VIETNAM BUSINESS NEWS AUGUST 8
16:06
State Appraisal Council for North-South Expressway to
be establish
The State Appraisal Council will be
established to appraise the pre-feasibility report of the North-South
Expressway project. Minister of
Planning and Investment Nguyen Chi Dung was appointed as the chairman of the
State Appraisal Council, with a deputy minister of Planning and Investment as
vice chairman. The list of
the remaining members of the council, who will be hailing from other
ministries, will have to be submitted to the Ministry of Planning and
Investment (MPI) by August 10. The Ministry of Transport was put in charge of
providing sufficient documents related to the appraisal of the project’s
pre-feasibility study report. As an
appraisal council, the body will appraise projects related to the North-South
Expressway, a key project of national importance. It will have the right to
request relevant documents from investors and contracted consultants as well
as hire domestic and foreign consultancy units to ensure the independent and
objective assessment of the works. The council will be dissolved once the
appraisal work is completed. The Eastern
Cluster of the North-South Expressway project will span 12 cities and
provinces from Ha Tinh to Ca Mau. The project includes 12 component projects
with three sections, including Ha Tinh-Quang Tri (267km), Quang Ngai-Nha
Trang (353km), and Can Tho-Ca Mau (109km). According to the Ministry of
Transport, there are two construction plans for the project. Under the
first plan, all 12 components projects would be implemented under the
public-private partnership (PPP) model by 2025. These sub-projects would have
a total investment capital of VND146.99 trillion ($6.4 billion), half of
which would come from the state budget and the other half from investors and
other sources. The second
plan would involve nine PPP components, while the financing of three others
would be decided later because a section of Ho Chi Minh Road crosses the
planning zone of the North-South Expressway. In this
case, the nine PPP projects would have a capital value of VND118.67 trillion
($5.16 billion), including VND61.63 trillion ($2.7 billion) from the state
budget and VND57.04 trillion ($2.48 billion) from other sources. British Council grants for traditional handicraft producers
utilising digital technology Organisations,
collectives and craftsmen from 18 countries, including Vietnam, have the
opportunity to receive financial support for the sustainable development of
traditional handicrafts. The British
Council (BC) is offering a total of five collaboration grants of
8,000 pounds (11,100 USD) for projects that showcase radical thinking using
digital technology in craft and how craft can benefit from technology in
order to continue to influence economic, social and environmental
sustainability. In response
to restrictions on global travel due to COVID-19 and rising concerns about
the sustainability of face-to-face collaborations, the Crafting Futures
Digital Collaboration Grants is a way to foster important international
connections and devise alternative ways of working virtually in craft. Countries
eligible for this opportunity include the UK, Brazil, Mexico, China,
Indonesia, Malaysia, Vietnam, Egypt, Iraq, Bangladesh, India, Pakistan,
Ethiopia, Kenya, Nigeria, Sudan, Turkey and Ukraine. Three of
these grants will be awarded to collaborations that are led by individuals
and two will be awarded to collaborations led by organisations. The
proposals need to showcase radical thinking about working digitally in craft
education and learning through making; how craft can benefit from the
injection of digital technology in order to continue to influence economic,
social and environmental sustainability; and inclusion and mutual
engagement of marginalised and indigenous or female communities in
the digital age. The British
Council is looking for projects that can be shared broadly with a wide range
of audiences such as residencies, exhibitions, showcases or conferences;
online archives; creative collaborations; online craft skills and education
among others. The collaboration
grant is open to craft practitioners, researchers, collectives,
organisations, institutions or companies, or anyone with an interest in and
knowledge of craft. The lead
collaborator must be based in the UK who will submit the application and will
be responsible for leading communications and disseminating the grant to all
collaborators. Applications
should be completed on August 22 at https://britishcouncil2.formstack.com/forms/crafting_futures_digital_collaboration_grant?/. Measures sought to boost export of dragon fruit to India,
Pakistan
A business
networking conference was organised virtually on August 5 to seek ways to
boost the export of dragon fruit to India and Pakistan amid difficulties due
to impacts of the COVID-19 pandemic. Dragon
fruit, which ranks first in terms of competitive advantage among 11 fruits
and is often in the group of products earning billions of USD from export, is
entering the harvest time, with an estimated output of 1.45 million tonnes in
2021, up 10 percent year-on-year. Therefore,
the sale of dragon fruit is a great pressure for localities, including
southern Binh Thuan and Long An provinces. Binh Thuan’s total output of
dragon fruit is estimated to reach 650,000 tonnes this year, while that of
Long An is estimated at 330,000 tonnes. Vu Ba Phu,
Director of the Vietnam Trade Promotion Agency, expressed his hope that
through this conference, businesses and localities will have the opportunity
to learn more about the market situations, demands and requirements of the
Indian and Pakistani markets. Businesses
