Workers keep physical distancing to prevent the spread of COVID-19

Businesses and local people in HCM City have had relatively low demand for capital due to the negative impact of the COVID-19 pandemic, resulting in the city’s credit growth in the first half of 2020 falling to its lowest level for many years.

According to the State Bank of Vietnam (SBV) - HCM City branch, as of the end of June, the total credit balance was estimated at 2.35 quadrillion VND (101 billion USD), up 2.52 percent against the end of 2019 and a three-fold reduction compared to an increase of 7.51 percent in the same period last year.

Nguyen Hoang Minh, Deputy Director of the SBV - HCM City branch, said the slow credit growth reflects market trends. Many sectors and businesses experienced production declines because of COVID-19 and businesses were forced to suspend operations.

Minh said the pandemic has had a negative impact on economic growth as well as the business community, including banks.

Banks face a high risk from rising bad debts, which as of April 30 accounted for 2.08 percent of total debts.

They are also experiencing other difficulties relating to the process of raising financial capacity and competitiveness, as they have had to focus resources on sharing the difficulties with the business community.

As of late May, credit institutions in the city had provided support for 223,974 customers, with total funds of over 292 trillion VND, through restructuring debts, reducing interest rates, or offering new loans.

Minh said that inspections confirm the greatest problem facing local banks is high bad debts.

Though banks are taking measures to address bad debts, following the National Assembly’s resolution on piloting the settlement of bad debts among credit institutions, the COVID-19 pandemic will have a huge impact on this process this year.

Low credit growth and high bad debts are common problems in the banking system. According to the SBV, as of mid-June, the sector’s credit growth reached 2.13 percent - much lower than the 5.4 percent posted in the same period last year.

SBV Deputy Governor Nguyen Thi Hong said the growth rate is acceptable amid COVID-19.

The banking sector’s liquidity remains abundant at present, she went on, adding that businesses can easily gain access to loans if they have demand and meet requirements.

The banking sector, however, will not lower lending standards to boost credit growth, she affirmed.

She added that the sector will exert every effort to bring the rate of bad debts and potential bad debts to below 3 percent by year’s-end./.

Market diversification proves effective for fruit industry

 
20 tonnes of lychee are now being processed for export to the US by sea. If successful, this will be a new market, in addition to Japan. Many businesses believe that demand for fruit has begun to increase in many countries around the world.

The Vietnam Fruit and Vegetable Association said that the first half of the year saw exports total just over 1.5 billion USD, representing a year-on-year decline of 15%. While the Chinese market fell nearly 30%, others, such as the US, Japan, and Australia, increased sharply. This proves that market diversification is the proper strategy to pursue.

According to experts, demand for fruit in high-end markets is huge but Vietnam is yet to fully tap into them. Products must meet strict regulations on pesticide residue to enter such markets. The growing area of fruit trees under Global Gap standards is expanding but not keeping pace with demand.

Experts also said that global supply is plentiful at this time, which is not favourable for Vietnamese fruit in terms of competition. Now is the time for the fruit industry to make sound preparations for shipping products of high quality to ensure output and price when markets reopen./.

Ninh Binh looks to revive tourism sector post-pandemic

The year 2020 offered the chance for tourism in the northern province of Ninh Binh to thrive, as it was set to host the National Tourism Year, with a range of activities slated for inside and outside of the province.

Due to the impact of COVID-19, however, which has been brought under control in Vietnam but remains a complex issue elsewhere around the world, the number of tourists to Ninh Binh in the first half of this year fell significantly year-on-year, by 72 percent to 1.5 million.

Tourism revenue was down 66 percent, to 800 billion VND (34.3 million USD).

At a seminar held in the province on June 22, participants, including local leaders and 40 travel companies, discussed measures to tackle the difficulties in the tourism sector.

They agreed to focus on the domestic market, especially visitors from Hanoi and central and northern localities.

Ninh Binh is also preparing the best possible conditions to attract tourists from Japan, the Republic of Korea, and Europe once the international tourism market reopens.

It will also diversify tourism services, such as providing scenic flights over the Trang An Landscape Complex - a world cultural and natural heritage site - along with kayaking, trekking, and craft village tourism./.

Around 540,000 jobs generated in first six months

An estimated 540,000 jobs have been generated in Vietnam in the first six months of this year, meeting just 36.5 percent of the set target.

According to the Department of Employment under the Ministry of Labour, Invalids and Social Affairs, 120,000 jobs have been created in June alone.

The rate of trained workers was estimated at 62.4 percent in the January-June period while the unemployment rate in urban areas was over 4 percent in the second quarter of this year.

The Department of Employment is working to make reports on employment of specific groups including youths, rural labourers, labourers at border areas, ethnic minority labourers, labourers with disabilities, labourers whose land has been acquired, and labourers who completed their prison sentence.

The department has also developed proposals for the update of the labour supply and demand database, surveys on the need of employees in various types of enterprises, forecasts of the labour market, and support of employment transactions in the 2021 - 2025 period.

In addition, the department has suggested that job service centres should enhance the connection between labour supply and demand and shorten the recruitment time in the context that the coronavirus has created huge impacts on the employment market.

Thailand boosts rice production strategy

Thailand’s government sets to promote seven rice products and seed development as part of a marketing-led production strategy for 2020-2024.

According to Commerce Minister Jurin Laksanawisit, who chaired the first meeting of a panel tasked with handling the Thai rice strategy on June 22, the five-year strategic plan will focus mainly on Thai hom mali rice, Thai fragrant rice, soft-textured white rice, hard-textured white rice, parboiled rice, glutinous rice and speciality quality rice.

