VIETNAM'S BUSINESS NEWS HEADLINES JUNE 27
Hanoi Gift Show 2020 to open in October
The Hanoi Gift Show 2020, an international fair for gifts and crafts, is expected to contribute to stable growth of the municipal handicraft export value this year. (Photo: chinhphu.vn)
The Hanoi Gift Show 2020, an international fair for gifts and handicrafts, is scheduled to take place from October 15-18.
This is an annual event held in Hanoi and is part of a series of international fairs specialised in handicrafts held in October every year in the Asia-Pacific region.
The upcoming event is expected to attract 10,000-12,000 visitors, including 650-700 foreign importers and visitors to visit and do business.
The fair is also expected to gain an export value of goods at 6.6 million USD, an increase of 6.8 percent compared to 2019.
This fair aims at being a bridge connecting local handicraft producers to foreign importers and domestic traders to promote local consumption and export of products, especially in the situation that Vietnam has controlled the COVID-19 pandemic.
Hanoi expects that this fair would contribute to stable growth of the municipal handicraft export value this year.
The previous edition lured more than 250 domestic and international businesses, showcasing their products at 650 booths./.
Gov’t permanent members discuss handling of loss-making projects
Prime Minister Nguyen Xuan Phuc on June 24 chaired a meeting of government permanent members to discuss ways to deal with long-delayed and loss-making projects administered by the Ministry of Industry and Trade (MoIT).
PM Phuc appreciated efforts of the steering committee for solving problems at the MoIT’s long-delayed and loss-making projects, some of which have been put into operation while proper solutions have been adopted for some others.
The PM asked the committee to review these projects on a case-by-case basis and prevent them from being delayed any further and causing more losses for the State.
The committe was assigned to come up with specific solutions for each project and clearly decide which projects need to be recovered and which should be declared bankruptcy.
The government leader also urged the committee to discover wrongdoings at the projects and avoid corruption in the process of handling them./.
Philippines plans record 86 bln USD 2021 budget for post-pandemic recovery
The Philippine government is seeking a record 4.3 trillion pesos (85.97 billion USD) budget for 2021, focusing on reviving a coronavirus-hit economy.
The draft budget, set to be submitted to the Congress when it resumes meeting next month, is 5 percent higher than this year’s 4.1 trillion pesos, said Budget Secretary Wendel Avisado.
Next year’s spending is geared toward further buttressing the healthcare system, ensuring food security, hastening the government’s digital transformation, and helping communities to rebound.
The proposed budget is separate from a 1.3 trillion peso stimulus bill that the lower house passed early this month, and another stimulus plan under discussion at the Senate.
It would help the government move past the pandemic and provide the kind of programmes, activities and projects for people, especially those who lost their jobs, Avisado said.
The administration of President Rodrigo Duterte faces the enormous task of resuscitating growth and creating jobs in 2021, before his six-year term ends in June of the following year.
The Southeast Asian country, which used to enjoy one of the world’s fastest economic growth rates before the coronavirus wreaked havoc on global business, is projected to suffer a decline of 2-3.4 percent in gross domestic product this year./.
Big-league funders at GoPay to push payments transformation
The investment of Facebook and PayPal into Gojek might pave the way for its in-app e-payment services to enter Vietnam, but it is not an easy mission due to the fierce domestic competition.
Indonesian technology group Gojek has announced that the two US tech giants injected a giant sum into the ride-hailing and food delivering company. According to the group, this latest investment is part of its ongoing F-round series and brings Gojek’s total funds raised to over $3 billion.
According to Gojek, this new investment will support the company’s mission to boost Southeast Asia’s digital economy, with a focus on supporting payments and financial services in the region.
In Vietnam, Gojek’s GoViet currently operates in ride-hailing (GoBike), courier services (GoSend), and food delivery (GoFood). However, Gojek has not yet applied the GoPay e-payment method to Vietnam.
GoViet’s spokesperson told VIR that the company is exploring in-app e-payment services for Vietnam to enhance the customer experience and will make an announcement in due course.
He highlighted that the company continues to be excited about the prospect of bringing e-payment services to Vietnam as part of its broader focus on becoming a digital enabler, and in line with its super-app vision. “We believe that this will support the Vietnamese government’s effort to move Vietnam to a cashless society.”
GoPay has long been focusing on increasing access to the digital economy among micro-, small-, and medium-sized enterprises, the majority of which continue to rely on cash to operate due to the region’s large unbanked population. The latest influx of funding will support more of these businesses as they seek to digitalise further, from micro merchants selling wares on the street to large businesses looking to strengthen their digital payment infrastructure.
Commenting on the latest investment from Facebook and PayPal into Gojek, Riddhi Dutta, regional head for ASEAN and India of software company Backbase, said in a note to VIR that this signifies an accelerated push for digital transformation in the payment and financial services sector in Southeast Asia.