and localities can introduce to Indian and Pakistani partners the potential
and strengths of Vietnamese dragon fruit products, and connect promising
business cooperation opportunities in the future, he added. Vietnamese
Ambassador to India Pham Sanh Chau affirmed that the Vietnamese diplomatic
agency and the trade office in Indian always exert their efforts to connect
Vietnamese exporters with the Indian market. In the past
5 years, the value of Vietnamese dragon fruit exports to India has surged,
from 26 percent in 2015 to 52 percent in 2020, Chau said, adding that this
shows that India has a huge demand for this fruit. The
Vietnamese Embassy in India is willing to support domestic enterprises in the
promotion and sale of fresh and processed dragon fruit products, he affirmed. As Vietnam
has yet to export dragon fruit to Pakistan, Vietnamese Ambassador Nguyen Tien
Phong suggested businesses learn about consumption habits to approach the
market appropriately./. Land encounters downward trend Previously a
profitable and stable segment of the real estate market in Ho Chi Minh City
and surrounding areas, land plots are showing the first signs of a downward
trend with many owners facing a cash shortage and having to sell their
property to cut losses. In the last
five years, land plots in the south of the country saw a steady increase in
profits, from 15 to 40 per cent on average. Some projects with good
infrastructure even experienced double profits – but the pandemic,
inevitably, is changing the game. Forced to
sell a land plot in an area adjacent to Ho Chi Minh City at a loss of nearly
10 per cent, Nguyen Minh Hung in Thu Duc city said this was the most
reasonable choice he could make now to cope with increasing pressure from
bank loans. Hung himself
could not hold on any longer when his family’s small business had to close
for months due to COVID-19, but he still has to pay interest for the debt for
the plot. Hung bought
a land plot in Thuan An city of Binh Duong province, next to Ho Chi Minh
City, at a cost of more than VND6 billion ($260,000) a year ago with the
purpose to re-sell to gain profit. The increasing presence of COVID-19
however prevented him from selling this plot when the market became frozen
with the lowest interest paid by potential buyers. Trading
activities have not only been halted in Ho Chi Minh City, but in all
neighbouring provinces. Meanwhile, people have felt forced to sell land plots
to collect their investment back in the context that they cannot bear the
bank interest and no-one knows when the pandemic will be controlled and the
market can be resumed. “My target
now is soon collect the investment back before everything becomes harder if
the pandemic is long-lasting,” Hung said. Figures from
batdongsan.com.vn reveal that many owners offer land plots in Ho Chi Minh
City and neighbouring provinces such as Long An, Binh Duong, Dong Nai, and
Binh Phuoc. However, sales are not easy with much fewer buyers than normal,
with owners forced to accept discounts and suffer losses if they want rid. According to
a report released in July by the Ministry of Construction, prices of land
plots in provinces have dropped by 10-30 per cent currently, compared to the
end of 2020. Real estate
experts said that the latest outbreak of pandemic is pushing real estate into
a scenario where there is intense downward pressure on the secondary market.
Nguyen Quoc Anh, deputy general director of batdongsan.com.vn, said it is
significantly even more challenging for investors who are using finance
solutions from banks and financial institutions. “Those
investors will be under pressure to reduce their selling price if they want
to sell their land plots to reduce financial burden. If the pandemic is soon
controlled and the market recovers quickly, the wave of cutting losses will
stop but on the contrary, there is certainly a wave of distressing land plots
to cut losses,” Anh said. Real estate
expert Tran Khanh Quang said that the unpredictable developments of the
pandemic causing long-lasting social distancing over 19 southern provinces
have pushed the real estate market into a standstill. Secondary trading
volume has meanwhile dropped by 90-95 per cent. The wave of
selling-off land plots is forecast to increase sharply in the latter months
of the year if the pandemic is not controlled soon. However,
Quang also said that “what is bad for one person may be good for another”. “Investors
who are holding cash in their pockets can utilise this opportunity to buy in
distressed property. Those will bring benefits when the pandemic is fully
controlled again,” he said. In
particular, Quang noted that, despite struggling with many challenges over
the past 18 months, the country may only be witnessing a short-term slowdown
of the real estate market, especially in land plots, a favoured segment for
investors. “Purchasing
power may increase soon when the pandemic is under control. Moreover, the
stimulus packages with preferential policies from the state such as tax
reduction or payment extensions will help the market become more resilient,”
he said. “The nature of the real estate market is sensitive – as easily as it
can freeze, it can also very quickly become feverish.” Tien Giang’s exports surge 19.8 percent during January-July The Mekong
Delta province of Tien Giang pocketed 1.96 billion USD from exports in the
first seven months of 2021, up 19.8 percent year-on-year and equal to 60.2
percent of the yearly plan, said Acting Director of the provincial Department
of Industry and Trade Dang Van Tuan. Foreign-invested
enterprises accounted for nearly 85 percent of the province's total export
turnover. Notably, the
province continued seeing growth in the shipments of its strong commodities.
