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Struggling logistics firms in dire need of support to survive COVID-19 crisis | Business | Vietnam+ (VietnamPlus)


Struggling logistics firms in dire need of support to survive COVID-19 crisis hinh anh 1A worker wears protective clothing while working at Golden Logistic Co Ltd in the northern province of Bac Ninh (Photo courtesy of the company)

Hanoi (VNS/VNA) – The COVID-19 health crisis and resulting wide-ranging and
deeply-felt economic upheaval has flipped the logistics industry on its head,
leaving ill-protected freight firms in dire need of emergency State support to
survive hardships.

Mandatory preventive measures among nations to contain the spread of the
pandemic has resulted in disrupted trade flow and fragmented supply lines,
dealing a blow to the logistics industry, which is viewed as an auxiliary for
trade and commerce, enabling other industries to deliver goods and services
to consumers.

Factories reducing production or suspending operations has led to a curtailment
in the transportation and delivery of goods in the supply chain, greatly
affecting the operation of logistics companies.

“Right from the early stages of the COVID-19 outbreak, the number of freight
orders received by logistics companies in Bac Ninh fell sharply, at the same
time, the delivery of goods, storage and warehousing activity is slowed and
disrupted,” said Nguyen Hoai Nam, sales manager of Golden Logistic Co. Ltd. in
the northern province.

“Following government guidelines on COVID-19 prevention and control, we
businesses are making a continuing effort to realise the dual goal of
maintaining production while ensuring work-related safety during the pandemic,
prioritising workers’ health,” he said.

Every stage involving transportation, warehousing, regular health check-ups for
workers and drivers transporting goods in pandemic-hit areas was all in
strict compliance with guidelines for disinfection and sterilisation. But this
had resulted in a surge in operational costs.

Travel restrictions also led to worsening shortages of truck drivers to pick up
containers, he said.

“Multiple unexpected costs have pressured logistics service
providers. However, it is time both manufacturing enterprises and logistics
enterprises need to work together,” Nam said.

Logistics costs in Vietnam account for about 20 percent of the goods value,
which is relatively high compared to the average costs over the world.

“However, devastating consequences caused by the prolonged pandemic, together
with the rising prices of warehousing and freight services, makes logistics
costs continue to increase, putting great pressure on businesses,” Nam said.

Businesses also faced a significant reduction in revenue from goods exported and
imported from pandemic-affected countries. Commodities shipped to Vietnam
dropped dramatically, those undergoing customs clearance were strictly
quarantined. Delivery time from suppliers in the Asian market and some other
regions is reportedly longer.

According to statistics of the Vietnam Logistics Business Association, up to 50
per cent of enterprises providing logistics services of all
types experienced a downturn in activities and revenue. Air and road
transportation services were hit the hardest.

Roughly 80 percent of the association’s members are micro, small and medium
enterprises, thus many of them are on the brink of collapse, meaning workers
are losing their jobs.

In Vietnam, infection cases were detected at large-scale industrial parks of Bac
Ninh and Bac Giang, causing many disturbances in the production lines of
enterprises, which inevitably placed a direct impact on logistics enterprises.

A report summarising recommendations of businesses and associations in April-May
2021 has been submitted to the Prime Minister by the Private Sector Development
Research Board (Board IV), under the government’s Advisory Council for
Administrative Procedure Reform and Young Presidents’ Organisation (YPO).

In the report, Board IV said amid the pandemic, manufacturing enterprises in
industrial parks, logistics and transportation businesses suffered, causing
economic hardship and supply chain disruption.

Exporting enterprises confronted great challenges due to worsening shortages of
containers and merchant ships on a global scale, as well as skyrocketing fees.

Board IV, therefore, recommended the Government consider and direct ministries,
branches and localities to simplify administrative processes or consider
according to priority for import and export processes, as in the priority just
applied to the export of Bac Giang lychee.

This would help businesses optimise time and costs in the domestic stages to
speed up the import procedures for essential goods or accelerate the export of
agricultural products and other key export commodities.

Le Duy Hiep, Chairman of the Vietnam Logistics Service Association (VLA), said
in light of COVID-19 developments, in order to support logistics businesses,
VLA proposed the Government grant a reduction of 50 percent on corporate income
tax for 2020 as a way to support businesses to overcome hardships.

It also proposed the extension and postponement for employers’ tax payment,
their contributions to the Social Insurance Fund, Unemployment Insurance and Health
Insurance Fund, he said.

VLA’s recommendations on tax payment extension have been approved by the
Government. However, “this takes time and many procedures are required by
the banks,” Hiep said.

Decisions on petrol retail price reduction benefited both businesses and
the whole economy, he said.

The Vietnam Maritime Administration in May last year decided to reduce the
pilotage fee by 10 percent for Vietnamese shipping enterprises operating on
domestic routes, as a support measure amid the COVID-19 pandemic.

Hiep said Vietnam’s logistics costs were still higher than the regional and
global averages of 16-20 percent.

“We are trying to reduce the cost to equal other countries in the region, such
as Thailand at 14-15 percent and Singapore at 8-10 percent,” he said.

The government targets that by 2025, the contribution of logistics services to Vietnam’s
GDP will touch 5-6 percent, with the growth rate of logistics industry reaching
15-20 percent, the rate of outsourced logistics services at 50-60 percent,
achieving Global Logistics Performance Index at 50 or higher.

Logistics enterprises
should urgently apply IT solutions, modernising management and operation
methods, use software systems and logistics optimisation platforms to cut costs
and improve service quality, Hiep said.

They should promote
linkages with other logistics providers and with manufacturing enterprises in
order to create competitive advantages in negotiation and improve service
provision capacity.

VLA would actively coordinate with localities and manufacturing companies
to devise solutions promoting the transportation and circulation of goods,
ensuring safety amid the pandemic, at the same time applying supportive
measures such as reducing freight, storage and warehousing costs.

Trade centres and supermarkets should consider augmenting the purchase of
agricultural products from farmers in pandemic-hit localities such as Bac
Giang, he said./.





LOGISTICS VIETNAM

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Central region’s seaports to be upgraded | Business | Vietnam+ (VietnamPlus)


Central region’s seaports to be upgraded hinh anh 1

Cam Ranh Port in Khanh Hoa Province. Ports across central Vietnam are planning to upgrade their capacity. – Photo baodautu.vn

Hanoi (VNA) – The central region is racing to upgrade their seaports to meet high demand on transporting goods, especially to serve container ships, reported Dau Tu (Investment) newspaper.

In its adjusted planning to 2020 with a vision to 2030, the Dung Quat Port Complex in the central province of Quang Ngai has been designed with 14 ports to become a modern and large-scale one that can serve both large
barges and container ships.

However, after more than ten years, it currently has only eight ports in operation, three general ports and five specialised ports.

Of these, only the Hoa Phat Dung Quat port can receive vessels with a capacity of
150,000 – 200,000 tonnes and the rest can only handle those with a capacity of
50,000 – 70,000 tonnes.

Quang Ngai province currently has more than 20 enterprises involved in
importing and exporting goods using container ships with around 6,500
containers per year. However, Dung Quat has no container port, forcing local exporters to transport their containers of export goods to Da Nang or neighbouring seaports in the central region.

 

Dang Van Minh, chairman of Quang Ngai Province’s People’s Committee, said most of the ports at Dung Quat Port Complex have operated at their full capacity, so they will not be able to meet the import and export needs of businesses in the long term. Therefore, fresh investment in ports is very necessary.

In nearby Binh Dinh province,  the cargo throughput of Quy Nhon port skyrocketed from 4.5 million tonnes in 2010 to 9.1 million tonnes in 2019 and more than 12 million
tonnes in 2020.


The port now handles 2,500 tonnes of goods per berth metre, more than five
times higher than the designed capacity. Therefore, the upgrading of Quy Nhon
port is extremely essential.

The Quy Nhon Port Joint Stock Company will start upgrading Quy Nhon Port’s wharf No 1 in August to ease the overloading at the port. The project will help to increase the port’s capacity in receiving ships up to 30,000 DWT ships.

In a recent document sent to the Ministry of Transport, voters in Phu Yen
province proposed to invest in Bai Goc deep-water port and seaport logistics
area in order to tap the local advantages to enhance the competitiveness and
promote regional linkages, creating a driving force to attract large
industrial and service projects to the Nam Phu Yen Economic Zone. 

 

The Ministry of Transport has expressed its backing of the proposal.

Meanwhile, the Cam Ranh Port Joint Stock Company which operates Ba Ngoi port in Khanh Hoa province also suggested the port be upgraded in order to receive ships of up to 70,000 dead weight tonnes (DWT), according
to provincial Department of Transport and Communications.

Nguyen Tan Tuan, Chairman of Khanh Hoa
Provincial People’s Committee said that the province has approved the proposal and is consulting the Ministry
of Defence before submitting to the Prime Minister for approval./.

VNA





LOGISTICS VIETNAM

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VIETNAM BUSINESS NEWS JUNE 14 – VietNamNet


Portal expected to reach large lychee consumers

VIETNAM BUSINESS NEWS JUNE 14

An online portal has been launched to help farmers in pandemic-hit Bac Giang province sell their lychees.

“Thank God, it’s so effective,” vice director of Bac Giang Enterprise Consulting and Assistance Centre (BECA) Duong Thanh Son said about the portal launched by the centre. Bac Giang has been hit hardest by COVID-19 during its fourth wave in Vietnam, causing difficulties for local farmers.

The portal www.hotrotieuthuvaithieubacgiang.com was launched about three weeks ago and a Facebook page hotrotieuthuvaithieubacgiang was created just a few days later when Bac Giang started entering the lychee harvest season.

Consumers can register to buy a large volume of lychees – a minimum of a tonne – after inputting basic information like name, e-mail, phone number, address and amount of lychee.

Son, who specialises in information technology and communication, said that the portal looked simple but behind it were automatic customer management and customer care programmes that help with online sales.

The portal and the Facebook page have reached hundreds of thousands of users, Son said, adding that he has received positive feedback on social media.

“We connect Bac Giang lychee farmers and co-operatives with buyers. We pledge that our consumers can buy high-quality lychee at very good prices,” Son said.

“If we had thought of the portal earlier and prepared for it about three months ago when lychee was still green, we could have reached more consumers,” Son said.

He said the idea for the portal came up when Bac Giang farmers entered lychee harvest time but the province was struggling to fight the COVID-19 pandemic.

This year, the province has about 28,100 ha of lychee with an estimated production of 180,000 tonnes. The COVID-19 outbreaks caused difficulties for harvesting, transporting, selling and exporting the fruit.

Together with the Government, provincial authorities, organisations and individuals, BECA helped farmers in lychee consumption. All BECA staff, mostly IT and media personnel, have helped with online sales.

On the first day of launching the portal, Son said they received hundreds of messages asking to buy lychees. Orders for small amounts, for example a few kilos, were transferred to local retailers while BECA would concentrate on large orders, especially those from enterprises, which as Son said, had financial ability and willingness to buy large amounts.

Within the first week, BECA helped to sell nearly 140 tonnes of lychee.

“We have a goal to help farmers sell 1,000-1,800 tonnes of lychee. It’s a big goal, so we need help from associations, enterprises and businesses,” Son said.

Son is also looking for other potential consumers – community groups. He said, for example, the Duong community – sharing the family name Duong in Vietnam – was very large. Son received an order of 17 tonnes from the Duong community in HCM City, and they were set to order two more containers. The Duong communities in Binh Thuan and Binh Duong ordered two containers each.

Dinh Thi Anh from the northern province of Nam Dinh said that on seeing news about COVID-19 hotspots in Bac Giang province, she wanted to do something for people there, especially farmers who faced difficulties in selling lychee.

She said that she was very happy to find a reliable source that supplies Bac Giang lychees and she asked her friends to add their orders on hotrotieuthuvaithieubacgiang.com and then sell the fruit to people in Nam Dinh city.

All the funds raised would be donated to the national COVID-19 vaccine fund, Anh said.

Anh and dozens of volunteers on June 7 received the first shipment of lychee from Bac Giang and by the afternoon of the same day, they sold nearly a tonne of lychee at two stalls located at 757 Vu Huu Loi and 440 Tran Hung Dao in Nam Dinh city.

“We unloaded the lychees, weighed and divided them into bags of 2kg, received orders and then delivered them to consumers or sold them at the stalls,” Anh said, adding that people not only bought lychee but also donated to the fund.

“We will be with Bac Giang! We can not do big things, so we offer a little help,” Anh said.

Son said that he deeply understood the hardships that local farmers faced as well as the importance of lychee fruit – a source of pride for people in Bac Giang.

They are more proud of the fruit, as now, lychee is grown with VietGAP and GlobalGAP standards. The farming products are not only tasty but also safe. For years, Bac Giang lychee has been exported to 30 countries all over the world including demanding markets like the US, EU and Japan. In the domestic market, the fruit is sold in major supermarket chains.

Son said that since the beginning of harvest time, despite the COVID-19 pandemic, Bac Giang lychee could reach consumers both in and outside of the country.

Bac Giang authorities were determined to minimise the impact of the COVID-19 pandemic on lychee harvesting and consumption.

Particularly, the authorities set up COVID-19-free lychee growing areas, meaning that in lychee growing areas, all people suspected to have close contact with confirmed COVID-19 cases are taken to concentrated quarantine areas and none of such areas are located in lychee growing areas.

Checkpoints have been set up to strictly control and monitor people and vehicles entering the lychee growing areas. All drivers, workers and traders arriving in lychee growing areas must take quick COVID-19 tests.

All vehicles carrying lychee must be disinfected.

Tran Quang Tan, director of the province’s Trade and Industry Department, said that lychee farmers would feel hurt if they hear their fruit needed rescuing.

The province’s authorities called for support, not rescue. To some extent, when it comes to “farming product rescue campaigns”, people tend to think about abundant, cheap, low-quality products.

“Bac Giang lychee does not need rescuing,” Son said, adding that despite the COVID-19 pandemic, since the beginning of harvest time, the lychee consumption was still going on.

“Difficulties? Yes, we face a lot of difficulties due to the COVID-19 pandemic and we need your support to overcome them. Bac Giang will overcome all such difficulties,” Son said.

“Bac Giang people are now proud to offer tasty lychee at reasonable prices. As the consumption goes smoothly, both farmers and consumers are happy for the benefits they get,” Son said.

The lychee harvest time in Bac Giang province will last about one and a half months. The province reported more than 70,000 tonnes were sold, meaning that more than 100,000 tonnes of Bac Giang lychee still needs to be sold. This year, lychee prices are similar to those of last year, ranging from 13,000 VND to 30,000 VND per kilo ($0.5-1.3)./.

Businesses in Ho Chi Minh City wallowing in lack of capital and high production costs

Due to the impact of the COVID-19 pandemic, most businesses in Ho Chi Minh City face a shortage of capital while production costs are increasing. 

“The pandemic situation in the area is still complicated,” Nguyen Thanh Phong, Chairman of Ho Chi Minh City People’s Committee, said in the meeting between the committee, the city’s leaders, experts, and businesses.

Regarding business activities, since the beginning of the year, 1,365 businesses have reported difficulties due to the pandemic, more than 42,500 workers lost their jobs or stopped working, 410 businesses needed loans to pay wages to workers, and 2,274 enterprises completed dissolution procedures.

The chairman expects the business community and people in the area to join the government to overcome this difficulty. He stated that, currently, Ho Chi Minh City has to spend about VND7 billion ($304,350) a day on testing. The city’s goal is to vaccinate its entire population.

“It is very difficult to access vaccines now because supply still cannot meet the demand,” Nguyen Van Nen, Secretary of Ho Chi Minh City Committee said and urged people who know of guaranteed vaccine supply to contact the city. 

Meanwhile, Le Thi Huynh Mai, director of Ho Chi Minh City Department of Planning and Investment, said that in the first five months, more than 6,400 businesses resumed operations.

However, the business community is facing difficulties, with the number of enterprises registering for dissolution increasing by 5 per cent over the same period last year (2,458 enterprises) and the number of enterprises temporarily suspending operation increasing nearly 24 per cent with more than 9,800 enterprises.

There are five common difficulties that businesses are facing, including a decrease in the labour force involved in production, incurring expenses for the prevention of COVID-19, employees having their work hours cut or forced to quit, disruptions in access to customers and supply chains, and lack of raw materials for production.

Chu Tien Dung, head of the Ho Chi Minh City Union of Business Associations (HUBA), expressed concerns, saying that more businesses withdrew from the market in the first two quarters than those entering.

A quick online survey of over 100 businesses by HUBA showed that over 84 per cent of small- and medium-sized enterprises have been facing difficulties since the fourth outbreak of COVID-19. Accordingly, 40 per cent of respondents claimed to have had difficulties from a lack of capital, 80 per cent from market disruptions, 52 per cent from downsizing employment, 14 from interruptions to raw material supply chains, and more than 50 per cent suffered from social distancing measures. 

Although some enterprises in key industries have quickly reconnected the source of raw materials and re-adjusted their operations, they are facing the biggest pressure from the lack of capital and the rising price of raw materials, raising manufacturing costs and reducing competitiveness.

Many businesses want to restructure, apply new technologies, or digitally transform to promote online shopping, but lack capital for it.

