With the issuance of the ground-breaking Law on Public-Private Partnership Investment, private groups have voiced expectations for future guiding decrees, requesting to extend the risk-sharing mechanism to completed and ongoing projects. 

The new PPP law promises to boost investment in infrastructure projects. Photo: Le Toan
Do Van Nam, representing a group of public-private partnership (PPP) experts, said at a webinar last week that there are some long-standing issues in the guiding decrees that should be addressed.

“Lending and bank support should also be part of future decrees. There need to be specific regulations on loans to facilitate future PPP developments,” Nam recommended. “Banks hesitate to offer loans for these projects, some even refuse them straightaway.”

Going into the issue of special concern – retroactive risk-sharing arrangements – Tran Van The, deputy chairman of the Board of Directors at Deo Ca Group, said, “We have worked on a number of key national projects when there was no legal framework on the risk-sharing mechanism. We are suffering losses at some projects, which reduces our loan repayment capacity.” He suggested that there should be transitional provisions to enable them to enjoy the mechanism.

Vaibhav Saxena, attorney at Vietnam International Law Firm, quoted that the current investment law and the new Law on Investment 2020, which will take effect on January 1, 2021, provide favourable investment incentives and ensure security for the investors from changes in law circumstances, where if a new law provides less favourable investment incentives than those currently enjoyed by the investor, the investor can switch to the new incentives for the remaining duration of their original arrangements for the investment project.

Previously, PPP regime followed the investment law as the apex law to drive investment activities in Vietnam. However, the new law on PPP investment is now a comprehensive legislation to cover PPP related investment activities in Vietnam.

“The old investors having contracts signed may follow the Law on Investment which allows them to access new policy benefits, and the PPP law provides an option for the same. The Vietnamese government is working on this matter and the regulations guiding the new PPP law are expected to have clearer guidelines,” Saxena told VIR.

Under Article 101 of the new PPP law, the National Assembly assigns the government to give specific guidance on transitional provisions. As current rules dictate, risk-sharing allocation should be set out in the feasibility study. Thus, projects which had their investment plans approved without risk-sharing arrangements will face challenges in enjoying such a mechanism. This forces investors who require such an arrangement to redo their investment plans.

“Retroactive risk-sharing arrangements should be carefully considered on a case-by-case basis while taking into account the state budget,” cautioned Vu Quynh Le, deputy director of the Ministry of Planning and Investment’s Public Procurement Agency.

Under these rules, the eastern cluster of the North-South Expressway, which has five PPP sections, and many other projects cannot add risk-sharing allocations unless they redo the entire investment process – and hundreds of private firms are seeking for retroactive access to risk-sharing.

Despite this, it is worthy to note that risk-sharing mechanism, including minimum-revenue risk sharing, is one of the major changes in the new PPP law, showing a significant effort to improve the appeal of this investment mode amid budgetary constraints.

Available from early 2021, the new revenue-risk sharing mechanism will be restricted to only certain projects to ensure bankability.

For years, revenue-risk allocation in PPP initiatives has been a controversial topic because of their high risk of losses and the lack of a completed legal framework. Thus far, the power sector has been the most successful at attracting foreign investment in build-operate-transfer (BOT) projects, while others have seen failures.

Some BOT initiatives have hit the rocks for several years, including Dau Giay-Phan Thiet Expressway, Van Don-Mong Cai, and Trung Luong-My Thuan expressways.

Vietnam Reform and Development Forum 2020 opens

Vietnam will focus on solutions to spur growth towards sustainability amidst the impact of COVID-19 during the 2021-2025 period, Minister of Planning and Investment Nguyen Chi Dung said on September 29.

In his opening remarks at the third Vietnam Reform and Development Forum, the minister said the country is striving to win the high middle-income status globally by 2030.

He briefed the forum on achievements Vietnam has recorded in pandemic combat and economic development, with a trade surplus of 12 billion USD so far this year, positive GDP growth and foreign direct investment (FDI) of 20 billion USD.

However, given the adverse impact of trade tensions among powers, and shortcomings of the domestic economy, Vietnam needs consultations of scientists, ministries, agencies, development partners and international organisations that would help the Vietnamese government adjust and adopt decisions and policies for early economic recovery and macro balances towards sustainable and inclusive growth.

Carolyn Turk, WB Country Director for Vietnam, said the forum offers an opportunity to assess the progress made by the Vietnamese economy amidst a changing world.

Lauding the country’s marked achievements, Turk, however, noted her concern about the negative impact of climate change, unusual weather patterns and natural disasters on the national socio-economic development.

She suggested Vietnam bring into full play opportunities, work to attract more foreign investments, optimise scientific-technological advances, and pay more attention to health care, education and social welfare.

The country should identify priorities and revamp its working methods to seek new values in the spirit of innovation and creation, in order to restructure its economy and improve its resilience and adaptability in the new context, she said.

The forum, themed “Vietnam: Actions for making growth recovery inclusive and sustainable in the COVID-19 era,” was jointly held by the Ministry of Planning and Investment and the WB.

Its objective is to discuss issues related to economic reform and development of Vietnam in the newly emerging context, reflect on major issues of particular concern to businesses and people, particularly in this new context characterised by both new challenges and new opportunities, continue contributing to the formulation of the SEDS 2021-2030 and SEDP 2021 – 2025, and contribute to enhancing Vietnam’s position in international and regional fora.

It comprised two sessions - COVID-19 and Vietnam’s actions to seize opportunities and move up the global value chain, and digital transformation and structural change towards inclusiveness and sustainability.