Accordingly, in the period, Tien Giang exported over 461 million USD worth of
metal products, including copper pipes, up 34.4 percent over the same period
last year, nearly 338 million USD worth of footwear, up 32.3 percent, over
8,300 tonnes of vegetables and fruits for 17.62 million USD, up 15.68 percent
in volume and 15.6 percent in value. Tuan said
that the department has promoted its role in coordinating with the Agency of
Foreign Trade under the Ministry of Industry and Trade to provide timely
information about the export markets to businesses, connect markets and
customers, and avoid the disruption of the supply chains for the export
markets amidst complex developments of the COVID-19 pandemic. The province
has encouraged enterprises to step up online trade promotion activities to
boost the export of local products such as processed seafood, agricultural
products, vegetables and fruits to China, Japan, the US, the Republic of
Korea and the European Union, especially those recovering soon after the
COVID-19 pandemic. Attention
has also been paid to the sale of products on e-commerce platforms such as
Sendo, Shopee, Tiki, Voso and Postmart, Tuan added./. Binh Phuoc to reclaim lands from delayed projects The 256
projects to lose the lands include many major ones like a 360ha solar energy
farm, a 300ha military airport and a 200ha hi-tech agricultural park. The province
has asked the Government for 40,000 hectares of land owned by the Viet Nam
Rubber Group and another 30,000ha owned by the province to expand three
industrial parks and for other industrial and urban development projects. Binh Phuoc,
which has 14 industrial parks, is situated in the Southern Key Economic Zone
and enjoys excellent connectivity with other economic hubs like Binh Duong
and Dong Nai provinces and HCM City. It plans to
build four new industrial parks and expand three existing ones by 2030. Thanh Hoa has 20 more OCOP products The
Coordinating Office of the New Rural Development Programme in the central
province of Thanh Hoa said on August 4 that the locality recently evaluated
and classified One Commune, One Product (OCOP) products for the third stage
this year. Twenty six
products from 14 districts, townships and cities were under classification.
However, only 20 of them were recognised as OCOP products, three of them met
four-star criteria, including Ha Lai leaf cake, Ha Trung district’s kitchen
utensils, Quang Xuong district’s Quang Phuc fish sauce, and the remaining
achieving three-starred standards. Their
production scale are above average and quality enough to be competitive in
the market. After over
three years of implementing the OCOP programme, the province had 120 OCOP
products as of August, ranking 10th nationwide in terms of the total
products. It is now home to one five-star OCOP product, 30 four-star and 89
three-star ones. To carry out
the programme sustainably and effectively, the province took strict steps to
evaluate and rank products in the right process. As scheduled this year, it
will develop additional 80 provincial-level OCOP products. Based on
registrations by districts, townships and city, the Office will inspect
production areas, help owners increase scale and quality, navigate markets
and handle necessary procedures to join the programme. Recognised
products must meet all criteria in line with regulations. It is also a key
task in the National Target Programme on New Rural Development in the
province. Bui Cong
Anh, deputy head of the Office said after having their products recognised
for the status, almost businesses and production facilities must expand
production scale because their products become more popular. Recently,
several owners of local OCOP products established “Thanh Hoa OCOP
cooperative” in line with the Co-operative Law 2012, playing a role as a
business to promote trade and develop markets. In the near
future, the Office will work with localities to instruct owners how to invest
in modern technology, improve product qualuty, gradually perfect production
process in line with the OCOP programme regulations. The province will
continue promoting trade at home and abroad, helping firms, cooperatives and
owners sell products. Many OCOP
products of Thanh Hoa are exported to foreign countries such as Russia, the
Republic of Korea, South Africa, Switzerland, Sweden, the United States,
Japan and China. Le Gia
shrimp paste from Hoang Hoa district’s Hoang Phu commune has been exported to
Russia, the Republic of Korea, Taiwan (China) and South Africa. Bamboo straws
have been shipped to Switzerland, Sweden, and the United State. Handicrafts
and other products made from sedge are sold in 64 supermarkets in the United
States. Over the
past three years, Thanh Hoa has spent over 114 billion VND (4.9 million USD)
supporting the implementation of the OCOP programme. Of these, more than 18.2
billion VND (791,622 USD) came from the central budget, 36 billion VND (1.5
million USD) from the local budget and the rest from producers. In the
2021-2025 period, the province is striving to have at least three OCOP
products rated as five stars, more than 100 as three and four stars, he said. It will
complete the application of information and technology in the production and
trading of OCOP products. Each district will have at least one showroom which
displays and sell these products. Creative design centres will also be formed
in association with OCOP products promotion during the period. The OCOP was
initiated by the Ministry of Agriculture and Rural Development in 2008,
following the model of Japan’s “One Village, One Product” and Thailand’s “One
Tampon, One Product”. It is an economic development programme for rural areas
focusing on increasing internal power and values, which is also meant to help
