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VIETNAM BUSINESS NEWS MAY 21

VN food exporters turn focus to domestic market

Vietnamese are tending to consume foods of clear origin and high quality after the COVID-19 pandemic, causing many export-oriented food brands to turn their attention to the domestic market.

The market with a population of nearly 100 million is in fact attracting both foreign and local food companies.

Phan Minh Thong, general director of Phuc Sinh Company, which has been exporting pepper, coffee and farm produce for the last 20 years, said Viet Nam is a very large market for coffee products.

His company exports 65,000-70,000 tonnes of coffee products a year, whereas domestic sales account for less than 1 per cent of that.

Phuc Sinh would focus more on promoting its Blue Son La Coffee brand in the domestic market, he added.

Viet Nam may be the world’s second largest coffee exporter, but Vietnamese have to drink coffee mixed with other ingredients, and that is the reason why his company wants to offer local customers pure and export-quality coffee, he claimed.

He hoped consumers would support K Coffee when offered pure, good-quality coffee at reasonable prices and told about it.

In 2022, Phuc Sinh Group plans to build more coffee processing plants to supply the domestic market and venture further into the spice industry.

Le Ba Minh, director of Pacific Foods Joint Stock Company, a fish sauce exporter to the US, claimed his company’s fish sauces are the top sellers on Amazon after just a year since launch.

In June, it started selling in the domestic market through e-commerce platform Shopee.

"The fish sauces for the domestic market have the same quality as for exports. We prepared for two years to develop our domestic market."

Dang Ba Long, director of the HCM City Honey Bee Joint Stock Company (Behonex), said in recent years the company's domestic sales have gone quite well, growing at 15 per cent a year.

In the past, Behonex products were mainly exported, with little domestic sales as Vietnamese used to think honey was only consumed when sick, he said.

But now honey is used by many people as an ingredient in cooking and beverages.

Another important reason is that Vietnamese people's incomes are increasing, and they could afford premium foods, Long said.

Domestic products are however facing fierce competition from imports, he said.

Analysts said Vietnamese consumers used to be price-conscious, but living standards are now increasing due to rapid economic growth and food safety has become a factor, persuading exports-only firms to look at the domestic market, especially with COVID hitting exports.

Capital proposes VND23 trillion road project

Hanoi has proposed an investment of VND22.8 trillion (USD991.37 million) to carry out part of project Belt Road 4.

The city plans to invest around VND19 trillion into the project between 2021 and 2025, while the remainder will be used for the 2026-2030 period.

According to the Hanoi People’s Committee, the 112.8 kilometre Belt Road 4, would cost VND85.8 trillion.

An Giang strives for US$858 million investment in 2022
     
The Mekong Delta Province of An Giang has set a target of attracting 15 projects with a combined investment capital of over VND20 trillion (above US$858 million) by year-end, according to its investment promotion programme in 2022.

These projects will be in the province's prioritised areas such as traffic infrastructure, urban development, housing, agriculture, as well as industry, trade and services, culture and tourism, baodautu.vn reported.

Under the programme, approved recently by An Giang People's Committee, the province also hopes to attract foreign direct investment (FDI) inflows in a wide range of sectors including the development of industrial park infrastructure, industrial real estate, supporting industries, and agriculture.

Between now and the end of this year, the province plans to host three online investment promotion conferences which will see the attendance of investors from Japan, South Korea, Australia, USA, Taiwan, Israel, Thailand, Singapore and European countries.

As per the programme, the locality will team up with the Ministry of Planning and Investment's Southern Investment Promotion Centre to organise its investment promotion conference in the fourth quarter.

Large industrial zones set up to attract FDI
     
Several large-scale industrial zones were being set up from the beginning of this year to capture the opportunity of attracting both foreign and domestic manufacturers in the wave of post-pandemic production and business recovery.

VSIP Group, at the end of March, started the construction of the VSIP 3 Industrial Zone, which covered more than 1,000 hectares in Hoi Nghia Commune, Tan Uyen Town and Tan Lap Commune, Bac Tan Uyen District, Binh Duong Province

To date, the industrial zone attracted more than 30 companies, both domestic and foreign, to study the production opportunity, with an expected total investment of around US$1.8 billion.

Recently, the Dai An Urban – Industrial Zone Development Corporation Joint Stock Company and Indian partners signed a cooperation agreement for developing a 960-hectare pharmaceutical park project worth around $10-12 billion in Hai Duong Province.

The park was expected to be where famous pharmaceutical companies in the world gathered for research and production.