“The first support packages for businesses and employees were timely but the implementation has not had a clear impact on businesses. Some policies such as tax exemption, social insurance reduction have helped businesses reduce difficulties in terms of liquidity and cash flow, but the application time is short and the number of these packages is not large, so it cannot help businesses overcome their difficulties,” said Dung.

Textile and garment companies struggle in fourth Covid-19 wave

Most textile and garment companies in the country have received large orders for the second half of the year but the fourth Covid-19 wave is threatening to hinder production.

According to the Ministry of Industry and Trade, textile and garment orders increased significantly after the Covid-19 pandemic was brought under control in the United States, the European Union and Japan, some of Vietnam’s main importers of textile and garment products.

The manufacturing index of the textile and garment sector in May 2021 rose 2.2% from the previous month and 10% compared with the same period last year. From January to May, the index grew 8.1% year-on-year.

The country exported over US$12 billion of textile and garment products in the first five months of the year, increasing 15% year-on-year.

However, textile and garment companies are struggling with disruptions caused by the ongoing fourth Covid-19 wave, which began on April 27.

Vu Duc Giang, chairman of the Vietnam Textile and Apparel Association, said at least 45 textile and garment companies had to suspend their operations over the past two weeks. They are facing a number of problems including rising costs, salary payments to maintain the staff and compensation for customers in case of late shipments.

“If a textile and garment company has to shut down for 14-21 days, its production plan for the entire year may be ruined,” he said.

Le Tien Truong, chairman of the Vietnam National Textile and Garment Group (Vinatex), said even if textile and garment companies remain operational, they may not be able to maintain their workforce as workers staying in areas under lockdown or social distancing are not allowed to travel to the workplace. This can cause a loss of billions of dollars and affect the reputation of the Vietnamese textile and garment sector.

Nguyen Xuan Duong, chairman of the board of Hung Yen Garment Corporation, said the Government should accelerate Covid-19 vaccination for workers of industrial parks and export processing zones, especially in current hotspots such as Bac Ninh, Bac Giang, HCMC and Hanoi. These hotspots are also home to many industrial parks and export processing zones.

Enterprises under Vinatex said they are willing to use their own money to vaccinate their workers against Covid-19. The cost is estimated at VND100-200 billion.

“We hope the Covid-19 vaccination will be prioritized for workers in the textile and garment sector so that we can stabilize our production in the coming time,” Duong said.

Local firms boost processed mango exports to U.S.

Due to difficulties in exporting Vietnam’s fresh mangoes, many firms have invested in processing to boost the consumption of processed mangoes in foreign markets, mainly the United States.

In the first three months of the year, Vietnam was the United States’ 13th largest mango supplier, according to the Import-Export Department under the Ministry of Industry and Trade.

During the three-month period, the U.S. increased its import of dried mangoes and mango juice from Vietnam. Vietnam shipped 97 tons of mango juice worth US$102,600 to the American market, skyrocketing by 340% in volume and 160.5% in value year-on-year. The country’s export of dried mangoes to the United States reached 68 tons worth US$83,000.

Despite the modest volume, fostering the export of processed products is a growth trend for Vietnamese mango, said many firms.

Nguyen Dinh Tung, general director of Vina T&T Group, told the Saigon Times that the export of fresh fruits, including mango, had faced multiple difficulties due to high transport costs and the prolonged transportation time, while fresh fruits also have a short shelf life. Besides, many countries have erected technical barriers to fresh fruits to protect local products and customers, he said.

Taking the U.S. market as an example, he said that in the past, it took 20-23 days to ship goods by sea from Vietnam to the market, but now, the transport time is 30-35 days. Meanwhile, Vietnam’s preservation technology keeps mangoes fresh for a mere 30 days.

“Sometimes, the fresh mangoes arrived in the U.S. market, but reached the expiration date and were not sold to customers,” Tung said.

Dang Phuc Nguyen, general secretary of the Vietnam Fruit and Vegetables Association, said that since 2020, when the Covid-19 pandemic emerged, many fruit exporters have sought ways to adapt to the new market situation.

Due to high transport costs and the shortage of containers, many firms which specialize in exporting fresh products have shifted to processed products for shipments.

“Processed mangoes have a longer shelf life than fresh ones and do not face severe competition from the products of other countries,” Nguyen said.

Statistics indicated that in 2020, Vietnam shipped some US$800 million worth of processed vegetables and fruits to the United States, accounting for 25% of the total value of veggie and fruit exports, while the proportion was 10%-15% in 2019.

In addition, Europe and other countries are raising their consumption of Vietnam’s processed fruit, mainly dried mangoes and mango juice, urging many local exporters to upgrade and improve their machines and technology and expand production to ramp up the capacity of processing fruits and meet demands.

“This year, Vietnam’s export of processed fruits, including mangoes, is expected to soar by 30% against last year,” said Nguyen.

Vietnam shipped an estimated US$400 million of vegetables and fruits to foreign countries in May, up 48.3% year-on-year, sending the country’s export value of these products in the first five months of the year to US$1.77 billion, up 18% year-on-year.

In 2020, Vietnam exported 2,100 tons of mangoes worth US$4.6 million to America, up 66% in volume and 70% in value against 2019, while the latter bought 1,150 tons of frozen mangoes from Vietnam, up 38% from the 2019 figure.

Unsecured debts require regulation

Unsecured loan sales may see growth accelerated in response to a Vietnamese government ban on debt collection services – however, experts believed a clearer legal framework and firmer rules would help spur a more substantial unsecured debts market.  

VietinBank has just announced an auction to sell consumer loans to recover debts – the very first commercial bank exploring this option.

The package of nine debts includes small loans, valued from VND1.68 million ($73) to VND17.58 million ($770). The consumer loans are unsecured and the starting selling prices are equal to their book value. The total value of nine debts is around VND75.5 million ($3,300).

The bank will select the buyer with the highest bid that is at least equal to the starting price of each debt. The starting price does not include any costs regarding to fee for ownership transfer and other costs, if any, when purchasing the debt.

These costs shall be solely borne by the auction winner. The down payment is also equal to the starting price of the debt.

“Loan sales are not a new phenomenon. Collateral-backed loans are quite common as a part of banks’ asset and liability management,” said Truong Thanh Duc, director of ANVI Law Firm. “They often sell loan packages with collateral such as real estate, machinery, equipment, factories, and cars, among others, while unsecured consumer loans sales are among the first of its kind for a commercial bank.”

A representative of VietinBank said that selling consumer loans is one of the bank’s normal operations, according to regulations, to handle and recover debts.

“Perhaps this is the first time that a commercial bank has offered unsecured loans sales to the public, so it attracts a tonne of attention. We will continue follow our precedent cases on debt sales. At the first stage, we set the initial price equal to book value. If these debts cannot be sold, we would lower the price later on,” the representative said.

Duc of ANVI said that it is not just “a walk in the park” to sell consumer loans at a book value, coupled with interest and late payment penalty interest. Banks can only sell loans at a price equal to 50-70 per cent of their book value even for collateral-backed ones.

The question of whether or not VietinBank could successfully execute their sales still remains unanswered, but it could set a precedent for other lenders to follow suit.

Financial expert Huynh Trung Minh noted that in other countries, trading unsecured debts is familiar to financial institutions and debt buyers, and consumer debts are important for buyers to expand their customers’ database and information.

According to Vietnam’s revised Law on Investment, debt-collecting businesses are now banned in Vietnam as part of local government action to protect customers’ rights.

However, this is considered a strict approach to consumer finance companies, since the majority of their customers are underbanked or unbanked.

Currently, there are nearly 20 consumer finance companies operating in the country. In the last 10 years, FE Credit has emerged as the top player, accounting for around 52 per cent of market share, far ahead of the rivals Home Credit (17 per cent) and HD Saison (11 per cent).

Masataka “Sam” Yoshida, head of the Cross-border Division of RECOF Corporation and CEO of RECOF Vietnam said, “Putting a stop to the operation of debt collectors poses challenges to lenders or creditors where their collection performance will be affected. Consumer finance companies need to make changes to meet these evolving regulatory requirements. This will be inconvenient, time-consuming, and expensive at first but creates an opportunity for the consumer finance companies to rethink their collections strategies and operations.”

On the other hand, Duc of ANVI shared his concern that it would be tough to take advantage of unsecured debts. Therefore, he hypothesised that the sale of the debts is just another approach to dodge the debt collection service ban. Duc also stated most debt collectors, after the Law on Investment took effect, have not dissolved, but instead converted their business to debt trading/buying to be legally in line with the current law.

If banks can sell their unsecured loans, it is likely that they will transfer their debts to ensure operational efficiency. Furthermore, driving forces behind loan sales may stem from a better cashflow statement and financial information to the public.

“We might also see an increasing trend of selling or trading the debts from those who are not strong enough in debt collection. Debt sales can be an effective tool for certain accounts, especially those with low expected recoveries. However, it might be better implemented if policies and procedures for debt sales could have clearer guidance from the government,” Yoshida of RECOF added.

Investors pointing to upbeat momentum

Vietnam’s generally effective control of the health crisis and improvement of the investment and business climate have further strengthened the confidence of investors in the country.
 
After spending months studying the investment climate of over 20 cities and provinces and more than 30 industrial zones in Vietnam, innovative solar module manufacturer JinkoSolar has decided to pour $500 million into a venture in the north-eastern province of Quang Ninh’s Song Khoai Industrial Zone. The factory, licensed in late March, is expected to become operational this year. Nguyen Duc Tiep, deputy head of Quang Ninh Investment Promotion Agency, told VIR that JinkoSolar is speeding ahead with the project. “Besides JinkoSolar, it is expected that Quang Ninh will see more foreign direct investment (FDI) in the time to come,” Tiep said.

Over the next few weeks, the province will hold an online investment promotion conference to attract more Japanese funding. The event is expected to be joined by 40-50 Japanese companies, mostly operating in manufacturing and processing.

Currently, the province is instructing 10 foreign investors to complete dossiers, which are expected to be licensed this year with the total registered capital of $576 million, including some big projects involving liquefied natural gas warehousing ($200 million), refrigerator equipment ($90 million), and environmental protection ($160 million).

According to the Ministry of Planning and Investment (MPI), Quang Ninh is a typical example among many localities as good destinations for FDI in Vietnam, where the business and investment climate is significantly improving.

Despite causing grave consequences worldwide, COVID-19 has as yet been unable to prevent FDI inflows to Vietnam for the long term, and rising manufacturing, with both being major drivers of Vietnam’s economic growth this year and beyond.

For 2021 up to May 20, the total of newly-registered, added capital, and capital contributions as well as share purchases hit $14 billion, up 0.8 per cent on-year. Notably, the newly-registered capital hit $8.83 billion, up 18.6 per cent on-year, and the added capital reached $3.86 billion, up 11.7 per cent on-year.

FDI disbursement hit $7.15 billion, up 6.7 per cent on-year, thanks to production and business recovery.

The MPI said many major foreign-invested enterprises (FIEs) are expanding in Vietnam, which is again restricting COVID-19 to only a handful of already locked-down areas.

For example, CEVA Logistics (Vietnam) under global logistics and supply chain company CEVA Logistics is now boosting recruitment of more employees for many positions. Under the business plan of CEVA Logistics Vietnam, the firm is expanding its network to ship goods to the US, which was Vietnam’s largest export market, with total turnover of $ 37.6 billion in the first five months of 2021, up 49.8 per cent on-year.

“In Vietnam, the company’s total revenue in the first quarter from freight shipping increased about 30 per cent on-year,” Nguyen Thanh Van, head of Contract Logistics at CEVA Vietnam, told VIR. “It is expected that the rate will be about 20-35 per cent for the entire year.”

According to the General Statistics Office, businesses such as CEVA have contributed greatly to the country’s goods transportation which hit 739 million tonnes in the first five months of 2021, up 10.5 per cent as compared to the same period last year, when the rate declined 8 per cent on-year. Also in the first five months, Vietnam’s total export-import turnover is estimated to hit $262.2 billion, including $130.94 billion from exports – up 30.7 per cent on-year, and $131.3 billion from imports – up 36.4 per cent on-year.

A World Business Outlook Survey conducted released two weeks ago by the German Chambers of Commerce Abroad said that German businesses are showing optimism about Vietnam’s economy.

“Vietnam is still one of the countries with the fastest economic growth in Southeast Asia,” said the report. “German business leaders in Vietnam maintain a positive view with the economic expectation as well as with their situation in Vietnam and they look forward to a recovered year of 2021 and 2022.”

According to the General Statistics Office (GSO), in the first five months of this year, the economy’s index for industrial production (IIP) climbed 9.9 per cent as compared to that of only 1 per cent in the same period last year. Notably the manufacturing and processing sector, which creates 80 per cent of the nation’s industrial growth, ascended 12.6 per cent in comparision with that of merely 2.2 per cent in the corresponding period of 2020.

The IIP in May expanded 11.6 per cent over the same period last year, when the IIP declined 3.1 per cent on-year.

The GSO also reported that, in the first five months of 2021, the economy witnessed 55,800 enterprises newly established, registered at VND778.3 trillion ($33.84 billion) and employing 412,400 new labourers, up 15.4 per cent in the number of enterprises and 39.5 per cent in registered capital.

If another VND975.1 trillion ($42.4 billion) registered by 19,100 operational enteprises was included, the total capital supplemented into the economy in the period was VND1.753 quadrillion ($76.2 billion), up 27.5 per cent on-year. Moreover, 22,600 businesses resumed their operations, up 3.9 per cent on-year. Source: General Statistics Office

Virus-hit provinces seek continuation of production

The people of the two northern provinces of Bac Giang and Bac Ninh are demonstrating their mettle in the fight against recent coronavirus outbreaks, retaining production to protect supply chains as much as possible. 

Deputy Minister of Health Nguyen Truong Son reviewed vaccine distribution in Bac Giang province
Under the strict and timely direction of Deputy Prime Minister Le Van Thanh and the leaders of the provincial people’s committees, last week factories in industrial zones (IZs) of Bac Giang and Bac Ninh resumed their production lines, while employees moved back to work and live in factories.

Amishh Rajnikant Jaitha, CEO of Spica Elastic Vietnam Co., Ltd. in Bac Ninh’s Que Vo IZ, said that the interruption recently has caused a lot of challenges to its 45 partners, especially some key ones that have 8,000-12,000 workers. “My company is operating four factories and four offices in separate places. We have asked office staff to work from home, and office areas will be accommodation for other workers. We have bought a lot of beds, and built some more bathrooms for them to live,” Jaitha said.

Dang Thi Kien Chung, head of Planning for ITM Semiconductor Vietnam in Vietnam-Singapore Industrial Park (VSIP) said, “That is the best solution to keep employees safe and resume factory operations. Safety is the goal that all of us should pay attention to, in order to confirm our responsibilities to society.”

A representative of Wisol Hanoi, also in VSIP said, “Instead of buying beds, we provided individual tents to make some privacy for workers. At living areas there are services such as wi-fi, air conditioners and purifier, clothes extractor, and the toilets have become bathrooms. They are also fed meals each day,” she said.

Bui Hoang Mai, director of the Bac Ninh Industrial Zones Management Authority said over 500 businesses resumed last week after careful preparation. “The board has established 40 delegations to check and guide factories and facilities to ensure safety. If enterprises are stuck or face some difficulties, they can report to us or the provincial government to ask for some help and resume operations as soon as possible.”

As of June 3, there were 951 positive COVID-19 cases in Bac Ninh, including almost 250 cases at businesses. Over 35,700 vaccines were administered for local people, and 90,000 workers in IZs are expected to be vaccinated this week.

In a meeting last week with Deputy Prime Minister Le Van Thanh, Chairwoman of Bac Ninh People’s Committee Nguyen Huong Giang proposed the government to provide an additional 500,000 antigen rapid tests, and support businesses hit by the pandemic with policies such as tax exemption or extension. She also proposed the state budget to provide around $21.7 million to the province to promptly prevent the pandemic from damaging the area further.

Before resuming operations, businesses have to meet all regulations on preventing and fighting against COVID-19 like negative tests and safe distancing in the factories; as well as setting up accommodation areas for employees. Bac Ninh and Bac Giang authorities continue to closely work with the delegations of the Ministry of Health to manage the pandemic before allowing businesses back into operation.

As of the end of June 4, there were 2,819 cases in Bac Giang positive with COVID-19, including about 380 cases in Van Trung IZ and 1,700 cases in Quang Chau IZ.

Cooperation plans still on hold amid railway system revamp

While state-owned giant Vietnam Railways’ new restructuring plan is expected to leverage private investment in the ailing railway industry, the track to prosperity remains steep.

The Commission for the Management of State Capital at Enterprises last week worked with Vietnam Railways (VNR) on separation of some parts in the long-awaited 2021-2025 restructuring plan to be approved first, with the establishment of a passenger transport and cargo transport units being a focus.

Vu Anh Minh, chairman of VNR – the operator of the country’s railway network – told VIR, “We will keep the merger of Haraco and Saratrans, the two largest train operators in Vietnam, under VNR and then proceed with the establishment. The submission of the separation to the prime minister for approval is expected within June.”

VNR expected that it will be able to attract private investment for its development plans when the separation is approved. Thus, in the establishment of a cargo transport company, stakes are being planned to sell for potential investors.

The separation also includes investment in construction of warehouses and inland container depots (ICDs); upgrading and development of railway stations into trade centres and offices for lease in line with the Law on Railways 2017; and upgrading of railway routes connecting with China to develop international railway transportation.

