said.
This would enable MSR to generate strong and consistent cash flows across price cycles and expand its addressable market by 3.5 times from $1.3 billion to $4.6 billion, he added.
Based on its current business operations and financial position and a possible V-shaped recovery in global markets in the second half of 2020, MSR targets net sales of VND8-9 trillion ($343.6-386.5 million) and net attributable profits of VND200 -500 billion ($8.58-$21.45 million), representing a minimum increase of 70 per cent in sales and a reduction of 57 per cent or increase of 42 per cent in profits.
Le said the company has well developed business continuity plans that have been enacted and would underpin its ability to navigate this global crisis.
Shareholders also approved many other key proposals and reports, including the resignation of Nguyen Dang Quang from the board of directors, issuance of new shares and reports on the results of dividend payment to shareholders for 2019 in the form of shares at a rate of 10 per cent.
Digiworld targets 20 per cent sales growth in 2020 despite pandemic
Digiworld Corporation announced its financial plans for 2020 at its annual general meeting on Monday, including a sales target of VND10.2 trillion (US$438 million), or 20 per cent higher than last year.
At the meeting in HCM City, the company said in spite of the market volatility Digiworld also targets a 25 per cent increase in profit after tax to VND202 billion ($8.7 million).
In 2019 the company exceeded targets to achieve revenues of nearly VND8.5 trillion and profits of VND163 billion ($7 billion), respectively up 43 per cent and 48 per cent.
Its debt to equity ratio reduced last year to 0.67 from 1.09 in 2018, as it gradually seeks to reduce debts and focus instead on using internal accruals.
Thanks to better control of operating expenses, the gross profit margin and gross profit ratio were 6.45 per cent and 2.46 per cent, up from 6.21 per cent and 2.31 per cent in 2018.
Doan Hong Viet, chairman and general director of Digiworld, said: “The context of global investment activities is changing and investors are increasingly concerned about responsible investment, which poses new challenges and offers new opportunities to listed businesses.
“Digiworld is determined that corporate governance will not be a short-term task but a constant improvement process. Therefore, we regularly review the company's management structure, processes and regulations to promptly make amendments and supplements.”
Established in 1997, Digiworld is the leading market expansion services provider in Viet Nam.
It has provided market expansion services to and been the authorised distributor for more than 30 global technology brands, and has a distribution network of 16,000 points of sale nation-wide.
2,500 pigs imported from Thailand
Nearly 2,500 pigs were imported via the Lao Bao Border Gate in the central province of Quang Tri on Tuesday night.
The pigs were imported from Thailand to supplement the domestic market's supply and repopulate herds.
Le Dinh Hue, deputy director of Region 3 Animal Health Division under the Department of Animal Health, said the quarantine of imported live pigs from Thailand was strictly controlled to prevent disease and ensure food safety.
The pigs were assessed by the Department of Animal Health for disease and food safety before being imported, said Hue.
They were also tested for diseases before arriving in Viet Nam and then clinically checked and placed in isolation areas for monitoring and sampling when arriving in the country to ensure food safety, he added.
Region 3 Animal Health Division said the Lao Bao Border Gate has carried out import procedures for nearly 5,800 gilts and more than 3,800 hogs.
The Ministry of Agriculture and Rural Development reported that enterprises had imported some 90,000 tonnes of pork since the beginning of the year to ensure the supply of pork for the domestic market.
Experts said the solutions deployed by the Ministry of Agriculture and Rural Development not only helped to reduce the price of pork in the market but also gradually met the supply of breeding pigs for the future.
VNDirect Securities eyes 5 per cent profit growth in 2020
VNDirect Securities Corporation projects its total post-tax profit may increase 5 per cent year-on-year to VND405 billion (US$17.5 million) in 2020.
Total revenue is forecast to gain 17 per cent on-year to VND1.87 trillion, according to acting CEO Do Ngoc Quynh.
The earnings forecasts were made upon VNDirect’s expectation that the benchmark VN-Index on the Ho Chi Minh Stock Exchange will move between 840 points and 920 points in 2020.
“Average market liquidity is estimated to increase by 14.5 per cent from the same period of last year,” the brokerage firm said in a filing to shareholders at the annual meeting on Tuesday.
“Subject to the basic scenario, foreign investors are not really excited about the Vietnamese market this year, thus, the market is mostly supported by domestic investors.”