Beach resort in Ha Tinh could lose investment licence

A coastal tourism project in the central province of Ha Tinh is facing the risk of being cancelled due to its slow pace of construction.

Tre Nguon Resort and Spa project which was licensed in 2011 covers a site of 17,000 square metres near Thien Cam Beach, Thien Cam District. With the initial total investment of VND100 billion (USD4.34 million), the project was scheduled to be put into operation in 2012 with a lifespan of 49 years.

The project was designed to include an 11-floor hotel, 14 bungalow rows and a two-floor food and sports area. It was intended to be a spearhead tourism project for the province.

However, to date, many facilities have remained on paper; while others have proved ineffective when in operation.

Many restaurants and coffee shops have been leased to other services. The swimming pool and the one-floor bungalow area have deteriorated.

Nguyen Thu Huong, director of the project’s investor Tre Nguon Company said that around VND60 billion have been invested into the project. She blamed environmental disasters such as floods and storms for slowing down the project’s pace.

Hoang Van Huong, head of Thien Cam tourist site management board, said that the project is located in a favourable place, but its implementation has been at a snail’s pace for years. So if the situation does not improve, local authorities will confiscate the site to give the land to other investors.

Huong noted that despite VND60 billion poured into the project, just one-third of the project’s approved items have been completed.

The areas for spa, restaurant and the two-floor bungalow services along with the 11-floor hotel have not yet been finished.

The investor still owes VND3 billion in land rent. The investor proposed the provincial people’s committee to increase the project’s total investment to VND430 billion (USD18.69 million). This, however, was rejected by local authorities.

Concerned agencies have asked the committee to revoke the project licence.

Skies clear over VIMC’s joint venture seaports

After enduring months of setbacks due to COVID-19, seaport joint ventures between shipping firm Vietnam Maritime Corporation and its foreign partners closed the first eight months of 2020 on a positive note while looking at bright prospects from the EU-Vietnam Free Trade Agreement.

Statistics from the maritime and logistics services giant Vietnam Maritime Corporation (VIMC) show that Cai Lan International Container Terminal’s (CICT) revenues reached VND236 billion ($10.26 million) in the first eight months of 2020, an on-year increase of 45.8 per cent.

Located in the northeastern province of Quang Ninh, the facility was estimated to handle a total of 3.17 million tonnes of goods during the period, up 32.05 per cent against the corresponding period last year. This is a big improvement for the seaport, which is a joint venture seaport between VIMC and US-based Carrix, the parent company of SSA Marine. In previous years, CICT had to handle goods in bulk to survive.

During the period, the performance of VIMC’s three other joint venture ports also improved, although not to the extent hoped as profits mostly stayed negative, except for Cai Mep International Terminal (CMIT).

CMIT, which has Denmark’s APM Terminals as foreign stakeholder, witnessed on-year rises in both the volume of goods and revenue. Specifically, it handled more than 16.19 million tonnes of goods, up 14.17 per cent on-year, while revenues ascended 5.77 per cent to VND777.44 billion ($33.8 million).

Located in the Cai Mep-Thi Vai area of the southern province of Ba Ria-Vung Tau, CMIT is the most profitable joint venture seaport between VIMC and its partner. Between January and August, it posted a pre-tax profit of VND43.53 billion ($1.9 million).

Similarly, SSIT – a joint venture between VIMC and SSA Marine – reported on-year improvements of 17.84, 68.2, and 71.62 per cent in the total volume of goods, container throughput, and revenue. Also located in the Cai Mep-Thi Vai area, these are the highest increases among the joint venture (JV) seaports during the span.

The volume of goods and revenue figures of SP-PSA, a joint venture between VIMC and Singapore-based PSA, lying in the Cai Mep-Thi Vai area, was roughly the same as in the same period last year. The port remains in difficulties.

SP-PSA passed the January-August span with no container throughput. In 2019, the facility also reported no container throughput, although its volume of goods in bulk rose 11 per cent on-year to over 3.43 million tonnes in comparison with the estimated 1.54 million tonnes in 2016. The seaport was estimated to have made nearly $7.5 million in revenue during 2019, up 15 per cent on-year.

These figures more often than not speak of better performance at the JV seaports, despite COVID-19 disruptions. For instance, CMIT’s revenue between January and March dropped by VND1.4 billion ($60,870), yet the port still managed to improve revenue in the first eight months.

Nguyen Canh Tinh, CEO of VIMC, told VIR, “VIMC business lines have been hit by the ongoing health crisis. Interruptions in global trade links also had a negative impact on our seaports, logistics, and shipping business lines.”

Looking forward, the coming months may carry further difficulties for CICT and others when more terminals are put into operation at Lach Huyen International Seaport and Gemalink Seaport, which is expected to come into operation in late 2020 with a total annual capacity of 8.5 million TEUs, making it one of 20 largest seaports worldwide.

In spite of the challenge, the JV seaports will likely be able to boost their throughput and revenues thanks to the enforcement of the EU-Vietnam Free Trade Agreement which took effect in August.

Vietnam is the EU’s second-largest trade partner in ASEAN after Singapore, with trade in goods worth €45.5 billion ($53.9 billion) in 2019. The FTA is projected to help increase Vietnam’s GDP by 4.6 per cent and its exports to the EU by 42.7 per cent by 2025.

Additionally, the European Commission has forecast the EU’s GDP to increase by $29.5 billion by 2035, thus spurring demand for maritime transportation services.

Furthermore, the seaport segment attracts the most foreign investment in the transport sector, thus helping Vietnam’s seaports and those of VIMC to become a link in the global supply chains of global shipping lines and seaport operators.