He explained that Vietnam’s fast-growing digital payment sector is fragmented with different players vying for a share of the pie. It is likely that there will be market consolidation of these providers while those with strong and expansive network-based business models are more likely able to sustain and fend off competition. Fintech partnerships both locally and regionally, he added, can add a competitive edge to developing a strong footprint in the market.
“With the latest announcement, Gojek, Facebook, and PayPal are joining other high-profile global corporations and new entrants in the fintech space such as Google and Tencent. Increasingly and rapidly these big techs are shifting their focus towards personalisation-at-scale in order to engage with consumers’ financial lives seamlessly through digital-first platforms,” Dutta said.
According to Backbase’s Fintech and Digital Banking 2025 report, Asia-Pacific will see 100 new financial institutions by 2025, ushered in by the liberalisation of several markets in the region and issuance of new banking licences. New digital challengers such as Gojek and Facebook will continue to enter the fintech market with innovative and agile solutions to compete for a share of the pie.
Although the new investment from Facebook aids Gojek in gaining more financial capability to roll out GoPay in Vietnam, the road ahead could still be tough as some other in-app e-payment services providers like MoMo, Zalo, and GrabPay by Moca have already developed strong footprints in the country.
According to the latest survey by market research group Cimigo, MoMo, Moca, and ZaloPay are the three most popular e-wallets in the two main cities in Vietnam, which account for more than 90 per cent of total market share of e-wallet users.
MoMo is one of the oldest players to heat up the e-wallet race in Vietnam. The group brought attention of smartphone owners to a new payment solution by offering them a variety of promotions and, as a result, MoMo has garnered a large number of users.
Cimigo’s survey shows that MoMo is mostly used for mobile top-ups, money transfers, and utility bill payments. Many experts deem MoMo as an experienced player with a deep understanding of the market.
ZaloPay, which is built on top Vietnam’s most popular messenger app Zalo, boasts plenty of advantages since its inception. Zalo is a familiar and friendly brand in the market with a huge pool of users. Hence, ZaloPay can take advantage of Zalo’s large database and famous brand to acquire new users.
Moca, meanwhile, has quickly become a big player in the e-wallet battle after only a single year into a strategic partnership with Grab, while it has taken much time and effort for other e-wallets to secure presence in the same market.
In fact, by taking advantage of the two basic services on Grab platform – ride-hailing and food delivery – Moca can enjoy a huge competitive edge over other rivals in terms of the necessity of the services and the frequency of payments.
The new investment is part of Gojek’s efforts to compete with Singapore-headquartered Grab in Southeast Asia to become the region’s leading super-app.
Industrial property prices bolster in anticipation of foreign giants
With Vietnam in exceedingly high demand among foreign investors, industrial property developers can afford to raise prices and expand scale.
At the Industrial Property Forum on June 19 in Hanoi, Pham Minh Phuong, director of Hai Duong Industrial Zones Management Board, said that industrial property in Vietnam has become "hotter" thanks to free trade agreements like the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the EU-Vietnam Free Trade Agreement (EVFTA). Most industrial zones are of a small scale, so large land areas need to be cleared for lease in the time coming.
“Vietnam’s industrial property sector is preparing to welcome giants. This is a chance for industrial property developers to prepare and build to become the best destination for investment,” said Phuong.
He also highlighted that industrial property is different from housing because developers have to pour a great deal of funds into infrastructure, factories, while returns trickle in slowly and operators are hard-pressed to fill up their properties quickly to start generating revenue.
In order to overcome this challenge, policies related to industrial property should be changed to select businesses that have enough financial capacity to implement clearance very quickly to be able to seize the most opportunities coming Vietnam's way.
Meanwhile, Tran Quoc Trung, vice director general of the Ministry of Planning and Investment's Department of Economic Zones Management said that in addition to increasing the number and improving the scale, industrial zones should be developed sustainably in parallel with promoting the strength of their locality, boosting linkages among regions and clusters.
Trung highlighted the role of key industrial zones, which are leading the development of the industry. Besides, it is necessary to develop small- and medium-sized economic zones in rural and mountainous areas to reduce pressure on transportation, urban, environment, and social infrastructure, as well as narrow the socio-economic development gap between urban and rural areas. "However, the efficiency of land usage must be good, and economic zones should not be built on highly productive agricultural land," said Trung.
Especially, economic zones should be developed in-depth to enhance quality and performance by technology, improving added value, diversifying co-operation and investment methods, and encouraging the private sector to build and develop economic zones.
In order to realise these things, Trung said that they need to perfect the legal framework related to economic zones, innovate management, and apply new economic zone models.
Notably, KTG Industrial, a subsidiary of Khai Toan Group (KTG), was highly praised at the forum for its new type of factory which was born through the integration of ready-built factories, warehouses, and 4.0 technology, creating a digital convergence among industry, business, functionality, and process.
"The 4.0 ecosystem in KTG’s industrial property includes imaging technology, facilities, services, and management to improve performance and protect the environment that meets all the targets that authorities highlight and go toward, as well as suit the current context of the pandemic," Dang Trong Duc said.