Jurin said the panel agreed on a greater focus on research and development for rice seeds to increase yield and quality.

Thailand produces over 20 million tonnes of rice per year, including about 10 million tonnes for domestic consumption and the remainder for exports.

In 2019, the Southeast Asian country exported 7.58 million tonnes of rice, a year-on-year decline of 32 percent./.

Singapore, RoK launch negotiations on new digital partnership deal

Singapore and the Republic of Korea have launched negotiations on a new Korea-Singapore Digital Partnership Agreement (KSDPA) to boost bilateral cooperation in new emerging digital areas, according to a joint statement.

This was announced on June 22 at a videoconference between Singaporean Minister for Trade and Industry Chan Chun Sing and the RoK’s Minister for Trade Yoo Myung Hee.

“As countries navigate the challenges posed by COVID-19, the important work of ensuring that our economies can thrive in the digital age must go on,” said Chan.

He noted that the deal will enable greater access, connectivity, and opportunities between the two countries’ people and businesses; further promoting trade and trusted data flows.

It will also strengthen the collaboration between the two economies and position them well to move fast and tap on the opportunities offered by the digital economy, he added.

The agreement seeks to deepen bilateral cooperation in new emerging digital areas, such as in personal data protection and cross-border data flows, digital identities, fintech, as well as Artificial Intelligence governance frameworks. It also aims to support and foster greater collaboration between both countries’ SME communities in the digital economy.

The launch of the KSDPA is part of a series of digital economy agreements that Singapore has embarked upon. The Digital Economy Partnership Agreements with Chile and New Zealand were signed on 12 June 2020, and negotiations for a similar deal between Singapore and Australia concluded on March 23./.

Agriculture needs more investment in processing industry

The agricultural sector needs more investment to develop the processing industry in order to increase exports of local farming products.

Minister of Agriculture and Rural Development Nguyen Xuan Cuong said the COVID-19 pandemic has affected exports of local fresh vegetables and fruits, especially to China, one of the key export markets for those products.

However, Vietnam has gained strong growth in processed farming products as the situation has forced local enterprises to change export markets and also promoted processing of farming products.

Local businesses have affirmed that investment in processing technology has helped the agricultural industry restore after the pandemic and also reach the goal of becoming one of the top 10 countries in processing agricultural products in the world, according to the Ministry of Agriculture and Rural Development (MARD).

The Government should have policies to encourage enterprises to invest in processing technology, the ministry said.

Many businesses said in the developing processing stage for the agriculture sector, they have not had difficulties in capital and investment in technology but struggled for material area to supply input products for processing factories.

The raw material area is a key factor in all processing sectors. Therefore, enterprises in the processing sectors need to promote co-operation with farmers and co-operatives to ensure input material, according to the ministry.

This has also required each locality to identify key products to develop material areas, the ministry said. Farmers need to strengthen links with businesses to sell their farm products.

Minister Cuong said there are many processing plants of the agricultural sector set to come into operation, especially processing plants for fruits and vegetables. In the future, Vietnam needs policies encouraging investment to the processing industry and to adjust locations of processing facilities to match the development of material regions.

Localities should develop clusters of production, processing and consumption of agricultural products.

Nguyen Quoc Toan, director of MARD’s Agro-product Processing and Market Development Department, Ministry of Agriculture and Rural Development said in recent years, the agricultural sector has restructured.

The ministry plans to restructure 13 products to develop key products together with development of the processing industry.

Recently, Prime Minister Nguyen Xuan Phuc issued a directive to set tasks and solutions to develop the processing industry of agro-forestry-fishery products and mechanisation of agricultural production.

According to the directive, Vietnam will strive to be among the world’s top 15 most developed countries in agriculture by 2030 with agricultural processing to rank in the world’s top 10.

The PM has directed that Vietnam must rank in the world’s top five countries producing fruit and vegetables, seafood and wood products. Those are key farming products with many advantages in development of production and export.

Vietnam records about 4 billion USD from fruits and vegetables exports annually, about 11 billion USD from exports of wooden products, and 9 billion USD from seafood products./.

Danang City seeks investment after social distancing

Danang City is seeking co-operation with foreign partners after the virus outbreak was curbed in the area.

Danang People's Committee has set up a delegation to call for investments in HCM City in June. During the trip, the delegation met with CMC Corporation to talk about building a technology centre in Danang. The Investment Promotion Board and the Department of Information and Communication in Danang will issue directives and guidance to the investors on the exchange at Danang Investment Forum 2020.

During the trip, the German Chamber of Commerce and Industry (AHK) agreed to introduce German investors to the opportunities in Danang, especially in hi-tech, communication and high-quality healthcare and education sectors.

Also in June, Danang authorities have collaborated with the American Chamber of Commerce in Vietnam (AmCham) to hold a conference about trade between the US and Danang. CEO of AmCham Mary Tarnowka, the Chairman of AmCham in Danang Chad Ovel, and 25 representatives of the US General Consulate in Vietnam along with many investors attended the conference.

Danang has 337 investments outside of the industrial parks with a total investment of VND115trn (USD4,0bn). There are 855 FDI projects with an investment of USD3.5bn, of which 68 projects belong to American investors with USD590m investment.

Import-export turnover between Danang and the US remained at USD193m in the first six months. On-going projects invested by Coca-Cola, Crown and Keytronic and the aero factory by Universal Alloy Corporation have completed their first phases in late March.

