VIETNAM'S BUSINESS NEWS HEADLINES JUNE 16   00:16    Vietnam spends over US$1.2 billion on fuel imports A view of Dinh Vu Petrol Terminal in Haiphong City. Vietnam spent some US$1.27 billion importing over three million tons of fuel products between January and May – PHOTO: VNA Vietnam spent around US$1.27 billion importing over three million tons of fuel products between January and May, dipping by 22.3% in volume and 48.1% in value year-on-year. The coronavirus pandemic has seen the consumption of fuels decline over the past few months of the year, VietnamPlus news site reported. Data from the Ministry of Industry and Trade indicated that the country imported some 650,000 tons of fuels worth US$152 million in May for domestic consumption, down 20.6% in volume and 71.3% in value year-on-year. South Korea remained Vietnam’s largest fuel supplier, followed by Singapore, Malaysia and China. The fuel inventory at the Vietnam National Oil and Gas Group (PVN) fell in late May due to the group’s effective production and business strategies. Meanwhile, the Binh Son Refining and Petrochemical Company and the Nghi Son Petroleum Products Distribution Branch – PVN saw their inventories of fuels down by 23%-65% month-on-month./. Pork imports rise nearly 300 pct in five months Vietnam imported about 67,640 tonnes of pork from the start of the year to May 30, a year-on-year surge of 298 percent, according to the Ministry of Agriculture and Rural Development (MARD). Nearly 130 domestic firms purchased pork and related products in the period, mainly from Canada, Germany, Poland, Brazil, the US, Spain and Russia. The imports encountered various obstacles as the global supply was also on the decrease, worsened by the ravaging African swine fever in many countries, the MARD said. There were about 678 million pigs worldwide in January, down nearly 12 percent compared to the figure in 2019. Due to complexities brought by COVID-19, the MARD has assigned relevant agencies to hold talks with regional countries regarding the import of live pigs. Animal health agencies of Vietnam and Thailand are discussing procedures to allow direct import of pigs from Thailand./. Supermarkets help farmers sell lychees Several large supermarket chains have pledged to support the consumption of lychees as the fruit enters the harvest season in the northern provinces of Bac Giang and Hai Duong, the two biggest growers of the fruit in the country. Last weekend, specialised trucks started to transport fresh thieu lychee, a unique variety grown in Bac Giang’s Luc Ngan district, for distribution at nearly 1,000 outlets of Saigon Co.op across the country. The volume this year will be 20 percent higher than last year. A spokesperson for Saigon Co.op said the retailer has bought fresh lychees directly from Luc Ngan and Hai Duong province’s Thanh Ha district, all meeting VietGap quality or safe fruit certification standards. This year Saigon Co.op has begun selling some agricultural products, including thieu lychees, online. Customers can order them using MoMo e-wallet, and the supermarket will deliver home. Besides fresh lychees, canned lychees that can be kept for a long time are also available at Co.opmart, Co.opXtra and Co.op Food at 40,000 VND (1.7 USD). Also last weekend, Central Retail transported fresh thieu lychees grown in Luc Ngan district in five 20-feet containers to its Big C and Go! supermarkets across the country for consumption and export to Thailand. A week of promotion will be held in Hà Nội to sell the fruit at 38 Big C and Go! stores across the country, said Nguyen Thi Phuong, deputy general director of Central Retail Group in Vietnam. This year Big C and Go! are expected to buy around 1,000 tonnes, three times the volume they bought last year. Central Retail will display the fruit at the best locations in its stores and offer a series of special promotions. Central Retail will continue to export Luc Ngan lychees to Thailand and display them on the shelves of Tops and Central Food Hall hypermarkets (Central Group’s food retail chain) to introduce the fruit to consumers in Bangkok. In addition to Saigon Co.op and Central Retail, the two provinces are also in touch with other retailers such as Aeon, MM Mega Market, Lotte Mart, Vinmart, and Hapro, agricultural product wholesale markets across the country and fruit processing plants to help farmers sell their lychees. This year the fruit was grown on a total area of 28,100ha in Bac Giang province and the output has risen by 10,000 tonnes this year to 160,000 tonnes. Deputy Director of Bac Giang province’s Department of Industrial and Trade Pham Công Toan said due to the COVID-19 pandemic, this year the province plans to promote its lychees mostly in the domestic market, and only 40 percent would be