However, the price of industrial property is said to be rising high. "They are offering up to $150 per square metre while $100 was deemed expensive before," Do Nhat Hoang, director general of the Ministry of Planning and Investment's Foreign Investment Agency said, forecasting that this will affect occupancy rates at industrial zones. Hoang also highlighted the need to prepare enough land supply at an affordable price to welcome overseas giants.
Pham Minh Phuong from Hai Duong Industrial Zones said that industrial zones need to complete a long and complicated process to extend area or add new industrial zones to the master plans, including three submissions to the prime minister and four rounds of collecting comments from ministries and agencies. This process takes one or two years at least.
As of the end of May, 2020, there were 561 economic zones based on a total of 201,000ha, equivalent to 0.6 per cent of the country's total area. Of this, 374 economic zones were built on 114,400ha and 259 ones were under construction or in the land clearance stage on 86,600ha.
CapitaLand announces new CEO appointment for core market of Vietnam
CapitaLand Limited on June 22 announced Ronald Tay as a new CEO appointment in its core market of Vietnam as part of its on-going leadership development and renewal process.
Starting his position at CapitaLand Vietnam from July 1, 2020, Ronald Tay with his expertise and the experience of his senior executive team will support the group’s continued growth in a post-COVID-19 era.
Ronald Tay is currently CEO, residential and retail, CapitaLand Singapore, Malaysia, and Indonesia. He takes over from Chen Lian Pang, who will be retiring from CapitaLand.
In his new role, Tay will focus on growing the overall business in Vietnam, including identifying investment and development opportunities.
Tay has been with CapitaLand since 2001 and has an all-around understanding of the group’s business, from capital market, development, and investment to asset management.
Before his current role, Tay was CEO, Ascott Residence Trust Management Ltd. Tay will continue to oversee ongoing development projects in Malaysia and Indonesia.
According to Lee Chee Koon, Group CEO, CapitaLand Group, today’s dynamic and competitive business environment demands organisations to renew themselves and become forward-looking and motivated enterprises proficient in sustaining success.
“Like any other strategic investments undertaken by CapitaLand, the group’s commitment to leadership renewal is fully embedded in our business strategy,” said Koon.
CapitaLand’s merger with Ascendas-Singbridge in last July brought about a further deepening of the group’s management bench strength.
This continuous investment in leadership development is key to achieving transformative growth for CapitaLand in an ever-changing world of business. Across the different markets, CapitaLand leaders are gearing up to adapt to a new normal for real estate post-COVID-19.
CapitaLand has been operating in Vietnam for more than 25 years. The group’s portfolio in Vietnam comprises of two integrated developments, close to 8,600 quality homes across 15 residential developments, two retail malls, and one business park.
The growth of CapitaLand’s lodging portfolios in Vietnam will continue to be driven by CapitaLand’s lodging business unit, The Ascott Limited. In Vietnam, Ascott has close to 7,000 lodging units in 27 properties.
Quang Binh aims to attract 1.5 billion USD in 10 years
The north central coastal province of Quang Binh has set the target of attracting a total of 1.5 billion USD in foreign direct investment (FDI) by 2030, according to the provincial Department of Planning and Investment.
In the 2021-25 period, the province expected to attract around 0.6-0.8 billion USD in FDI and 1-1.2 billion USD for the 2026-30 period.
The planning and investment department said that the province would focus on attracting FDI in sectors of the province’s strength, including renewable energy, tourism, services, processing and manufacturing industry and hi-tech agriculture, which were appropriate to the provincial, regional and national planning.
The province would strive to improve the business climate and provincial competitiveness as well as enhancing quality and efficiency in FDI management.
Vice Chairman of the provincial People’s Committee Nguyen Xuan Quang said that Quang Binh would increase and renovate methods of dialogue with investors to tackle problems they were facing.
In addition, management would also be enhanced to ensure FDI projects are appropriate with the planning and bring socio-economic efficiency and protect the environment.
Projects which caused pollution and inefficiency in land use or those incurring losses for many years or failed to follow commitments would be dealt with, he said.
There were 20 valid FDI projects in Quang Binh as of May 20, worth 766.5 million USD, according to statistics from the Foreign Investment Agency./.
Latest G-bond auction raises over 450 million USD
The State Treasury of Vietnam mobilises 10.48 trillion VND (450.55 million USD) from a G-bond auction held by the Hanoi Stock Exchange (HNX) on June 24.
A total of 8.5 trillion VND worth of bonds was up for auction, including 5-year bonds valued at 1.5 trillion VND, 10-year bonds at 4 trillion VND, 15-year bonds at 2.5 trillion VND each, and 20-year bonds at 500 billion VND.
The five-year bonds were sold for 130 billion VND with an annual interest rate of 1.95 percent, equivalent to that of the previous auction on June 17.
A total of 6 trillion VND was mobilised from 10-year bonds with an annual interest rate of 2.98 percent, down 0.02 percent from the previous auction.