The city authorities have offered many incentives for investors at hi-tech parks including incentives for corporate income taxes. According to the authorities, fields that US firms experienced in are also what Danang wants to call investments for like IT, artificial intelligence and supporting industries.

Mary Tarnowka said Danang is among the best investment places with good infrastructure and support from the government. The AmCham in Danang will help promote the city and call for more investments.

Despite the impact from Covid-19, Danang's socio-economic development has been positive. In the first five months of the year, four local projects with VND10.8trn (USD463m) investment and 58 FDI projects with USD78m investment were approved.

Electronic certificates of origin save businesses US$5.7 million

Since Vietnam moved to apply the ASEAN Single Window mechanism, especially the exchange of electronic certificate of origin (C/O) form D from 2018 to the present, it has been able to save approximately US$ 5.7 million in transaction costs for local businesses.

The latest information has been released by the General Department of Vietnam Customs. 

Through making connections with the ASEAN Single Window, the nation has been able to exchange electronic C/O form D with nine other ASEAN member states, including Singapore, Malaysia, Indonesia, Thailand, Brunei, Cambodia, Myanmar, Laos, and the Philippines.

As of June, the country has sent approximately 385,000 electronic C/O to other ASEAN members, therefore saving roughly US$15 in each application.

In addition, the nation has also been increasing the implementation of the National Single Window system. A total of 13 relevant ministries and agencies have so far connected to the system, with some 198 administrative procedures being digitalised through the National Single Window.

Since coming into use, more than 3.1 million applications from 38,700 businesses have been handled through the National Single Window system.

Phuoc Ninh solar farm completed and connected to grid

The Phuoc Ninh Solar Power Project was completed on Monday in the central province of Ninh Thuan.

Speaking at the site of the project, deputy minister of industry and trade Cao Quoc Hung said the solar farm, which is expected to produce up to 75 million kWh annually, reaffirmed Viet Nam and Ninh Thuan's commitment to the development of renewable energy.

The country was forecast to require up to 6,000 MW in the 2021-2025 period, with demand for power surging by 8.5 per cent year-on-year.

Pham Van Hau, vice chairman of the province's People Committee said the solar power project was to play an important part in the province's socio-economic development, especially in transforming the province into the country's largest producer of renewable energy.

Hau said the project was part of Politburo Decision 55 on Viet Nam's national energy strategy until 2030 with a vision to 2045, which offers incentives to private investors to make investments in the power sector.

The VND1 trillion (US$43 million) solar farm, an investment by T&T Group, was connected to the national grid earlier on June 10. 

Son La mangoes exported to US, Canada and Australia

The northern mountain province of Son La on Monday exported 30 tonnes of mango to the US, Canada and Australia.

This is the first batch to be exported overseas this year. The mango, grown in Mai Son District, is a green-skinned type that weighs from 0.6-1.1 kilo.

Under provincial authorities’ guidelines on planting orchards on sloping land, farmers in Mai Son District have focused on developing mango trees in Co Noi, Na Bo, Hat, Lot and Chieng Mung communes for three years.

The district has more than 9,300ha of orchards, including 2,650ha of mango. It has registered growing area code for 593ha of mango, 422ha of which are certified VietGAP and qualified for export.

Dao Manh Cuong, a farmer in Thanh Cong sub-area of ​​Na Bo Commune, said his family grew 3ha of mango following the district’s guidelines. All were qualified for export this year, making them more profitable than those for domestic consumption.

“I estimate to harvest about 50 tonnes of mango, earning nearly VND400 million (US$17,240) this year. My family’s living standard has improved a lot,” Cuong said.

He added that if he sold mangoes to small traders for local consumption, it was priced at only VND7,000-VND8,000 per kilo, but at VND11,000-VND12,000 for export.

Dinh Kim Nhung, Director of Kim Nhung Company Limited, which exports local mangoes, said mangoes grown in Mai Son District have high quality, nice design and good size and weight qualified for export.

“The mango growing areas in Son La are blessed with nature, the soil is fertile and pests are inconsiderable, so annual output is very large. This is an important factor to expand the growing area to meet export standards to foreign markets,” Nhung said.

“However, many mango growers still have a habit of harvesting mangoes according to standards for domestic consumption, they need to take time to change and adapt that habit,” she added. 

VPBank and State Treasury co-operate in State budget collection

Viet Nam Prosperity Joint-Stock Commercial Bank (VPBank) and Viet Nam State Treasury (VST) on Monday signed a bilateral co-operation agreement.

Accordingly, VPBank is one of the first commercial banks co-operating with VST in State budget collection and collection orders with an aim to enhance administrative reform and non-cash payments to better serve businesses and people in implementing duties.

VST would co-operate with VPBank to open and use an account system for State budget collection at the bank. The two sides would exchange information and data relating to State budget collection. State budget revenues through VPBank will be recorded directly into the system of treasury-collecting accounts at VPBank. At the same time, information on collection will also be transferred to the General Department of Taxation and the General Department of Customs quickly, safely and conveniently.

The agreement once again showed that the State agencies have assessed VPBank meets all conditions on safety, advanced information technology platforms and connectivity, especially for digital technologies to enhance automation and processing transactions across VPBank's network to customers. The co-operation between VST and VPBank would help the bank effectively use resources to improve payment service quality for customers, opening new utility payment channels.

With a network of nearly 300 transaction offices nationwide, VPBank is ready to co-operate with VST in State budget collection. 