exported. According to Hai Dương province’s Department of Industry and Trade, the output is 55,000 tonnes this year, double that of last year./. Cambodia, RoK move closer to signing FTA The Republic of Korea said on June 11 that it has made further progress in fleshing out details for the planned free trade agreement (FTA) with Cambodia, as Seoul seeks to broaden economic ties with Southeast Asian nations and diversify its export portfolio. The RoK plans to hold a public hearing on the envisioned FTA on June 12 by inviting related experts, which is mandatory under the local law before seeking a commerce treaty, according to the Ministry of Trade, Industry and Energy. In November, the two countries launched a joint feasibility study on their potential FTA in line with the RoK’s summit with ASEAN. They completed the study last month and agreed to start domestic procedures to pave the way for official talks. The RoK's exports to Cambodia reached 696 million USD last year, up 5.5 percent from a year earlier. Its imports from the Southeast Asian country came to 335 million USD, up 6.8 percent year-on-year. The country mainly shipped textile materials and used freight trucks to Cambodia and imported finished clothing goods. ASEAN comprises Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Thailand, Singapore and Vietnam./. Chinese investors plan to build oil refinery in Indonesia An official from the Indonesian Coordinating Ministry for Maritime Affairs and Investment has said that Chinese investors plan to develop a multi-billion-dollar oil refinery in Batam, Riau Islands province of Indonesia. Maritime and energy sovereignty deputy Purbaya Yudhi Sadhewa told an online press conference on June 9 that the investors had sent a letter addressed to the ministry asking for supporting an investment worth around 5-6 billion USD. Purbaya did not identify the investors or provide details on the refinery’s installed capacity, but he affirmed that foreign investors are still interested in Indonesian refineries, despite recent developments. On June 5, director of State-owned energy holding company Pertamina Ignatius Tallulembang said Saudi Arabia’s Aramco had pulled out of the 5 billion USD Cilacap project after a prolonged negotiation process. Earlier this year, Italy’s Eni also withdrew from the Plaju project in South Sumatra province. However, Purbaya said “I am optimistic that we can [proceed with these] investments if we guard them well.” The unnamed Chinese investors also sought to export some of the refinery’s output, which was why they planned to develop the project in the Riau Islands, he added. The provincial capital of Batam is just across the Singapore Strait from the island nation and is the closest point in Indonesia to Singapore. Purbaya said it appeared that the investors may not be required "to partner with Pertamina for the refinery", but that some of the refinery’s output "might need to be adsorbed domestically”./. VinFast sells over 2,160 cars in May Vietnam’s first domestic automaker, VinFast, announced on June 10 that it sold more than 2,160 vehicles during the month of May, with the hatchback Fadil its most popular model. May represented not its best monthly sales to date but was also a particularly encouraging result after a period of production suspension and stagnant business due to COVID-19. The outcome was attributed to a series of incentives and stimulus programmes introduced by VinFast during the month. VinFast boasts a network of service workshops expected to be present in all 63 cities and provinces nationwide by the end of this year. The Ministry of Industry and Trade said in a recent report that Vietnam’s auto industry has been one of the key sectors most affected by the pandemic, with production in the first quarter falling 10.5 percent year-on-year to 56,200 units while inventories tripled. Sales totalled 322,322 last year, up 11.7 percent against 2018, according to the Vietnam Automobile Manufacturers Association./. WB forecasts Indonesia’s economy to grow by zero pct in 2020 Indonesia’s gross domestic product (GDP) will grow at zero percent this year due to the COVID-19 pandemic, the World Bank has forecast. In its latest Global Economic Prospect report, the bank said that Indonesia is among the three countries hit hard by the pandemic in Southeast Asia and the Pacific. The country’s economy is projected to rebound sharply and record 4.8 percent growth in 2021, although still lower than the World Bank’s earlier projection in January. The coronavirus outbreak has disrupted economic activity throughout the archipelago as the government has called on citizens to implement physical-distancing measures to contain the spread of the coronavirus, forcing offices, factories, shops and schools to shut down. The