Saigon Telecom Technology Joint Stock Company (Saigontel) and VinaCapital signed a memorandum of understanding with Singapore – based Aurous about cooperation in investing in a 700-ha urban–industry complex in Bac Giang with an estimated investment of around $2.5 billion.

According to SSI Research, the demand for hiring industrial land will be strong this year, fuelled by a production shift to Viet Nam together with the completion of infrastructure projects such as Bien Hoa – Vung Tau, Dau Giay – Phan Thiet, North-South expressways, Thi Vai – Cai Mep and Gemalink ports.

SSI Research forecast that industrial land rents in Viet Nam would increase by 8-9 per cent in the Southern region and 6-8 per cent in the North this year due to a scarcity of supply amid the rising demand.

Su Ngoc Khuong, senior director of Savills Viet Nam, said that the positive growth prospect of the Vietnamese economy after the pandemic attracted investors and created conditions for the industrial real estate market to be robust in the first months of this year.

To attract multinational corporations, Viet Nam needed to develop not only large-scale industrial parks but also the transportation and logistics infrastructure systems and hasten administrative reforms to improve the investment climate, Khuong said.

Localities and Vietnamese firms need to prepare high-quality human resources, especially for hi-tech industries, to meet the demand of multinational corporations, an important factor to attract them, as the Government prioritises attracting investment in hi-tech industries, not labour-intensive.

According to David Jackson, CEO of Colliers Viet Nam, Viet Nam needed to renew the industrial park development model to build eco-industrial parks.

This model would play an important role in the sustainable development strategy, reducing resource exploitation and limiting the impact on the environment but not affecting the performance of businesses, adding that this model would also contribute to the countries and global effort to combat climate change.

Specific steps to be taken were to improve the technology transfer capacity of enterprises, apply advanced technologies and minimise emissions, he added.

He said that industrial zones should enhance linkage to develop production and logistics chains to improve competitiveness, lower production costs and increase sustainability.

HCM City food businesses under pressure to hike prices as costs skyrocket
     
Rising raw material and fuel costs are putting pressure on food businesses and restaurants in HCM City to hike prices.

Saigon Food JSC was quoted by Tuoi Tre newspaper as saying it has increased processed food prices by up to 15 per cent due to high costs.

Raw materials and packaging costs have been rising for the past two years as COVID-19 disrupted supply chains, while transport costs have gone up due to rising fuel prices.

Other food companies such as Vissan JSC and Duy Anh Food Company also increased their prices.

Pham Thi Huan, chairwoman of poultry products supplier Ba Huan JSC, said her company’s egg products were part of the city’s price stabilisation programme, but rising costs were creating great pressure.

Tran Quoc Thinh, founder of the 109 Chicken Hotpot chain, said raw material costs had increased by 15 per cent from last year, and rent had also gone up.

Even cheap restaurants whose main customers are students and low-income workers are having to raise prices since the costs of ingredients and cooking oil have doubled in the last two years. Some are losing price-sensitive customers as a result. 

Viet Nam should prioritise value added cashew products for EU market
     
Enterprises should prioritise investment in developing value-added cashew products to avoid losing its market share instead of only focusing on wholesale, according to experts.

Viet Nam's cashew nut is dominant in the EU market, however, it is mainly raw material and there are very few processed products, especially roasted and spiced products according to the taste of EU customers.

Meanwhile, products made from cashews, especially spiced cashews, chocolate covered cashews, cashew milk, and cashew yoghurt, are becoming more and more popular for EU consumers because they are healthy alternative foods.

In addition, to maintain the market shares of Viet Nam's cashew nuts in the EU market, experts have recommended that the domestic enterprises should take consultancy from law firms on EU regulations on imported goods, including cashews, because the regulations are very complicated and are frequently updated. They also need the law firms' support during implementing business transactions to avoid risks.

In the food sector, the EU has no mandatory regulations, but food safety certifications, social responsibility certifications, and packaging and label requirements are notable plus points for the businesses when exporting foods to the EU, according to the experts.

Organic cashew products are very popular in the EU so this is a potential niche market for Vietnamese businesses.

However, the experts have warned that Viet Nam's cashew nuts have faced competition in the EU market. Specifically, in 2019-2020, Viet Nam's cashew market shares in France decreased from 61 per cent to 46 per cent. At supermarkets and hypermarkets, there are almost no Vietnamese-branded cashew products because the domestic enterprises have mainly focused on wholesale, not retail.

Son said the cashew nut supply chain in France had changed markedly with declining volumes of the big suppliers, such as Viet Nam and India, and the emergence of some other suppliers, especially Cambodia.