Sales of the 15-year bonds totalled 3.6 trillion VND, with an interest rate of 3.15 percent per annum, equivalent to that of the previous auction.
The 20-year bonds raised a total of 750 billion VND at an interest rate of 3.42 percent, down 0.03 percent from the previous auction.
The State Treasury has raised close to 84.59 trillion VND (3.63 billion USD) from G-bonds so far this year. Last month, it mobilised over 18.39 trillion VND from G-bonds via 16 auctions./.
Gia Lai to develop 100-ha hi-tech agricultural zone
A 100-ha hi-tech agricultural zone is to be built in the Central Highlands province of Gia Lai that will engage in developing breeding pig supply and the production of organic cattle feed and fertiliser, a conference held by the province on June 24 heard.
The DHN hi-tech agricultural zone will be developed by the Netherlands-based De Heus in Asia and the Hung Nhon Group of Vietnam, at an estimated cost of 1.03 trillion VND (44.4 million USD).
It will apply advanced technology in pig farming and slaughtering and the production of organic cattle feed and fertiliser that meet international standards. It will also use a grid-connected solar power system to promote clean energy and reduce CO2 emissions.
Jobs will be created for 150 local workers.
Speaking at the conference, Chairman of the provincial People’s Committee Vo Ngoc Thanh vowed to provide the best conditions possible for the project and its investors.
De Heus and Hung Nhon aim to expand pig farming across five Central Highlands provinces over the next five to ten years.
Following Gia Lai, the two will develop breeding pig projects in Dak Nong, Kon Tum, and Lam Dong provinces.
These projects are hoped to turn the Central Highlands into a leading hub of breeding pig farming in the Southeast Asia and Asia./.
Garment-textile industry seeks diverse supplies of raw materials
Diversifying supplies of raw materials for the garment-textile industry has proven a headache during the COVID-19 pandemic, which has now been largely brought under control in Vietnam but remains a complex issue in other countries, a conference in HCM City on June 24 heard.
Figures show that the sector incurred losses of over 12 trillion VND (517.5 million USD) in the first half of 2020 due to COVID-19.
Nguyen Thi Tuyet Mai, Deputy General Secretary of the Vietnam Textile and Apparel Association, said the sector has set an export target of 40 billion USD in 2020.
The pandemic made that goal next to impossible, she said, and the association has now adjusted it to 34 billion USD, but even this will be problematic.
Apparel export turnover for the year as a whole is expected to be about 20 percent less than in 2019, while enterprises will only operate at 70-75 percent of capacity to the end of the year./.
HCM City targets 1,000 MWp of rooftop solar power at IZs by 2024
Ho Chi Minh City aims to have 1,000 MWp of rooftop solar power capacity installed by 2024 in its industrial parks, export processing zones and high-tech parks, up from 700MWp now.
To meet the goal, the HCM City Export Processing Zones and Industrial Parks Authority (Hepza), Hepza Business Association (HBA) and Electricity of HCM City (EVN) launched a programme in the zones on June 19 to encourage businesses to participate.
Nguyen Van Be, Chairman of the HBA, said more than 1,000 factories in the city’s numerous industrial zones have signed up to install solar rooftop energy with BCG Energy, a subsidiary of Bamboo Capital Group.
The city has 17 IPs and EPZs with a total area of more than 4100ha where rooftop solar can be installed on 500-1000ha.
Installing solar panels on their roof would also enable the factories to reduce the temperatures inside by 4-5 degrees Celsius, Be said.
The association said 1000MWp of solar power would mean a cut in carbon emissions of 23 million tonnes.
Participating businesses would get technical and financial advice, add to their brand value, increase competitiveness, and could sell solar power to EVN HCM City, Be said.
Nguyen Le Tan, Deputy Director of the municipal Department of Industry and Trade, said the national grid was under increasing pressure to ensure supply of electricity.
Since traditional sources such as thermal power affect the environment, renewable energy including rooftop solar would be one of the solutions to reduce the pressure, he added.
Be said solar rooftop might hold the answer to the country’s energy shortage in future and cutting carbon emissions.
Bui Trung Kien, Deputy Director of EVN HCMC, said amid climate change Vietnam also faced the problem of finding new sources of energy.
Green and clean renewable energy could gradually replace traditional sources, and so rooftop solar is supported by businesses, he said.
EVN HCMC would introduce popular rooftop solar models and brands to them and provide technological and technical support, he said./.
Vietjet Air promoting tourism in Nghe An
Budget carrier Vietjet Air will partner with the Tourism Department of north-central Nghe An province to promote local relic sites and scenic spots under a cooperation agreement the two signed on June 24.
Vietjet’s flights and services will also be introduced within tourism promotions.
Preferential air tickets will be offered to travel agencies to build full-package tours.
The carrier is offering various flights to and from Nghe An’s capital Vinh, linking it with HCM City, Can Tho, Phu Quoc Island, Nha Trang, Buon Ma Thuot, Da Lat, and Da Nang.