These prospects have not gone unnoted as many investors from Japan, the US, and South Korea have expressed strong interest in acquiring state stakes in ports in the northern city of Haiphong, the central city of Danang, and Ho Chi Minh City.

Monopoly risks likely in Grab-Gojek merger

Singaporean-backed Grab’s tremendous expansion drive and super app strategy to gain dominion in Vietnam and Southeast Asia could be further fuelled by the potential merger with Gojek, resulting in what some fear would be a death grip on the market.

The regional tech circle has been in a stir over news of a coming tie-up between ride-hailing platform Grab and its Indonesian competitor Gojek.

As expected, the two sides have declined to offer comments prior to the conclusion of the deal. Gojek even denied the talks and asserted the news were only rumours. However, according to DealStreetAsia, the two are approaching a workable agreement.

A deal would significantly strengthen Grab in Vietnam – but it also raises questions about violating market concentration rules.

According to Article 30 of the Law on Competition 2018, “Economic concentration shall be prohibited if it causes or probably cause substantial anti-competitive effects on the Vietnamese market.”

In a response to VIR, Kieu Anh Vu, managing director at KAV Lawyers, said that in case Grab and Gojek carry out the economic concentration, it will be necessary to “review the magnitude of the resulting anti-competitive effect to determine whether the deal should be allowed.”

According to Article 13 of Decree No.35/2020/ND-CP dated March 24, elaborating on several articles of the Law on Competition 2018, enterprises party to an economic concentration deal are obligated to notify the National Competition Commission if the deal fulfils one of four terms:

- The total assets available in Vietnam of either party are worth VND3 trillion ($130.43 million) or more in the fiscal year before the planned year of economic concentration;

- The total sales or purchase volume of either party in Vietnam is worth VND3 trillion;

- The value of the economic concentration deal is at least VND1 trillion ($43.47 million); and

- The joint market share of the parties is at least 20 per cent of the total market in the fiscal year before the planned economic concentration.

Currently, the market share of Grab in Vietnam is about 70 per cent, according to New York-based research market firm ABI Research. Thus, in case it performs a merger with Gojek, their combined market share will definitely trigger the decree. As a result, Grab will have to notify the National Competition Commission if they go ahead with the alliance.

Referring back to the similar deal between Grab and Uber in 2018, Dinh Thi Hoang Nhung, managing director at HNLaw & Partners, told VIR that the deal was determined as “purchase and sale, transfer, and obligation acceptance” that was insufficient to constitute a violation of the economic concentration rules of the Law on Competition 2018. She was of the opinion the same transaction method could be employed this time as well.

“Uber withdrawing from Southeast Asia in exchange for 26 per cent of Grab’s shares in 2018 was a stock trading deal, under the Law on Competition 2004,” said Nhung.

Under Article 16 of the Law on Competition 2004 and Article 34 of Decree No.116/2005/ND-CP released in 2005 on detailing a number of articles of the Law on Competition 2004, the arrangement did not give Uber control over Grab as its shareholding was far below the requisite 50 per cent of voting right.

“Meanwhile, Grab did not own Uber stocks, so it had no voting rights on Uber’s management board,” said Nhung.

Despite passing the checks in Vietnam, the Grab-Uber deal was in 2018 assessed as anti-competitive by the Competition and Consumer Commission of Singapore, which fined them to a combined SGD13 million ($9.5 million).

The Philippine Competition Commission approved the merger in August 2018, with conditions related to pricing and service quality. However, two months later, the watchdog imposed a penalty of nearly $300,000 on Grab and Uber for failing to reach the terms.

In February 2019, the Malaysia Competition Commission (MyCC) proposed a fine of $20.5 million against Grab for allegedly abusing its dominant position by imposing restrictive terms on its drivers, preventing them from promoting and providing advertising services for Grab’s competitors in the e-hailing and transit media advertising market. Subsequently, Grab has filed for a judicial review of the fine, claiming it did not violate Malaysia’s Competition Act 2010.

Grab started operations in Vietnam in 2014. Initially a ride-hailing service provider, since then the company has expanded geographical coverage and established an ecosystem of services including transportation (Grab, GrabBike), credit and payment (GrabPay by Moca, Grab Rewards), food delivery (GrabFood), hospitality (co-operation with Agoda and Booking.com), as well as amusement (minigames). In April 2019, it applied to change its business registration to add real estate activities.

The expansion started with the co-operation deal with e-wallet Moca to debut GrabPay by Moca. According to the information released by the two parties, Grab owned only 3 per cent stake in Moca, yet two of its representatives were on the Moca Board of Directors. Also, after the deal, Moca has become an exclusive partner to the Grab ecosystem, without signing with any other partners.

An unofficial source stated that Grab has taken over Moca. If the information is true, the Singaporean company has become a major contender on the local e-payment scene, next to MoMo and ZaloPay.

Meanwhile, Gojek is valued at $12.5 billion and is focusing on food and payments, in addition to core transportation. In 2018, as Uber sold its Southeast Asian operations to Grab, Gojek decided to expand into Vietnam, Thailand, Singapore, and the Philippines – starting with ride-hailing but aiming to replicate the multi-service offering which had worked so well for them in their home country. In Southeast Asia, Gojek is known as a multifunctional app with 20 services.

With these profiles, the two have so far been rivals, but if the two merge, they could combine their strengths, removing a major element of competition from the market and bringing them closer to total domination.

Most recently, Alibaba was reported to invest $3 billion in Grab, giving rise to speculation that the sum could be used for the merger with Gojek.

iPrice received investment from IGDEV

With the COVID-19 pandemic unabated in Southeast Asia, Malaysia-based online shopping aggregator iPrice has just received an investment from IG Digital Equity Venture (IGDEV) of an undisclosed value.