government expects this year’s economic growth to reach 2.3 percent under the baseline scenario, or to contract by 0.4 percent under the worst-case scenario as consumer spending and investment dry up amid the pandemic. Indonesia’s economy grew by 2.97 percent in the first quarter, the slowest pace in 19 years. On June 9, Indonesia reported the highest single-day increase in the COVID-19 count with 1,043 new cases, according to the country’s Ministry of Health. The daily jump raised the total number of coronavirus infections in the country to 33,076, including 1,923 deaths./. EVFTA: Vietnamese steel companies seek export opportunities The European market is expected to become a key target of Vietnamese steel exporters when the EU-Vietnam Free Trade Agreement (EVFTA) fully comes into effect, insiders have said. Steel is one of the sectors forecast to benefit the most from the agreement. According to the latest report from the Vietnam Steel Association (VSA), Vietnam has exported over 815,000 tonnes of steel worth 454 million USD so far this year, up 47 percent in volume and 24 percent in value year-on-year. However, the country primarily exports to Southeast Asian countries with 494,000 tonnes worth 263 million USD this year, accounting for 60 percent of total export volumes and 57.8 percent of export turnover. Though export data for the steel industry is much rosier than in 2019, exports to the EU have fallen by more than half compared to the same period last year. With tariff preferences to follow when the EVFTA comes into being, the EU will be a major market for Vietnamese steel companies in particular and those in other sectors in general. Experts said that to fully tap into the opportunities presented by the trade pact, Vietnam needs to pay due regard to improving its institutions and the competitiveness of its businesses, while strengthening market research and supply and demand forecasts. A representative from the Hoa Phat Group - the largest steel maker in Vietnam - said that in the context of international integration, businesses themselves must improve their product competitiveness by raising quality, reducing prices, and ensuring delivery times are met. According to the Ministry of Industry and Trade, the EVFTA will help increase Vietnam’s export turnover to the EU by about 20 percent this year, 42.7 percent in 2025, and 44.37 percent in 2030. It will also contribute to increasing the country’s GDP by 2.18 - 3.25 percent in the 2019-2023 period, 4.57 - 5.30 percent in 2024-2028, and 7.07 - 7.72 percent in 2029-2033./. Hai Phong working to attract 1.5bn USD in FDI in 2020 The northern city of Hai Phong is striving to raise annual FDI attraction to 1.5 billion USD by the end of the year. Head of the Hai Phong Economic Zone Authority (HEZA) Pham Van Moi said that to realise such a target, the city will focus on increasing site clearance, training human resources to meet demand, and establishing new industrial parks (IPs). It has completed the necessary procedures to set up a host of new IPs, including DEEP C 4 in Kien Thuy district and Tien Thanh and Vinh Quang in Tien Lang district, while several other projects in the city have already been submitted to the Ministry of Planning and Investment and are awaiting approval from the Prime Minister. Hai Phong currently needs about 22,000 high-quality employees. HEZA is building a plan to work with businesses to train workers, while the city’s manual workforce meets just 60 percent of demand from economic zones and IPs. The city has prioritised attracting high-tech projects to cut its workforce and is considering launching more social housing projects to accommodate workers from other localities. As of May 31, local IPs and economic zones had attracted a total of 377 FDI projects with nearly 15.18 billion USD in investment./. Honda Vietnam’s motorcycle, auto sales shoot up in May Motorcycle and automobile sales by Honda Vietnam rocketed up 193 percent and 222 percent month-on-month, respectively, in May, following a nosedive of 72 percent in April due to COVID-19. The company reported on June 10 that it sold 180,633 motorbikes in May, up 193 percent against April but down 12 percent year-on-year. The best-selling model was the Wave Alpha, with 42,282 units sold, accounting for 23 percent of Honda Vietnam’s total motorcycle sales. The Vision was the most popular scooter, with 44,787 units sold, or 25 percent. Honda Vietnam also exported 15,574 motorcycles during May. The joint venture also delivered 2,714 automobiles to buyers last month, up 222 percent against April but down 9 percent year-on-year. The CR-V was the hottest among imported completely-built-up (CBU) models, with 1,581 units, making up 58 percent of all Honda automobiles sold. The City posted the best sales