Vietjet Air and the Vietnam General Administration of Tourism also signed a tourism promotion agreement for the 2019-2021 period.
The airline has actively responded to the “Vietnamese people travel in Vietnam” programme introduced by the Ministry of Culture, Sports and Tourism, offering discounted tickets to stimulate demand.
As an official member of the International Air Transport Association (IATA) and with an IATA Operational Safety Audit (IOSA) certificate, the privately-owned Vietjet Air has been ranked a seven-star airline in terms of international aviation safety by the prestigious AirlineRatings.
It was also among the world’s top 50 carriers in terms of financial health in 2018 and 2019, according to Airfinance Journal, and was named the best low-cost airline by Skytrax, CAPA, and AirlineRatings./.
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 aims to receive 11 million domestic tourists in H2
Hanoi has set itself a target to welcome about 11 million domestic tourists by the end of 2020, according the city’s tourism sector.
Based on forecasts and Hanoi’s socio-economic development scenarios to counter the COVID-19 pandemic, the city will give priority to the recovery of the domestic tourism.
Accordingly, some tourist destinations in the city have lowered ticket fees or presented gifts to attract more visitors.
The Department of Tourism said it will focus on tourism products which Hanoi boasts strengths in, such as heritage tourism, ecotourism and agrotourism when COVID-19 is brought under control.
The sector will also work to further promote the city’s image as a safe, friendly and civilised destination, and improve human resources quality.
Night-time economy is expected to help develop Hanoi tourism, according to tourism experts and policymakers.
The Hanoi Old Quarter, located in the downtown in Hoan Kiem district, is the most popular destination in the capital city. Tourists come here to explore ancient streets, craft products, local food or experience lives there. In the evening, streets become more crowded and lively with Hang Dao – Dong Xuan night fair and outdoor music performances.
Since 2016, Hanoi has allowed Hoan Kiem district to pilot the extension of opening hour of bars and restaurants to 2am. As a result, their revenues increased by about 30 percent.
Following the pilot, tourist arrivals in 2016 neared 1.4 million, up 22.8 percent from a year earlier. The figure went up to 1.95 million in 2017, nearly 2.2 million in 2018 and 2.5 million in 2019.
Between January and May 2020, Hanoi’s tourism sector earned over 16.6 trillion VND (715 million USD), a deep reduction compared to the same period last year. However, it was still an encouraging figure, as both the national and global economies have been adversely impacted by the pandemic.
There are 3,499 tourist accommodation facilities with 60,782 rooms in Hanoi. Among them, 66 hotels with 9,953 rooms have three- to five-star ratings, and eight condotels with 1,534 rooms have four- or five-star ratings.
According to the Vietnam National Administration of Tourism, foreign tourist arrivals to Vietnam in the first five months of this year totalled 3.7 million while the number of domestic holidaymakers stood at 16 million, down 50 percent and 58.5 percent, respectively, from the same period last year.
The capital city last year welcomed nearly 29 million tourists, up 10.1 percent year-on-year, more than 7 million of them foreign guests, increasing by 17 percent.
In recent years, Hanoi has been hailed as one of the most attractive destinations in the region and the world by prestigious international organisations such as “Asia’s Leading Destination” and the “World’s Leading Destination” in 2018.
In 2019, Hanoi won the Travelers’ Choice Awards and was ranked among the 25 leading destinations in Asia, and the 25 world’s leading places on TripAdvisor website.
CNN listed Hanoi along with Phu Quoc Island in the Mekong Delta province of Kien Giang as the best travel destinations in Asia in 2019.
Many highlights of Hanoi were recently listed in the CNN’s article suggesting 13 memorable experiences for foreign visitors in Vietnam such as “search for the best pho in Hanoi”, “make vermicelli noodles in Cu Da village”, and “ride the Reunification Express (officially known as North-South Railway)”.
Hanoi ranked fifth among the seven best places in Asia for solo travellers by Bigseventravel.
The Italian tourism website described Hanoi as a hectic, crazy and often confusing city, and a wonderful base from which to explore the north of Vietnam, including the world natural heritage site of Ha Long Bay in the northeastern province of Quang Ninh and the popular resort town of Sa Pa in the northern mountainous province of Lao Cai.
According to Mastercard’s Asia Pacific Destinations Index, Hanoi ranked 15th among the 20 leading destinations in the region./.
Over 84 percent of Kien Giang fishing vessels equipped with monitoring systems
Some 3,360 fishing vessels or 84 percent of the total in the Mekong Delta province of Kien Giang had been equipped with the vessel monitoring systems as of late May, according to the provincial Department of Agriculture and Rural Development.
Relevant agencies have been asked to complete the installation of the systems on all local fishing vessels and impose strict punishments on violators, as part of the measures to prevent, mitigate and put an end to illegal, unreported and unregulated (IUU) fishing and unlawful entry into foreign waters.