with the national target programme on new-style rural area building./. Disbursed public investment up 5.6 per cent in seven months The General
Statistics Office (GSO) reported that the disbursed capital sourced from the
State budget was estimated at VND38.3 trillion (US$1.7 billion) in July, down
1.7 per cent month on month and 12.4 per cent year on year. The figure
between January and July reached VND210.8 trillion, equivalent to 44.3 per
cent of this year’s target and up 5.6 per cent from the same period last
year. The sum
comprises VND35.2 trillion managed by central agencies and another VND175.6
trillion by localities, respectively rising 12.7 per cent and 4.3 per cent
year on year, statistics show. The COVID-19
resurgence has affected the implementation of public investment projects in
19 southern provinces and cities which are applying social distancing
measures under the Prime Minister’s Directive 16/CT-TTg, as well as some
others imposing anti-pandemic measures under Directive 15/CT-TTg, the GSO
said. It cited
localities as reporting that many projects have been halted or lagged behind
schedule, but investors, management boards, and contractors are making
efforts and pledge to accelerate project implementation after the social
distancing period is over. Ca Mau works to increase banana value, output The
Department of Agriculture and Rural Development of Ca Mau province will
popularise Vietnamese good agricultural practices (VietGAP) and organic
standards in order to increase the value and yield of its bananas. The
southernmost province will also combine the banana orchards with eco-tourism
services to add to farmers’ incomes. It will
encourage farmers to turn mixed orchards, areas around fields growing other crops
and near forests and unproductive rice fields into banana plantations. Banana
farmers will use intensive farming to increase yields, tissue culture and
high-quality varieties. In the plantations, farmers will be encouraged to
breed fish and livestock. Besides, the
province will strive to strengthen linkages between farmers and processors to
increase the output of various products made from the fruit and its
by-products. Ca Mau, one
of the largest banana growing provinces in the Mekong Delta, has 5,400ha
under various varieties of the fruit, including 4,800ha of xiem, with an
annual output of 60,000 tonnes. The banana
growing areas are located mostly in U Minh and Tran Van Thoi districts. Nguyen Tran
Thuc, head of the department’s Plant Protection and Cultivation
Sub-department, said demand for xiem bananas remains steady despite the
COVID-19 pandemic, and it fetches farmers a price of 3,500 VND a kilogramme,
the same as before the outbreak. The
province’s bananas are sold in the delta and Ho Chi Minh City and exported to
Cambodia through local traders. Most are
sold for eating fresh, with a quantity meant for processing into products
like dried banana and banana cake. Ca Mau plans
to expand its area under banana to 6,000ha and annual output to 120,000
tonnes by 2025./. Agro-forestry-fisheries exports up over 24 percent in Jan-Apr Fisheries
exports declined 4 percent year on year in July after surging 15 percent to
earn 4.1 billion USD in the first half of 2021 as the COVID-19 outbreak has
forced many seafood processing plants in the south to suspend production,
according to the Vietnam Association of Seafood Exporters and Producers
(VASEP). VASEP now
has a total of 270 producer members, mostly in the Mekong Delta and south
central regions, said General Secretary Truong Dinh Hoe. Just around 30
percent of seafood producers in the south can adopt “three-on-site” model,
which involves on-site production, dining and rest, to be permitted to maintain
production, he noted. In those
able to keep the production going, the headcount only accounted for 30 – 50
percent of the normal level since the remainders had quitted or taken unpaid
leave, causing capacity to shrink 50 – 60 percent, he added. Tra fish
companies are struggling to purchase fresh inputs from farmers, said Truong
Thi Le Khanh, Chairwoman of the Vinh Hoan Company, a tra fish producer in the
Mekong Delta province of Dong Thap. Tra fish must be collected from different
locations to provide inputs for production but travel restrictions have made
it very difficult to do, she noted. The VASEP
forecast that export-led production is likely to suffer a 20 – 30 percent
lack of inputs in the final months of the year due to a decrease in fishing
and fish farming, and inputs for processing and exporting, while financial
pressure is on a rise as a result of cancelling orders and costly
“three-on-site” model. The
association is proposing the government to prioritise vaccinations for
workers at seafood processing factories that are applying the model in order
to prevent the risk of mass COVID-19 infections. It said if these workers are
vaccinated against the virus, seafood processing plants will be able to
sustain production, keep their buyers, and maintain employment for a large
number of people./. Swings and roundabouts for pharma groups so far in 2021 With risks
from interruption of the medical ingredient supply chain and losses in the
hospital channel, the Vietnamese pharma industry experienced a topsy-turvy
first half of 2021, with potential growth set to focus on mergers and
acquisitions. Domesco
Medical Import-Export JSC, the third-largest Vietnamese domestic drugmaker,
in July announced the dissolution of the Vinh branch, which may be part of
the company’s efforts to reorganise operations to increase efficiency amid
the COVID-19 pandemic. The first
half of 2021 was not rosy for Domesco after the company made revenues of
VND697.54 billion ($30.32 million), only slightly up 0.17 per cent on-year.