He also added that EU enterprises could invest in the African region to diversify the supply of cashew nuts and avoid dependence on Viet Nam and other Asian countries.

The EU, especially France, has a very special relationship with Africa, which not only has a closer geographical location than Viet Nam but also has a historical relationship with France. Therefore, Viet Nam also needs to pay attention to this issue, according to Son.

In addition, according to Dang Hoang Giang, general secretary of the Viet Nam Cashew Association, domestic cashew enterprises are lacking market information about customer tastes, especially the customers who are interested in roasted Vietnamese cashew products sold in EU convenience stores.

Inspectorate urges HCM City to speed up restructuring of SOEs
     
HCM City needs to speed up equitisation to restructure state-owned enterprises and improve their efficiency, according to the Government Inspectorate.

The equitisation of state companies is progressing at a tardy pace, a recent report by the inspectorate says.

It also has shortcomings in terms of allocation of assets for equitisation, determination of enterprise value, determination of the ratio of state capital post-equitisation, and selection of strategic investors.

According to the Ministry of Finance’s corporate finance department, many SOEs in the city are large and have complicated financial and land ownership structures, and so equitisation, especially evaluating their assets, is not easy.

As of 2016 the city had 62 SOEs fully owned by the state, according to the Government Inspectorate.

Phan Thi Thang, vice chairwoman of the city People’s Committee, has sought the HCM City Business Management Innovation Board’s advice to remove obstacles and speed up equitisation of SOEs.

Equitisation plans for 2016-20 had not been fruitful, she admitted.

She said the People’s Committee would continue to inspect the use of public properties and real estate to ensure they are used in accordance with guidelines.

Experts said the restructuring of SOEs must focus on resolving issues faced by weak and loss-making enterprises while maintaining, consolidating and developing efficient ones through good branding.

Vietnam to introduce national development strategies at 2022 Davos WEF: Ambassador

Deputy Prime Minister Le Minh Khai will attend the 52nd World Economic Forum (WEF) annual meeting from May 23-24 in Davos, Switzerland, at the invitation of WEF Founder and Executive Chairman Professor Klaus Schwab.

This will be one of the major multilateral foreign relations activities of Vietnam in 2022, especially in the context that the annual meeting of this major global economic forum has been postponed over the past two years due to COVID-19, according to Ambassador Le Thi Tuyet Mai, Permanent Representative of Vietnam to the United Nations, the World Trade Organisation (WTO) and other international organisations in Geneva.

She said that since Vietnam and the WEF set up their relationship in 1989, leaders of both sides have paid great attention to the promotion of bilateral ties in many fields.

Vietnam attended four WEF annual meetings at prime ministerial level in 2007, 2010, 2017 and 2019, and joined the WEF on ASEAN at prime ministerial level four times in 2012, 2013, 2014 and 2017. The country hosted the WEF on ASEAN in 2018, the WEF on Mekong in 2016 and the WEF on East Asia in 2010.

120 businesses to join Automechanika Ho Chi Minh 2022 exhibition

As many as 120 domestic and foreign exhibitors are set to display auto products of famous international brands such as DTE system, Dunlop Tech, Exedy, CEPSA, and Respol at Automechanika Ho Chi Minh 2022, which will take place in the southern metropolis from June 29 to July 1.

Automechanika Ho Chi Minh 2022 will be conducted in both online and traditional formats and will feature the participation of international enterprises from 15 countries and regions, including China, Germany, Hong Kong (China), India, Italy, the Republic of Korea, Malaysia, Middle East, Poland, Spain, Taiwan, Vietnam, and Singapore.

This year, as a means of satisfying the needs of the regional market as well as the high requirements for high-quality products, the exhibition will serve as a platform as a connection and interactive channel for businesses. The event will also provide professional social networks about automobiles as a means of enhancing marketing activities.

A car maintenance and care festival at Automechanika Ho Chi Minh 2022 will represent a new playground for car owners to experience and realise the importance of maintenance, as well as being an opportunity for them to access new technology products. This will contribute to helping the vehicle operating process achieve optimum efficiency and safety.

Furthermore, leading domestic and foreign experts will share the latest information on the auto industry and some development orientations, along with outlining ways of improving the knowledge of automotive mechanics through practice sessions and seminars held within the event.

Automechanika Ho Chi Minh 2022 will offer a proper solution for the auto industry’s development and help businesses to promote trade exchanges with both domestic and foreign customers.

Forum promotes Vietnamese and Latvian business connectivity

The Vietnam - Latvia business forum slated for May 31 is anticipated to boost trade exchange and development between the two countries moving forward.

The organisation of the forum is part of a range of activities being held to mark the 30th anniversary of diplomatic relations between the two sides.