VNDirect also delivered two other projections for this year’s performance, in which the VN-Index may end 2020 in the ranges of 940-810 points or 960-1,000 points.
In the better forecast, positive signs will appear, for example, the total weight of Vietnamese shares in the MSCI Frontier Index will gain, the trend of global quantitative easing will direct cheap capital to flow into emerging markets, and foreign investors will return to net-buying from July.
Under this forecast, trading liquidity will grow 20.8 per cent year-on-year in 2020 and post-tax profit is estimated at VND490 billion.
Meanwhile, if the VN-Index falls back to the 940-810 range, average trading liquidity on the local market will increase by only 5.8 per cent year-on-year in 2020.
Post-tax profit may fall to VND320 billion under this projection.
In 2019, VNDirect earned VND1.5 trillion in total revenue, down 7.8 per cent year-on-year, and VND383 billion in post-tax profit, up 2.7 per cent year-on-year.
The company’s financial report 2019 pointed out that revenues from brokerage services and proprietary trading lost 34.5 per cent and 12.8 per cent year-on-year.
But a 113.6 per cent surge in revenue from investment banking, which was VND48 billion, helped offset those losses.
VNDirect blamed losses in proprietary trading and brokerage services on the sharp drop of the local market in 2019 caused by “disappointing earnings growth of listed companies, the absence of notable IPOs and the delay of State-owned enterprises’ divestments, and the vibrant corporate bond market which has partially absorbed money from the equity market”.
In the second half of 2020, the company expects the stock market will recover as the amended Law on Securities will “improve share quality, enhance the transparency and better protect investors’ interests.”
More domestic and foreign funds are expected to enter Viet Nam’s stock market and accelerate the process of upgrading the market to the “emerging markets” level, the company said.
In addition, the Government’s divestment plans in large-cap companies like dairy producer Vinamilk, petrol firm Petrolimex, the Vietnam Engine and Agricultural Machinery Corporation (VEAM), tech group FPT and insurer Bao Minh may be executed in the short term, probably this year, VNDirect said.
“However, the progress of equitisation and divestment in SOEs may be difficult to improve in 2020 because the bottlenecks in the equitisation process have not been thoroughly solved, especially the issues related to land pricing.”
Cambodia-Japan trade grows in first four months
Trade between Cambodia and Japan reached 778 million USD in the first four months of 2020, up 4 percent year on year, the AKP news agency reported, citing recent statistics from the Japan External Trade Organisation (JETRO).
Of the figure, Cambodia exported 627 million USD worth of products to the Northeast Asian market.
Cambodian products shipped to Japan include clothes, footwear and electronics, according to the Southeast Asian country’s Ministry of Commerce.
Last year, bilateral trade rose by 13 percent to about 2.29 billion USD.
Vietnamese lychees hit shelves in Singapore
Vietnamese lychee was officially put up for sale in Singapore’s FairPrice supermarket chain, making the first year when the specialty fruit has been imported from the Southeast Asian country on a large scale.
According to the Commercial Affairs Office under the Vietnamese Embassy in Singapore, nearly 50 tonnes of lychee have been shipped to Singapore via Hai Phong Port so far, and the export volume is expected to reach 100 tonnes this year.
Thanks to its good quality and eye-catching appearance, the fruit has quickly won over local consumers, leaving shelves in many supermarkets empty after only two weeks.
It was sold at 5 SGD (3.59 USD) per kg in the first week under a promotion programme, and 6 SGD in the next week.
Tran Thu Quynh, Vietnamese Trade Counsellor in Singapore, said since early 2018, the office has worked with major Singaporean importers to introduce the fruit, and held working sessions with Singaporean experts in lychee preservation.
Over the past three years, the office has organised trips to Vietnam for Singaporean fruit importers, including FairPrice whose representatives directly examined Vietnamese lychee farms.
Since the beginning of this year’s lychee season, it has coordinated with the Vietnam Trade Promotion Agency and the Department of Industry and Trade of Bac Giang province, dubbed as the kingdom of lychee in Vietnam, to hold an online workshop promoting the fruit.
Quynh said the office plans to join hands with Bac Giang and Hai Duong provinces, and FairPrice to organise a Vietnamese lychee day in Singapore in the next crop.
With the support of Singaporean experts, it is designing leaflets introducing the fruit in English, she added.
In 2020, Bac Giang has 28,000 hectares of lychee, including over 160,000 hectares for harvesting, up 10,000 tonnes compared to the previous year.