among completely-knocked-down (CKD) models, with 495 units sold, representing 18 percent of Honda Vietnam’s total car sales./. PNJ reduces targets for this year due to pandemic Shareholders of Phu Nhuan Jewelry Joint Stock Company (PNJ) approved the company’s financial statements for last year, a number of targets for this year, profit distribution plans and other important proposals at its annual general meeting held in HCM City on Wednesday. Le Tri Thong, the company’s CEO, said PNJ achieved net revenues of VND17 trillion (US$733.4 million) last year, up 16.7 per cent from the previous year but nearly 7 per cent short of the target. But thanks to the company’s optimisation of costs, profit after tax was 1 per cent above the target and 24.4 higher than the previous year at VND1.19 trillion ($51.3 million), he said. The Covid-19 pandemic this year has greatly affected the market as well as consumers’ behaviour and demand, but PNJ has proactively adjusted its plans to cope, he said. This has helped it to achieve positive growth in the first quarter, he added. PNJ achieved a year-on-year increase of 5 per cent in net revenues and profits in the first quarter to VND5 trillion ($215.6 million) and VND408 billion ($17.6 million). Chairwoman Cao Thi Ngoc Dung said the pandemic and trade wars would continue to badly affect many economies around the world, including Viet Nam’s, prompting consumers to cut unnecessary spending. Jewellery wholesale and export activities have been stagnant, and so PNJ has cut its revenue and profit targets for 2020, she said. It now targets net revenues of VND14.48 trillion (nearly $625 million) and profit before tax of VND1.047 trillion ($45.16 million), 15 per cent and 30 per cent down from 2019, she said. The company plans to speed up digital transformation and establish a digital transformation centre, she said, explaining, “It is impossible to move forward in the changing environment after 2020 ... if we don’t invest in it." She said PNJ would continue to focus on innovation and restructuring the product portfolio to introduce new lines, and developing new sales channels. It plans to invest to increase its production capacity and become the leading jewellery production company in the region, enhance technological capabilities, and adopt modern retail management practices to ensure to maintain its leading position in the industry, she said. PNJ plans open 31 more stores this year, raising its total number to 377. Shareholders approved the issuance of more than 2.3 million shares at VND20,000 each to its key staffs who have made outstanding contributions. The meeting also voted in three new members of the board of directors to replace three who resigned recently./.  Steelmaker Hoa Phat aims for 19 per cent profit growth Giant steelmaker Hoa Phat Group (HPG) hopes to achieve VND9 trillion (US$390 million) in post-tax profit this year, up 19 per cent year-on-year. The group's management board recently approved the production and business plan for 2020 to submit to the Annual General Meeting of Shareholders, set to take place on June 25. The group targets to earn a revenue of VND86 trillion this year, up 33 per cent against last year. The board of directors also approved the plan for dividend payment in 2019 with the payout ratio of 25 per cent. The form of payment is 5 per cent in cash and 20 per cent in stock. The payment will be made in the second and third quarter of 2020. In the first quarter of this year, the group earned revenue of VND19.5 trillion, up 28 per cent year-on-year. It reported a post-tax profit of VND2.3 trillion in the quarter, up 27 per cent against the same period last year. The board of directors also approved the increase in the total investment of the project phase 1 and phase 2 of Hoa Phat Dung Quat Iron and Steel Complex in the central province of Quang Ngai. The total investment will be around VND60 trillion, of which VND30 trillion will be contributed by shareholders, VND25 trillion will be lent by credit institutions and VND5 trillion lent by members of the group. On the stock market, Hoa Phat shares (HPG) have risen sharply after plummeting to a two-year bottom of VND6,200 per share at the end of March this year. Currently, HPG is being traded at around VND27,000 per share./. VinaCapital no longer a major shareholder of Dabaco VinaCapital Group Limited has announced that it is no longer a major shareholder of Dabaco Group JSC (DBC). Its two member funds, Fraser Investment Holdings Pte. Ltd and VinaCapital Fund Management JSC, have sold a total of 395,000 DBC shares. After the transaction, Fraser Investment Holdings holds more than five million shares, equivalent to 4.78 per cent of Dabaco’s charter capital. VinaCapital Fund Management JSC no longer holds a stake in