A delegation will work with nearly 150 owners of over 220 vessels to raise awareness of turning the systems on round the clock.
The move is expected to help lift the “yellow card” warning of the European Commission (EC) on Vietnamese seafood products since October 2017.
Kien Giang reported 106 violating vessels last year.
According to the Ministry of Agriculture and Rural Development, due to the “yellow card”, Vietnam’s seafood exports to the EU fell by 6.5 percent to 390 million USD in 2018 and 11.5 percent to 345.2 million USD in 2019.
From being the second-largest import market for Vietnam’s seafood, after the “yellow card” the EU dropped to the fifth and its imports have decreased from 18 percent to 13 percent of Vietnam’s total exports./.
Reforms must focus on regulation inconsistencies and overlaps
It is critical for Viet Nam to focus on removing inconsistencies and overlaps in business regulations to create a favourable climate for enterprises, attendees heard at a conference held by the Viet Nam Chamber of Commerce and Industry (VCCI) on Wednesday in Ha Noi.
VCCI’s Chairman Vu Tien Loc said that the business community was highly expectant of the Government’s new wave of reforms, making regulations stronger and more practical. The Government carried out two waves of reforms in the past five years. The first was in 2016 with the highlighted requirement that no business prerequisites were raised in decrees and the second was in 2018 with the focus on simplifying and removing business prerequisites.
The third reform wave should be removing overlapping and inconsistent regulations, Loc stressed, adding that the management agencies needed to make greater efforts to create a favourable environment for businesses.
Some ministries reported that around 60 per cent of business prerequisites under their management were removed or simplified, however, the figure was only on paper, Loc said. In fact, businesses felt that the simplification or removal of business prerequisites was not that much, at only around 30-40 per cent, according to VCCI.
VCCI said that the current legal system of business and investment still had a number of problems. Many business lines which required prerequistes needed to be abolished or simplified, Loc said, adding that complicated procedures for joining the market remained barriers to small- and medium-sized enterprises.
After reviewing 411 legal documents on business prerequisites, VCCI also raised 106 proposals, including amendments to 93 legal documents, 32 laws, 51 decrees and 10 circulars, Dau Anh Tuan, head of VCCI’s Legal Department said.
VCCI also planned to carry out a more comprehensive review of existing legal documents with a focus on regulations about market entry and enterprise operation management.
Recently, VCCI proposed the Government to tackle 25 points of overlaps and inconsistencies in the existing regulations.
Tuan said that the business environment could not improve if business prerequisites remained in place.
Nguyen Hoai Nam, deputy general secretary of the Viet Nam Association of Seafood Exporters and Producers, said he felt that ministries were still slow in carrying out reforms although the Government issued resolutions about improving the business and investment climate every year.
For example, in seafood processing and export, Viet Nam had some standards which were even stricter than the US, causing a lot of difficulties for firms, Nam said.
Le Net from law firm LNT & Partners said it was necessary to announce the list of business lines which required prerequisites for foreign investors to participate in.
SMEs need support as EVFTA takes effect
The opening of the domestic market as committed in the EU – Viet Nam Free Trade Agreement (EVFTA) will lead to the strong penetration of foreign businesses to expand their retail chains in the country.
This poses great challenges, requiring state management agencies to make appropriate and timely decisions to support retail businesses in the new context.
Dinh Thi My Loan, vice president and general secretary of the Association of Viet Nam Retailers (AVR), said that this was an opportunity to increase the circulation of domestic goods through expanding the business size and network of foreign retailers.
The size of the domestic market had plenty of room for growth, which was a space for Vietnamese retail businesses to expand their market share, she said.
The opening of the market would give Vietnamese retailers opportunities to access large investment capital, as well as advanced management technology in trade activities from EU countries.
Commercial infrastructure would be modernised, helping domestic businesses and consumers access the supply of high-quality products and services, said Loan.
However, the EVFTA also has negative effects, creating great challenges for domestic distribution businesses, especially small and medium-sized enterprises.
The Ha Noi Moi (New Ha Noi) newspaper quoted Nguyen Thi Kim Dung, director of Co.opmart Ha Dong supermarket, as saying that many businesses with small capital and low management qualifications would face difficulties.
In addition, businesses in the retail sector were also challenged to adapt to the rapid development of information technology and the digital economy, said Dung.
The transformation and digitalisation of information systems related to business and customer management were important issues, but they were still a huge obstacle for domestic retailers.
Tran Duy Dong, director of the Ministry of Industry and Trade's Domestic Market Department, emphasised that in order to make full use of the EVFTA, state management agencies needed to implement a number of solutions.
In particular, it was necessary to focus on studying the EVFTA's commitments to implement them effectively, and strengthen policies to support small and medium enterprises, said the director.
Besides, it was necessary to remove difficulties in logistics to support trade development, promote reforms and simplify administrative procedures, and create linkages between ministries and sectors to improve the competitiveness of the business environment, he added.