The area of lychee produced according to VietGAP standard is estimated at 15,000 hectares with an output of 110,000 tonnes, accounting for 53 percent and 69 percent of the total, respectively.
As many as 80 hectares of lychee are planted under GlobalGAP practices with an estimated output of 500 tonnes to serve high-end markets.
Meanwhile, Hai Duong is now home to 9,700ha of lychee, mostly in Thanh Ha district with about 3,600ha and Chi Linh city with 3,900ha. The total lychee output is estimated at 45,000 tonnes this year. The early lychee harvest is estimated to be 20,000 tonnes and the main crop is about 25,000 tonnes./.
Vietjet honoured as “Operating Lease Deal of the Year” by Airfinance Journal
New-age carrier Vietjet has been honoured as the winner of “the Operating Lease Deal of the Year” title for its 10 Airbus aircraft operating lease in 2019.
The title is listed amongst the Annual Global Awards of the world prestigious aviation and aerospace finance industry magazine Airfinance Journal.
The deal, which was signed between Vietjet and Novus Aviation Capital in July, 2019, covers five aircraft (three A321s and two A321neos) delivered in 2019 while the five remaining aircraft scheduled for this year delivery.
The award recognized Vietjet’s benefits from the transaction including the flexibility in financing structure, attractive pricing of the lease, repeat documentation, and aircraft delivery schedule.
“The award is an acknowledgement for Vietjet’s relentless efforts in aircraft financing activities, which sets a strong base for the airline’s sustainable investment and development of new and modern fleet in the coming years,” said Ho Ngoc Yen Phuong, Vietjet Vice President and CFO.
Drugmakers fight to attain approval
Switzerland’s drug maker Novartis Pharma Services AG has announced a GMP qualification for Lek Pharmaceuticals d.d. within the scope of certification for medicines in Vietnam, but doubts have been raised about recognition in regards to the valuable and much-sought-after PIC/S-GMP and EU-GMP standards.
The Drug Administration of Vietnam (DAV) under the Ministry of Health (MoH) has announced the list of foreign-invested manufacturing factories failing to attain PIC/S-GMP and EU-GMP recognition, with some being required to make further clarifications. They include Novartis Pharma Services AG.
Specifically, in Annex 2 of the DAV’s Dispatch No.3518, Novartis Pharma Services AG site with the registered name Lek Pharmaceuticals d.d. is required to give further clarification regarding the company submitting a general file of the manufacturing establishment showing the manufacture of dosage forms without special requirements.
Novartis was also asked to provide an inspection report, or CPP certificate of a Good Manufacturing Practice (GMP) certification agency, clearly showing the dosage forms without special requirements within the scope of certification.
A representative of Novartis Vietnam Co., Ltd, told VIR, “Novartis appreciates the MoH’s transparency with regards to the announcement, which shows the prudent-monitored operations of the industry, and makes it convenient for companies and the community to have fast access to sufficient information and guidance from the MoH during the implementation of the process.”
The representative also elaborated, “As one of the leading global pharmaceutical companies with operations in Vietnam, we comply with all regulations and guidance from the MoH. As of now, the DAV and MoH have approved and announced the GMP qualification for Lek Pharmaceuticals within the appropriate scope of certification for our medicines in Vietnam.”
Despite Novartis’ announcement of the GMP qualification, it remains unclear whether the manufacturing site gets the high-in-demand PIC/S-GMP and EU-GMP certifications.
GMP is a basic standard, in a system for ensuring products are consistently made and controlled according to quality standards. It is designed to minimise the risks involved in any pharmaceutical production that cannot be eliminated through testing the final product. In Vietnam in 2004, the MoH issued Decision No.3886/2004/QD-BYT implementing the principles and standards of good manufacturing practices.
For western medicines, by the end of 2010, all enterprises producing external medicines and medicinal drug had to achieve GMP-WHO standards at least.
Meanwhile, PIC/S-GMP and EU-GMP are higher-standard certifications than GMP. EU-GMP certification is the highest recognition available by companies in the pharmaceutical space, while the PIC/S-GMP is a non-binding, informal co-operative arrangement between regulatory authorities in the field of GMP of medicinal products for human or veterinary use.
It is open to any authority with a comparable GMP inspection system. PIC/S presently comprises 53 participating authorities from all over the world.