“When the separation and restructuring plan is approved, the new changes will enable the company’s partnership with private firms in hundreds of stations and ICDs to more effectively tap into their available potential, thus enabling us to move faster,” Minh noted.

Industry insiders, however, said that it is impossible that there will be any significant foreign interest in railways, although transport is one of the six sectors covered in the Law on Public-Private Partnership Investment, which took effect from January.

Railways have proven difficult for the public-private partnership (PPP) model in many countries worldwide, with Vietnam being not an exception. More opportunities might come for domestic private firms instead. To enable this, the master scheme in line with implementation of Decree No.46/2018/ND-CP governing the management and use of railway infrastructure assets, should be approved, with VNR’s proposal to hand over 297 railway stations, warehouses, and ICDs to the giant to own, use, and develop with assets to be recorded as state capital contribution to the operator to be included.

However, the master scheme remains at odds with the VNR proposal, and so no final conclusion has yet been made. Legal barriers have so far hindered VNR from making the next steps with its cooperation plans with its partners, and many of its projects as well as investors have been suffering as a result.

In 2017, VNR signed a cooperation agreement with Saigon Newport Corporation to develop ICDs and warehouses at Song Than, Dieu Tri, Yen Vien, Dong Anh, and Dong Dang stations, with the plan to develop more in the future to meet demands. However, the projects have not yet been carried out.

Similarly, Lotte E&C’s proposal to invest in the second phase of the upgrading of the Yen Vien-Lao Cai railway route has been on paper for years, while Japanese auto giant Toyota is seeking to build a railway route connecting its factory in the northern province of Vinh Phuc to the main North-South network, using the Danang railway station as a transhipment hub to other provinces in the central region.

Furthermore, Southern Airports Services JSC has sought a partnership with VNR in upgrading the Saigon Railway Station building. Many other initiatives remain stuck because of Decree 46.

In 2017 when the restructuring plan of VNR was first submitted to authorised agencies, the giant planned for the restructuring by 2020, but inevitable disagreements and legal issues have dragged the proposals into the 2021-2025 period instead.

The separation of the railway network is important at this time as the new restructuring plan is still waiting for completion of a new order that replaces 2017’s Decision No.707/QD-TTg on approving the restructuring of state-owned enterprises. At present, the draft master plan on restructuring of such enterprises for 2021-2025 is still being completed by the Ministry of Finance.

In the last 10 years, the railway sector has failed to mobilise resources for its development plans. State funding for railways, despite an increase, was just $174-196 million annually over the period, which has been mostly used for maintenance works and social security, and not for development plans.

IFC promotes Vietnam’s PPE production capacity for COVID-19 fight

As the significant shortage of personal protective equipment (PPE) in many countries has impacted the containment of the COVID-19 pandemic over the past 18 months, IFC is supporting PPE manufacturers in developing nations including Vietnam to supply reliable and quality PPE products to protect frontline health workers and reduce community transmission.

Given the unprecedented pandemic, the global demand for high-quality PPE products – face masks, medical gloves, safety glasses and shoes, respirators, coveralls, vests, and full bodysuits – increased three to four times between 2019 and 2020, according to a recent study funded by the United Kingdom Foreign, Commonwealth & Development Office (FCDO).

In Vietnam, PPE manufacturing capacity surged with a 6-fold jump in production in 2020 and the country has emerged as one of the new PPE suppliers globally. This ramped-up supply was initially driven by textile manufacturers shifting production in response to the health emergency and to mitigate losses caused by cancelled orders for garments.

“Some textile manufacturers who started producing PPE products as an immediate response to the pandemic, are now considering the medium- to longer-term business opportunity in this area,” said Vu Duc Giang, chairman of the Vietnam Textile and Apparel Association (VITAS). “However, local manufacturers have struggled with insufficient input materials, technical skills, and sector knowledge, and disparity between local and international standards to access the global market.”

In response, as part of the global PPE advisory programme supported by the UK government, the IFC is working with local garment manufacturers through the VITAS and national labs through the Directorate for Standards, Metrology and Quality of Vietnam (STAMEQ). The aim is to improve PPE producers’ operations and reduce costs by removing unnecessary burdens related to PPE standards and conformity assessments.

A kick-off webinar – PPE Supply and Demand Perspectives – was organised today in Hanoi in collaboration with VITAS. This is the first of a series to boost PPE-related industry knowledge, with a focus on technical requirements and standards for PPE products in different markets.

“The COVID-19 pandemic has tested the resilience of supply chains to the limit, especially on medical supplies including PPE. The UK believes that the diversification of PPE manufacturing will make the global supply chain more adaptable and prevent future disruption,” said Gareth Ward, British Ambassador to Vietnam. “I am very pleased that Vietnam has been chosen as a priority country for this UK government-funded programme. Vietnamese companies have a lot of potential to succeed globally with a skilled labour force.”

Over the next 18 months, the project will also support select manufacturers to scale quality PPE production, access reliable supply of materials and equipment, and achieve PPE international standards and certification to expand exports.

“Access to cost-effective and quality PPE products is vital to national COVID-19 responses, helping contain and manage the spread of the coronavirus,” said Kyle Kelhofer, country manager for Vietnam, Cambodia and Lao PDR. “Promoting the production of PPE products in compliance with international standards not only helps increase Vietnam’s resilience to the pandemic but also presents a business case as the PPE global supply chain is diversifying with opportunities for new manufacturers from emerging markets including Vietnam.”

In January 2021, the IFC and the UK government launched a global PPE advisory programme to increase the supply of COVID-related PPE products to developing countries – as part of the IFC’s COVID-19 response and under the IFC’s Global Health Platform. The IFC’s platform was launched in July 2020 and includes up to $4 billion financing to increase access to critical healthcare services and products to fight the pandemic in the developing world.

Foreign investors from South Korea continue ramping up investment in Dong Nai

Investors from South Korea are looking to increase investment in Dong Nai in the midst of the global health crisis. 

According to Dong Nai Department of Planning and Investment, South Korean investors have injected an additional $500 million into the locality, increasing the total investment capital from $6.5 billion in 2019 to $7 billion in May 2021. South Korea topped the list of 45 countries and territories investing in Dong Nai.

South Korean Consul General in Ho Chi Minh City Kang Myong-il said that many South Korean companies wanted to expand investment in the province. However, their projects have been suspended due to travel restrictions caused by the COVID-19 pandemic.

Once the pandemic is controlled and trade flows between two countries return to normal, a new wave of South Korean investment is expected to flow into Dong Nai. South Korean investors highly appreciated Dong Nai’s potential in the field of industrial production, technical infrastructure, and real estate sector.

Some South Korean investors have made big investment in the province including Changshin’s $100 million footwear factory in Tan Phu Industrial Zone (IZ), Hansol Technics’s $100 million electronic component factory in Ho Nai IZ and Intops’ $30 million electronic equipment factory in Amata.

The representative of Hansol Technics said that the company decided to develop its factory in Dong Nai due to the province’s developed IZs and convenient traffic. The company specialises in manufacturing electronic components so the investment in Dong Nai will facilitate it to source input products from other partners.

Park Hyun Bae, chairman of the Korean Business Association in Dong Nai is upbeat about the potential of Dong Nai to lure foreign direct investment (FDI) capital in the industrial, energy, service, trade, and supporting industries. Despite the pandemic, many Korean businesses have requested information about Dong Nai. They hope that when the COVID-19 pandemic is contained, it will be easier for them to travel to the province to register new investment. Indeed, South Korean investors are looking to rent big ​​land sites in Dong Nai to carry out large projects to produce electronic components, fabrics for the textile, footwear, as well as machinery and equipment.

As of present, South Korea is the second-largest import market of Dong Nai, following China. The province mainly buys materials to produce textile, apparel, footwear, computers, electronic components, equipment, tools, and spare parts. On average, local companies spend $200 million importing materials from South Korea.

Obstacles hindering O Mon III venture

The O Mon III thermal power plant in the Mekong Delta city of Can Tho is facing lingering issues related to investment policy and responsibility, leading to the protracted delay in part of the gas project. 

Electricity of Vietnam (EVN) recently proposed to the prime minister an investment plan for the O Mon III thermal power plant in a bid to remove the bottlenecks for the Block B gas complex.

After the Law on Public Investment took effect in 2020, the Ministry of Planning and Investment (MPI) proposed to the prime minister to apply the provisions of the law to appraise and decide on the investment policy for the O Mon III. Meanwhile, the ministry proposed amendment and supplement of Decision No.1015/QD-TTg dated August 2019 on the establishment of a state appraisal council to appraise the project’s feasibility study. However, some obstacles have emerged during the implementation of investment policies, especially the authority to approve investment policies.

The Ministry of Industry and Trade (MoIT), the MPI, the National Steering Committee for Power Development, and the Commission for the Management of State Capital at Enterprises (CMSC) have submitted many reports to the government to tackle difficulties in the investment procedures for the project.

Last December the government submitted a report to the National Assembly Standing Committee on this issue. According to its conclusion, the use of official development assistance (ODA) loans for enterprises to borrow 100 per cent for the O Mon III is not within the scope of the Law on Public Investment as well as under the prime minister’s authority to approve investment policies. It has been nearly two years since EVN submitted the project to the CMSC to request for investment policy. However, the authority to approve the investment policy for this project has not been determined.

The O Mon III was approved by the government to be on the list of ODA projects funded by the Japanese government in 2012. EVN was the investor of the project and signed the ODA loan contract with the Japan International Cooperation Agency (JICA). In 2013, Vietnam and Japan signed a commitment note to grant the first loan worth $254 billion for the O Mon III. The JICA loan agreement would be signed by the parties following the result of negotiation and signing of a gas purchase and sale contract.

Foreign investors have often raised their voices about the obstacles hindering the Block B gas project. In 2015, US oil giant Chevron decided to withdraw from the project by transferring stakes to PetroVietnam.

In July 2020, Japan’s Mitsui Oil Exploration Co., Ltd. (MOECO) and Thailand’s PTT Exploration and Production Public Co., Ltd. (PTTEP) also submitted letters to the prime minister about their concerns for the slow approval of the onshore power project, which has caused tremendous challenges for the Block B gas project chain and delayed the final investment decision (FID). Thus, the target of the first gas flow by the end of 2023 will be missed.

Two months later the foreign investors sent another letter to the prime minister noting that the first gas for the project is expected in September 2024 at the earliest. Due to the delayed approval of investment policy, the investors could not make the FID in 2020 while the first gas flow by the end of 2023 became infeasible.

EVN said the delayed approval of the investment policy is due to the inability to identify the agency responsible for this project, which slows down the progress and efficiency of the project chain. Meanwhile, the wellhead gas price has been calculated since 2016 with the price slippage of 2.5 per cent per year and the transportation price slippage of 2 per cent a year, which has raised investment and electric production costs.

Commenting on the conditions for borrowing ODA loans from JICA, EVN said that the plan has better economic efficiency than the commercial loan plan. In addition, the Japanese government has confirmed to continue to provide ODA loans for the O Mon III. However, to make efficient use of the loans, it needs to establish the authority to approve investment policy for the project. Up to now, the project is still waiting for the amended decree to be approved for implementation.

To issue the amended decree, it is necessary to get feedback from relevant ministries and sectors. It will take a great deal of time, even though FID needs to be made this October.

EVN has formulated a plan to use domestic and foreign commercial loans to remove bottlenecks at the O Mon III. With this plan, the power generation progress of the project will take place in the third quarter of 2026, 18 months earlier than the plan of using the ODA loan. However, the biggest obstacle for the new plan is the increase in the total investment, mainly due to the loan interest.

On May 7, the Government Office issued a document announcing the opinion of Deputy Prime Minister Pham Binh Minh, assigning the CMSC to cooperate with the MoIT and relevant agencies to handle EVN’s proposal and report it to the prime minister soon.

In 2018, when calculating the O Mon III and IV projects using gas fuel, EVN proposed the electricity selling price of VND2,355 (10 US cents) per kWh and a maximum of about VND2,840 (12 US cents) per kWh to ensure efficient financing of these projects.

The Block B gas pipelines are being implemented by Phu Quoc Petroleum Operating Company (PQPOC) and South West Pipeline Operating Company (SWPOC), along with PTTEP and MOECO. The approval of O Mon III is the premise to finish commercial negotiations and select the engineering, procurement, and construction (EPC) contractor.

The bidding packages will expire in bid validity in October, and investors expect the investment policy to be issued by August to open commercial bidding packages. If delays continue, PQPOC could have to extend the EPC bidding validity for the fifth time for contractors. In the worst scenario, PQPOC would have to reorganise the international bidding, which would likely delay the whole project for more than a year.

Inflation reined in as materials prices rise through year

Despite a big rise in the prices of construction materials and fuel, a 5-year low in the consumer price index caused by weak demand in the first five months of 2021 is signalling a successful control of inflation. 

Dang Duc Anh, vice director of the National Centre for Socio-Economic Information and Forecast, told VIR that in spite of some recovery in production in the economy causing a climb in the prices of many items in the market, the government may still keep the inflation target at about 4 per cent this year.

“Weak demand at home and in the global market are generally there. In the first five months, prices have increased, but not too strongly. COVID-19 has led to tightened spending,” Anh said.

According to the General Statistics Office (GSO), in the first five months of 2021, the average 5-month consumer price index expanded 1.29 per cent on-year, the lowest ascension in the period since 2016 (see chart).

Vietnam is using prices of 11 groups of items to measure the inflation rate in the country. In the period, the average price of the groups rose by about over 1 per cent on-year. Notably in the group of housing and materials, in which the average price rose 4.42 per cent on-year, the steel price has augmented strongly.

The Vietnam Steel Association was cited by the Ministry of Planning and Investment’s Department of Industrial Economy as reporting that due to a rise in input material prices in the global market, the domestic price of steel products has also climbed strongly. In May the average steel billet price hovered at VND14,000 (60 US cents) per kg, up 30 per cent against that in early last December.

The price of construction steel in Vietnam in early May increased in parallel with the rise in steel material price. For example, the price of iron ores on May 5 was around $190 per tonne at China’s Tianjin Port, up by about $50 per tonne or up 25-39 per cent as compared to that in early December. This has caused a big rise in the price of the domestic steel market in the first quarter and the beginning of the second quarter.

“The price of materials is likely to highly increase,” said department director Le Tuan Anh.

In the same vein, the price of oil globally has also increased. By late last week, oil prices rose by more than 3 per cent on renewed optimism about global demand as global vaccinations continue.

Goldman Sachs is expecting the price of global crude oil to rise to $80 per barrel by the end of the year. “The case for higher oil prices therefore remains intact given the large vaccine-driven increase in demand in the face of inelastic supply,” Goldman analysts said.

So far this year, the number of enterprises halting operations was 59,800, up 23 per cent on-year. On average, each month has seen nearly 12,000 enterprises withdraw. This has also reduced demand for goods in the market.

Global analysts FocusEconomics told VIR in a statement that price pressures in Vietnam this year are expected to ease slightly compared to 2020 amid a projected appreciation of the VND, with panelists seeing inflation average well below the government’s estimate of 4 per cent.

“FocusEconomics Consensus Forecast panelists expect inflation to average 2.9 per cent in 2021. For 2022, the panel projects inflation to average 3.6 per cent,” read the FocusEconomics statement.

Vietnam to shortern quarantine period for fully-vaccinated people

Vietnam is mulling to reduce the quarantine period for vaccinated foreign experts and Vietnamese people stranded overseas to seven days. 

At a meeting yesterday, the Standing National Steering Committee for COVID-19 Prevention and Control has requested the Ministry of Health (MoH) to complete the process and technology system for immigration management.

Specifcailly, the MoH is urgently completing the process of receiving experts and Vietnamese people to Vietnam. The ministry is developing a closed management process from the time of immigration registration to concentrated quarantine and medical monitoring at home.

It is expected that people entering Vietnam will be classified into different groups. Vaccinated people are subject to various coronavirus tests to confirm the effectiveness of vaccination. The main reason is that at present vaccines are 70-90 per cent effective. If they test negative, the quarantine period will be shortened to seven days.

The committee expected that the COVID-19 pandemic will be contained by June but there are still some sporadic cases in the community. It will not be easy to achieve herd immunity soon given vaccination efforts in Vietnam and many countries around the world. Therefore, the forces should always be alert to prevent and fight the epidemic.

Relaxing quarantine rules for fully vaccinated business people and foreign experts will help ensure the investment and trade flow between Vietnam and the world.

According to the Ministry of Labour, Invalids, and Social Affairs, there are nearly 8,500 highly-skilled foreign workers on a priority list to enter Vietnam. They involve some 2,000 employees of key national projects that use new technologies.

Live streaming in Vietnam growing more popular for agricultural business

Farmers across the country have picked up live-streaming to boost sales amidst the COVID-19 pandemic. 

By partnering up with e-commerce sites like Shopee and Sendo, farmers in the northern province of Bac Giang have started live streaming on the platforms to promote their lychee products and improve their earnings.

“With live streaming, millions of customers can keep track of how we harvest lychee,” said a farmer. “We received many orders after each live stream.”

Regarding the activities, Nguyen Dac Viet Dung, chairman of Sendo said, “As the pandemic is growing more serious, we hope to aid farmers to efficiently approach new technologies such as live streaming to form a firmer foundation for the agricultural sector.”