Meanwhile, its after-tax profit was down nearly 39 per cent on-year. In its
financial statement, Luong Thi Huong Giang, general director of Domesco,
blamed the poor result mainly on the fall in sales due to COVID-19 which
prevented people from going to hospitals and drugstores; as well as rises in
medical ingredient costs. Although the
year has brought challenges for Domesco and other Vietnamese pharmaceutical
companies, some still made gains thanks to their strength and new strategies. Traphaco
JSC, the country’s second-largest publicly traded drugmaker, estimated that
it made VND1.03 trillion ($44.78 million) in consolidated revenues and
after-tax profit of VND124 billion ($5.39 million) in the first six months,
up approximately 22 and 38 per cent on-year, and fulfilling 49 and nearly 52
per cent of the year’s targets, respectively. Tran Tuc Ma,
general director of Traphaco, attributed the growth to the new product
Traphaton, which adds vitamin and mineral supplements, meeting local strong
demands amid hot weather and pandemic developments. “The new product produces
good revenue, surpassing the expected plan,” he noted. Moreover,
the strength of Traphaco’s operation is maintaining the growth rate of
self-manufactured goods. During the period, the company saw double-digit
growth in its self-manufactured goods. Traphaco now
boasts three big shareholders – State Capital Investment Corporation (35.67
per cent), Magbi Fund Ltd. (24.99 per cent), and Super Delta Pte., Ltd (15.12
per cent). Traphaco set
a target of obtaining net revenues of VND2.1 trillion ($91.3 million) and
VND240 billion ($10.43 million) in profit after tax in 2021, an increase of
10 and 11 per cent compared to the previous year, respectively. Similarly,
Imexpharm Pharmaceutical JSC (IMP), Vietnam’s fourth-biggest pharma group,
witnessed a slight on-year rise of 3.6 per cent to VND613.9 billion ($26.69
million) in the second quarter, while its after-tax profit ascended 3.2 per
cent from the same period last year. IMP cited the challenges in the second
quarter when the global supply chain of medical ingredients was hit as India,
one of the biggest suppliers, experienced dire pandemic developments. As a
result, IMP and other Vietnamese pharma firms faced steep price hikes. Moreover,
the latest wave of the pandemic in Vietnam is related to many hospitals, thus
negatively affecting the ethical drugs channel (ETC), or the hospital
segment, with which pharma giants like IMP are targeting. Imexpharm
targets a 10.7 per cent on-year rise in total revenue and 13.5 per cent in
after-tax profit in 2021. SK Investment Vina III Pte., Ltd. is now the
biggest foreign stakeholder at IMP with 29.42 per cent. Likewise,
the biggest publicly traded drugmaker DHG Pharmaceutical JSC recorded
consolidated net revenue of over VND1.96 trillion ($85.21 million), and a
consolidated after-tax profit of VND404.48 billion ($17.58 million), up 17.36
and 11.5 per cent on-year, respectively. DHG, with
the main foreign shareholders being Japan’s Taisho (51.01 per cent),
attributed the improvements to its focus on selling strategic and key
products, a well-organised distribution system, and reduction of expenses to
adapt to COVID-19. This year, DHG
set targets of VND3.97 trillion ($172.6 million) in revenues, up 4 per cent
from 2020, and pre-tax profit of VND821 billion ($35.69 million), equal to
last year. Like the
others, the third-largest drugmaker aims to gain VND1.54 trillion ($66.95
million) in net revenues and VND215 billion ($9.34 million) in after-tax
profit in 2021, up 6 and 20 per cent from 2020, respectively. Blockades
and social distancing in southern cities and provinces in July are expected
to affect pharma firms’ sales more seriously in the third quarter when both
the over-the-counter and ETC channels are hard hit. Worse still,
as most Vietnamese pharma firms are reliant on the import of medical
ingredients, mostly from China and India, high risks of price rises in
medical ingredients are expected. This has urged pharma firms to ensure
reasonable storage of medical ingredients to deal with any possible breaks in
the global supply chain. In this
challenge, IMP will strictly control inventory and debts, while focusing on
online sales and marketing activities in the second half to ease the
difficulties from social distancing and blockades. To deal with
the problem related to medical ingredients, IMP increased its reserves.
Statistics from the drugmaker’s financial statement showed that IMP’s total
assets rose 15 per cent on-year in the second quarter as the company
increased working capital to store up ingredients to serve its demands. Meanwhile,
Traphaco will focus on self-researched and new products. Also, the progress
of the technology transfer of modern pharmaceutical products by South Korea’s
Daewoong Group to Traphaco is also a drastic focus. In 2021, Traphaco aims to
complete the technology delivery of at least three products so that the
company can make revenue from them next year. The South Korean partners’
products include diabetes, cardiovascular, and blood pressure medicines,
which are now in great demand in Vietnam. Nevertheless,
the long-term prospects of the Vietnamese pharmaceutical industry are bright.
According to Fitch Solutions, Vietnam’s spending on healthcare is projected
to reach $23 billion in 2022 and $42.9 billion in 2028. Rapid urbanisation is
increasing healthcare demands in urban areas and, together with this, an
ageing population leads to rising diseases and growing healthcare spending.