Dabaco. Other VinaCapital Group Limited’s two member funds, VOF Investment Limited and Vietnam Investment Limited, are currently holding 77,057 shares and 30,000 shares, respectively. The total number of shares in Dabaco that VinaCapital Group hold is more than 5.1 million shares, equivalent to 4.88 per cent of charter capital. VinaCapital group has continuously lowered the ownership rate in Dabaco since DBC shares increased dramatically thanks to the benefits from rising pig prices. Dabaco now has only one major shareholder, namely Nguyen Nhu So, Chairman of Dabaco’s Board of Directors with a ownership rate of 15.89 per cent. DBC shares closed Wednesday at VND51,400 per share (US$2.2). The company recorded its highest ever first quarterly profit in Q1 this year, reaching VND340 billion ($14.5 million). Revenue in Q1 was VND3.2 trillion. This year, Dabaco aims to collect VND13.2 trillion in revenue and VND512 billion in after-tax profit. Dabaco is multi field group which specialises mainly in animal feed, cattle and poultry breeding, and food processing. The group also invests in building industrial zones, urban zone facilities and infrastructure and real estate. It is among the ten biggest enterprises specialising in animal feed nationwide./.  HeyU expands its operation to Hai Phong city HeyU - a fast delivery application, on Wednesday officially launched its service in the northern port city of Hai Phong, continuing its expansion plan across the country. HeyU (formerly San Ship) is a sharing economy model connecting shippers and shops, providing solutions to manage orders and optimising delivery time by plotting the shortest route. It has also provided ride-hailing services by motorbike. This is the first time that HeyU Vietnam Technology JSC launched the chain model in the city, following its presence in Ha Noi and HCM City. The company expected to enhance its strength in technology to promote digital transformation in Hai Phong as well as changing local people’s habits in ride-hailing and goods delivery. Pham The Anh, HeyU’s CEO said: “We chose Hai Phong to launch our chain model because this is a young and dynamic city that quickly catches up with new technologies. We target to have 10,000 taxi drivers and 30,000 regular customers using the app every day in the city by the end of this year." The company also targeted to expand to other localities such as Quang Ninh, Hai Duong, Thai Binh, Nam Dinh, Thanh Hoa, Vinh and Can Tho in 2020. Founded in 2017, HeyU now has 250,000 registered shippers and 350,000 online and offline stores after four years of operation. In 2018, HeyU received US$500,000 from its angel investor - Shark Nguyen Hoa Binh, Chairman of the NextTech Group./. Firms register for stimulus scheme to boost consumer demand Up to 242 businesses have registered their participation in the ’60 golden days’ promotional event being held in Ho Chi Minh City, with the total value of goods reaching over VND146 billion, according to Nguyen Huynh Trang, deputy director of the Ho Chi Minh City Department of Industry and Trade. Hundreds of firms register for stimulus scheme to boost consumer demand in Ho Chi Minh City With the event scheduled to run until July 30, it is being held as part of a range of trade promotion activities aimed at spurring on economic recovery as the country moves into a period following the novel coronavirus.  The scheme is set to be deployed across 235 traditional markets, 217 supermarkets, and 45 shopping centres, in addition to thousands of other sales points and e-commerce channels that operate within the city. During the event, enterprises are expected to launch 1,740 promotional activities for a variety of goods and services, along with offering huge discounts of up to 100%. Moreover, the Ho Chi Minh City Department of Industry and Trade has also moved to co-operate alongside the provincial Department of Industry and Trade in an effort to organise the trade fair as a means of boosting consumer demand with discounts poised to reach over 50% for the special event. The trade fair is set to last from July 2-5 in Thu Duc district, with the participation of businesses from the southern city and nearby localities coming to display their products across 500 booths. Trang outlined how the programme aims to strengthen connectivity among producers, suppliers, and distributors, whilst increasing the volume of goods to the domestic market along with introducing many of the region’s key products./. Major export industries at a disadvantage amid global economic landscape Several of Vietnam's major export sectors such as garments and textiles, footwear, seafood, and fruit and vegetables have been significantly affected by the economic impact of the novel coronavirus (COVID-19) pandemic, with each of these industries recording a double-digit decline over the opening five months of the year. Indeed, the majority of businesses forecast that their export revenue for the duration of 2020 will suffer a double-digit reduction due to orders at the end of the year failing to show positive signs of recovery with consumption generally falling as a result of the effects caused by the COVID-19.  