The investment was made under the Series B mobilisation round with the attendance of ACA Investments, Daiwa PI Partners, LINE Ventures, and Mirae Asset-Naver Asia Growth Fund.

Contrary to the disruptions in many sectors, the health crisis has aided the evolution of e-commerce across the region. According to data published by iPrice, e-commerce traffic has increased by 60 per cent in the recent two months.

Previously, a report performed by Google forecasted Southeast Asian e-commerce to reach $180 billion by 2025. However, under the impact of the COVID-19 lockdown, ths value is expected to grow even larger.

Amidst the rise of online shopping, iPrice asserted itself as a genuine companion to consumers and as a factor accelerating the growth of e-commerce sites.

“iPrice’s approach is unique. Instead of directly competing with other players, iPrice chooses to offer many solutions for e-commerce platforms, helping them reach more customers,” said JGDEV managing director Jojo Malolos.

Through JGDEV’s ecosystem, iPrice has a great opportunity to collaborate with overseas partners such as the Philippines-based RewardsMart integrated with the e-commerce platform Robinson Rewards and online news aggregator PEP.ph under the management of Summit Media.

iPrice will offer millions of items for Robinson Rewards’ consumers. Meanwhile, readers PEP.ph could use promotion codes given by iPrice to purchase goods from Lazada, Shopee, Zalora, and GrabFood, among others.

In Vietnam, iPrice Group has been operating iPrice.vn since 2014 and has partnered up with Home Credit Vietnam in 2019.

Conglomerates brush off ministry requests

Major foreign-invested husbandry companies CJ Group Vietnam and Emivest Feedmill Vietnam seem unwilling to provide performance information to help Vietnamese authorities build trade remedies that could reinforce the domestic husbandry industry against a deluge of cheap imports.

The Ministry of Industry and Trade (MoIT) has held numerous working sessions with the Ministry of Agricultural and Rural Development (MARD), some husbandry associations, and big husbandry companies over the past few years to collect information in order to prepare potential trade remedies to protect domestic companies, especially poultry producers.

“However, when the MoIT contacted them for input for a document proposing an anti-dumping investigation, numerous foreign-invested husbandry companies including South Korean conglomerate CJ Group and Emivest, which hold large market shares and looked ready to help before, gave us the cold shoulder,” said Pham Chau Giang, deputy director of the MoIT’s Trade Remedies Authority of Vietnam (TRAV).

Based on current regulations, trade remedies can be raised following the proposal of an individual or a group of agricultural producers holding 25 per cent of the market share.

Explaining their possible reluctance to cooperate, a major husbandry company told VIR that the information requested by the local authorities constitutes trade secrets, and while they are obliged to report some of this information to the tax authorities and the MARD, they are not obligated to share them with other ministries.

A representative of the local authorities told VIR that foreign-invested husbandry companies are tight-lipped about their performance because trade remedies would be against the best interests of their parent companies as they would impact business relations with partner countries.

VIR tried to contact CJ Group Vietnam and Emivest but no response was forthcoming.

In fact, due to cheap chicken imports flooding the market, domestic farmers have been complaining that they lose around VND10,000 (43 US cents) after each chicken they sell.

In the opinion of Nguyen Van Ngoc from the Animal Husbandry Association in the south-eastern region, foreign-invested giants deliberately ignore taking action to fight against imported chicken, with the intent of leaving local companies to die. “Foreign-invested companies have been earning a lot from feed or pigs recently which they can use to offset the losses from chicken, while local companies do not have the reserves to suffer for long,” he said.

Over the past five years, chicken imports have grown to massive volumes at very low pricing.

“The average price of imported chicken is low enough to confirm dumping, and a number of local husbandry companies are calling for an anti-dumping investigation, but foreign-invested ones ignore it,” Giang from TRAV said.

She added that the MoIT will strengthen monitoring domestic enterprises’ compliance with international regulations and provisions in bilateral and multilateral trade agreements. The areas of special attention will include the livestock sector that have been and are at risk of foreign countries launching investigation and applying trade remedies against Vietnamese exporters. “More, the ministry will study, review, and perfect domestic and international policies and laws related to trade remedies,” said Giang.

Trade remedies include anti-dumping action, countervailing duties, and safeguard action. These are trade policy tools that allow the government to take remedial action against imports which are causing material injury to a domestic industry.

“This should be highlighted in the context that Vietnam is integrating ever deeper into the global economy. Trade remedies are last-resort measures to protect domestic production from imports,” the TRAV representative added.

CJ Vina Agri opened for business in Vietnam in 2001 with the launch of a plant in the Mekong Delta province of Long An. Another plant in the northern province of Hung Yen was inaugurated five years later and in 2008, the company built its Vinh Long factory to produce fish feed. In 2015, it inaugurated the Dong Nai factory, the last before 2018’s new arrivals in Ha Nam and Binh Dinh provinces. CJ Vina Agri is also building a factory in the Mekong Delta region, bringing the total number of animal food processing plants to seven. Along with the animal feed segment, CJ Group has raised its ownership in local food businesses several times over the past few years. It bumped up the ownership rate in CJ Cau Tre from 51.6 to 71.4 per cent, and subsidiary CJ Cheiljedang bought 64.9 per cent of Minh Dat Food’s capital in 2017. In the previous year, the corporation also purchased 4.18 per cent of Vissan JSC’s stocks.