On receiving the EU-GMP and PIC/S-GMP certifications, drugs channels can gain advantages and high profit in tenders in Group 1 of brand-name drugs which go to the hospital system, or the ethical drugs channel, which is the most profitable segment.
At present, there is no difference in tax incentive treatments in domestically-owned and foreign-invested facilities conducting outsourcing in Vietnam, all being subject to VAT exemption. Together with that exemption, currently the cost of brand-name drugs is 10-20 times higher than generic products, thus bringing in high profit for multinational corporations.
In the wake of the advantages, multinationals are rushing to seek PIC/S-GMP and EU-GMP recognition for their manufacturing sites. Besides Novartis, other famous multinational corporations in the race include GlaxoSmithKline, Sanofi, F.Hoffmann-La Roche Ltd., and more.
However, the path is not rosy for all of them. In the 72nd list of application for the announcement of manufacturers with PIC/S-GMP and EU-GMP qualifications which meet or did not meet requirements announced by the DAV-MoH in April, 64 applications require additional dossiers/clarifications.
French pharmaceutical giant Sanofi Vietnam Shareholding Company, proposed by Sanofi Vietnam, and Pharmatis, proposed by Abbott Laboratories Singapore Plc. and Dr. Reddy’s Laboratories Ltd.-FTO-3, are also on the list of those failing to receive the standards recognition.
Ca Mau to launch sea route to Kien Giang’s tourist sites
A sea route which links Ca Mau Province and two tourist sites in Kien Giang Province in the Mekong Delta region will be opened in early July.
The Phu Quoc Express Joint Stock Company’s high-speed boats will be run on the route, the first of its kind in Ca Mau.The boat which can transport 300 passengers can help to save much time for the travel between Ca Mau and Kien Giang. At present, people from Ca Mau Province have to travel for nearly 100 kilometres to Phu Quoc Island.
On Monday, Chairman of Ca Mau Province People’s Committee Nguyen Tien Hai checked a port built recently in Tran Van Thoi District to serve the boat.
From the port, tourists will also be able to more easily reach destinations in Ca Mau such as Thi Tuong Lagoon, U Minh Ha National Park, and Hon Da Bac relic site.
It takes the boat around one and a half hour to run on the route from every Monday to Thursday. The ticket will be VND350,000 (USD15.21) for adults and VND280,000 (USD12.17) for the elderly and children. The VIP ticket is VND610,000 (USD26.52).
China maintains position as largest Vietnamese import market
Despite the first half of the year seeing Vietnamese export turnover to China only reaching a mere US$34.8 billion, equal to a slight fall of 2.2% from the same period last year, the northern neighbour retained its place as the country’s largest import market, according to the General Statistics Office (GSO).
The continuation of increasingly complicated developments regarding the global novel coronavirus (COVID-19) epidemic, especially among nations that are key trade partners of Vietnam, has hit the export and import turnover of many commodities, with overall import and export turnover reaching only US$ 238.4 billion, an annual fall of 2.1%.
During the reviewed period, the country recorded 22 items with an export value over US$1 billion, representing 86.2% of total export turnover. Moreover, there are four products worth more than US$10 billion, making up 52.7% of overall export turnover.
Generally it can be seen that the export proportion of some key products were still part of the foreign direct investment sector, in which phones and components held 91.7%; machinery, equipment and spare parts at 70.4%, footwear at 77.8%, and garments and textiles with 58%.
With regard to the export commodity market, the United States makes up the nation’s largest export market with a turnover of US$30.3 billion, an increase of 10.3% over the corresponding period from last year, followed by China, the EU, and ASEAN.
During the past six months, import turnover was estimated to stand at US$117.17 billion, marking a drop of 3% on-year, with the domestic economic sector raking in US$51.55 billion, a slight increase of 0.1 %, whilst the FDI sector stood at US$ 65.62 billion, a fall of 5.4%.
The first half of the year also saw the country register 22 import items that enjoy a value of over US$1 billion, accounting for 81.2% of total import turnover.
Most notably, the GSO outlined that the average commodity exchange rate between January and June fell by 0.78% compared to the same period in 2019, reflecting unfavourably on the Vietnamese export price to foreign countries when compared to the price of goods imported into the nation from abroad.
Qatar Airways to resume flights to HCMC
Qatar Airways has announced that it will be resuming operations on the Doha-HCMC route from today, July 3, via an Airbus A350-900 with 36 flatbed seats in Business Class and 247 seats in Economy Class.