On the other hand, he also said it was neccessary to complete policies to attract foreign investment, develop measures to protect domestic enterprises by setting up technical barriers and strictly controlling the activities of foreign enterprises.
In addition to the above solutions, to minimise the negative impacts, small and medium-sized enterprises in the country need to strengthen links and co-operation with domestic and foreign partners to take advantage of technology, management and markets to participate in the value chain, co-operate with manufacturers and participate in domestic, regional and global production networks and supply chains.
Seminar discusses sustainable development for textile industry
Besides satisfying rules of origin prescribed in free trade agreements, Vietnamese firms must also follow global standards of corporate social responsibility to take advantage of tariff benefits brought by FTAs, a seminar heard in HCM Cityon Wednesday.
Nguyen Thi Tuyet Mai, vice secretary general of the Viet Nam Textile and Apparel Association, said garment and textile exports were worth US$38.89 billion last year, a year-on-year increase of 23 per cent.
But to achieve this, the country imported $22.37 billion worth of feedstock like fabric, yarn and cotton, she said.
“The EU-Viet Nam Free Trade Agreement, which will take effect in August, is expected to enable Vietnamese firms to boost exports to the bloc.”
Mai said: “Vietnamese garment and textile exports to the market now attract tariffs of 10-25 per cent. Therefore, with the lower tariff duties under the EVFTA, we will have more opportunities to boost exports.”
But to be able to get zero tariffs under the EVFTA, firms must meet “fabric forward” rules of origin and CSR standards, she said.
The country is still weak in the dyeing and fabric finishing phases, but local authorities discourage investment in dyeing because of environmental concerns, she said.
“There is a lack of specialised industrial parks for the textile sector with complete wastewater treatment systems.
“Almost all firms in the sector are small or medium-sized and so lack the resources to invest in ‘green’ dyeing plants.
“With the fabric-onward rules of origin, enterprises must change to survive.”
The Government must have policies to establish specialised industrial zones, solicit investment in infrastructure, especially general wastewater treatment systems using advanced technologies, and solicit investment in fabric making, weaving and dyeing in the zones, she said.
Tran Ngoc Liem, deputy director of the Viet Nam Chamber of Commerce and Industry’s HCM City branch, said since many countries still have their borders closed because of the ongoing Covid-19 pandemic, developing local sources of raw materials is an urgent need for the country.
This requires co-operation between various stakeholders in the sector.
Hoang Thi Thanh Nga, Sustainable Textile Programme manager at the World Wildlife Fund Vietnam’s HCM City office, said to take advantage of tariff exemptions and reductions under the EVFTA and CPTTP, Viet Nam needs to meet the rules of origin requirements for raw materials (fabric-forward or yarn-forward) and ensure environmental and social standards.
The EVFTA offers an opportunity for Vietnamese firms to develop fabric production, but this would cause pollution to increase if production technologies do not change.
The WWF and VITAS have implemented a project called Greening Viet Nam’s textile sector to transform it into a sustainable and environmentally responsible one, she said.
Global consumers are shifting their preferences towards environmental sustainability, and so more brands are committed to sustainability goals and set clear criteria for their supply chains, she said.
Textile enterprises increasingly heed the requirements of brands and seek to convert to clean energy and technologies to reduce production costs and develop sustainably in the long run, she said.
Mai said the labour productivity remains low, affecting the development of the sector, and this should be improved.
Currently Vietnamese firms mainly do sub-contracting work for foreign brands, earning low profits and adding little value, she said.
The sector must raise the capacity of its firms and persuade brands to place orders directly with local producers -- instead of going through trading companies -- and undertake orders on FOB basis to earn higher profits, she said.
The textile and garment industry is one of Viet Nam’s most important economically, with 6,800 firms and 2.8 million workers.
Shrimp exports to Canada rise steadily
Shrimp exports to Canada as of mid-May had reached US$54.7 million, a 32 per cent increase year-on-year, following steady increases since 2016, aside from a slight dip last year, according to the Viet Nam Association of Seafood Exporters and Producers.
Canada has been buying a large number of warm-water shrimp from Southeast Asian countries, as supply of coldwater shrimp has been falling. Purchases of processed shrimp products are also rising among Canadian consumers, especially for white-leg shrimp.
Viet Nam is Canada's second largest shrimp supplier, and its prices are among the highest of all shrimp suppliers to Canada.
Canada is the sixth largest buyer of Vietnamese shrimp, accounting for 5.7 per cent of Viet Nam's shrimp exports.
According to the association, Canada is diversifying its markets and lowering its dependency on the US. Viet Nam is among the countries with which Canadian businesses would like to do business.
Vietnam Airlines unveils 4 new air routes from Cần Thơ
Vietnam Airlines has launched four new air routes from the Mekong Delta city of Cần Thơ to Hải Phòng, Vinh, Buôn Ma Thuột, and Đà Lạt.
At a seminar held on June 22 to discuss how to promote domestic tourism, Dương Tấn Hiển, deputy chairman of the Cần Thơ People’s Committee, said the new routes are aimed at reviving tourism, which was hit by the COVID–19 pandemic.