Meanwhile, Emivest FeedMill Vietnam is the main feed mill producing arm of Malaysian poultry supplier and producer Leong Hup International Bhd. It operates four feed mill plants in the southern provinces of Binh Duong, Tien Giang, and Dong Nai, in addition to a northern plant in Hai Duong. The company also produced medicine and supplements in Bau Bang district of Binh Duong.

Conglomerates brush off ministry requests

Major foreign-invested husbandry companies CJ Group Vietnam and Emivest Feedmill Vietnam seem unwilling to provide performance information to help Vietnamese authorities build trade remedies that could reinforce the domestic husbandry industry against a deluge of cheap imports.

The Ministry of Industry and Trade (MoIT) has held numerous working sessions with the Ministry of Agricultural and Rural Development (MARD), some husbandry associations, and big husbandry companies over the past few years to collect information in order to prepare potential trade remedies to protect domestic companies, especially poultry producers.

“However, when the MoIT contacted them for input for a document proposing an anti-dumping investigation, numerous foreign-invested husbandry companies including South Korean conglomerate CJ Group and Emivest, which hold large market shares and looked ready to help before, gave us the cold shoulder,” said Pham Chau Giang, deputy director of the MoIT’s Trade Remedies Authority of Vietnam (TRAV).

Based on current regulations, trade remedies can be raised following the proposal of an individual or a group of agricultural producers holding 25 per cent of the market share.

Explaining their possible reluctance to cooperate, a major husbandry company told VIR that the information requested by the local authorities constitutes trade secrets, and while they are obliged to report some of this information to the tax authorities and the MARD, they are not obligated to share them with other ministries.

A representative of the local authorities told VIR that foreign-invested husbandry companies are tight-lipped about their performance because trade remedies would be against the best interests of their parent companies as they would impact business relations with partner countries.

VIR tried to contact CJ Group Vietnam and Emivest but no response was forthcoming.

In fact, due to cheap chicken imports flooding the market, domestic farmers have been complaining that they lose around VND10,000 (43 US cents) after each chicken they sell.

In the opinion of Nguyen Van Ngoc from the Animal Husbandry Association in the south-eastern region, foreign-invested giants deliberately ignore taking action to fight against imported chicken, with the intent of leaving local companies to die. “Foreign-invested companies have been earning a lot from feed or pigs recently which they can use to offset the losses from chicken, while local companies do not have the reserves to suffer for long,” he said.

Over the past five years, chicken imports have grown to massive volumes at very low pricing.

“The average price of imported chicken is low enough to confirm dumping, and a number of local husbandry companies are calling for an anti-dumping investigation, but foreign-invested ones ignore it,” Giang from TRAV said.

She added that the MoIT will strengthen monitoring domestic enterprises’ compliance with international regulations and provisions in bilateral and multilateral trade agreements. The areas of special attention will include the livestock sector that have been and are at risk of foreign countries launching investigation and applying trade remedies against Vietnamese exporters. “More, the ministry will study, review, and perfect domestic and international policies and laws related to trade remedies,” said Giang.

Trade remedies include anti-dumping action, countervailing duties, and safeguard action. These are trade policy tools that allow the government to take remedial action against imports which are causing material injury to a domestic industry.

“This should be highlighted in the context that Vietnam is integrating ever deeper into the global economy. Trade remedies are last-resort measures to protect domestic production from imports,” the TRAV representative added.

CJ Vina Agri opened for business in Vietnam in 2001 with the launch of a plant in the Mekong Delta province of Long An. Another plant in the northern province of Hung Yen was inaugurated five years later and in 2008, the company built its Vinh Long factory to produce fish feed. In 2015, it inaugurated the Dong Nai factory, the last before 2018’s new arrivals in Ha Nam and Binh Dinh provinces. CJ Vina Agri is also building a factory in the Mekong Delta region, bringing the total number of animal food processing plants to seven. Along with the animal feed segment, CJ Group has raised its ownership in local food businesses several times over the past few years. It bumped up the ownership rate in CJ Cau Tre from 51.6 to 71.4 per cent, and subsidiary CJ Cheiljedang bought 64.9 per cent of Minh Dat Food’s capital in 2017. In the previous year, the corporation also purchased 4.18 per cent of Vissan JSC’s stocks.

Meanwhile, Emivest FeedMill Vietnam is the main feed mill producing arm of Malaysian poultry supplier and producer Leong Hup International Bhd. It operates four feed mill plants in the southern provinces of Binh Duong, Tien Giang, and Dong Nai, in addition to a northern plant in Hai Duong. The company also produced medicine and supplements in Bau Bang district of Binh Duong.

Parent company of Cho Tot wraps up $80 million investment

Carousell, one of the world’s largest and fastest-growing classifieds and the parent company of Cho Tot, has announced receiving an $80 million investment from a consortium led by Naver and featuring Mirae Asset-Naver Asia Growth Fund and NH Investment & Securities.

Carousell will be valued at over $900 million after this investment, following the merger of local online marketplace Cho Tot in 2019 to accelerate leadership in Vietnam. This latest round of funding signals continued confidence in Carousell’s growth and mission relevance, with the acceleration of e-commerce adoption with shoppers moving online, selling more preloved items and supporting their local communities during this global pandemic.

“The last six months have been challenging for all. It’s inspiring to see how the Carousell community is making the best out of a challenging situation, helping those in need and rallying each other on. Their stories of how Carousell has been essential to them to make ends meet and afford what they need during this global health crisis reminds us to keep our heads down, focused on serving our community,” said Quek Siu Rui, co-founder and CEO of Carousell.