A representative of Shopee also said that the Shopee Farm programme is expected to help farmers to shift to online business models to take advantage of e-commerce like other vendors selling clothes and cosmetics.

Indeed, live streaming for agriculture is an inevitable trend in Vietnam, said Nguyen Hoa Binh, chairman of Nextech Group which operates live streaming skill training institution NextOn.

“Before Vietnam, China was very successful in adopting the live streaming model for agricultural businesses,” said Binh. “Many trends in China also take root in Vietnam and the rest of Southeast Asia in 2-3 three years.”

A prime example for the success of agriculture in e-commerce is Hubei, a Chinese province, where farmers began to sell their produce online with live streaming to overcome the health crisis. As a result, over the first quarter of 2020, revenue from online sales in the province saw an on-year growth of 184 per cent with hundreds of millions of RMBs.

In the 1.4-billion population market of China, live streaming is a core part of online sales and has become a skill most retailers in the country demand from their staff members.

In particular, in last May, the country’s Ministry of Labour and Social Security listed retail live streaming as one of the top 10 new sectors generated by Industry 4.0.

As of the end of 2020, China had about 600 million people purchasing goods after watching live streams, and 250 million vendors (16 per cent of the country’s population) have adopted the business.

As the pandemic grew more serious last year, live streaming has became a lifebuoy for all corners of Chinese society. Leaders of local authorities, billionaire Jack Ma, small- and medium-sized enterprises, and even farmers use live-streaming services. 

Source: VNA/VNS/VOV/VIR/SGT/Nhan Dan/Hanoitimes

VIETNAM BUSINESS NEWS JUNE 11

VIETNAM BUSINESS NEWS JUNE 11

Russia becomes largest pork supplier to Vietnamese market  



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Businesses struggle with rising costs during COVID-19 | Business | Vietnam+ (VietnamPlus)


Businesses struggle with rising costs during COVID-19 hinh anh 1A seaport in HCM City. Many businesses around the country and in HCM City are struggling with rising costs, with tens of thousands of businesses being forced to close down (Photo: VNA)

HCM City (VNS/VNA) – Many businesses have closed down or are
struggling with rising overheads due to COVID-19.

From January to the
end of May, nearly 60,000 businesses around the country closed. As many as
31,800 of them closed temporarily, while the rest were dissolved or are in the
process of dissolution.

Many others are
struggling with rising production costs.

Ly Kim Chi, chairwoman
of the Food and Foodstuff Association of Ho Chi Minh City, said that since the
start of the year businesses have been struggling with rising costs for raw
ingredients such as condiments, rice and seafood.

Production materials
and items like packaging and rubber gloves have also risen in cost.

Do Van Khuol, supply
director of the Saigon Food Company, said that COVID-19 was driving up the cost
of imported ingredients, and prices could rise by 10-25 per cent in the third
and fourth quarters.

Last month the Vietnam
Association of Seafood Exporters and Producers called for HCM City to delay its
plan to charge extra fees for using seaport infrastructure works and utilities.

The city planned to
begin doing this from July 1 to raise funds to upgrade seaport infrastructure.

The association
proposed delaying that plan until at least 2022.

If the plan begins in
July, businesses will face a serious financial burden on top of existing
problems such as rising sea transportation costs and falling purchase demands,
according to the association.

Although HCM City’s
seaports play a key logistical role in transportation within the southern
region and the Mekong Delta, traffic infrastructure for the seaports is still
underdeveloped, leading to frequent congestion and high logistics costs.

Chi said that the next
few months will see businesses importing a high volume of raw ingredients.

Businesses have asked
that the proposed seaport fees be lowered so they can recover and improve
competitiveness more easily, she added.

Businesses are also
asking the Ministry of Industry and Trade to facilitate cooperation between
them and e-commerce platforms to boost their business activities./.





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Vietnam resolutely protests all violations of its sovereignty over Truong Sa archipelago – VietNamNet


Vietnam resolutely protests all violations of its sovereignty over Truong Sa (Spratly) archipelago, Foreign Ministry spokesperson Le Thi Thu Hang stated at the ministry’s regular press conference held online on June 10.

Vietnam resolutely protests all violations of its sovereignty over Truong Sa archipelago hinh anh 1

Vietnamese agencies always keep a close watch on all activities in the Hoang Sa (Paracel) and Truong Sa (Spratly) archipelagos as well as Vietnam’s territorial waters in the East Sea. (Illustrative photo: VNA)

Responding to questions related to the situation on the East Sea, the spokesperson said Vietnamese agencies always keep a close watch over all activities in the Hoang Sa (Paracel) and Truong Sa archipelagos as well as on Vietnamese waters in the East Sea.  

Regarding reports that several Chinese vessels appeared near Tri Ton island in Vietnam’s Truong Sa archipelago, Hang reiterated that Vietnam has sufficient historical evidence and legal grounds to testify to its sovereignty over Hoang Sa and Truong Sa in accordance with international law.

As a member of the 1982 UN Convention on the Law of the Sea (UNCLOS 1982), Vietnam has sovereignty, sovereign rights and jurisdiction over related waters in the East Sea as defined in line with the Convention, she said.

Commenting on a report that the chief of staff of the Philippine armed forces made a trip to Thi Tu island in Vietnam’s Truong Sa and affirmed the Philippines’ plan to convert the island into its logistics hub, the spokesperson stressed that Vietnam resolutely objects to all violations of its sovereignty and related rights over the Truong Sa archipelago.

“Vietnam requests that all concerned parties respect Vietnam’s sovereignty and international law as well as the Declaration on the Conduct of Parties in the East Sea (DOC) and take no actions to complicate the situation while making practical and positive contributions to the maintenance of peace on the East Sea as well as creating favorable conditions for the negotiation on a Code of Conduct on the sea (COC),” spokesperson Hang said./. VNA



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Vietnam firmly opposes sovereignty violations in Truong Sa


She made the statement during the ministry’s regular press conference in Hanoi on June 10, in response to a reporter’s question about Vietnam’s reaction to the recent arrival of a Philippine military official to Thi Tu (Thitu) island in Vietnam’s Truong Sa archipelago.

“As repeatedly affirmed, Vietnam has sufficient legal basis and historical evidence to affirm its sovereignty over Truong Sa (Spratly) archipelago in accordance with international law. The nation resolutely opposes any act of infringing upon its sovereignty and related rights over the archipelago,” the spokesperson said.

Vietnam requests concerned parties to respect its sovereignty, international law, and the Declaration on the Conduct of Parties in the East Sea (DOC), without taking actions that could complicate the situation. The parties should make practical and active contributions to maintaining peace and stability in the East Sea and create an environment conducive to negotiations on a Code of Conduct in the East Sea (COC), Hang added.

Earlier on June 9, the Philippine Department of National Defense reported that Armed Forces of the Philippines (AFP) chief Cirilito Sobejana on June 7 came to Thi Tu island by C-130 military transport aircraft.

Reuters quoted Sobejana as saying that the visit aims to review the situation on the island, serving a plan to renovate the island into a logistics center to ensure the operation of Philippine forces.

Thi Tu is an entity belonging to Vietnam’s Truong Sa archipelago, which is currently illegally occupied by the Philippines.
 





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Vietnam resolutely protests all violations of its sovereignty over Truong Sa archipelago | Politics | Vietnam+ (VietnamPlus)


Vietnam resolutely protests all violations of its sovereignty over Truong Sa archipelago hinh anh 1Vietnamese agencies always keep a close watch on all activities in the Hoang Sa (Paracel) and Truong Sa (Spratly) archipelagos as well as Vietnam’s territorial waters in the East Sea. (Illustrative photo: VNA)


Hanoi (VNA) –
Vietnam resolutely protests all
violations of its sovereignty over Truong Sa (Spratly) archipelago, Foreign
Ministry spokesperson Le Thi Thu Hang stated at the ministry’s regular press
conference held online on June 10.

Responding to questions related to the situation on the East Sea,
the spokesperson said Vietnamese agencies always keep a close watch over all
activities in the Hoang Sa (Paracel) and Truong Sa archipelagos as well as on
Vietnamese waters in the East Sea.  

Regarding reports that several Chinese vessels appeared near Tri
Ton island in Vietnam’s Truong Sa archipelago, Hang reiterated that Vietnam has
sufficient historical evidence and legal grounds to testify to its sovereignty
over Hoang Sa and Truong Sa in accordance with international law.

As a member of the 1982 UN Convention on the Law of the Sea
(UNCLOS 1982), Vietnam has sovereignty, sovereign rights and jurisdiction over
related waters in the East Sea as defined in line with the Convention, she
said.

Commenting
on a report that the chief of staff of the Philippine armed forces made a trip
to Thi Tu island in Vietnam’s Truong Sa and affirmed the Philippines’ plan to
convert the island into its logistics hub, the spokesperson stressed that
Vietnam resolutely objects to all violations of its sovereignty and related
rights over the Truong Sa archipelago.

“Vietnam requests that all concerned parties respect Vietnam’s
sovereignty and international law as well as the Declaration on the Conduct of
Parties in the East Sea (DOC) and take no actions to complicate the situation
while making practical and positive contributions to the maintenance of peace
on the East Sea as well as creating favorable conditions for the negotiation on
a Code of Conduct on the sea (COC),” spokesperson Hang said./.

VNA





LOGISTICS VIETNAM

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VIETNAM BUSINESS NEWS JUNE 10 – VietNamNet


Vietnam to see export growth as global demand recovers

VIETNAM BUSINESS NEWS JUNE 10

Global demand for goods is recovering and this is an opportunity for Vietnam to boost its exports of consumer and industrial products, according to the Ministry of Industry and Trade (MoIT).

The ministry forecasts that Vietnam’s import and export activities will continue to increase in the coming months as free trade agreements (FTAs) are gradually being implemented in a more comprehensive and effective manner.

Those agreements will continue to create conditions for Vietnamese goods to enter to partner markets with preferential tariffs, including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), EU-Vietnam Free Trade Agreement (EVFTA) and the UK-Vietnam Free Trade Agreement (UKVFTA).

Besides that, export prices for many kinds of goods are also tending to increase, especially Vietnam’s key export commodities, according to the ministry.

However, Deputy Minister of Industry and Trade Do Thang Hai said import and export activities may be negatively affected by the COVID-19 outbreak in many localities, especially localities in the northern region with the largest trade value such as Bac Giang, Bac Ninh and Hanoi.

Meanwhile, Asia continues to be a hot spot with a rapidly increasing number of new COVID-19 cases, causing a series of countries and territories such as India, Japan, Taiwan, Indonesia and Thailand to promote measures to control the pandemic.

“In this situation, domestic enterprises must improve competitiveness and adaptability to overcome difficulties and seize opportunities,” Hai told chinhphu.vn.

The ministry has requested its agencies and departments, and Vietnam’s Trade Offices abroad, to provide updates on the COVID-19 pandemic which may affect trade and economic cooperation between Vietnam and other countries.

It has also proposed measures on maintaining and developing export markets and supporting local businesses to find and import raw materials and components for stable production of export products in the future.

For the exports of farming, forestry and seafood products, the industry and trade departments of Hanoi, Hai Duong, Lang Son, Quang Ninh and Lao Cai should consider arranging more working hours, including working on Saturdays, Sundays and holidays, based on the issuing of the certification of origin (C/O) for those export products, especially agricultural products in localities affected by the pandemic such as lychees in Bac Giang and Hai Duong provinces.

Meanwhile, the import-export departments in the northern border areas are asked to closely monitor the customs clearance of goods at the border gates and report signs of goods stuck at the border gates to the ministry.

According to the ministry, the total trade value of goods in the first five months of 2021 increased by 33.5 percent year on year to 262.25 billion USD, although trade activities and production of export goods in May were affected by the fourth outbreak of the COVID-19 pandemic.

Specifically, in the first five months of 2021, the export value of goods was at 130.94 billion USD, up 30.7 percent over the same period last year.

Especially, the group of 22 items with export value of over 1 billion USD continued to hold stable exports, accounting for 87.3 percent of total export value. Of which, six items achieved export turnover of over 5 billion USD.

The group of phones and components had the largest export value of 21.9 billion USD, up 19.6 percent over the same period last year, accounting for 16.7 percent of total export value.

Following were electronics, computers and components (19.5 billion USD, up 26 percent); machinery, equipment, tools and spare parts (4.9 billion USD, up 74.8 percent); textiles and garments (12.2 billion USD, up 15 percent); footwear (8.5 billion USD, up 26.4 percent); and timber and wood products (6.6 billion USD, up 61.3 percent).

The United States continued to be Vietnam’s largest export market with a turnover of 37.6 billion USD, up 49.8 percent over the same period last year; followed by China with 20.1 billion USD, up 26 percent.

Other large export markets of Vietnam included the EU (16.1 billion USD, up 20.8 percent); ASEAN (11.5 billion USD, up 23.6 percent); the Republic of Korea (8.9 billion USD, up 17.1 percent); and Japan (8.4 billion USD, up 7.7 percent).

The ministry also reported that import activities increased strongly in the first five months thanks to the production expansion of the manufacturing sector. That was a good sign showing the recovery of domestic consumer demand.

In the first five months of 2021, Vietnam’s import turnover of products was estimated at 131.31 billion USD, up 36.4 percent over the same period last year./.

Top 50 public companies in 2021 announced

Vinhomes JSC, Hoa Phat Group JSC, Mobile World Investment Corporation and Vietcombank are among the top 50 public companies in 2021 announced by Vietnam Report.

Many other businesses operating in real estate, food production and processing, construction materials, and telecom electronics have also been named in the list that was made on the basis of turnover, profits, assets and market capitalisation of the enterprises.

Vietnam Report has also assessed the prestige and operational efficiency of the firms through investors, experts and market, as well as their communications prestige.

Vietnam Report Director Vu Dang Vinh said the public firms played a central role in the stock market that is developing strongly.

According to a study by the company, up to 72.73 percent of experts and public companies said the market will continue to grow in the time ahead, and 52.38 percent believed that the VN-Index will expand 20-30 percent./.

ODA disbursement in agricultural projects hits 31.33 mln USD in five months

The disbursement of official development assistance (ODA) at the Ministry of Agriculture and Rural Development (MARD) this year was estimated at 718.3 billion VND (31.33 million USD) as of May 31, or 25.2 percent of the target.

The ministry has attempted to remove bottlenecks in each project and speed up the process.

Some projects have seen adjustments to policies and loan agreements resulting in implementation and capital disbursement, in particular Sustainable Agricultural Transformation (VnSAT) and the Forest Sector Modernisation and Coastal Resilience Enhancement Project (FMCR).

The ravages of COVID-19 have also been an obstacle to the importation of machinery and equipment and the hiring of foreign consultants and contractors.

Most forestry projects require large amounts of time for training stakeholders, according to acting head of the Management Board for Forestry Projects Do Quang Tung.

Forestation is also hampered by COVID-19, he noted.

To speed up disbursement in ODA projects, MARD has asked relevant agencies to report to the Prime Minister on reciprocal capital replacing foreign capital for value-added tax payments.

Close to 2.85 trillion VND in foreign capital has been allocated to MARD in 2021, which has been distributed to 16 of its projects since the end of last year./.

Vietnamese goods able to expand presence in UK under trade deal

The UK-Vietnam Free Trade Agreement (UKVFTA), which officially took effect on May 1, is believed to herald a new era for Vietnamese goods to gain a foothold in a market with strong purchasing power, according to the Dau tu (Vietnam Investment Review) newspaper.

Vietnam’s exports to the UK rose nearly 27.4 percent year-on-year in the opening four months of 2021, to 1.94 billion USD, data from the General Department of Vietnam Customs shows, which is considered an impressive result amid COVID-19’s impact on global trade.

The UKVFTA, which temporarily came into force on January 1 this year, is hoped to create more favourable conditions for exports to the UK now it is officially in effect.

During the first five months of this year, exports to the UK grew more than 20 percent year-on-year to about 2.4 billion USD.

The UK is currently Vietnam’s third-largest trade partner in Europe.

Data from Vietnam Customs also shows that bilateral trade reached 6.6 billion USD in 2019, including 5.76 billion USD worth of exports from Vietnam, placing the UK ninth among the country’s main export destinations.

Trade revenue fell slightly last year to 5.642 billion USD, due to COVID-19.

Vietnamese goods currently make up no more than 1 percent of the UK’s total annual imports of over 700 billion USD, the newspaper pointed out.

For example, although Vietnam supplies the largest volume of coffee to the UK, the value accounts for just 10.9 percent of the UK’s total imports, ranking Vietnam fourth after France, Germany, and Brazil.

Dau tu cited Nguyen Canh Cuong, Trade Counsellor of Vietnam to the UK, as recommending that businesses further tap into the market since Vietnamese coffee will become more competitive thanks to the UKVFTA, under which most coffee products from the country will benefit from an import tariff of zero percent.

Meanwhile, the UK imported over 1.6 billion USD worth of fruit and vegetables in 2019, with only some 10 million USD coming from Vietnam.

Under the new trade pact, fruit and vegetables from Vietnam will receive a considerable advantage, as 94 percent of the 547 tariff lines on fruit, vegetables, and related products will be slashed to zero percent.

Cuong said that to expand their market share, fruit and vegetable exporters should sustainably meet the UK’s legal regulations on food safety, plant quarantine, and origin traceability.