This reflects much growth room for the local lucrative industry. In addition,
the development of IT applications is widening access to medical services,
thus facilitating the operation of pharma giants’ distribution networks. More
than that, new modern sales channels will be developed by pharma firms,
together with traditional ones. Industry insiders forecast that mergers and
acquisitions (M&A) activities will be more bustling in the industry in
the months to come as investors want to tap into this growth potential. Ngo Thanh
Hai, senior associate of the law firm LNT & Partners told VIR, “More
international businesses are planning to expand in Vietnam, with M&A
being a targeted channel because acquiring Vietnamese firms will enable them
to have the distribution rights.” SeABank reduces interest rate to support customers The support
programme will focus on sectors such as transport, warehousing, accommodation
and catering services, education and training, and healthcare. In addition,
the bank will also launch preferential credit programmes and encourage
customers to use non-cash transactions. SeABank has
been implementing a super fast disbursement programme for businesses affected
by COVID-19 valued at VND2 trillion (US$87.3 million) with an interest rate
of 6.5 to 8 per cent a year. It offers
preferential interest rates for firms that have import-export activities with
an interest rate of 5.6 to 6.4 per cent a year. Businesses enjoy no fees for
using a SeABank Visa Corporate for the first year. Businesses can take
advantage of the working capital available from their card credit to help
manage capital and spending effectively. The bank
also launched a range of measures for individual customers such as reducing
interest rates by 0.3 per cent a year for all loans, and providing fee-free
money transfers and bill payments. SeABank
would continue to have timely solutions to untie its customers’ difficulties
in the complicated changes of the COVID-19. Factors for Vietnamese agricultural produce to successfully
break into UK market Local
businesses are looking at rosy opportunities to boost exports of agricultural
products to the UK since the UK-Vietnam Free Trade Agreement came into effect
from the outset of this year, but more is needed to turn the opportunities
into concrete benefits. The first
batch of longan of the 2021 season from the northern Highlands province of
Son La has just arrived to the UK and the EU, paving the way for further
batches of fresh fruits to enter these demanding markets from the province. Earlier,
local firms exported several shipments of rice and coffee to the UK to take
advantage of the UK-Vietnam Free Trade Aagreement (UVFTA) which came into
force at the beginning of this year. So far,
despite zero tariffs on fruit and fragrant rice, shipments to the UK have
been of a small value and reached the UK with support from new importers. For
instance, Vietnam National Seed Group (Vinaseed) shipped 60 tonnes of
fragrant rice to the UK through privately-held Long Dan, which is owned by
Vietnamese people and is based in the UK. Local
agricultural products could only make successful forays into UK market once
local producers exercise production following Global GAP or EURO GAP
standards and apply globally recognised management systems like ISO, or SA. Before the
UVFTA, the UK applied 17.4 per cent import tariff on Vietnamese fragrant rice
(Jasmin), which has been abolished as of the beginning of this year, helping
to bolster the competitiveness of Vietnamese rice According to
the Ministry of Industry and Trade’s Agency of Foreign Trade, Vietnam posted
$2.85 billion of export turnover to the UK in the first six months of 2021, a
nearly 28 per cent jump against the year prior. The growth was deemed quite
positive thanks to the UVFTA. The UK
imports more than $700 billion of goods each year, of which Vietnam accounts
for less than 1 per cent, which means there is definitely room for growth. Last year,
the UK imported more than 5.7 million tonnes of vegetables and fruits alone,
valued at approximately $9 billion. The export value of such products from
Vietnam to the UK only reached $11.6 million, 0.18 per cent of this. As for rice
products, last year the UK imported around 762,526 tonnes. Vietnamese exports
made up 3,396 tonnes with a value of nearly $1.3 million, only 0.45 per cent
of the total. The finest
agricultural export item to the UK is cashew nuts. According to figures from
Vietnam's trade office in the UK, last year the country imported 23,000
tonnes of cashew nuts, with more than 16,000 tonnes coming from Vietnam,
accounting for 71 per cent. Pepper
exports are also upbeat. Last year, Vietnam shipped 5,621 tonnes of pepper to
the UK, raking in $48 million of the total 14,000 tonnes and $121 million
that the UK imported. According to
Nguyen Canh Cuong, trade counsellor at the Vietnamese Embassy to the UK,
Vietnamese agricultural produce is gaining a foothold in the UK, with coffee,
cashew nuts, and pepper selling well in big supermarkets while rice and
fruits (longan, litchee, and dragon fruit) are mostly sold in minimarts. Cuong noted
that Vietnamese agricultural items have an edge in the UK over similar
products from countries which have not yet signed an FTA with the UK. Local
firms, however, can only avail of these competitive advantages if they can
reach UK quality standards and match customer taste. Industry
experts noted that although the UK is a big market and the UVFTA has come
into force, local firms need to take quicker actions to capitalise on this
agreement, as the UK is also actively pursuing FTAs with other big trading
partners. The country might also join the Comprehensive and Progressive