The Vietnam Trade Office in Sweden, concurrently of the Nordic region, said that Latvia is one of the three nations in the Baltic region.

In the three decades following the initial establishment of diplomatic relations, Vietnam and Latvia have enjoyed a sound co-operative relationship. However, in terms of trade, turnover between the two countries remains extremely limited.

Currently, Vietnamese export staples include seafood, cashew nuts, coffee, pepper, plastic products, bamboo and rattan products, wood and wood products, garments and textiles, footwear and other products.

Vietnam imports items from Latvia such as rubber, timber and wood products, cotton, fabrics of all kinds, raw materials for textiles and garments, leather, machinery, equipment, and pharmaceuticals.

Latvia is widely viewed as a potential import market for seafood and canned fish products from 40 countries globally as it provides necessary materials for the country's seafood processing industry.

Tan Son Nhat International Airport’s Terminal 3 construction to kick off in May

Airports Corporation Vietnam (ACV) has proposed beginning the construction of Tan Son Nhat International Airport’s Terminal 3 this month after a long delay.

The latest plan suggests that the construction of the new terminal will be completed within 37 months.

According to ACV, the preparation work for the construction is basically completed and the investor is just waiting for the land handover. The Ministry of Defence has asked the prime minister to approve handing over 16 hectares of land in Tan Binh district – which is managed by this ministry – to serve for the construction.

At present, Ho Chi Minh City is waiting for opinions from the Ministry of Finance and then it will build a report to submit to the prime minister for approval.

The terminal has a designed capacity of 20 million passengers a year, which would help ease the overload at Terminal 1. It will also contribute to dealing with the traffic jams at the city’s gates, promoting economic and tourism development for Ho Chi Minh City and other parts of the southern region.

UN promises support for Vietnam’s energy transition scheme

The United Nations (UN) has affirmed its willingness to support Vietnam in establishing a partnership on energy transition with the Group of Seven (G7) nations in a letter of UN Secretary-General Antonio Guterres to Vietnamese Prime Minister Pham Minh Chinh.

Special Adviser to the UN Secretary General on Climate Action Selwin Hart handed over the letter to Ambassador Dang Hoang Giang, Permanent Representative of Vietnam to the UN at a meeting in New York on May 18.

In the letter, the UN Secretary General applauded Vietnam’s decision to make a strong commitment to net-zero emissions by 2050 and reducing domestic coal-fired electricity consumption at the 26th United Nations Climate Change Conference of the Parties (COP26), affirming that the UN fully supports Vietnam's efforts to phase out coal-fired power by 2040.

Guterres welcomed G7 nations’ recent agreement to prioritise the establishment of partnership with Vietnam on energy transition.

Ambassador Giang thanked the UN and the Secretary General for the support for Vietnam, saying that he will soon send the letter to PM Chinh and will continue to work closely with the special adviser and UN agencies in this issue.

SCG kicks off the first-ever Hacks to Heal our Planet competition in Vietnam

SCG has announced the Hacks to Heal our Planet contest in Thailand, Indonesia, and Vietnam. It is an opportunity for the new generation to show their creative ideas to improve the environment, build a better society, and ensure a better world for future generations.

In Vietnam, SCG is cooperating with the Student Assistance Center to invite citizens aged 15 to 30 to unleash their talent and share their innovative ideas in the environmental sector with a total prize of up to VND100 million ($4,315). Through the contest, SCG not only hopes to create a large-scale playground for the talented new generation but also reaffirms its responsibility of leading young people to work together to build a greener and better planet.

Adopting the environmental, social, and governance (ESG) approach, the idea-pitching contest Hacks to Heal our Planet is divided into three categories, including ideas to solve environmental problems and inequality, improve inclusion, diversity, and transparency, and fight injustice.

The contest includes two rounds, the Vietnamese national round from May 10 to June 6 and the ASEAN regional round from June 6 to July 19.

People are able to apply for the contest individually or as a team – with a maximum of five members per team. Vietnamese participants are required to submit a video concept presentation, an artwork poster, a project proposal, and participant information at scg.sac.vn/ytuongxanh by the end of May 24.

The top 10 awards in Vietnam will be announced on June 6 and selected for the regional round to compete with other countries. In the final round, the top three in each category will present their ideas online on June 10 and the winners will be announced at the ESG Symposium in Thailand on July 19.

In addition, to motivate the nine best participants in the final regional round, the contest will be open for voting on the website from June 17 to July 12.

Source: VNA/SGT/VNS/VOV/Dtinews/SGGP/VGP/Hanoitimes

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