An Phat Group successfully auctioned 4.3 million shares

An Phat Holdings Group (APH) on Monday successfully held an auction of 4.3 million shares at Ho Chi Minh City Stock Exchange (HOSE) with a total value of VND215 billion (US$9.25 million).

With a starting price of VND25,000 per share, there were 109 investors participating in the auction. The highest price paid was VND52,800 per share.

All 4.3 million shares were sold to 15 investors with an average auction price of VND50,018 each, double the starting price. APH was valued at more than VND6.6 trillion.

The capital raised would be used to invest in a fully biodegradable material factory, AnBio. The plant, with total investment of VND1.5 trillion, is expected to start construction in the northern port city of Hai Phong at the beginning of 2021. It is scheduled to come into operation by the end of 2022 with a capacity of 20,000 tonnes of products a year.

It is expected that in the next 3-5 years, the proportion of fully biodegradable bags could increase from the current 10 per cent to about 50 per cent in APH's packaging revenue structure. This significantly improves the group's overall profit margin.

The group planned to issue 20 million more shares, equal to 14 per cent of its circulating amount. APH is negotiating with foreign investors on its development strategies.

Pham Do Huy Cuong, the group’s Standing Deputy General Director and Financial Director, said: “The IPO and listing on HOSE would help APH raise capital and improve ability to implement long-term targets. APH was expected to become a leading high-tech and environmentally friendly plastic group in Southeast Asia region in the next five years.”

The group would organise a roadshow at the beginning of next month before its official listing.

It targeted net revenue and profit of VND12 trillion and VND650 billion respectively this year. In the long term, APH’s growth momentum will come from fully biodegradable products through investment in the AnBio plant. 

Cashew nut exports grow in first five months

Cashew nut exports experienced a decline in May but still increased during the first five months of 2020, according to the General Department of Vietnam Customs.

Last month, overseas shipments of cashew nuts fell 3.7 percent in volume and 9.7 percent in value from April to 42,821 tonnes and 263.14 million USD.

Meanwhile, the five-month figures rose 17.1 percent in volume and 1.4 percent in value year on year, with 182,799 tonnes shipped abroad.

The US was the biggest destination of Vietnamese cashew nuts during the period, accounting for almost 37 percent of total exports, followed by the EU with 25 percent.

Some European and US importers said due to the COVID-19 pandemic, the consumption of processed cashew nuts has dropped at hotels and restaurants there.

However, the product sold well at supermarkets, and this is one the reasons why the volume of cashew nuts shipped to these markets surged between February and April, the general department noted./.

Signing of RCEP to help post-pandemic regional economic recovery: Lao official

The completion and early signing of the Regional Comprehensive Economic Partnership (RCEP) is very important to the process of economic recovery in the region, said a member of the Lao negotiation team to the RCEP talks.

Santisouk Phounesavath, deputy head of the Foreign Trade Policy Department under Laos’ Ministry of Industry and Trade, told the Vietnam News Agency that due to the different levels of development in RCEP participating countries, the talks have encountered many difficulties. However, most of them have been settled and very few remain after eight years of negotiations, he said, adding that he personally believes the deal can be signed at the end of this year.

According to the official, the signing of the RCEP will be a sign showing that the deal’s members support the multilateral trade system, so it is important to accelerate the work to quickly complete and sign the deal.

Once signed, the RCEP will become the world’s biggest trade agreement, thus creating opportunities and markets for Laos, helping the country participate deeper in regional supply chains, he said.

The RCEP is a free trade agreement in the Indo-Pacific region between the 10 member states of the ASEAN and its five FTA partners (Australia, China, Japan, New Zealand, and the Republic of Korea). India initially participated in the talks, but it withdrew in November 2019. The 15 negotiating parties account for 30 percent of the world's population and just under 30 percent of the world's GDP.

RCEP negotiations were formally launched in November 2012.

Thailand: EEC to propose business bubble travel scheme

The Eastern Economic Corridor Policy Committee will be proposing to the Centre for COVID-19 Situation Administration this week a scheme to allow international travel by businesspersons from selected countries, in order to continue investment activities in the Eastern Economic Corridor (EEC) which is important in driving the country’s economy.

The EEC Policy Committee meeting chaired by the Prime Minister Gen Prayut Chan-o-cha discussed a proposal to allow businesspersons from certain countries to enter Thailand.

The EEC Policy Committee has previously discussed with the Ministry of Foreign Affairs and the Ministry of Public Health the so-called Business Bubble model, to reopen the country to visitors travelling for business and investment purposes, especially investors in the EEC, as well as technicians and specialised workers.

The move follows requests from international companies and organisations including the Japanese Chamber of Commerce, the Japan External Trade Organisation, and companies from the Republic of Korea.

Under this proposal, foreigners allowed to enter the country must consent to a compulsory 14-day quarantine, but will be allowed to conduct businesses and sign documents from their place of quarantine. They must also fulfil pre-travel requirements which may include a COVID-19 test, obtain a Fit-to-Fly certificate, and must hold an eligible travel insurance package.

The ECC office will be submitting the Business Bubble proposal to the Centre for COVID-19 Situation Administration this week, along with guidelines on the registration of additional Alternative State Quarantine facilities in the EEC area.

Bà Rịa-Vũng Tàu kick-starts tourism recovery

The southern coastal province of Bà Rịa- Vũng Tàu is gearing up for intensive promotions to draw tourists back as the COVID-19 pandemic comes under control in Việt Nam.