“Naver’s investment in Carousell is a vote of confidence and reinforces the relevance of our mission. We are excited to work closely with Naver, a leader in mobile services which has industry-leading credentials in advanced technologies, as we continue our focus on using technology to make selling and buying even simpler, effective, and more inspiring,” Quek Siu Rui added.

"Carousell has built a tremendous platform enabling people in the region to transact more effectively and efficiently. We believe its efforts to focus on the products and the community will be further consolidating its market leader position. We look forward to working closely with Carousell,” said Jung An Lee, head of Investments at Naver.

​The COVID-19 pandemic has greatly affected individuals and businesses globally in many ways. For the past six months, Carousell has stepped up as an essential platform for our users across its eight markets, including Vietnam. This includes regional initiatives such as providing $2 million worth of free ads to non-profit organisations, the launch of a new "Free Items" category for the #ChoosetoGive campaign where the community donated free items to users in need and partnerships with government agencies such as Enterprise Singapore, Hong Kong Productivity Council, and Malaysia Digital Economy Corporation to support the digitalisation of micro-enterprises and SMEs.

Construction of 143-million-USD industrial park begins in Binh Dinh

Deputy Prime Minister Truong Hoa Binh attended a ground-breaking ceremony for the Becamex VSIP Binh Dinh Township and Industrial Park on September 27.

The complex, with an investment of more than 3.33 trillion VND (143.45 million USD), will span an area of 1,425 ha in Van Canh district of the south central coastal province of Binh Dinh.

Once operational, it is expected to attract investment in excess of 2 billion USD, create stable jobs for about 150,000 workers, and contribute around 400 billion VND per year to the State budget.

Addressing the event, Deputy PM Binh said the project will serve as a nucleus promoting the development of Binh Dinh’s industrial and services sectors, urging local authorities and people to work with the investor to ensure its progress and safety.

He also asked Binh Dinh authorities to improve investment climate, promptly handle administrative procedures for investors and care for residents whose land is revoked for projects.

The same day, the Deputy PM attended a ceremony to open a road linking Nhon Hoi Economic Zone with Phu Cat airport of Binh Dinh province. The road, measuring 20km in length and 20.5m in width, was built at a cost of 1.82 billion VND, with four lanes.

Also on September 27, a ground-breaking ceremony for a high tech agricultural complex was held in Cu M’gar district of the Central Highlands province of Dak Lak.

It is invested by Hung Nhon Group and De Heus of the Netherlands at an investment of 1.5 trillion VND (64.6 million USD), aiming to produce high quality animal feed and fertiliser for exports.

Covering an area of about 200ha, the complex is scheduled to be completed by the fourth quarter of 2025.

Upon its completion, the project is hoped to turn the Central Highlands into a hub for swine breeds and hi-tech husbandry models in the region and Asia.

Deputy Minister of Agriculture and Rural Development Phung Duc Tien said the project is an environmentally-friendly one which will use solar power energy and create jobs for nearly 300 local labourers.

Construction on waste-to-energy plant begins in Hau Giang

Construction of a waste-to-energy plant started in Hoa An commune, Phung Hiep district, the Mekong Delta province of Hau Giang, on September 27.

Truong Canh Tuyen, Vice Chairman of the provincial People’s Committee, asked departments, agencies and localities to join hands to ensure the process, quality and safety of the project, and put the plant into operation in late 2021 as scheduled.

He asked the investor to choose cutting-edge and environmentally friendly technologies for the factory.

Covering 23ha, the plant has total investment capital of 1.32 trillion VND (56.86 million USD). During the first phase, it is designed to have a capacity of handling 300 tonnes of waste per day, generating 6MW, while 600 million tonnes of waste are expected to be handled in the second phase to produce 12MW.

Improving sentiment lifts emerging East Asian bonds

The improvement of global investment sentiment and financial conditions has provided a much-needed lift for local currency bond markets in emerging East Asia, including Vietnam, despite risks from the COVID-19 pandemic, according to the latest issue of the Asian Development Bank’s (ADB) Asia Bond Monitor.

Government bond yields in most emerging East Asian markets declined from June 15 to September 11 on the back of accommodative monetary policies and weakening growth across the region. Meanwhile, improving sentiment has led to gains in equity markets and a narrowing of credit spreads, with most regional currencies strengthening against the dollar.

Local currency bonds outstanding in emerging East Asia reached 17.2 trillion USD at the end of June, up 5 percent from March this year and 15.5 percent higher than in June 2019.

The report showed that Vietnam’s local currency bond market decreased by 1.7 percent at the end of June this year to reach $58.2 billion, after posting 10.4 percent quarterly growth in the first quarter. This is mainly due to lower outstanding debt in the Government area, even as the corporate bond stock increased.

Vietnam’s Government bond segment contracted 7.8 percent quarter-on-quarter at the end of June to reach 50.1 billion USD, accounting for 86.2 percent of the country’s total bond stock. Corporate bonds, however, surged by 65.6 percent in the second quarter compared to the first, reaching 8 billion USD.

On an annual basis, growth in corporate bonds stood at 76 percent at the end of June this year.

ADB Chief Economist Yasuyuki Sawada said governments in the region have been agile in dealing with the impact of the COVID-19 pandemic through a wide range of policy responses, including monetary easing and fiscal stimulus.

“It is crucial that governments and central banks maintain accommodative monetary policy stances and ensure sufficient liquidity to support financial stability and economic recovery,” Sawada said.

Emerging East Asia consists of China, Hong Kong of China, Indonesia, the Republic of Korea, Malaysia, the Philippines, Singapore, Thailand and Vietnam.