Anh Dao Carrick, a trade specialist in the UK, suggested Vietnamese enterprises join hands with British distributors to develop their own brands and access the market, work to meet importers’ strict technical and quality requirements, and pay due regard to labelling issues./.

Legal documents for UKVFTA implementation to be released

The Ministry of Industry and Trade (MoIT) will finalise and issue a number of legal documents needed for the implementation of the UK-Vietnam Free Trade Agreement (UKVFTA) in 2021.

Under a plan approved recently by Minister Nguyen Hong Dien, the minisry will build particular market development programmes for Vietnamese products with strength and potential for export to the UK, while providing guidelines and support to enterprises so they clearly understand the methods of approach and make the best use of advantages brought about by the deal.

The ministry will continue increasing online trade promotions, which have been applied effectively for the realisation of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the EU-Vietnam Free Trade Agreement (EVFTA), thus presenting more opportunities for Vietnamese firms to engage deeply in production and value chains involving UK businesses and expanding their links regionally and globally. 

It will also speed up the building, amendment, and issuance of legal documents relating to the implementation of commitments within the UKVFTA with a suitable roadmap.

Training courses will be organised and publications released introducing and analysing the deal, while help will be given to businesses and organisations to participate in large-scale trade promotions in the UK and such promotions will be increased through e-commerce platforms. The origin tracing app will be maintained to serve exporters.

At the same time, the MoIT will deal with all matters arising during the implementation of the deal, according to the plan./.

Industrial developers winning big from rising rentals

Industrial properties continue to be a “bright spot” in Vietnam’s real estate sector, with mounting rental enquiries and increased capital market activity.

2021 is forecast to be another bumper year for the sub-sector, with Vietnam continuing to scoop up global manufacturing relocations, and industrial developers with large land banks are looking forward to an even brighter future, according to the latest report from real estate consultants Savills Vietnam.

The report stated that average occupancy rates have increased significantly since 2018. In the north, average occupancies last year were up to 90 percent in Hanoi, 95 percent in Bac Ninh, 89 percent in Hung Yen, and 73 percent in Hai Phong. The rate in Ho Chi Minh City was 88 percent, Binh Duong 99 percent, Dong Nai 94 percent, Long An 84 percent, and Ba Ria-Vung Tau 79 percent.

Vietnam now has about 260 operational IPs and 75 others under construction. The national occupancy rate averages over 70 percent.

The sudden increase in rental enquires for land, ready-built factories, and warehousing has been accompanied by price escalations in IPs near major cities. In the north, prices in Hanoi of 129 USD per sq m were up 13.1 percent year-on-year, of 95 USD in Bac Ninh were up 9.2 percent, of 83 USD in Hung Yen were up 6.4 percent, and of 96 USD in Hai Phong were up 3.2 percent.

In 2020, HCM City saw rental prices of 147 USD per sq m, while in other southern industrial areas, the price in Binh Duong of 107 USD per sq m was up 4.9 percent year-on-year, of 98 USD in Dong Nai was up 6.5 percent, and of 65 USD in Ba Ria-Vung Tau was up 18.1 percent.

Rising demand for industrial properties gave a major push to overall performance by developers. The Kinh Bac City Development Holding Corp (KBC) reported revenue in excess of 2 trillion VND (87 million USD) in the first quarter of 2021, almost quadrupling the figure in the same period last year. Of this, over 1.9 trillion VND came from land rentals and property transfers, a three-fold increase year-on-year.

The Sonadezi Corporation’s revenue rose 14 percent from January-March to over 1.26 trillion VND, with more than 365 billion VND from industrial real estate, Savills said, adding that other developers such as the Tan Tao Group (ITA), the Becamex Infrastructure Development JSC (IJC), and the Nam Tan Uyen JSC (NTC) also saw high growth in profit during the period.

Vietnam has been drawing up plans since last year for the heavy investment being channelled into developing infrastructure and industrial parks to attract more companies in supply chains. Various incentives, including corporate tax exemptions, have been adopted to acquire a competitive advantage over rivals in the region./.

Ben Tre to outlay nearly 28.5 trillion VND on transport infrastructure, logistics

The Mekong Delta province of Ben Tre has earmarked over 28.46 trillion VND (1.24 billion USD) for the development of local infrastructure and logistics services in the 2021-2025 period.

The sum will be poured into 89 projects, including upgrades to National Highways 57 and 57B and the North-South Expressway sections serving the local Phu Thuan Industrial Park and Phong Nam industrial cluster.

In the subsequent period of 2026-2030, more than 29.91 trillion VND will be invested in 41 transport and logistics projects in the province, including those involving the completion of a coastal road and the HCM City-Tien Giang-Ben Tre-Tra Vinh Expressway.

Local authorities are also calling for more than 1.47 trillion VND in business investment to develop ports at local industrial parks and clusters.

In 2026-2030, it will channel money into in a new deep-water port in Binh Dai district and continue upgrading and expanding existing ports.

According to the Chairman of the provincial People’s Committee Tran Ngoc Tam to realise these goals, Ben Tre will deploy a raft of solutions on institutions, capital, land, human resources, and communications.

The province’s funding for such development in the 2016-2020 period totalled 82.9 trillion VND./.

Infrastructure boosts development of Hai Phong

Improved transport and tourism infrastructure has boosted the socio-economic development of Hai Phong city over the past five years.

According to Chairman of the municipal People’s Committee Nguyen Van Tung, in 2021-2030, the city plans to build more than 100 bridges with a total investment of some 83 trillion VND (3.6 billion USD).

In 2015-2020, Hai Phong built 45 bridges, including the Tan Vu-Lach Huyen bridge – one of the longest sea bridges in Southeast Asia with a length of about 16km.

The bridge not only shortens the travel time from Hai Phong to Cat Ba island but also serves as a trade connection between the city and other countries through Lach Huyen port.

Another bridge that has connected traffic between Hai Phong’s inner city and Thuy Nguyen district, as well as a tourist highlight of the port city, is Hoang Van Thu bridge belonging to the technical infrastructure project in the new urban area of northern Cam river.

This bridge is known as the most beautiful bridge in Hai Phong.

The Hoang Van Thu bridge’s operation is one of the steps contributing to the completion of the new city centre planning.

In addition to the outstanding development of its road transport system, Hai Phong has also strengths in terms of its seaports.

Lach Huyen deep-water seaport was put into operation in 2019 and became the first port in the northern region to receive large tonnage ships of 12,000TEU and 132,000 DTW transporting goods directly to Europe and the Americas instead of transiting via foreign ports as before.

Chairman of the Vietnam Chamber of Commerce and Industry Vu Tien Loc said: “With the advantage of being the main gateway to the sea of the whole northern region, Hai Phong has a strategic location playing a vital role in the development of the northern key economic regions.”

“In particular, Hai Phong holds a key position in the ‘Two Corridors – One Economic Belt’ Co-operation between Vietnam and China as well as is an area with strategic relationships with major growth poles in East Asia and Southeast Asia,” Loc added.

The city’s economic indicators last year and the first four months this year, increased by 1.5 to 2 times compared to other localities nationwide despite the complex developments of the COVID-19 pandemic.

Minister of Industry and Commerce Nguyen Hong Dien said: “Hai Phong is currently a ‘fertile land’ for both domestic and foreign investors”.

A representative of the Hai Phong Economic Zone Management Board said that as of April this year, the city has 770 projects with a total investment capital of more than 20.669 billion USD.

From the beginning of this year, the city saw 12 new projects registered with a total investment capital of 87.81 million USD and 20 projects which increased their capital by a total of 914.55 million USD.

The projects are mainly in the processing and manufacturing industries.

In 2021-2025, the city plans to establish 15 new industrial parks with an area of more than 6,400 hectares.

In addition to attracting investment, the development of transport infrastructure has helped make tourism a key economic sector of the port city.

According to Vice Chairman of the city People’s Committee Le Khac Nam, before 2012, Hai Phong’s tourism industry always failed to meet its targets but from 2013, the number of tourists coming to the city has increased year by year, especially in 2016-2021, when the number of tourists increased by an average of 20 percent per year.

“In 2021-2025, Hai Phong identified tourism as one of the three pillars of the city’s economic development,” said Nam.

“To develop the industry, the city focused on infrastructure to attract big investors in this field,” he said.

By the year 2025, there will be six more 5-star hotels put into operation, raising the number of 5-star hotels to 10.

Cat Ba island, coastal Do Son district and Vu Yen island are three key tourist destinations of the city, he added./.

Ben Tre’s shrimp sector targets production value of 1 billion USD by 2025

The production value of the shrimp industry in the Mekong Delta province of Ben Tre is to surge by an average of 41.1 percent each year to 2025 and reach 1 billion USD.

According to a plan to develop the sector, issued recently by the provincial People’s Committee, the locality will develop 4,000 ha of brackish water shrimp aquaculture area applying high technology by 2025, to promote the sustainable development of the fisheries economy in particular and the coastal province’s socio-economic development in general.

Chairman of the provincial People’s Committee Tran Ngoc Tam said Ben Tre aims to modernise its industrialisation-oriented marine shrimp farming sector and turn it into a large commodity production sector with high levels of competitiveness, productivity, and quality, thus creating breakthroughs in the stable and sustainable development of the fisheries economy and, most importantly, contributing to the province’s GDP growth.

To that end, local authorities have implemented solutions such as re-organising production, improving the quality of young marine shrimp, prompting the research and application of science and technology in production, developing infrastructure, managing the environment, and developing shrimp processing activities.

Attention will be paid to developing concentrated and large raw material production areas and expanding effective aquaculture models to help local farmers improve their earnings.

According to the Deputy Director of the provincial Department of Agriculture and Rural Development Nguyen Van Buoi, Ben Tre currently has nearly 1,700 ha of brackish water aquaculture areas applying high technology, with an annual average yield of 36 tonnes per ha and profit of 2.1-2.4 billion VND (91,400-104,560 USD) per ha per year.

Brackish water shrimp farming has been developing strongly in Ben Tre, especially intensive and semi-intensive shrimp cultivation.

According to the department, as of 2020, the locality had exploited 45,747 ha of aquaculture area out of 50,000 ha of potential aquaculture area, including 36,000 ha of intensive and semi-intensive marine shrimp farming areas, with total production reaching some 70,000 tonnes.

Infrastructure in the province’s aquaculture areas has been gradually improved, especially road and irrigation networks, basically meeting current demand./.

Hanoi to prepare housing development programme for 2021-2030

The Hanoi People’s Committee has issued a decision approving the outline for a task of devising the capital’s housing development programme for 2021-2030, with vision towards 2040.

The programme aims at realising the Resolution of the Hanoi Party Organisation’s 17th Congress for the 2020-2025 tenure and identifying new criteria for the work in line with the local master plan for socio-economic growth to 2030 approved by the Prime Minister.

Accordingly, the city will conduct surveys and assessments regarding the current situation of commercial housing, social housing, resettlement housing, official residence and private housing in urban and rural areas. It will set goals for housing development and make forecasts on demand for housing among social welfare beneficiaries.

The programme will identify local demand for houses and land areas to build different types of housing in the city and links between housing and urban development, among other things.

Hanoi hopes to build a system of suitable solutions to ensure sustainable, modern, and climate change-adaptive housing development, as a basis for the management and implementation of related projects, investment attraction, and the healthy growth of the real estate sector./.

HCM City seeks cashless payment for company transactions

Businesses would be required to use non-cash payments for trading transactions of any value under a proposal submitted to the Government by the Ho Chi Minh City Tax Department.

Currently, trading transactions worth more than 20 million VND (868 USD) have to be made by cashless payment in order to enjoy tax refunds and corporate income tax reductions as regulated by the law on value-added tax.

The proposal is aimed at improving tax governance and strengthening monitoring of expenditures and turnover of businesses and traders, according to an official at the tax department.

The official said that payments using non-cash methods have become increasingly popular in Vietnam, and the Government last year issued a resolution to boost cashless payments in the country.

The department also proposed that the Government create regulations for e-commerce or digital-based business activities conducted by foreign companies like Google, Facebook, YouTube, Agoda, Booking.com and Airbnb.

These companies would be required to provide tax agencies information on individuals and businesses in Vietnam involved in their business activities.

The department also proposed that the Government set regulations concerning investigation of tax fraud and related crimes.

Associate professor Dinh Trong Thinh of the Academy of Finance said it was vital to speed up cashless payments to reduce the risks involved in cash payments and to increase financial transparency.

However, limited payment infrastructure was one of the barriers hindering electronic payment adoption, he said.

Regulations on non-cash payments for all transactions should not be required, he said. There should be a detailed roadmap to implement regulations on non-cash transactions to make it feasible, especially for small enterprises, he added./.

Tra Vinh shrimp output up over 6,000 tonnes

Total salt and brackish water aquaculture output in the Mekong Delta province of Tra Vinh reached 28,000 tonnes in the first five months of 2021, with shrimp output of over 20,000 tonnes, an increase of 6,000 tonnes year-on-year.

According to General Director of the Tra Vinh Department of Aquaculture Nguyen Van Quoc, total output surged thanks to favourable weather conditions and expanded breeding areas, while shrimp farmers strictly complied with farming schedules, exerted better control over breeding stocks, and improved their techniques.

Shrimp prices increased 10,000 to 15,000 VND per kg in April, allowing farmers to post a handsome profit. However, as the pandemic has again broken out, the market for shrimp has contracted, causing prices to drop. In order to cope, farmers have decided to maintain production and wait for shrimp exports to pick up.

Tra Vinh is urging local aquaculture processing businesses to resume production and seek new markets for exports to ensure sales./.

Wood exports hit record high despite COVID-19 in five months

Exports of wood and timber products surged 42 percent year-on-year to reach a record high of over 6.42 billion USD in the first five months of 2021 despite global supply chain disruptions caused by the COVID-19 pandemic, according to customs data.

Of the figure, 4.96 billion USD came from wood furniture, up nearly 57 percent against the same period last year.

Domestic producers have adapted well to the “new normal” by stepping up digital trade meetings with foreign buyers in order to boost sales, said Deputy Minister of Agriculture and Rural Development Ha Cong Tuan.

There is plenty of room for the global wood and furniture market to grow, said Bui Chinh Nghia, vice director of the Vietnam Forestry Administration under the Ministry of Agriculture and Rural Development.

Vietnam now makes up 9 percent of the global market, he noted, stressing that with the current growth rate, Vietnam will soon rise to the fourth or even third places among the world’ largest exporters of wood products from the current fifth place.

According to several foreign importers, COVID-19-induced social distancing orders and travel restrictions have forced people in many countries to work from home, triggering increasing demand for home furniture. Vietnamese furniture has been more and more favoured by importers as producers have strictly complied with rules of origin.

Insiders, however, warned that rising orders may cause troubles for Vietnamese producers as disruptions in supply of material wood remain./.

Veggie, fruit exports reach 1.77 billion USD during Jan-May

Vietnam’s export turnover of fruits and vegetables hit 1.77 billion USD in the first five months of 2021, a year-on-year increase of 18 percent, according to the Ministry of Agriculture and Rural Development.

In May alone, fruit and vegetable exports raked in 400 million USD, a surge of 48.3 percent compared to the same period last year.

China currently remained the top importer of fruits and vegetables from Vietnam. These products are also witnessing positive signs in other major markets such as the US, Japan, Russia, and Australia.

To boost the export of fruits and vegetables, the ministry assigned the Director of the Plant Protection Department to negotiate to open 19 markets for 20 types of products, assist in handling, negotiating and removing technical difficulties arising in the export process, coordinate with localities to build codes for growing areas and export establishments to ensure traceability and meet requirements of major importers./.

Gov’t responds swiftly to COVID-19 economic impacts: ADB official

The Vietnamese Government has responded swiftly to the COVID-19 economic impacts, which was supported by strong fundamentals, thus ensuring the economy’s resilience, said Asian Development Bank (ADB) Country Director for Vietnam Andrew Jeffries.

Jeffries made that statement in a recent interview granted to the Vietnam Government Portal (VGP) regarding Vietnam’s macro-economic prospects amidst the COVID-19 pandemic outbreaks.

Jeffries highlighted that Vietnam’s economic growth is expected to growth by 6.7 percent in 2021 and 7.0 percent in 2022 – strong and steady growth made possible by Vietnam’s success in containing the COVID-19 pandemic.

Inflation will be under control, despite an expected rise to 3.8 percent this year and 4.0 percent in 2022 due to rising international oil prices on the global economic recovery and increased domestic consumption, he added.

The ADB Country Director referred to the drivers of this growth, including industry, driven by export-oriented manufacturing, increased investment (private and public investment) given accommodative fiscal and monetary measures, and expanding trade, thanks to the faster-than-expected recoveries in China, the US, and Vietnam’s participation in 15 major free trade agreements involving all advanced economies.

Regarding the Vietnamese Government’s support packages for enterprises and people affected by COVID-19, he asserted that the Government has responded swiftly to the COVID-19 economic impacts, which was supported by strong fundamentals, thus ensuring the economy’s resilience.

The accommodative monetary policy through key interest rate cuts together with the implementation of credit package and fiscal support measures have provided breathing space to affected businesses, including small- and medium-sized enterprises (SMEs).