A total of 78 businesses are participating in its tourism stimulus programme, which offers discounts of 10-50 per cent on accommodation, 10-30 per cent on food and 10-20 per cent on entertainment services, Phạm Ngọc Hải, chairman of the province Tourism Association said.

The businesses are committed to the discounts and to good quality, he told a press meeting in the province in early June.

Tourism authorities would strengthen links between tourist sites in the province and neighbouring localities, diversify tourism products and promote the province’s tourism potential to attract visitors, he said.

The tourism sector has come to a standstill since the COVID-19 pandemic shut down travel, he admitted.

The number of visitors this year has plummeted by 90 per cent year-on-year, he said.

Hotel occupancy rates were only 5-10 per cent, he said.

Nguyễn Hữu Thọ, chairman of the Việt Nam Tourism Association, said Bà Rịa-Vũng Tàu has become a magnet for visitors with its range of attractions like the sea, rivers, forests, and mineral water streams and the robust development of luxury seaside resorts.

The province is on track to become one of the country’s tourism hubs, with a focus on sea, MICE and cruise tourism, he added.

Vinatex predicts 50% drop in profit before tax this year

Viet Nam National Textile and Garment Group (Vinatex), stock code VGT, predicts its consolidated profit before tax this year to fall by half to VND382 billion (US$16.5 million) year on year due to the negative impacts of the COVID-19 pandemic.

This is the lowest consolidated profit before tax over the past four years, according to Vinatex.

Its business reports for its annual general meeting of shareholders this year have also revealed that its consolidated revenue is estimated at VND14.64 trillion, down 27 per cent compared to last year.

Vinatex said the reductions were due to the impact of the COVID-19 pandemic on its member companies' production and business.

In the report, Vinatex has targeted this year’s revenue of the parent company at about VND1.33 trillion, down by 5 per cent and profit before tax at VND130 billion, down by 56 per cent compared to 2019 because of difficulties in production and business during and after the pandemic.

Tran Quang Nghi, chairman of the Vinatex board of directors, said in the 2020-25 period, the group must adjust its development strategy because it faced competition in technology but not in price 10 years ago.

In its development plan for this period, Vinatex would promote mergers and acquisitions, and restructure its businesses because the group's current business and production model will become inefficient.

Accordingly, the group would renew management and business models, as well as technology and products. Besides continuing divestment, it would also buy shares of other companies as well as invest in newly-established enterprises necessary for the development strategy.

Vinatex has also reported that 2019 was a difficult year for the textile industry, especially the yarn production industry, due to the influence of the US-China trade war, leading to reducing market shares in the world, especially China, reported ndh.vn.

Its yarn companies faced decreasing profits and even losses due to abnormal fluctuations of cotton and fibre prices on the global market, leading to lower selling prices.

However, the garment enterprises gained good business results to reach their growth targets compared to the previous year.

Therefore, Vinatex’s consolidated revenue in 2019 reached VND20.14 trillion, similar to 2018, fulfilling 91 per cent of the 2019 plan. Its profit before tax was VND765.5 billion, or 91.2 per cent of the yearly plan and up 0.5 per cent over the same period last year.

With these business results, the Board of Directors has submitted to shareholders the cash dividend payment plan at a rate of 5 per cent with a total payment of VND250 billion.

The General Department of Customs said that in the first five months of this year, the domestic textile and garment industry saw a year on year reduction of 13.6 per cent in total export value to $10.56 billion due to the impacts of the pandemic.

However, this export value in May surged by 16 per cent to $1.87 billion against the previous month.

In the first five months, the US remained the largest textile and garment export market of Viet Nam, with an export value of $4.84 billion, down by 14.9 per cent over the same period last year.

Japan was the second largest export market with a value of $1.39 billion, down by 4.1 per cent and the EU ranked third with an export value of $1.26 billion, down by 19 per cent.

Clouds are breaking for local supporting industries

Despite the impact of the COVID-19 pandemic, Vietnamese supporting industries are still moving forward in line with a wave of manufacturing relocation. 

The potential in the area was stressed at a digital workshop on business initiatives under the theme of guerrilla business in the digital age. The workshop was held on June 10 by Thai-backed Reed Tradex Vietnam in collaboration with the Vietnam Electronic Industries Association (VEIA) and PR Newswire, a global provider of news release distribution and media monitoring services.

Vu Trong Tai, general director of Reed Tradex Vietnam and organiser of the annual electronics fair NEPCON Vietnam, said that 2020 marks an important milestone for the Vietnamese electronics business community with many obstacles in the way. Tai said the pandemic has created turmoil in the market, which left many companies in a tough position due to lack of input materials and new orders.

“However, there will be several changes in the coming time with the strong progress of 5G and the manufacturing relocation to Vietnam. The Made-in-Vietnam automobile plan from VinFast has made great strides. All of these factors, coupled with the upcoming implementation of the EU-Vietnam Free Trade Agreement, will create new driving forces for Vietnam’s electronics and supporting industry firms to join the global supply chain,” Tai explained.

According to data from the Ministry of Industry and Trade, the total number of enterprises currently involved in the supporting industry sector is more than 600. However, the number of domestic enterprises in the supporting industries of electronics is fewer in number due to the internal constraints of enterprises, and also the limitations of understanding between the two sides.

Therefore, the connection between foreign-invested enterprises and domestic counterparts is very necessary, and industry leaders said businesses need to step up their game as quickly as possible to overcome the global health crisis and capitalise on the opportunities.