Agreement for Trans-Pacific Partnership (CPTPP) in the not so distant future. Competition
would therefore mount up, even as Vietnamese producers are working to reach
stringent quality requirements such as Global GAP or EURO GAP standards and
apply globally recognised management systems like ISO or SA. In addition,
the firms must ensure stability in both quality and quantity to develop sustainable
relations with UK partners while simultaneously having suitable market access
strategies. Industrial zone leasing takes a hit as 2021’s pandemic
complexities hinder activities Manufacturers
are buckling under the stress of attempting to operate with reduced staff
numbers, or even house them at all as social distancing and domestic travel
restrictions continue to make it difficult for industrial zones as well as
developers in the leasing game. More than
two months have passed since the latest wave of the broke out, severely
impacting industrial manufacturers and zones in the southern provinces. Many
localities such as Ho Chi Minh City, Binh Duong, Long An, Dong Nai, and Ba
Ria-Vung Tau are forced to apply regulations that allow enterprises to only operate
when they ensure the implementation of strict stay-at-work guidelines, which
enables their workers to sleep, have meals, and work at the site. Many
companies and factories, however, had to suspend operations. Pham Quang Anh,
general director of Dony Garment Co., Ltd. said that his factory had closed
because he could not meet all requirements. “Enabling
hundreds of workers to stay and have meals in the factory exceeded our
ability, so we had to halt operations,” Anh said. According to
a Ho Chi Minh City Export Processing and Industrial Zones Authority (HEPZA)
report, only 70 out of 85 enterprises in Saigon Hi-tech Park registered to
continue operating under the new regulations. In Linh Trung Export Processing
Zone and Industrial Park 1, 13 of 32 enterprises had stopped running. Challenging
production activities of enterprises also affect the operation of industrial
zones (IZs). Meanwhile, the social distancing and travel restrictions
continue to make it difficult for developers to find customers to rent land,
factories, and warehouses. Apart from
foreign investors who cannot enter Vietnam, potential industrial real estate
financiers and tenants can also not directly visit and survey projects in
other provinces, which partly affects the rental prices in IZs. Lam Dieu Tam
Hieu, deputy general director of Kizuna JV Corporation, an enterprise
specialising in ready-built factories in Long An province, said that only
about 50 per cent of enterprises are currently still operating with the
company’s factory solutions. These are businesses maintaining production for
orders that are in progress or have raw materials available at the
warehouses. “It is
extremely difficult for manufacturing enterprises to maintain their
production in this period due to many factors such as rising labour costs,
shortage of labour, increased shipping costs, and regulations amid the
pandemic,” Hieu said. As a support
for many enterprises, Kizuna decided to reduce its rental fees by 15 per cent
for the third quarter of 2021. Its fees will also not be adjusted according
to the economic growth forecast from the last quarter of 2021 to the end of
2022. According to
Nguyen Van Be, chairman of the HEPZA, the industrial real estate market has
slowed down, with few potential tenants asking for expanding or leasing
factories. Although
affecting the leasing results of IZs, businesses still expect industrial real
estate to continue to grow thanks to the government’s efforts in both
fighting against the pandemic and maintaining production. The implementation
of community vaccinations and the promise of a vaccine passport programme are
what brings confidence to both property owners and investors. Hieu said
that Kizuna is now trying to attract existing enterprises that want to expand
their businesses in Vietnam and look for a new factory. The company is
particularly focusing on manufacturing enterprises with existing factories
who are looking for relocations and upgrades to cut costs. “The
readiness and support services of Kizuna are helping enterprises to locate to
Vietnam. Our marketing and consultant services are also adjusted to be more
suitable amid the pandemic. Meetings and discussions are happening on online
platforms like Meet, Zoom, and other social networking channels such as
KakaoTalk, Line, and Skype,” Hieu said. Dang Thanh
Tam, chairman of Kinh Bac City Development Holding Corporation, believes that
with vaccinations in cities and provinces, the pandemic will soon be
controlled. “With the current policies, I hope that Vietnam can push back the
pandemic within the next few months, and that the country remains a favourite
destination for foreign investors,” Tam said. As one of
the country’s leading IZ developers, Kinh Bac is determined to expand and
build new IZs to meet the demand of new tenants. “Just a few
days ago, Kinh Bac received bookings from existing investors to expand their
production lines and, at the same time, from new investors. For example, LG
has expressed its willingness to acquire more space in the third phase of our
IZs,” Tam said. Vietnam may receive $1.56 billion from $650 billion IMF special
drawing rights The board of
governors of the International Monetary Foundation (IMF) has approved a
general allocation of special drawing rights (SDR) equivalent to $650 billion
on August 2 to boost global liquidity. Vietnam could be one of the emerging
countries receiving support from this package. “This is a
historic decision – the largest SDR allocation in the history of the IMF and
a shot in the arm for the global economy at a time of unprecedented crisis.