However, the credit support has been mainly arranged and provided by commercial banks, said Jeffries, adding that the bulk of the increases of liabilities have been shouldered by the commercial banks, but they still have to apply required lending standards, especially when the balance sheets of affected firms are being deteriorated.

Without risk sharing by the Government, banks may have been reluctant to provide more loans to affected firms, he emphasised.

Mentioning Vietnam’s measures to support businesses and people to overcome negative impacts of COVID-19, Jeffries said that the State Bank of Vietnam has instructed the banks to extend the implementation of credit support measures to the end of 2021.

The Government also allowed extending the deferral of taxes and landing rental in 2021 to further reduce the shock’s impacts and support economic recovery, he said, stressing that the long-term economic recovery is being fleshed out by the Government.

However, he supposed that the support was mainly in the form of deferral of taxes and land rental, and size of the support remained modest, as compared with other countries with fiscal support of up to 15 percent – 20 percent of the GDP, like in France, the UK or Singapore.

Among others, the emerging long-term economic priorities after the COVID-19 are the imperatives to build an economy which is resilient to internal and external shocks which have become more frequent in recent decades; broad-based that can help reduce disruptive impacts from external crisis; and digitally able to strengthen economic competitiveness and efficiency, the ADB Country Director proposed.

An ADB study suggests that there is a huge impact of COVID-19 on income and poverty of Vietnamese households. For example, the impact of the pandemic will reduce household per-capita income on average by 9.8 percent, and the poorest income group will suffer a 10.2 percent income drop, while the poverty rate of households in the poorest income quintile will rise by 40 percent.

There will be an additional 1.7 million poor people due to the pandemic, and those living in rural, remote areas and ethnic minority people will be more severely affected.

Cash transfer in Resolution No. 42/NQ-CP dated April 09, 2020 assistance for people affected by the COVID-19 pandemic should be a short-term solution to over income shock, said Jeffries.

A more sustainable long-term strategy should be to help the poor and vulnerable to diversify their livelihoods through, for example, short-term vocational training and improved access to microfinance for establishing new businesses, he suggested.

In short-term, Jeffries indicated that the major downside risks are the pandemic re-emerging from new coronavirus variants and delays in the Government’s vaccination plan.

A faltering global COVID-19 vaccine rollout could have an immediate impact on Vietnam being able to return to its strong pre-pandemic growth path given the country’s reliance on external demand.

The fast revival of domestic private investment may also heighten the risk of asset bubbles if credit is not channeled to productive sectors.

Meanwhile, in the medium and long-term, main challenges facing Vietnam include climate change impact, unfinished reforms (financial sector reform and SOE reform), and low labor productivity, he underlined.

The ADB Country Director recommended Vietnam to reset the growth momentum to achieve green recovery in the medium-term and green growth in the long-term, given the daunting impact of climate change on Vietnam in the decades to come.

Strengthening institutional efficiency is the key to unlock the private sector’s potential to support growth, he said.

Accomplishing unfinished business reforms (financial sector reform, and SOE reform), improving the quality, transparency, and enforcement of laws and regulations, and simplifying businesses conditions are all critical to improve institutional efficiency for private sector development, Jeffries advised.

He stressed the significance of promoting digital transformation to improve productivity by investing on education, technology, and innovation./.

VNR faces difficulty due to drop in passengers

Vietnam Railway Corporation (VNR) announced that its revenue in the first five months of 2021 decreased strongly to only 51.4 percent of the figure of the same period last year, due to the impact of the COVID-19 pandemic.

The railway served about 1.147 million passengers, a reduction of 35.4 percent compared to the same period last year, bringing in over 400 billion VND (17.4 million USD) in revenue. 

In May, which saw the peak of COVID-19 outbreaks in the latest resurgence wave, the number of passengers was only by 132,300, equal to 48.4 percent of the corresponding figure last year. As a result, revenue from passenger transport stood at 44.7 billion VND (1.9 USD), equivalent to 55.4 percent of the figure of the same period last year.

According to VNR, a decline in revenue and demand for transportation and travel is attributable to travel restrictions prompted by outbreaks of COVID-19 in many localities across the country.

The VNR curtailed most of its operations in May. It is currently operating only one train on the Hanoi-Ho Chi Minh City route.

Also due to the COVID-19 resurgency, more than 11,300 tickets were returned on the occasion of the Reunification Day (April 30) and May Day (May 1) holidays, worth about 4 billion VND (174,900 USD)./.

Ministry seeks to boost consumption of farm produce

Policymakers and experts recently gathered in a meeting to seek solutions to deal with difficulties in transporting farm produce and goods to border gates and between provinces amid the COVID-19 pandemic.

Container trucks go through Kim Thanh International Road Border Gate No.2 in Lao Cai Province.
At the meeting, Deputy Minister of Agriculture and Rural Development (MARD) Tran Thanh Nam said his ministry had worked with the Ministry of Industry and Trade and the Ministry of Health to create a mechanism where the latter would issues certificates for farm produce to be transported faster.

Ministries and agencies needed to conduct procedures in good time to help farmers and businesses know how and where they can get said certificates for their farm produce, he noted. 

The deputy minister said businesses only needed the health sector to issue a certificate of eligibility for agro products circulation. Once traders show the certificates, traffic police would let them go to ensure farm produce is shipped quickly.

Nam also asked the Ministry of Foreign Affairs to work with Chinese partners to temporarily allow the use of “vaccine passports” for drivers specialised in driving agricultural products and goods between the two countries to reduce costs for businesses. 

Hoang Anh Tuan, Deputy Director of the Domestic Market Department under the Ministry of Industry and Trade, requested traders to follow measures on pandemic prevention and control to ensure circulation of goods. 

The Ministry of Industry and Trade has issued documents to instruct businesses to work together to ensure supply and demand with the use of modern trade channels and e-commerce to promote the consumption of farm produce.

Nguyen Quoc Toan, Director of the Agro Processing and Market Development Authority under the Ministry of Agriculture and Rural Development, said difficulties in transporting farm products between provinces were due to checkpoints for controlling the pandemic. Despite having a safety compliance certificate for COVID-19, all drivers and goods were inspected again, causing transport congestion and harming businesses.

Toan said he wanted ministries to review and conduct suitable measures on transport management to ensure pandemic prevention and business operations.

Vietnamese Ambassador to Spain join activities in Barcelona

Vietnamese Ambassador to Spain Hoang Xuan Hai led a delegation of the Embassy of Vietnam to join a host of activities in Barcelona city on June 5-8.

The ambassador attended a ceremony marking the 20th founding anniversary of Casa Asia, which was held under the chair of the Spanish Minister of Foreign Affairs and the Mayor of Barcelona.

Casa Asia, established in 2001, has hosted various exchange events between Spain and Asian nations, including Vietnam.

Hai and other ASEAN diplomats also joined a working session with leaders of the Barcelona Chamber of Commerce and Industry.

He informed the delegates of Vietnam’s socio-economic development in the recent past and affirmed the Government’s aspiration in improving business climate, in a bid to attract foreign investors.

The ambassador believed that the EU-Vietnam Free Trade Agreement (EVFTA), which took effect in August 2020, and the EU-Vietnam Investment Protection Agreement (EVIPA), will offer new chances for businesses of Spain and Vietnam.

He hoped for a close coordination and cooperation between the Vietnamese Embassy and the Spanish city’s Chamber of Commerce and Industry in organising events to promote Vietnam’s economy, trade, investment and tourism in Barcelona in the coming time.

The hosts spoke highly of Vietnam’s accomplishments, voicing a hope that the Vietnamese Government will further simplify administrative procedures and create a more optimal climate for investors.

Hai also attended a session with Vietnam’s Honorary Consul in Barcelona and overseas Vietnamese, during which he hoped that the Honorary Consul would serve as a bridge linking Vietnam and the Spanish city, and continue to support the Vietnamese community.

He also briefed the participants on the successful organisation of the 13th National Congress of the Communist Party of Vietnam, the elections of deputies to the 15th National Assembly and all-level People’s Councils for the 2021-2026 tenure; along with socio-economic development in the first five months and achievements and efforts made in COVID-19 prevention and control./.

Dong Nai to build more roads linked to Long Thanh Airport

The People’s Committee of Dong Nai province has approved investment plans for four local roads, most of which are directly connected to Long Thanh International Airport – a driving force for investment and economic development in the southern region.

Investment in those projects is expected to hit more than 7 trillion VND (304.3 million USD), excluding site clearance costs.

The provincial People’s Committee has assigned relevant units to prepare pre-feasibility studies, propose investment plans, review demand for land use and estimate compensation and clearance costs.

Capital for the road construction will be taken from the budget and the land funds along the two sides of the roads. The province has requested relevant districts coordinate with units involved to exploit the land funds and put potential land lots up for bidding.

Construction of the four roads will be conducted during 2021-2025.

Chairman of the provincial People’s Committee Cao Tien Dung said demand for transport connectivity in Dong Nai is a pressing matter as the airport is now under construction and is expected to be put into operation in 2025.

Roads directly or indirectly linked to Long Thanh will play an important role in the province’s development, as they can help bring into full play opportunities brought about by the airport.

The airport will be built in three phases over three decades, and is expected to become the country’s largest.

In the first phase, one runway with a length of 4,000 metres, taxiways, an apron, and a passenger terminal with other auxiliary works sprawling 373,000 sq.m will be built to serve 25 million passengers and handle 1.2 million tonnes of cargo each year.

The airport is designed to have four runways, four passenger terminals, and other auxiliary facilities to ensure a capacity of 100 million passengers and 5 million tonnes of cargo a year by 2040.

Covering a total area of more than 5,580ha, the airport will straddle six communes in Long Thanh district. It is expected to cost 336.63 trillion VND (14.5 billion USD), with the first phase requiring over 109 trillion VND./.

Agency banking model develops in rural, remote locations

The State Bank of Vietnam (SBV) is amending regulations related to the operation of agency banking to improve access to the banking system.

Agency banking is a type of branchless banking that allows traditional banks to extend their network of branches and services through authorised agents.

The model arrived in the country in recent years, especially since the Government issued the national comprehensive financial strategy in early 2020.

According to the SBV’s research, Brazil, Kenya, Mexico and India have all seen agency banking become an important tool to expand access to basic financial services and promote financial inclusion. Five years since Brazil launched the agents, the network has served 12.4 million new bank accounts.

The state bank said in Southeast Asia, Malaysia’s agency banking model uses the nationwide telecommunications network to expand the network of traditional banking services to customers in rural and remote areas at a low cost. The model also helps Malaysian banks save more than 80 percent of costs for setting up service points and 60 percent of transaction costs compared to the traditional bank branch network.

Banks intrigued

According to the latest Comprehensive Financial Report of World Bank released in 2018, 69 percent of adults in Vietnam were unbanked and relied on cash while the rate in the world was 31.5 percent at the same time.

Meanwhile, the national strategy of financial services sets the goal to have at least 50 percent of communes accessing financial service points and 80 percent of adults having transaction accounts at banks or other institutions by 2025.

Experts reckon the low rate of bank accessing in Vietnam is a big chance to develop banking agents across the country.

By the end of 2017, the SBV piloted agency banking in rural areas with three models.

MB Bank work with Viettel services, PGBank with Petrolimex sales points and Vietcombank with M_service Company, reaching 32,185 sales points.

More than 11 million transactions with a value of more than 81 trillion VND (3.49 billion USD) were recorded among some 6 million customers.

Outside of the SBV pilot, LienVietPostBank took advantage of post office locations to develop savings services, while Jens Lottner, CEO of Techcombank, shared the bank’s plan to work with Masan Group to take advantage of convenience stores to bring the bank’s financial products and services to a wider population.

Between 2020 and 2025, Agribank plans to set up a network of banking agencies and work with postal organisations, public administrations and microfinance projects to deploy low-cost, convenient, safe products for individual payment transactions.

Seeing the potential of the model, a SBV representative said there must be a legal corridor.

The SBV said completing the legal framework on agents was proposed in the national comprehensive financial strategy) to improve the level of access to financial services for people.

The central bank said it was amending other regulations related to the operation of the model, especially those on anti-money laundering/terrorist financing, regulations on electronic money and know-your-customer (KYC) processes.

CEO of TPBank Nguyen Hung said such regulations would need to go into detail to guide the establishment of agencies to provide banking services, such as regulations on approved and prohibited services, criteria to become authorised agencies and the form of operation.

Hung mentioned two main forms of authorisation used in Brazil known as full authorisation and credit authorisation, adding a fully authorised agent will provide a full range of services from receiving and forwarding application documents for opening a payment account, savings account, deposit/withdrawal transaction, transfer, payment as well as loan applications and opening credit cards. Meanwhile, a credit agency will only provide services on payment, borrowing and credit.

Taking another example of Bangladesh, Hung said authorised dealers can provide cash withdrawal/deposit services, support for small loan disbursement and debt collection/instalment, bill payment assistance, fund transfer assistance, balance queries, collect and forward applications for opening accounts, opening savings, loans and credit cards. However, they are not allowed to approve the decision to open card/loan accounts, conduct financial appraisals and conduct foreign currency transactions.

According to another financial expert, it is necessary to clarify the quality and capacity of organisations authorised to act as banking agents.

The agents must ensure that they meet all the standards of financial capacity, reputation, ability to meet commitments under adverse conditions, ability to provide financial services based on technology and capacity of internal control, security assurance and anti-money laundering./.

Source: VNA/VNS/VOV/VIR/SGT/Nhan Dan/Hanoitimes

VIETNAM BUSINESS NEWS JUNE 9

VIETNAM BUSINESS NEWS JUNE 9

Vietnam exports first batch of lychee under EVFTA



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Egyptian localities wish for closer ties with Vietnam in port services, logistics | Politics | Vietnam+ (VietnamPlus)


Egyptian localities wish for closer ties with Vietnam in port services, logistics hinh anh 1Vietnamese Ambassador Tran Thanh Cong to Egypt (second, left) meets with Port Said Governor Adel e-Ghadban on June 9. (Photo: VNA)

Cairo (VNA) – Egypt’s coastal governorates of
Damietta and Port Said want to beef up cooperation with Vietnam in various
fields, including port services and logistics, heard the meetings of their
governors with Vietnamese Ambassador Tran Thanh Cong on June 9.

Cong and his entourage met with Port Said Governor
Adel e-Ghadban and Damietta Governor Manal Awad Mikhail to continue effectively
enforcing agreements signed by the two countries.

The Vietnamese diplomat said Vietnam and Egypt have
maintained a good relationship in wartime in the past and national construction
at present. The bilateral ties have seen important progress over the previous
years, particularly after the official visits made by the two countries’
leaders in 2017 and 2018, he said.

Briefing about Vietnam’s economic development and
advantages alongside its incentives for investment attraction, he said Vietnam
and Egypt have inked various documents and agreements to bolster the bilateral
relations in economics, trade and investment.

Cong proposed the two sides to hold more seminars and
trade promotion events to connect enterprises from both countries and help them
explore the strengths of each other.

He also asked the Egyptian side to share experience in
managing ports and logistics and to facilitate Vietnamese investors to do
business in the two governorates.

Port Said Governor Adel e-Ghadban expressed his hope the two
sides step up partnership in port services, logistics, gas, fisheries,
textile-garment, agriculture, road construction, tourism and culture.

Damietta Governor Manal Awad Mikhail, meanwhile, expected
the two sides to enhance cooperation in port services, logistics, canned
seafood, agriculture, timber production, medical equipment, textile-garment,
cultural exchange.

Both of them welcomed Vietnamese firms to invest in the
East Port Said and Damietta export processing zones./.





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VIETNAM BUSINESS NEWS JUNE 9 – VietNamNet


Vietnam exports first batch of lychee under EVFTA

VIETNAM BUSINESS NEWS JUNE 9

The first batch of Thanh Ha lychees was officially exported to Europe under the EU–Vietnam Free Trade Agreement (EVFTA) on June 7.

At the ceremony to export the first batch of lychee to the European Union, Vu Ba Phu, director of the Vietnam Trade Promotion Agency under the Ministry of Industry and Trade, said that in the next few days, lychee will be on store shelves of the Czech Republic, which has a large market and the largest Vietnamese community in the EU. This result comes from efforts to connect and promote consumption in the 2021 litchi crop.

Currently, the EU, a potential market of about 430 million people, is the fourth export market for Vietnamese vegetables and fruits. This advantage, as well as the import tax exemption and reduction as committed in the EVFTA, will help to increase the competitiveness of Vietnamese fruits compared to markets that do not have an FTA with the EU such as Thailand, China, Malaysia, and Indonesia.

It is expected that the export shipment will reach European consumers in the next 4-5 days. Apart from Thanh Ha lychee, a batch of Luc Ngan lychee (Bac Giang) will also set out to conquer this community of 27 fastidious countries in the next week.

Chung Tri Phong, general director of Pacific Foods, the company is in charge of exporting the lychee, revealed that the company has about three years of understanding and negotiating the procedures for the export of lychee to the EU.

“Right from the beginning of the season, the production management system and monitoring software of the litchi area must be checked by import partners. We also cooperate with many partners to preliminarily process and preserve lychees, ensuring the best condition this fruit reaches consumers in Europe,” shared Phong.

Le Ba Linh, chairman of the Board of Directors of Pacific Foods said that Vietnam’s agricultural products have great potential, especially tropical fruits such as lychee, dragon fruit, jackfruit, mango, longan, and grapefruit. He said that the EU market always wants to experience products from Vietnam as part of the speciality of the lower Mekong region. After litchi, this company will continue exporting jackfruit, dragon fruit, and rice to the EU.