As a share of regional gross domestic product, emerging East Asia’s local currency bonds outstanding climbed to 91.6 percent at the end of June, from 87.8 percent in March, mainly due to the large amount of funding needed to fight the pandemic and its impact.

Bond issuance in the region hit 2 trillion USD in the second quarter, up by 21.3 percent from the first quarter this year. China remained home to the region’s largest bond market, accounting for 76.6 percent of the region’s total bond stock as of the end of June.

The region’s government bonds outstanding reached 10.5 trillion USD at the end of June and made up 60.8 percent of the region’s aggregate bond stock. Corporate bonds, meanwhile, totalled 6.7 trillion USD.

The ADB said that a worsening and prolonged COVID-19 pandemic that could dent the region’s economic outlook. Developing Asia will contract by 0.7 percent this year, its first contraction in six decades. Growth will rebound to 6.8 percent in 2021.

Other risk factors include potential social unrest due to the pandemic’s economic impact, as well as continuing tensions between China and the US, ADB experts said.

Long An international port’s phase 1 inaugurated

The Dong Tam Group held an inauguration ceremony for the first phase of the Long An International Port in Tan Lap commune, Can Giuoc district, the southern province of Long An on September 26.

Construction for the second phase of the port also began the same day.

The 147-hectare port is developed in three phases with total investment of nearly 10 trillion VND (430.7 million USD). It is designed to have seven wharves, which are able to receive ships of up to 70,000 DWT. More than 400,000 square metres at the port were arranged to build warehouses, serving the transportation of farm produce, steel, fertiliser, among others in the Mekong Delta.

The port project is key to reducing traffic congestion and logistics costs in Long An province and the Mekong Delta.

Construction has been completed for three wharves with total length of 630 metres. As of 2019, Long An International Port received nearly 1,000 domestic and foreign ships (including many 50,000DWT ships), with about 1 million tonnes of goods imported and exported through it.

This year, the Dong Tam Group are building wharves No.4 and 5, and striving to put them into operation in 2021.

The project investor is working on legal procedures to expand the port and build two other wharves, at an undisclosed date, that would be able to receive 100,000DWT ships.

This would increase the total number of wharves to nine, and their combined length to 2,368 metres, making it one of Vietnam's longest international ports.

Squid and octopus exports rebound after enforcement of EVFTA

Vietnam’s squid and octopus exports enjoyed growth in major markets during August, representing a 22% increase to US$53.7 million, with a notable boost for exports to the EU which rose for the first time since March. 

August witnessed squid and octopus exports to the majority of key markets increase, including the Republic of Korea (RoK), ASEAN, the EU, China, the United States, Taiwan (China), and Israel, with the exception of the Japanese market­­­.

Despite enjoying a rebound in August, Vietnamese squid and octopus exports during the initial eight months of the year were affected by the novel coronavirus (COVID-19) pandemic, therefore causing a fall in export value.

Throughout the eight-month period, the squid and octopus exports reached close to US$345 million, an a year-on-year decline of 10.5%.

The RoK remains the nation’s largest import market for squid and octopus, representing approximately 42% of the total national export value for these items. Indeed, exports of these products to the RoK witnessed a consistent increase in June, July, and August.

Furthermore, August witnessed the export of the products to the RoK grow by 30.8% to US$20.7 million. However, due to a decrease in previous months, the export of squid and octopus to this market still endured a fall of 6.3% to US$143.5 million during the first eight months of the year.

Japan ranked second in terms of importing local octopus and squid, making up 23%, with exports during the opening eight months of the year reaching roughly US$79.5 million, a drop of 19% from the corresponding period in 2019.

China makes up the country’s fifth largest import market for squid and octopus, accounting for 7.7% of overall exports. This comes as the export of squid and octopus items to China in August witnessed growth of 28.4% to US$4.5 million. During the reviewed period, the export of squid and octopus to China stood at US$26.6 million, a rise of 52.9% from the same period last year.

Most notably, the northern neighbour is the market with the best growth rate in terms of squid and octopus imports from the nation during the eight-month period. With these positive signs, especially with the EU market, seafood enterprises expect that the export of squid and octopus items will provide a breakthrough during the remaining months of the year.

Wood exports hit nearly US$9 billion over nine-month period

The opening nine months of the year saw the export value of timber and forestry products reach an estimated figure of US$8.97 billion, up 12% from the same period last year, according to a report released by the Vietnam Timber and Forest Product Association (Vifores). 

During the reviewed period, wood and wood product exports stood at US$8.38 billion, representing a year on-year  rise of 11.2%.

The nation’s five leading export markets include the United States at US$4.19 billion, an increase of 27.4% over the same period in 2019, Japan, China, the EU, and the Republic of Korea (RoK).

Deputy Minister of Agriculture and Rural Development Ha Cong Tuan assesses that following two waves of the novel coronavirus (COVID-19) pandemic, Vietnamese wood exports still show many positive signs due to the efforts and creativity shown by local businesses.

“Looking back at difficulties, we have drawn lessons for success. This year, we conclude our five-year plan. In retrospect, the export target of US$7.5 billion in 2020 was far exceeded. The wood industry is poised to reach the export target of US$20 billion by 2025 as expected by the Prime Minister”, Deputy Minister Tuan says.

Since the beginning of the year , the wood and forest product processing and export sector has experienced a number of fluctuations, strongly affecting the production, processing, and export value of timber and local forest products, although the impact of COVID-19 must also be taken into account.

Despite this negative impact, starting from July when the pandemic was gradually brought under control, countries have begun to restore production and business activities as a means of boosting economic development. This has therefore resulted in growing demand for importing timber and forest products, coupled with an increasing number of signed orders.