The SDR allocation will benefit all members, address the long-term global
need for reserves, build confidence, and foster the resilience and stability
of the global economy. It will particularly help our most vulnerable
countries struggling to cope with the impact of the COVID-19 crisis,”
Kristalina Georgieva, IMF managing director, said. The general
allocation of SDRs will become effective on August 23. The newly created SDRs
will be credited to IMF member countries in proportion to their existing
quotas in the fund. About $275
billion of the new allocation will go to emerging markets and developing
countries, including low-income countries in Southeast Asia such as Vietnam,
Thailand, and the Philippines. Bloomberg
predicted Vietnam could receive $1.56 billion from the IMF package. “We will
also continue to engage actively with our membership to identify viable
options for voluntary channelling of SDRs from wealthier to poorer member
countries to support their pandemic recovery and achieve resilient and sustainable
growth,” Georgieva said. One key
option is for members with strong external positions to voluntarily channel
part of their SDRs to scale up lending for low-income countries through the
IMF’s Poverty Reduction and Growth Trust (PRGT). Concessional support through
the PRGT is currently interest-free. The IMF is also exploring other options
to help poorer and more vulnerable countries in their recovery efforts. A new
Resilience and Sustainability Trust could be considered to facilitate more
resilient and sustainable growth in the medium term, the IMF stated. However, in
July, the IMF forecasted lower prospects for Indonesia, Malaysia, the
Philippines, Thailand, and Vietnam where recent waves of COVID-19 infections
are weighing on activity. The fund forecast that emerging Asia would grow 7.5
per cent this year, down 1.1 percentage points from the April forecast,
according to Reuters. Tien Giang’s exports surge 19.8 percent during January-July The Mekong
Delta province of Tien Giang pocketed 1.96 billion USD from exports in the
first seven months of 2021, up 19.8 percent year-on-year and equal to 60.2
percent of the yearly plan, said Acting Director of the provincial Department
of Industry and Trade Dang Van Tuan. Foreign-invested
enterprises accounted for nearly 85 percent of the province's total export
turnover. Notably, the
province continued seeing growth in the shipments of its strong commodities.
Accordingly, in the period, Tien Giang exported over 461 million USD worth of
metal products, including copper pipes, up 34.4 percent over the same period
last year, nearly 338 million USD worth of footwear, up 32.3 percent, over
8,300 tonnes of vegetables and fruits for 17.62 million USD, up 15.68 percent
in volume and 15.6 percent in value. Tuan said
that the department has promoted its role in coordinating with the Agency of
Foreign Trade under the Ministry of Industry and Trade to provide timely
information about the export markets to businesses, connect markets and
customers, and avoid the disruption of the supply chains for the export
markets amidst complex developments of the COVID-19 pandemic. The province
has encouraged enterprises to step up online trade promotion activities to
boost the export of local products such as processed seafood, agricultural products,
vegetables and fruits to China, Japan, the US, the Republic of Korea and the
European Union, especially those recovering soon after the COVID-19 pandemic. Attention
has also been paid to the sale of products on e-commerce platforms such as
Sendo, Shopee, Tiki, Voso and Postmart, Tuan added./. Vietnam, Germany bolster cooperation in renewable energy The
Vietnamese Government gives high priority to sustainable energy development,
aiming to ensure national energy security and greenhouse gas emission reduction,
Vietnamese Ambassador to Germany Nguyen Minh Vu told a meeting between the
Vietnamese Embassy in Germany and Germany’s Großmann Ingenieur Consult GmbH
(GICON) and the Vietnam Petroleum Institute (VPI) on August 4. He said
Vietnam supports the close cooperation between GICON and Vietnamese partner
VPI. The meeting
was organised with the purpose of sketching out details for the content in
the memorandum of understanding (MoU) signed between GICON and VPI on March
29 on collaboration on renewables and hydrogen production in Vietnam. The
ambassador said renewable energy accounted for 11.4 percent of the total
electricity produced in Vietnam in the first six months of this year, adding
that it tended to increase in the future. Vietnam has
been successful in developing solar power energy projects with a combined
capacity of nearly 6,000 MW, with most located in the south-central region,
Vu said. In terms of
wind energy, the country is home to nine wind farms with a total capacity of
304.6MW, with the largest one located in the southern Bac Lieu province at
nearly 100MW. The
Vietnamese Ambassador said he expected the MoU between GICON and VPI would
further strengthen cooperation between the two countries in this field and
tap into Vietnam’s huge potential in solar and wind power, especially in
offshore wind energy. It would
contribute to improving Vietnam’s environment and resilience to climate
change, as well as to enhancing the two countries’ cooperation in economy,
trade, and investment, Vu said. At the
meeting, GICON Group President, Professor Jochen Großmann said that with a
long coastline of more than 3,200km and an average wind speed at 6m/s in the
East Sea at a height of 65m, Vietnam has great potential for wind power
development. With many years
of experience in this field, GICON is confident that it can cooperate and
support Vietnam in promoting the development of environmentally friendly
renewable energy sources, he said. Nguyen Anh
Duc, director of VPI, said GICON has strengths in technology and experience
in renewable energy development. In the
coming time, VPI will continue to work closely with GICON to promote the
implementation of cooperation projects in the spirit of the MoU signed by the
two sides, Duc said./. Source: VNA/VNS/VOV/VIR/SGT/SGGP/Nhan
Dan/Hanoitimes |
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