They would also help attract investors to Cần Thơ and other places in the delta, he said.
Lê Hồng Hà, deputy director of Vietnam Airlines, said the new routes are expected to raise the profile of Cần Thơ Airport and help develop the economy, especially the tourism industry, of all five cities.
Vietnam Airlines already flies from Cần Thơ to Hà Nội, Đà Nẵng and Côn Đảo.
According to Cần Thơ authorities, the new routes offers travellers the opportunity to visit famous tourist sites including the Cái Răng Floating Market, Tràm Chim National Park and flower villages.
They would also contribute to the growth of the tourism industries in the other four localities and the country’s tourism sector generally, they added.
Fish ports in Quang Binh face overloading problem
Local people are complaining about overloading and pollution as two fish ports in Quang Binh Province are deteriorating.
Nhat Le Port in Dong Hoi City and Song Gianh Port in Bo Trach District are managed by Quang Binh Fish Ports Management Board. Song Gianh Port went into operation in 2001 with an investment of VND19bn (USD818,000). It covers 22,000 square metres and is designed for 30 boats with 150CV capacity per day. It has two piers that are nearly 100 metres long that serve 7,000 boats and 9,000-12,000 tonnes of cargoes every year.
This is one of the biggest fish ports in the North Central Coast. The number of boats at Song Gianh recently increased and caused overloading as well as damage to the port. Subsidence has been detected in the waiting area and on the roads. Moreover, as silting occurs near the port, the water is only two to five metres deep and boats are having a harder time docking.
Nguyen Van Son, a boat owner in Bo Trach said he had to wait for hours or even the whole day to find a spot at the port. When the tides are low, they were grounded.
Nhat Le Port was built in 2000, covering 4.5ha with an investment of VND20bn from the fund for islands and borders. Each year, it serves 2,000-2,500 boats with 9,000 tonnes of cargo. However, its designed capacity is only 20% of the actual boats that use the port.
The port is also deteriorating with cracks and subsidence. During the rainy season, the port is flooded as the drainage system is broken. Pollution from both ports is also bothering people living nearby.
Nguyen Trung Son, head of the Song Gianh Port Management Board said that the deterioration and overloading are getting worse.
"During the rush hour, dozens of boats line up, waiting for a vacant spot. Cargo trucks that provide food or want to buy fish from the boats have to park out of the port and the loading and unloading of cargo isn’t easy," he said.
Tran Dang Thao, deputy director of the Quang Binh Fish Ports Management Board said since only 20-30% of the boats can access the ports, the other boats have to use illegal ports. That's why they have trouble with monitoring the boats.
Thao said Quang Binh People's Committee had allocated the fund but the processes haven't been synchronised.
"In the long term, everything needs to be done including dredging, upgrading the system and repair the ports. And new services will be built like shelters for boats during storms and fishery logistics," he said.
Fair on Thai products underway in Da Nang
A wide range of consumer goods made in Thailand are being exhibited at a trade fair in the central coastal city of Da Nang.
Opened on Thursday, the fair features 40 Vietnamese businesses showcasing their products including foodstuff and beverages, fresh fruits, home appliances, garments and jewellery and gems at more than 60 stalls.
In his speech at the event's opening ceremony, the municipal People's Committee vice chairman Nguyen Van Thanh said the fair will make a contribution to enhancing bilateral trade between Thailand and Viet Nam, especially in the post-pandemic context.
Thanh also described the event as a good chance for local businesses to explore new opportunities and seek partners.
The fair will last until Sunday.
Last year, two-way trade between the two nations witnessed a yearly modest decline of 3.4 per cent to US$16.9 billion. Of the sum, $5.3 billion came from Vietnamese exports, a year-on-year decrease of 4 per cent while its import from Thailand also dropped 3.2 per cent at $11.6 billion.
The two countries hope to hit $20 billion bilateral trade by the end of this year.
Mini Thailand Week returns to Hai Phong
Mini Thailand Week has returned to the northern port city of Hai Phong this year, starting on June 25 and aiming to restore trade between the two countries following COVID-19.
Running to June 28, the exhibition features 67 booths from 40 Vietnamese importers of Thai products.
On display are high-quality Made-in-Thailand food and beverages, fresh fruit, home appliances, clothing, jewellery, beauty products, decorative items, souvenirs, and other goods.
Thai Ambassador to Vietnam Thani Saengrat said the two countries boast longstanding trade relations and remain important trade partners of each other.
Two-way trade has grown steadily, he added, exceeding 17 billion USD last year.
Vice Chairman of the Hai Phong City People’s Committee Nguyen Van Thanh said Mini Thailand Week 2020 is vital in further expanding Thailand’s trade ties with Vietnam and especially with the port city.
It also provides a good opportunity for local enterprises and investors to exchange experience and seek partnerships with Thai counterparts to further boost bilateral trade.