Nguyen Thi Xuan Thuy, deputy director of the Ministry of Industry and Trade’s Industrial Development Centre, said that electronic businesses have strived to sail through the tough period. Businesses highly appreciate the government’s relief measures and supporting policies to counter the impact of the pandemic, such as delaying tax payments, reducing interest rates, and cutting land rent.

However, around 10 per cent of firms did not know about the supporting policies and 50 per cent did not know how to apply for them. It is clear more communication is required to bring the policies into life and create real benefits for businesses.

A survey on Vietnamese electronic firms after COVID-19 showed that 58 per cent of such groups will need more than a year to return to normal manufacturing activities after the crisis subsides. Three-quarters of electronics businesses, meanwhile, need innovative solutions and consulting advice as a result. About 46 per cent of electronic businesses care about effectiveness, and 34 per cent care about costs when participating in trading activities after the pandemic.

Therefore, the workshop on business initiatives for the year have been seen as crucial to helping electronic firms gain information to overcome difficulties, recover from the crisis, and improve productivity. It is also an ideal platform for businesses to connect with each other and create stronger supply chains in Vietnam.

Betting through the phone via e-wallets and top-up cards

Gamblers will be able to place bets via e-wallets and pre-paid top-up cards via telephone – this is one of the highlight changes to the draft amendments to Decree No.06/2017/ND-CP outlining rules on horse racing, greyhound racing, and international football betting business. 

As technology and e-payments flourish, payment methods are diversifying – a trend which should be accommodated in betting as well, necessary, according to the Ministry of Finance that is responsible for the draft amendment.

A highlight adjustment was made to Article 17.2.dd, where the registered account could be one at a non-cash payment service provider or an agent, in addition to a lawfully established and operated credit organisation in Vietnam.

Thus, under the draft, players can select bank account, e-wallet, and pre-paid mobile cards to place bets.

According to Article 17.1 of Decree No.06/2017/ND-CP, any bettor wishing to place bets via telephone (landline or mobile phone) shall have a betting account registered with the bet-organizing enterprise. Those registering an account will need to submit ID or passport number (applicable for foreigners), identify the place for placing bets, and an account number (Article 17.2).

In related news, in late May news surfaced that a company had become the first business to be licensed by the government to operate football betting activities. The MoF immediately issued a press release that asserted that no companies have been licensed to run betting business as of yet.

As of now, all betting activities on the internet remain illegal.

An Phat Holdings mobilises $9 million from HSX auction

The VND215.08 billion ($9.35 million) that An Phat Holdings mobilised from a share auction on the Ho Chi Minh City Stock Exchange will be used to develop a compostable biological materials manufacturing factory called AnBio.

On June 22, An Phat Holdings organised an auction to sell 4.3 million shares on the Ho Chi Minh City Stock Exchange (HSX) with the initial price of VND25,000 ($1.08) apiece. The auction attracted 109 investors who registered to buy 20.8 million shares in total.

As a result, 15 investors won the auction with the average unit price of VND50,018 ($2.17), double the initial price. Whit this price, An Phat Holdings is valued at VND6.6 trillion ($286.96 million) and the group acquired VND215.08 billion ($9.35 million) from the sale.

The proceeds will be used to build the AnBio compostable biological materials manufacturing factory in Haiphong. The construction is expected to kick off in early 2021 and finish in 2020. The factory has a total investment capital of VND1.5 trillion ($65.22 million) with the capacity of 20,000 tonnes per year.

Thanks to An Phat Holdings' proactivity, in the next 3-5 years, the revenue ratio of compostable biological packages will increase from the existing 10 to 50 per cent of package products. In addition, it will contribute to increasing the group's profit margin (these products feature an average profit margin of 20 per cent while the general profit margin of packaging is 14 per cent)

The capital demand of the AnBio factory is over $70 million, thus, half of which the company planned to allocate from its equity and the rest mobilise through loans. The group expects to mobilise 80 per cent of the necessary capital for the project this year and the rest next year.

This year, An Phat Holdings plans to put about 20 million shares on sale, equalling 14 per cent of the outstanding shares, with 15.75 million offered to strategic investors and 4.3 million sold in public auction. At present, the company is negotiating with foreign investors about future co-operation strategies.

An Phat Holdings was established in March 2017, focusing on compostable biodegradable products and materials, packaging, technical and interior plastics, precision engineering, and mould samples, materials, and chemicals for the plastic industry and industrial real estate. Its charter capital reached VND1.42 trillion ($61.74 million) and in this January it became a public company.

In 2019, An Phat Holdings’ consolidated revenue and after-tax profit reached VND9.51 trillion ($413.48 million) and VND712 billion ($30.96 million), respectively, up 19 and 305 per cent on-year. Previously, the company's main income came from packaging manufacturing (90 per cent of both revenue and profit), but now with the expansion into other areas, especially supporting industry, it accounted for 12 per cent of the group's consolidated revenue structure and increased average annual growth of 9 per cent during 2015-2019.

Especially, after more than a year of official operation, the industrial real estate segment has achieved remarkable success by contributing 7 per cent of the group's revenue and 29 per cent of its gross profit in 2019, while the compostable biodegradable product segment is also steadily increasing its contribution to the group's revenue.

In 2020, An Phat Holdings targets revenue and net profit for the whole year to reach VND12 trillion ($521.74 million) and VND650 billion ($28.26 million). In the long term, its driving force is expected to be the compostable biodegradable product line through the investment in AnBio.