According to the Vietnam Leather, Footwear and Handbag Association (Lefaso), the first five months of the year saw exports of bags, wallets, suitcases, and hats and umbrellas reach a mere US$1.3 billion, representing a drop of 15.5% in revenue when compared to the same period from last year, the deepest decline since the pandemic broke out. Similarly, footwear exports reached only US$6.8 billion, a fall of 5%. Based on the number of signed orders and cancelled ones, Lefaso anticipates a sharp decline ahead in June, with concerns surrounding a number of orders towards the end of the year which have yet to be finalised. According to Lefaso, the leather & footwear industry has been forced to adjust its export targets for the year, with a reduction of over 10%. With export turnover for footwear and bags to the United States reaching US$8.2 billion in 2019, the leather and footwear industry anticipates that the highly lucrative market will remain a large consumer of Vietnamese products moving forward. However, the current situation is becoming increasingly more challenging despite this positive outlook. Upon informing Vietnamese businesses about details of the US footwear market, Matt Priest, President & CEO at Footwear Distributors & Retailers of America, said that the COVID-19 has been the catalyst for a surge in unemployment at a time when the income of American citizens is falling. As a result, consumers in the market have become more cautious when it comes to spending money and purchasing goods, including footwear. With the demand for footwear within the US market during the reviewed period enduring a fall, it is forecast that the remaining months of the year will see a consistent downward trajectory, making it more difficult for exporters, including those coming from the nation, Priest noted. With regard to other sectors, seafood exports are also predicted to witness an annual decline due to the global spread of the virus. The Vietnam Association of Seafood Exporters and Producers (VASEP) outlined that 2019 saw many fishery products such as shrimp, catfish, and octopus endure a drop in value, of which, the country’s shrimp exports reached US$ 3.38 billion, down close to 5% on-year. Overall, the reviewed period saw seafood exports hit US$2.8 billion, an annual fall of 10.3%. Most notably, one of the major disadvantages for the industry is that major consumption markets such as the EU has seen demand decrease sharply. This has been a major factor resulting in the nation’s exports to the EU falling to US$12.9 billion, a decline of 12% in comparison to the corresponding period last year. In the face of the current global market situation, Nguyen Hoai Nam, VASEP Deputy General Secretary, said the industry is making every effort to match the strong performance achieved in 2019. Despite totaling approximately US$40 billion in export turnover last year, the textile and apparel industry has also suffered a sharp decline in value, with the sector only bringing in US$10.4 billion during the reviewed period, a drop of 14.5% on-year. With the European Union-Vietnam Free Trade Agreement (EVFTA) set to become effective from August, there is hope on both sides that the trade deal can act as a driving force for boosting exports of many industries until the end of the year. Despite this, with the epidemic weakening both the US and EU economies, businesses are not expecting a demand to increase exports in the remaining months of the year with sectors such as garments and textiles, footwear, along with agriculture and fisheries facing hurdles to stimulate exports to the EU due to low demand throughout the region. Elsewhere, the country’s imports and exports largely depend on the purchasing power of the global market. In addition to exports to the EU decreasing by 12%, Vietnamese exports to the ASEAN and Korean markets during the reviewed period reached US$9.4 billion, down 13.4%, and US$ 7.7 billion, down 0.5%, respectively. In the face of reduced purchasing on a global scale in the short term, the long term is expected to see the EVFTA allow domestic goods to gain entry into the EU market as they will enjoy a competitive advantage following the removal of tariffs. Furthermore, the goods of rival suppliers that compete with the nation within the EU market, such as China, have yet to reach a similar trade agreement with the bloc and are therefore at a