Jared Lee, Qatar Airways Vice President for South East Asia, said in a statement, “As the world’s largest international and trusted carrier that has flown over two million passengers home safely and reliably during the coronavirus pandemic, we are thrilled to be reinstating services to HCMC, one of our most popular Asia-Pacific destinations.”
Due to the large number of Vietnamese diaspora in North America and Europe, to which the carrier has been offering services, coupled with more entry restrictions being eased, Qatar Airways is taking steps to resume more services within the region so that families can be reunited, he noted.
Pham Vu Cuong, deputy director of the HCMC-based Tan Son Nhat International Airport, was quoted as saying in the statement, “We are pleased to be welcoming Qatar Airways back to HCMC this July. Qatar Airways has demonstrated leadership in hygiene and safety standards during this time; thus, we will work closely with them to ensure the smooth and safe handling of all passengers.”
The national carrier of the State of Qatar has further enhanced its onboard safety measures for passengers and cabin crew to prevent a Covid-19 infection. It has introduced Personal Protective Equipment for cabin crew, which comprises gloves, face masks, safety glasses and a new protective gown that is fitted over their uniforms as well as a complimentary protective kit for passengers.
Moreover, travelers departing from Hamad International Airport will receive their face shields at check-in counters, whereas at other destinations, the face shields will be distributed at the boarding gates.
Cranes shipped to port in Ba Ria-Vung Tau province
Doosan Heavy Industries Vietnam (Doosan Vina) on July 2 shipped two Rail Mounted Quayside Cranes (RMQC) cranes to Gemalink International Port in the southern province of Ba Ria-Vung Tau province.
It is the first two cranes out of six units of the orders inked by Doosan Vina and Gemanlink International Port from 2019, and the next cranes will be completed later this year for operating at the Cai Mep-Thi Vai deep-water port in Ba Ria-Vung Tau.
These cranes, which were designed with a capacity of loading 65-tonne cargo containers, have been produced at Doosan Vina’s factory in the Dung Quat Economic Zone in central Quang Ngai province.
Vietnam, Australia work together to make transport more inclusive
The Australian Government-funded Aus4Transport program and Vietnam’s Transport Development and Strategy Institute yesterday, July 3, signed a Memorandum of Understanding on building capacities for transport authorities to enhance a universally accessible public transport network.
During the ceremony, witnessed by representatives of the Australian Embassy in Vietnam and the Vietnamese Ministry of Transport, participants also highlighted the important role of the Aus4Transport program in assisting the Ministry of Transport with its post-Covid-19 recovery action plan.
The activity aims to assist the Vietnamese Government with its goal of providing affordable and reliable transport that allows everyone, especially people with disabilities and the elderly, to access opportunities in education, employment, healthcare, housing and community life.
According to the Australian Embassy, Vietnam has robust laws in place to support transport accessibility for people with disabilities, which Australia is helping to execute. Data of the United Nations International Children’s Emergency Fund indicated that some 6.2 million people in Vietnam or 6.5% of the population are disabled, and this figure is growing.
Motivated by the goal to improve transport infrastructure accessibility for everyone, regardless of ability, the activity will provide training for government officials, civil societies, local disabled persons’ organizations and non-governmental organizations on accessible transport, focusing on current Vietnamese regulations and on the application of a universal design for transport infrastructure projects.
It will also recommend improving the implementation of the existing regulations on comprehensive access to transport nationwide and assisting with the engineering design of three transport infrastructure projects.
Besides this, Aus4Transport and the Project Management Unit of Waterways under the Vietnam Ministry of Transport on July 1 signed a Memorandum of Understanding as the first step to introduce an activity that will support the update of the feasibility study and environmental and social assessment instruments for the Southern Region Waterways and Transport Logistic Corridors project.
The project will improve access to and from the Mekong Delta and link it to HCMC and connect to the deep-sea import and export Cai Mep-Thi Vai Port in Ba Ria-Vung Tau Province.
This will help boost economic activity and employment in the Mekong Delta and reduce congestion in and around HCMC, thereby contributing to the reduction of disparities in the region.
The activity aims to update the feasibility study originally conducted in September 2017 and update the environmental and social assessment instruments originally issued in early 2018 to incorporate and address recent changes to the scope of the project and to comply with the World Bank’s environmental and social framework.