Most notably, the export value of timber and forest products has bounced back, with the export value witnessing a two-digit increase in both August and September. Indeed, the export value of wood and forest products in August reached over US$1 billion for the first time.

Improving sentiment lifts emerging East Asian bonds

The improvement of global investment sentiment and financial conditions has provided a much-needed lift for local currency bond markets in emerging East Asia, including Vietnam, despite risks from the COVID-19 pandemic, according to the latest issue of the Asian Development Bank’s (ADB) Asia Bond Monitor. 

Government bond yields in most emerging East Asian markets declined from June 15 to September 11 on the back of accommodative monetary policies and weakening growth across the region. Meanwhile, improving sentiment has led to gains in equity markets and a narrowing of credit spreads, with most regional currencies strengthening against the dollar.

Local currency bonds outstanding in emerging East Asia reached US$17.2 trillion at the end of June, up 5% from March this year and 15.5% higher than in June 2019.

The report showed that Vietnam’s local currency bond market decreased by 1.7% at the end of June this year to reach US$58.2 billion, after posting 10.4% quarterly growth in the first quarter. This is mainly due to lower outstanding debt in the Government area, even as the corporate bond stock increased.

Vietnam’s Government bond segment contracted 7.8% quarter-on-quarter at the end of June to reach US$50.1 billion, accounting for 86.2% of the country’s total bond stock. Corporate bonds, however, surged by 65.6% in the second quarter compared to the first, reaching US$8 billion.

On an annual basis, growth in corporate bonds stood at 76% at the end of June this year.

ADB Chief Economist Yasuyuki Sawada said governments in the region have been agile in dealing with the impact of the COVID-19 pandemic through a wide range of policy responses, including monetary easing and fiscal stimulus.

“It is crucial that governments and central banks maintain accommodative monetary policy stances and ensure sufficient liquidity to support financial stability and economic recovery,” Sawada said.

Emerging East Asia consists of China, Hong Kong of China, Indonesia, the Republic of Korea, Malaysia, the Philippines, Singapore, Thailand and Vietnam.

As a share of regional gross domestic product, emerging East Asia’s local currency bonds outstanding climbed to 91.6% at the end of June, from 87.8% in March, mainly due to the large amount of funding needed to fight the pandemic and its impact.

Bond issuance in the region hit US$2 trillion in the second quarter, up by 21.3% from the first quarter this year. China remained home to the region’s largest bond market, accounting for 76.6% of the region’s total bond stock as of the end of June.

The region’s government bonds outstanding reached US$10.5 trillion at the end of June and made up 60.8% of the region’s aggregate bond stock. Corporate bonds, meanwhile, totalled US$6.7 trillion.

The ADB said that a worsening and prolonged COVID-19 pandemic that could dent the region’s economic outlook. Developing Asia will contract by 0.7% this year, its first contraction in six decades. Growth will rebound to 6.8% in 2021.

Other risk factors include potential social unrest due to the pandemic’s economic impact, as well as continuing tensions between China and the US, ADB experts said.

Fuel prices might be adjusted three times per month

Fuel prices may be reviewed and adjusted three times per month instead of two as currently, according to the latest version of a draft decree amending Decree No 83 on petrol and oil trading.

Under the draft, fuel prices would be adjusted every ten days, on the first, 11th and 21st of each month.

Tran Huy Dong, Director of the Ministry of Industry and Trade's Domestic Market Department, said adjusting fuel prices every 10 days aimed to ensure the domestic price would more closely follow world prices.

If there were increases or decreases by 10 per cent or higher in the prices of factors relevant to fuel prices, the Ministry of Industry and Trade must report to the Prime Minister, the draft said. Currently, changes of 7 per cent or higher must be reported to the Prime Minister.

Dong said that reporting to the PM when there were changes from 10 per cent or higher, instead of 7 per cent, would give more room for ministries to be flexible in managing fuel prices when there were huge fluctuations. Reporting to the Prime Minister would take more time for a decision.

Dong added that the Ministry of Industry and Trade and Ministry of Finance were considering the formula for calculating the base fuel price based on the prices of imported and domestically-produced fuel.

Regarding the proposal to allow the operation of mini petrol stations, the draft said these stations would only be allowed to be opened in remote areas where distributors had not invested in building traditional petrol stations.

According to Dong, only fuel traders with permission can open mini petrol stations.

The list of localities where mini petrol stations were allowed to be opened would be made public, Dong said.

At a meeting in late August, Deputy Prime Minister Trinh Dinh Dung asked for careful consideration to be given to the opening of mini petrol stations, including regulations about fire prevention and fuel quality. 

Bình Phước builds roads to connect to industrial parks

Dồng Phú District People’s Committee in Bình Phước Province has begun the construction of several roads to connect the cross-provincial ĐT741 road to the Đồng Phú industrial, service and urban complex and the upcoming expansion area of the South Đồng Phú industrial park.

Four new roads will connect the ĐT741 road, a key road that connects the two southern provinces of Bình Phước and Bình Dương with the Central Highlands, and the Đồng Phú – Bình Phước Highway across different junctions.

Another road will connect ĐT741 to the Tân Lập rubber farm in Đồng Phú District.

Investment for the VNĐ150 billion (US$6.47 million) project is from the local government budget.

Thirty-five households donated their land to the project.

The project is meant to boost the social economic development of the region, as well as celebrate the upcoming 11th Bình Phước Province Party Congress. 

Source: VNA/VNN/VNS/VIR/VOV/SGT/NDO/Dtinews