Hai Duong province currently grows lychee on more than 9,000 hectares, of which Thanh Ha district has more than 3,300ha and Chi Linh town has more than 3,500ha with a total output of about 55,000 tonnes. The province currently has 45 litchi areas with a total area of 450ha planted according to GlobalGAP standards and 6,300ha planted according to VietGAP standards. Up to now, 1,000ha have been certified with VietGAP, GlobalGAP, and 8,000ha have been granted export planting area codes.

Industrial developers winning big from rising rentals

Industrial properties continue to be a “bright spot” in Vietnam’s real estate sector, with mounting rental enquiries and increased capital market activity.

2021 is forecast to be another bumper year for the sub-sector, with Vietnam continuing to scoop up global manufacturing relocations, and industrial developers with large land banks are looking forward to an even brighter future, according to the latest report from real estate consultants Savills Vietnam.

The report stated that average occupancy rates have increased significantly since 2018. In the north, average occupancies last year were up to 90 percent in Hanoi, 95 percent in Bac Ninh, 89 percent in Hung Yen, and 73 percent in Hai Phong. The rate in Ho Chi Minh City was 88 percent, Binh Duong 99 percent, Dong Nai 94 percent, Long An 84 percent, and Ba Ria-Vung Tau 79 percent.

Vietnam now has about 260 operational IPs and 75 others under construction. The national occupancy rate averages over 70 percent.

The sudden increase in rental enquires for land, ready-built factories, and warehousing has been accompanied by price escalations in IPs near major cities. In the north, prices in Hanoi of 129 USD per sq m were up 13.1 percent year-on-year, of 95 USD in Bac Ninh were up 9.2 percent, of 83 USD in Hung Yen were up 6.4 percent, and of 96 USD in Hai Phong were up 3.2 percent.

In 2020, HCM City saw rental prices of 147 USD per sq m, while in other southern industrial areas, the price in Binh Duong of 107 USD per sq m was up 4.9 percent year-on-year, of 98 USD in Dong Nai was up 6.5 percent, and of 65 USD in Ba Ria-Vung Tau was up 18.1 percent.

Rising demand for industrial properties gave a major push to overall performance by developers. The Kinh Bac City Development Holding Corp (KBC) reported revenue in excess of 2 trillion VND (87 million USD) in the first quarter of 2021, almost quadrupling the figure in the same period last year. Of this, over 1.9 trillion VND came from land rentals and property transfers, a three-fold increase year-on-year.

The Sonadezi Corporation’s revenue rose 14 percent from January-March to over 1.26 trillion VND, with more than 365 billion VND from industrial real estate, Savills said, adding that other developers such as the Tan Tao Group (ITA), the Becamex Infrastructure Development JSC (IJC), and the Nam Tan Uyen JSC (NTC) also saw high growth in profit during the period.

Vietnam has been drawing up plans since last year for the heavy investment being channelled into developing infrastructure and industrial parks to attract more companies in supply chains. Various incentives, including corporate tax exemptions, have been adopted to acquire a competitive advantage over rivals in the region./.

Budget revenue rises on robust banking, securities, real estate and automobile sectors

The budget revenue increased significantly in the first five months of this year thanks to recovery from 2020 and some sectors seeing strong growth, such as banking, securities, real estate and automobile industries, according to the General Department of Taxation.

Statistics showed that tax collection was estimated to total 575.6 trillion VND (24.85 billion USD) in January – May, equivalent to 51.6 percent of the plan and 114.5 percent of the same period last year.

The General Department of Taxation said that the budget revenue was quite good from the beginning of this year thanks to the fact that some sectors have benefited from the fiscal and monetary policies introduced in 2020 to aid the economy to overcome the COVID19-pandemic.

With good credit and deposit growth in 2020, which contributed significantly to boost the profit of commercial banks, the corporate income tax which banks paid to the State budget increased by 4.5 trillion VND.

The tax collection from transferring property projects also increased by around 6 trillion VND as the property market was robust in many localities nationwide.

Mergers and acquisitions became more robust in the first months of this year after the impacts of the virus in 2020, which pushed up tax revenue by 5-6 trillion VND.

The Government’s policy of reducing 50 percent of registration fees for domestically-produced and assembled automobiles till the end of 2020 also promoted car sales and the automobile production industry.

The development of the securities and real estate market from the beginning of this year also helped increase revenue from real estate registration fees, personal income tax from the transfer of securities and real estate assets.

According to the Vietnam Securities Depository, the number of new accounts opened in the first four months of this year totalled nearly 370,000, increasing by 90 percent against the whole of 2020, bringing the total number of accounts of individual investors to 3.12 million and organisational investors to 15,800.

Director of the General Department of Taxation Cao Anh Tuan said the outbreak of the fourth COVID-19 pandemic wave in Vietnam from late April might affect budget collection in the second half of this year.

Tuan asked for a close watch to be placed on the virus development to work out solutions for effective tax collection in the remaining months of this year.

At the same time, the department would study and propose measures to efficiently implement the Government’s policies extending the deadline for payment of value added tax, corporate income tax, individual income tax and land fees in 2021 to support enterprises to overcome the difficult time./.

Hanoi takes action to raise PCI ranking

The Hanoi People’s Committee recently issued a directive on improving the city’s Provincial Competitiveness Index (PCI) in 2021, given the fact that many of its sub-indexes have tended towards decline even though its overall position in the national rankings has remained unchanged in recent years.

For the third year in a row the capital city stood in ninth place among Vietnam’s 63 cities and provinces in the 2020 PCI rankings, with a total score of 66.93 points, up 1.13 points from 2019.

The rankings were unveiled earlier this year by the Vietnam Chamber of Commerce and Industry (VCCI) and the US Agency for International Development (USAID).

Among the 10 sub-indexes, the capital earned its highest score, 7.93 points, in the “time costs” index, followed by “labour and training” (7.85 points), “entry costs” (6.74 points), and “business support services” (6.68 points).

Hanoi has made efforts to reduce informal charges, promote fair competition, enhance transparency, and boost the proactivity of city leadership.

VCCI Chairman Vu Tien Loc described Hanoi’s continual presence in the top 10 as an encouraging result, according to the Nhan dan (People) newspaper, as the city is one of the two localities with the largest number of enterprises in Vietnam.

Its sustained position and higher score also indicates the city’s stable performance in administrative reform and improvements to its investment and business climate, he said.

Although Hanoi is viewed by many enterprises as having a good investment and business climate, the unchanged ninth place, with some sub-indexes falling, has stopped the city from reaching a higher position in the rankings, the newspaper pointed out.

For example, its “policy bias” sub-index rose from 5.39 points in 2019 to 6.06 points last year, but it ranked just 52nd among the 63 localities in this regard. “Proactivity of provincial leadership” increased only 0.1 percent to 6.06 points, putting the city at 44th place in this index.

Meanwhile, the city experienced a substantial fall in two important sub-indexes: “entry costs” (down 51 places to 61st) and “access to land” (down 15 places to 56th).

Even the “labour and training” sub-index fell slightly, by 0.06 percent to 7.85 points, ranking fourth nationwide, Nhan dan noted.

To raise the PCI ranking, the Hanoi People’s Committee has issued Directive No 14/CT-UBND on improving the city’s PCI performance in 2021.

The committee demanded that departments, sectors, and district-level authorities invest resources in dealing with the sub-indexes experiencing a downward trend and those ranking “low” or “mid-low” last year.

They were told to take drastic measures to raise the indexes of “entry costs” and “access to land”, which plunged last year.

In particular, they need to have all business registration dossiers handled online, ensure the settlement of business registration procedures completed on schedule or ahead of schedule, publicise such procedures, increase the training of civil servants to boost the quality of guidance provided to people and enterprises, and press on with streamlining land-related administrative procedures.

The northern province of Quang Ninh retained its top position in the 2020 PCI rankings, followed by the southern provinces of Dong Thap, Long An, and Binh Duong.

The PCI report has been published annually by the VCCI and the USAID since 2005 to assess the ease of doing business, economic governance, and administrative reform efforts by city and provincial governments to promote the development of the private sector.

Based on data collected from enterprises, the PCI is viewed as “the common voice” of the business community on the level of reform in various fields./.

Enterprises in Bac Giang, Bac Ninh, and Haiphong thirst for workers

Numerous enterprises such as Fuyu Precision Component Co., Ltd. and Silex Vietnam Co., Ltd. in Bac Giang and Bac Ninh provinces and Haiphong are lacking employees due to the impact of the COVID-19 pandemic. 

A quarter of the workforce of manufacturers in industrial zones (IZs) in Bac Giang are in isolation or are undergoing treatment for COVID-19.

Currently, there are 3,000 workers working at three manufacturing facilities of Foxconn in IZs in the two provinces. All of them are living in dormitories of the group and commute to the facilities by shuttle bus. Before the pandemic outbreak in the provinces, the company had 12,000 employees at these facilities.

Meanwhile, the representative of Fuyu Precision Component Co., Ltd. said that the company is in need of a large number of employees and has proposed the province to allow its employees in isolation to return to work under strict management. The leaders of the company committed to complying with all regulations to ensure safety for their employees.

Silex Vietnam in Quang Chau IZ is also struggling to maintain operations because its employees are afraid to come back to work until they receive confirmation from the districts and communes that they are are not COVID-19 positive and that it is safe to return to work.

As of now, 11 enterprises in IZs of Bac Giang (including two Foxconn facilities and Silex) have been allowed to resume operations with a total of 5,007 employees.

In Haiphong, Crystal Sweater Vietnam Co., Ltd. in Trang Due IZ said that the company has been receiving stable orders since the beginning of this year, however, 300 of the company’s workers are isolated, impacting production progress.

The shortage of workers is also a problem at Maple Co., Ltd, JASAN, Canadian Solar in VSIP, Primzen, Vinamode, and Yazaki Haiphong Vietnam in Trang Due IZ.

Pegatron to pour additional $101 million into Vietnam investment

The Taiwanese government has given the nod to Pegatron Corporation to pour an additional $101 million investment in Vietnam.

The news was announced by the Taiwanese Ministry of Economic Affairs’ Investment Commission, which is responsible for the approval of foreign investments by Taiwanese companies. Pegatron’s investment in Vietnam will specialise in th emanufacturing and trade of computers and peripheral equipment, communication equipment, and electronic components.

It was reported in last September that Pegatron Corporation, one of the world’s five largest electronic parts and component manufacturers, was seeking to invest $1 billion in Vietnam, and proposing to develop a plant in the northern region.

Petragon plans to manufacture computing, communications, and consumer electronics, in addition to moving its research and development centre from China to Vietnam, according to a source from the Ministry of Planning and Investment.

Pegatron is a key supplier to Apple, along with Taiwan’s Foxconn and Wistron Corporation. Petragon established local subsidiary Pegatron Vietnam Co., Ltd. in March last year. In October 2020, the company was awarded an investment certificate to develop a $481 million factory to produce gaming equipment, phone accessories, smart speakers, game controllers, and all kinds of computers in Haiphong.

Proposing urgent vaccination for retail workers

As workers at retail distribution establishments such as supermarkets, convenience stores, and traditional markets are easily exposed to the COVID-19 pandemic, they need to be given priority for vaccination. 

On June 4, Central Retail in Vietnam donated VND5 billion ($217,085) to source and procure vaccines for its employees. The amount is deducted from the donation of VND10 billion ($434,170) to the Vietnam Fatherland Front Central Committee to respond to the government’s call for contributions to speed up the COVID-19 vaccination programme. Another donation of VND5 billion ($217,085) would be contributed to the National COVID-19 Vaccine Fund.

Olivier Bernard Langlet, CEO of Central Retail in Vietnam expressed that the donation commits to its vision of contributing to Vietnam’s prosperity and enhancing the quality of life of the people.

Do Thang Hai, Deputy Minister of Industry and Trade has just signed Official Dispatch No.3150/CV-BCT recommending the prime minister to give priority to vaccination against COVID-19 for employees at the retail distribution system.

The Ministry of Industry and Trade said that adding retail workers to the priority list for vaccination would protect those at a high risk of infection. Because this is a group that has to deal with millions of customers every day while maintaining the supply of essential goods to serve people at all levels.

Accordingly, the Ministry of Industry and Trade requested the health sector to assist in sourcing vaccines, guide import procedures, and organise injections for workers at retail distribution businesses that need to be vaccinated against COVID-19 pandemic using the financial resources of the businesses.

Earlier, many associations and businesses in the manufacturing fields such as textiles, apparel, footwear, seafood, or electronics also wanted to be prioritised for vaccination because most of them are businesses with a large number of employees in industrial zones.

Le Tien Truong, chairman of Vietnam National Textile and Garment Group (Vinatex) said that many textile and garment businesses have signed orders until the end of the year. If the company cannot guarantee workforce for production and delivery on time, businesses will be fined for cancelling orders, causing billions of dollars worth of damage to the whole industry. He highlighted the need for these employees to receive priority in accessing vaccines, especially businesses in high-risk localities such as Bac Ninh, Bac Giang, Ho Chi Minh City, and Hanoi.

“Vinatex businesses are willing to pay to vaccinate their workers. As calculated, businesses under Vinatex will spend VND100 to 200 billion ($4.35 to 8.7 million) to vaccinate their workers,” he added.

In a document recently sent to the prime minister, the Private Sector Development Research Board (IV Board) also proposed to allow businesses to organise COVID-19 vaccination for employees according to the instructions and safety requirements of the Ministry of Health (MoH).

The IV Board also proposed allowing private businesses and organisations to actively negotiate buying vaccines with global suppliers, based on the list of vaccines accepted by the Ministry of Health. Besides, the vaccination force should also be considered and expanded to meet the requirements of mass and large-scale vaccination by mobilising not only vaccination facilities but also qualified hospitals and medical centres according to the regulations of the MoH.

Merger could lead to “GoTo” app for all

The recent merger between Gojek and Tokopedia to create technology powerhouse GoTo Group is expected to heat up Vietnam’s digital platform market. 

Indonesian ride-hailing and payments firm Gojek and e-commerce leader Tokopedia has made a big splash in the market by merging to form multi-billion dollar firm GoTo. Backed by investment giants like Alibaba, Tencent, and Google parent company Alphabet, GoTo is poised to expedite the digital economy in Southeast Asia, including Vietnam.

Specifically, the new group features a wide range of services including ride-hailing, food delivery, e-commerce, logistics, and also financial services.

Gojek Vietnam under GoTo has offered ride-hailing, food delivery, and logistics. To expand its presence in the market, the group will roll out car-sharing and cashless payment services this year. By adding the two new services, Gojek Vietnam is expecting to gain a competitive edge over its rivals in the fast-growing market.

A representative of Gojek Vietnam told VIR that the company has already secured a licence for 4-wheel riding hailing service GoCar in Ho Chi Minh City. The company will be launching GoCar in the next few months, with Hanoi in its sights after Ho Chi Minh City.

After Gojek Vietnam has built a strong foundation there, the company expects to expand to other cities. Meanwhile, cashless payments will also be launched within this year.

Following the GoTo deal, Gojek has more resources and capital to implement expansion plans in Vietnam. According to Ralf Matthaes, managing director of technology-driven market research company Infocus Mekong Research, the key to all online platforms is growing their customer base and offering, thus the new merger should aid in this pursuit.

“Specifically, it will allow its present customer base more services and also erode competitor services, if it can perform well across more new services. For the consumer this is great news, as it should start a price war, at least temporarily, and also force the likes of Grab to up its game in Vietnam,” Matthaes added.

The Gojek and Tokopedia merger may provide food for thought for key platforms in Vietnam. It is not only a ride-sharing and food delivery battle but also an e-commerce game as GoTo is combining Gojek’s on-demand services and Tokopedia’s e-commerce expertise. As Gojek Vietnam is introducing most key services here, there is likelihood that it will add e-commerce into the market at some point in the future.

Commenting on this, Matthaes said that both Lazada and Shopee are rather entrenched in Vietnam, so GoTo may require more time to penetrate the e-commerce space than ride sharing.

Meanwhile, Peh Quan Yao, research analyst of services and payments at Euromonitor International, told VIR that both Gojek and Tokopedia plan to operate separately but leverage each other’s complementary strengths. There is scope for an end-to-end e-commerce solution that leverages an existing tried-and-tested platform in Tokopedia, and Gojek’s last-mile delivery fleet and digital wallet capabilities.

However, Yao noted that the competitive landscape is unlikely to change much for ride-hailing in Vietnam, given Gojek and Grab’s dominant positions. For e-commerce, it is too early to tell. GoTo will be a new entrant with no large-scale operating experience outside of Indonesia. In the near term, challenges like customer and merchant acquisition, optimising delivery and fulfilment operations, and adapting to consumer preferences such as cash-on-delivery and live-streaming need to be addressed to compete with incumbents such as Shopee and Tiki, which have already done well in the market.

According to Euromonitor International, e-commerce made up for just 3 per cent of Vietnam’s retail market in 2020, the lowest amount in Southeast Asia. Meanwhile, the country’s digital economy is forecast to grow to $52 billion by 2025, an annual 29 per cent increase from 2020, according to a study by Google, Temasek, and Bain & Company.