Pham Do Huy Cuong, standing deputy general director and CFO at An Phat Holdings, said, “The IPO and listing on the HSX will help the group enhance opportunities to mobilise capital and improve capacity to implement long-term goals. Together with the right strategic direction and the expansion of other potential production and business fields, especially the investment in the compostable biodegradable bio-material factory, we are confident that in the next five years, the group will grow rapidly, becoming the leading high-tech and environmentally friendly plastic group in Southeast Asia.”

After the successful auction of 4.3 million shares on June 22, An Phat Holdings plans to hold a roadshow in early July 2020 before officially selling more shares to strategic investors at the end of the month.

Masan MeatLife sets a spike in profits despite struggling with pandemic

Masan MeatLife targets a spike in profit as its parent company Masan Group has been submerged in losses due to the COVID-19 deadlock.

Masan MeatLife (UPCoM: MML) has just published the documents for its 2020 shareholders' meeting. Based on these papers, the company hopes to get VND16-18 trillion ($695.65-782.6 million) in net revenue, up 16-30 per cent on-year. Moreover, the after-tax profit is forecast to reach VND200-500 billion ($8.7-21.74 million) this year, up 1.7-4.3 times over the same period last year.

Of this, the meat earnings are estimated to occupy about 20 per cent of the total net revenue. Meanwhile, animal feed will stay on the rise thanks to the huge demand for breeding.

The spike in demand and worries over a shortage of pork has given a leg up to prices, benefiting companies in the industry. 

In the first quarter of 2020, Masan MeatLife saw a 6 per cent on-year increase in revenue with VND3.397 trillion ($147.7 million), of which pork made up about 8 per cent or VND278 billion ($12 million). However, due to a 57 per cent increase in financial costs and a 31 per cent soar in sales expenses, the company recorded a 60 per cent plunge in after-tax profit to VND14 billion ($608,700).

In 2019, Masan MeatLife saw VND13.799 trillion ($600 million) in net revenue and VND115 billion ($5 million) in net profit. Additionally, the company is waiting for approval to issue 2.6 million bonus shares at VND10,000 (43.48 US cents) per stock. The timeline of the issuance is forecast to fall this year or before May 2021.

The earnings from the issuance will be used to raise the charter capital and supply liquid capital to the company.

Under the pressure of COVID-19, Masan Group also reported a loss of VND78 billion ($3.39 million) in the first quarter of this year.

Pork prices stay high despite imports

Although live pigs have been imported under the Vietnamese government’s order in an attempt to soothe the current hike in pork prices, domestic prices remain high, triggering a need for local authorities to apply more sturdy solutions. 

The first 500 live pigs weighing 90-130 kilogrammes were imported last week into Vietnam from Thailand by Thanh Do Nghe An Co., Ltd. through Lao Bao Border Gate of the central province of Quang Tri.

“After five days of quarantine, these pigs will be supplied to slaughterhouses. Depending on the local market demand, we can import 3,000-5,000 pigs per day and will stop when the market price stabilises. We hope to contribute to decreasing the current pork prices with these measures,” Nguyen Van Thanh, director of Thanh Do Nghe An, told VIR.

According to Thanh, Thailand is not impacted by African swine fever (ASF), and its market of live pigs is huge, making it possible for Thanh’s company to import up to 10,000 pigs per day. The Department of Animal Health under the Ministry of Agricultural and Rural Development (MARD) stated that Thanh Do Nghe An is one of eight companies in Vietnam that meet all requirements to import live pigs.

Some businessmen said that, currently, the amount of imported pigs is still quite large, reaching 5,000-6,000 per day.

Despite this abundant supply, pork prices remain high on the market, triple the current expense of feeding.

Johan van den Ban, general director of Dutch-backed De Heus Vietnam and Cambodia, told VIR that Vietnam has been active in finding solutions on controlling the pork price. “Besides importing live pigs, Vietnam has also allowed the breeding of new ones. However, so far, there has been no impact on the market. It also remains questionable if the bred pigs will be sold to Vietnamese farmers at competitive prices,” he said.

According to Ban, a well-developed institutional framework to develop, enhance, and maintain a high level of biosecurity is key to producing food, particularly meat, in a safe and sustainable manner. Thus, an important next step for Vietnam is the further development of the cold chain and modern slaughterhouses. “The impact of ASF on pork prices is significant, but will be temporary. Vietnam can take this situation as an opportunity to professionalise the sector and, hopefully, the Vietnamese government will support farmers to play an important role in the future,” he added.

Meanwhile, Vu Anh Tuan, deputy director of Thai-backed C.P. Vietnam Corporation, said that the government should let the pork price follow the market mechanism. “Besides this, domestic feeding facilities should pay attention to sanitary and epidemiological issues to be able to maintain and increase the number of pigs and ultimately meet the market demand,” Tuan said.

According to the MARD, in the first five months of 2020, Vietnam imported about 70,000 tonnes of pork, up over 300 per cent on-year. Moreover, over 8,000 live pigs were also imported. By May, Vietnam had about 25 million pigs, accounting for 80 per cent of the total pigs before ASF occurred, and is expected to meet the local demand by the end of the third quarter.

Vietbuild 2020 kicks off in HCM City

The 2020 Vietbuild International Exhibition kicked off at the Saigon Exhibition and Convention Centre in Ho Chi Minh City’s district 7 on June 24, with the theme “Construction - Building Materials - Real Estate - Interior and Exterior Decoration.”