KIDO to open a thousand Chuk Chuk coffee and milk tea shops

KIDO Group today announced its plan to launch its own coffee and milk tea brand Chuk Chuk with the goal of opening 1,000 outlets by 2025.

The stores will serve ice cream, tea, milk tea, coffee and other beverages under TTV Trading Investment JSC – a member of KIDO Group. With a total investment capital of VND100 billion ($4.35 million), KIDO will hold 61 per cent of the controlling stake at the chain to inject investment capital and scale up operations in the future.

At the same time, Chuk Chuk will team up with foreign partners to extend its reach to the Asian market between 2021 and 2023. Tran Tuyet Van, one of the three daughters of Tran Le Nguyen is the general director of Chuk Chuk.

Chuk Chuk will be developed with a variety of business models including a system of stores, trolleys, and kiosks deployed on main roads and in commercial centres.

2021 will be a crucial year for Chuk Chuk to develop a system of stores, kiosks, and trolleys in Ho Chi Minh City with the goal of developing 58 stores by the end of the year.

Accordingly, the first Chuk Chuk stores in Ho Chi Minh City will open in June, while the kiosk and trolley system is expected to launch a month later. In the next 2-3 years, Chuk Chuk will make its debut in Hanoi and other big cities in Vietnam.

In addition to beverages, Chuk Chuk also sells fresh bakery under KIDO’s Bakery brand, as well as tea and coffee packages, glasses, and souvenirs.

Leflair rumored to get new owner after bankruptcy filling

The e-commerce market is heating up following the news of e-commerce brand Leflair making a return under the wings of a new investor. 

It is said that the investor behind Leflair is a US tech firm that has been operating in Vietnam for three years now with a track record of many successful mergers and acquisitions (M&A) deals involving local small and mid-sized tech firms.

Leflair is an e-commerce platform that provides genuine branded products at a discount. The e-commerce platform official debuted in 2015 and quickly left an impression in the market with its business model of an inventory business rather than a marketplace. Specifically, Leflair keeps products from suppliers in its warehouses. To ensure the quality of the products, it developed two warehouses in Singapore and Hong Kong (China) with a strict inspection and management system.

In Vietnam, Leflair has become a reputable shopping site for luxury brands among middle-class customers. Following its inception in Vietnam in 2015, Leflair entered into partnerships with 2,500 brands and extended its reach to Singapore and the Philippines. By 2019, the e-commerce platform served over 120,000 customers a year, posting net revenues of up to dozens of million dollars per year with the highest average order value in Vietnam’s e-commerce market.

The startup bringing Leflair to Vietnam quickly achieved success and easily raised capital thanks to its strong business model built on flash sales. In its first few years, Leflair made a big splash in the local e-commerce market before filing for bankruptcy in May 2020. In March 2021, bankruptcy proceedings were opened, confirmed by the court’s approval of bankruptcy proposal.

While Leflair has yet to make an official announcement regarding its new owner, customers are excited about rumours of their once beloved e-commerce platform returning to the market. Meanwhile, old partners looking for partnership opportunities are also wondering what the return would bring: even as Leflair’s sudden bankruptcy declaration was a source of various difficulties, its return may open up new opportunities.

The startup owning Leflair filed for bankruptcy in May 2020 and then received legal approval. So far, Leflair has transferred the ownership of its trade name and intangible assets associated with the Leflair trademark to a new investor in accordance with international law.

This M&A deal is made between the new investor from the United States and the owner of the Leflair brand, a corporation headquartered in Hong Kong. It is known that the new investor will soon launch the Leflair brand in the market with a view to make full use of the familiarity of the brand to revive the Leflair e-commerce platform. The new investor also focuses on investment and business activities by combining the new platform and operating system as well as selecting suppliers with high-quality and genuine products to offer customers professional service.

Leflair is a familiar name but it has been fully acquired and is now operated by a new owner who is not legally responsibly for any activities by the previous owner whose bankruptcy proceedings were approved by the law.

PM approves 2021-2023 public debt management programme

The Prime Minister has recently approved a public debt management programme for the 2021-2023 period.
Under the programme, the total borrowing over the next three years will be VND1,738.4 trillion (US$75.8 billion), of which VND1,604 trillion (US$70 billion) will go to the central budget.

The local budget spending deficit is limited at 0.2% of GDP, as stipulated in the 2015 Law on State Budget, and the debt repayment obligation of local governments is approximately VND18.4 trillion (US$801.8 million).

With regards to foreign commercial loans by enterprises and credit institutions, the growth rate for short-term credit is capped at 18-20% per year and the net maximum medium-term and long-term loans are around US$6.35-7 billion per year.

For 2021, the government is expected to borrow VND624.221 trillion (US$27.2 billion), including VND527.357 trillion (US$23 billion) from domestic sources and VND96.864 trillion (US$4.2 billion) from foreign lenders.

Of this figure, VND579.772 trillion (US$25.3 billion) will be used to balance the central budget while the remaining VND44.449 trillion (US$1.9 billion) will be spent on lending to other borrowers.

The government is expected to repay debts of VND394.506 trillion (US$17.2 billion) in 2021.

Vietnamese tourists increasingly favour sustainable tourism

Vietnamese tourists have expressed their wish to choose ecotourism (59% of participants), limit single-use plastic on flights/at lodges (57%) and encourage financial rewards for accommodation facilities that maximise energy efficiency (40%) towards more sustainable tourism in the post-COVID-19 period.

This is part of the results of a survey on Sustainable Tourism Trends just released by Agoda on the occasion of the World Environment Day (June 5).

Agoda, a digital travel platform offering a global network of 2 million properties across more than 200 countries and territories around the world, conducted a survey on sustainable tourism and pointed out the leading solutions for the sustainable development of the tourism sector.

According to this survey, the top measures consist of the provision of more eco-friendly travel options, the reduction of single-use plastics and the offering of monetary rewards to accommodation providers who use energy-saving measures. In the rankings of positive solutions to make tourism more sustainable, many other useful methods, such as the establishment of nature reserves to limit tourist numbers and the elimination of disposable bathroom products, were highlighted.

The top concerns in Vietnam were overcrowding (28%) and deforestation for tourism (24%). Survey respondents said that many Vietnamese people expressed their hope that hotels and other accommodation providers will switch to using water and renewable energy sources and reduce their reliance on single-use plastic products.

The current trend of Vietnamese tourists is to give preference to pristine and little-known attractions as well believing the Government and travel agencies need to share the responsibility in ensuring sustainable tourism.

Along with Thailand, Indonesia, the Philippines and China, Vietnam is also a top tourism market committed to cleaning up beaches. 

Similarly, actual statistics from many countries around the world show that people believe the Government should take the main responsibility for creating positive change in respect of the environment and tourism activities, followed by agencies and enterprises and then individuals. Up to 36% of people in Indonesia and the UK, 33% of Chinese people and 28% of Australians share this view.

On the other hand, other people around the world believe individuals must play the most important role in promoting the sustainable development of tourism.

Although there is no one-size-fits-all answer, people worldwide affirmed that actions contributing to enhancing sustainable or eco-friendly tourism will protect the environment more effectively in the near future.

Regarding the commitment to help tourism sector develop better during post COVID-19 period, almost all survey respondents answered that the management of single-use plastic is a top commitment, followed by turning off air conditioners and lights when not in use and developing eco-friendly accommodation.

CEO of Agoda John Brown said that simple measures to promote sustainable tourism such as turning off lights and air conditioners when leaving the room and reducing waste by limiting the use of single-use plastics are now favoured by tourists around the world.

Despite the many different interpretations of eco-friendly activities and sustainable tourism, most travelers want to choose eco-friendly accommodation and make smart choices for their travels.

Local firms boost processed mango exports to U.S.

Due to difficulties in exporting Vietnam’s fresh mangoes, many firms have invested in processing to boost the consumption of processed mangoes in foreign markets, mainly the United States.

In the first three months of the year, Vietnam was the United States’ 13th largest mango supplier, according to the Import-Export Department under the Ministry of Industry and Trade.

During the three-month period, the U.S. increased its import of dried mangoes and mango juice from Vietnam. Vietnam shipped 97 tons of mango juice worth US$102,600 to the American market, skyrocketing by 340% in volume and 160.5% in value year-on-year. The country’s export of dried mangoes to the United States reached 68 tons worth US$83,000.

Despite the modest volume, fostering the export of processed products is a growth trend for Vietnamese mango, said many firms.

Nguyen Dinh Tung, general director of Vina T&T Group, told the Saigon Times that the export of fresh fruits, including mango, had faced multiple difficulties due to high transport costs and the prolonged transportation time, while fresh fruits also have a short shelf life. Besides, many countries have erected technical barriers to fresh fruits to protect local products and customers, he said.

Taking the U.S. market as an example, he said that in the past, it took 20-23 days to ship goods by sea from Vietnam to the market, but now, the transport time is 30-35 days. Meanwhile, Vietnam’s preservation technology keeps mangoes fresh for a mere 30 days.

“Sometimes, the fresh mangoes arrived in the U.S. market, but reached the expiration date and were not sold to customers,” Tung said.

Dang Phuc Nguyen, general secretary of the Vietnam Fruit and Vegetables Association, said that since 2020, when the Covid-19 pandemic emerged, many fruit exporters have sought ways to adapt to the new market situation.

Due to high transport costs and the shortage of containers, many firms which specialize in exporting fresh products have shifted to processed products for shipments.

“Processed mangoes have a longer shelf life than fresh ones and do not face severe competition from the products of other countries,” Nguyen said.

Statistics indicated that in 2020, Vietnam shipped some US$800 million worth of processed vegetables and fruits to the United States, accounting for 25% of the total value of veggie and fruit exports, while the proportion was 10%-15% in 2019.

In addition, Europe and other countries are raising their consumption of Vietnam’s processed fruit, mainly dried mangoes and mango juice, urging many local exporters to upgrade and improve their machines and technology and expand production to ramp up the capacity of processing fruits and meet demands.

“This year, Vietnam’s export of processed fruits, including mangoes, is expected to soar by 30% against last year,” said Nguyen.

Vietnam shipped an estimated US$400 million of vegetables and fruits to foreign countries in May, up 48.3% year-on-year, sending the country’s export value of these products in the first five months of the year to US$1.77 billion, up 18% year-on-year.

In 2020, Vietnam exported 2,100 tons of mangoes worth US$4.6 million to America, up 66% in volume and 70% in value against 2019, while the latter bought 1,150 tons of frozen mangoes from Vietnam, up 38% from the 2019 figure.

Vietnam’s insurance market growing rapidly

Vietnam’s insurance market has grown significantly faster than other countries in the region and the world. The growth rate is maintained for a long time, regardless of the world financial crisis or other damaging impacts.

According to the Government’s report on the revised Insurance Business Law project which the Ministry of Justice has been appraising, Vietnam’s insurance market has grown significantly faster than other countries in the region and the world from 2000 to 2020. The growth rate is maintained for a long time, regardless of the world financial crisis or other negative impacts.

Currently, about 72 insurance enterprises are operating in Vietnam. Among 72, some are non-life insurers while others are insurance brokers and reinsurance companies.

Total assets of the whole market grew by an average of 24 percent annually, reaching VND573,233 billion (US$25 billion) in 2020, of which assets of non-life insurance enterprises reached VND99,340 billion while life insurance enterprises reached VND 473,893 billion.

Total money insurance companies investing in other sectors grew at an average of 24 percent a year, reaching VND468,125 billion in 2020. Of the funds, non-life insurers have poured VND 52,278 billion into other sectors while life insurance enterprises poured VND415,847 billion.

In addition, insurance premium revenue averagely increased by 19 percent a year, reaching VND87,211 billion in 2020. Of these, premium revenue from non-life insurance enterprises reached VND 56,654 billion, and life insurance enterprises reached VND130,557 billion.

Equity of insurance enterprises roughly increased by 38 percent a year, reaching VND127,842 billion in 2020. Of the amount, equity of non-life insurance enterprises reached VND33,516 billion and insurance enterprises for life expectancy reached VND94,326 billion.

By the end of 2020, the insurance market has offered nearly 1,000,000 jobs with stable income. Moreover, employees are trained in finance and insurance. According to statistics of insurance companies, the total insured value is VND11.7 quadrillion.

Currently, about 11.9 million Vietnamese people are buying in life insurance, equivalent to more than 10 percent of the country’s population. Four million people have bought health insurance and short-term health insurance while 12 million students have participated in accident and health care insurance.

Additionally, 18 million passengers and 12 million passengers are insured by aviation and railway accidents while 1,620 million passengers are covered by road accident insurance companies.

Telefilm goes virtual for 2021 edition

Vietnam International Exhibition on Film and Television Technology – Telefilm 2021 have been held online from June 7-30 due to the Covid-19 outbreak. 

The virtual exhibition attracts more than 100 local and international enterprises specialized in fields of media, audio visual (films, photos), graphics, telecommunications, data processing, computer, advanced technology, materials, composite R&D ( research and development ) from 11 countries and territories, such as Japan, South Korea, Turkey and others.

Exhibits include Content Production Program, TV advertising, TV formats, technology and equipment in the broadcast industry as well as related services and products.

The exhibition is also an opportunity for insiders to exchange and share experiences and seek partners as well as promote Vietnamese Film and Television industry to international visitors.

Deal signed to promote farm produce sale via digital platforms

A memorandum of understanding was signed in Hanoi on June 8 to carry out a programme on facilitating digital transformation and assisting small- and medium-sized enterprises, cooperatives and business households in the consumption of farm produce in the country.

Signatories were the Ministry of Planning and Investment (MoPI)’s Agency of Enterprise Development, the Ministry of Agriculture and Rural Development’s Agro Processing and Market Development Authority, the Vietnam Cooperative Alliance’s Centre for Trade Promotion and Investment, and Grab Vietnam.

In the immediate future, the programme will help with farm produce sale via digital platforms in localities hit by COVID-19 or those under lockdown, including experimenting on Grab.

Practical activities will be also held to raise awareness of digital transformation among businesses, cooperatives, business households and farmers.

The activity is also part of the programme to assist firms in digital transformation for the 2021-2025 period launched by the MoPI.

Earlier, Grab announced the GrabConnect project to connect farmers with consumers nationwide to consume farm produce and safe local specialties.

GrabConnect also launched the first scheme to help consume 300 tonnes of Luc Ngan lychees in Bac Giang province via Grab’s ecological system./.

Northern mountainous region should turn disadvantages into development advantages: Official

Tran Tuan Anh, Politburo member and Chairman of the Party Central Committee’s Economic Commission, on June 8 urged northern midland and mountainous provinces to turn their disadvantages into advantages to serve development.

Speaking at a conference in Hanoi, Anh highlighted the northern midland and mountainous region’s strategic location in economy, social affairs, national defence-security, and foreign relations of the whole country.

Aware of its important role, the Politburo issued Resolution No. 37-NQ/TW dated July 1, 2004 and Conclusion No. 26-KL/TW dated August 2, 2012, to promote socio-economic development and ensure national defence and security in the region, he said.

Over the past two decades or so, the region has achieved notable socio-economic achievements.

However, it still remains the country’s poorest and most disadvantaged region, he went on, with low per capita income and high poverty rates, especially in ethnic minority areas.

Anh asked ministries, agencies, and localities to analyse the advantages and challenges, especially in the new context, during the implementation of the above-mentioned resolution.

Comprehensive tasks and solutions are needed to create momentum for the localities to move ahead, he stressed.

Participants suggested issuing a new resolution on socio-economic development and national defence and security in the region by 2030 with a vision towards 2045 in the new setting.

They cited development orientations for the region as set out in the Resolution of the 13th National Party Congress, focusing on forest protection and restoration, mining, the border economy, inter-regional connectivity, and community-based and eco-tourism./.

Teleconference discusses consumption of Bac Giang lychees

A teleconference linking 29 locations at home and abroad was held on June 8 to discuss lychee consumption this year.

The gathering was co-organised by the Bac Giang provincial People’s Committee, the Ministry of Industry and Trade, and the Ministry of Agriculture and Rural Development.

Addressing the conference, Minister of Industry and Trade Nguyen Hong Dien hailed Bac Giang for selling lychees via e-commerce platforms, saying this is the right approach amid the COVID-19 pandemic.

The Bac Giang lychee trademark is currently protected in eight countries: China, the US, Japan, Australia, the Republic of Korea, Singapore, Laos, and Cambodia.

Earlier, in March, it became the first Vietnamese farm produce to receive geographical indication protection in Japan, paving the way for it to navigate other promising markets.

Chairman of the provincial People’s Committee Le Anh Duong said Bac Giang has identified three scenarios for selling lychees this year while working closely with foreign partners and cities, provinces, and merchants to sell other farm produce.

Over 1,500 trucks together with workers are ready to transport and sell lychees, he went on. Sales have proceeded smoothly so far.

Bac Giang’s lychee output is estimated at 180,000 tonnes this year. As of June 7, more than 53,000 tonnes had been sold at home and abroad.

On the occasion, a ceremony was also held to announce a certificate of geographical indication from Japan for Luc Ngan lychees, while stalls selling local lychees were also launched on domestic and foreign e-commerce platforms./.

Source: VNA/VNS/VOV/VIR/SGT/Nhan Dan/Hanoitimes

VIETNAM BUSINESS NEWS JUNE 8

VIETNAM BUSINESS NEWS JUNE 8

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