The exhibition features nearly 1,800 booths from more than 400 exhibitors, including major brands such as Viglacera, Secoin, Sado Germany Window, Apollo Silicone, Eurowindow, Phuong Nam, Truong Phat, and Nha Vui.

It is one of the first expos held this year and many other Vietbuild exhibitions with different themes will be held in the country’s four biggest cities of Hanoi, HCM City, Can Tho, and Da Nang during 2020.

On display are building materials, electrical equipment, interior and exterior decorative items, hygiene equipment, doors and door accessories, paint, water purifiers, and hand tools, among others, with many new models and improved features and quality that meet the rising requirements from customers for environmentally-friendly products.

Speaking at the opening ceremony, Deputy Minister of Construction Nguyen Van Sinh said the Government has adopted a variety of measures to curb the spread of COVID-19, revive the economy, and support enterprises and people, including land rental relief and cuts to corporate income tax and interest rates.

The Ministry of Construction is advising the Government on a resolution to stimulate real estate investment, in which low-cost commercial apartments will be offered at 20 million VND per sq m, he said.

These policies provide opportunities for developers and providers of building materials and furniture to bounce back, he added.

Professional seminars and business-matching events are scheduled on the sidelines of the exhibition, including a seminar on “Innovative technologies and materials in the construction industry post-COVID-19”, which seeks to encourage businesses to continue their research and produce new and high-tech products to meet urban construction and housing market demand for green and sustainable development.

The exhibition offers a platform for companies to meet, exchange information, explore prospects for cooperation, and introduce their latest products and technologies, according to the organisers.

It is co-organised by the Ministry of Construction’s Information Centre and the VIETBUILD Construction International Exhibition Organisation Corp. and is open until June 28./.

Mekong Delta Trade and Industrial Fair 2020 opens

The Mekong Delta Trade and Industrial Fair 2020 kicked off in Tien Giang province on June 24, aiming at popularising strong products of each locality in the region.

Vice Chairman of the provincial People’s Committee Le Van Nghia said that the fair, which will last until June 29, offers a chance for regional enterprises to introduce and sell their products to visitors, and negotiate and sign contracts with partners to expand their consumption network.

The fair comprises over 330 booths highlighting daily necessities, hi-tech products, semi-processed and processed food, vegetables and fruits.

This year’s event targets domestic markets, including Mekong Delta localities, Ho Chi Minh City, the south-eastern region, and the central and Central Highlands region.

Participating units are expected to introduce and transfer scientific advances.

Hanoi supports Heineken Vietnam’s business strategy

The capital city of Hanoi is ready to create the best possible conditions for Heineken Vietnam to achieve its growth and development goals in the future, said Hanoi mayor Nguyen Duc Chung.

Receiving Alexander Koch, the newly-appointed managing director of Heineken Vietnam Brewery Ltd. Co. in Hanoi on June 24, Chung congratulated the company on its effective operations in 2019 and voiced his support for the company’s business strategy in Vietnam. 

The mayor briefed his guest on the capital’s socio-economic development in recent times, saying despite the impact of the COVID-19 epidemic, Hanoi has achieved a gross regional domestic product (GRDP) growth of 3.9% in the first six months of the year. Thanks to epidemic control efforts, people's lives and economic activities have gradually returned to normal.

At the meeting, CEO Koch hailed Vietnam in general and Hanoi in particular for their initial success in containing the epidemic, as well as the capital’s recent rapid development.

Koch stressed that his firm has set long-term sustainable goals in its development strategy, by caring for the people and preserving the planet towards common prosperity for a better Vietnam.

Hanoi Investment and Development Co-operation Conference to welcome 1,200 investors

With the participation of more than 1,200 foreign and local investors in collaboration with organisations, embassies, trade counsellors, the Hanoi Investment and Development Co-operation event promises to be an occasion to seek out partners and investment opportunities. 

The press conference announcing the Hanoi Investment and Development Cooperation Conference
Prolonging the success of previous conferences, on June 27, Hanoi will organise the annual Investment and Development Co-operation Conference, marking the first of a series of events to be hosted by Hanoi in response in celebration of the city’s 17thParty Congress, 1010th anniversary of Thang Long, Hanoi, and the 13rd Party National Congress.

At the conference, the city will grant investment planning licenses for over 116 newly-registered projects with the total investment capital of VND339.6 trillion ($14.77 billion), and several existing projects with the total added capital of VND266.2 trillion ($11.57 billion).

In addition, leaders of the city people’s committee will sign MoUs with organisations, enterprises, and investors with the total cost of $26.07 billion, including 23 with local enterprises (worth $17.85 billion) and 13 with foreign investors worth $8.22 billion.

Furthermore, the city is calling for investment in 282 projects with the estimated combined cost of VND483.1 trillion ($21 billion).

Organising the conference after Hanoi’s lifting of the COVID-19 social distancing order sends a strong message about the efforts of the capital and Vietnam to lure investment from domestic and overseas businesses.

More than ever, Hanoi remains a safe and stable investment destination for investors as the capital city is determined to be the pioneer among Vietnam’s localities in rebooting the economy in the post-pandemic period.

The conference is an occation to connect the leaders of Hanoi People’s Committee with leaders of cities and provinces and investment promotion centres to bring investors to the cities in the country in general and Hanoi in particular.

In addition, based on the results of investment attraction since 2016 (the first year that Hanoi organised this event), parties will discuss solutions to increase the effectiveness of investment attraction.

In 2020, Hanoi targets economic growth that is 1.3 times higher than the national average, with a budgetary revenue of VND285 trillion ($12.39 billion).