disadvantage./. Workshop discusses measures to support coronavirus hit businesses A workshop held in Hanoi on June 10 discuss measures aimed at helping local businesses affected by the novel coronavirus (COVID-19) pandemic overcome challenges and ensure stable development in the post-pandemic period. Local firms are urged to improve their management capacity to adapt to the new normal situation The event saw experts underline the importance of the government’s urgent support policies to help businesses weather the storm. Some of the suggested solutions include encouraging private investment, attracting more foreign direct investment, boosting exports, speeding up the disbursement of public investment, and encouraging greater levels of domestic consumption.  Delegates emphasized the need to accelerate institutional reform, increase training for human resources, develop science and technology, and enhance innovations. Bui Tat Thang, former director of the Institute of Development Strategy under the Ministry of Planning and Investment, advised local enterprises to restructure their operations and swiftly adapt themselves to the digital economy as the country enters a ‘new normal’ phase following the COVID-19.  Noting the importance of developing the green economy over the long run, Thang simultaneously urged firms to improve their management capacity to adapt to the new normal situation, while actively finding new markets and customers moving into the new period. Bui Tuong Lan, vice chairman of the Vietnam-ASEAN Economic Cooperation Development Association, stated the need to strengthen connectivity among enterprises as a way of overcoming difficulties during this challenging time, saying that companies must be fully aware about changing their mindsets with regards to production, business operations, and management in order to be able to adapt to the new situation and support each other for mutual development. Experts expressed hope Vietnam will continue to simplify administrative procedures, improve the overall business climate in the near future in an effort to revive the economy in the post-pandemic period./. Transfer pricing among FDI firms causes severe tax revenue loss Vietnam’s tax collection has suffered heavy losses in the past few years as a result of transfer pricing among foreign-invested firms operating in the country, according to the State Audit of Vietnam. So far, some 50% of foreign direct investment (FDI) firms in Vietnam reported that they are operating at a loss. In HCMC, some 60% of 3,500 FDI firms have been reporting losses for many years, the agency announced at a recent conference. Despite the heavy losses, the FDI enterprises are still expanding business and production here. While most Vietnamese enterprises in the apparel and footwear sectors have announced profitability, FDI firms operating in the same industries have reported losses even though they enjoy several tax incentives offered by the Government. While many investors are looking for ways to transfer obsolete machines and equipment to recipient countries including Vietnam, it is very difficult to evaluate the real value of these machines, noted the State Audit of Vietnam. Doan Xuan Tien, deputy State Auditor General, said that several multinational groups and FDI firms have set up a complicated intermediate system to buy and sell goods and services among subsidiaries and associated companies. They usually lower the prices in the system before selling to consumers, thus reducing tax obligations, especially the special consumption tax. FDI firms may also sell services and products to their associated firms at a low price but buy materials and machines from them at high prices, Tien noted. Nguyen Thi Phuong Hoa from the National Economics University said many FDI firms remain profitable during the tax exemption period and then report losses, suggesting transfer pricing regulation violations. Besides this, spending on internal services, training, management consulting and finance makes up a high ratio at these enterprises. It is unusual to spend regularly on these services for years, added Hoa./. Customs officials not to check foreign QR code on exported goods Mai Xuan Thanh, deputy general director of the General Department of Vietnam Customs, signed a document on June 9 stating that customs officials should refrain from asking exporters to present paperwork signed by relevant agencies on the use of foreign quick response (QR) codes on exported goods. The department also asked the customs agencies not to sanction exporters for administrative violations related to the use of foreign QR codes on exported goods. In case customs agencies find that exporters don’t have sufficient documents over the confirmation or authorization on the use of foreign QR codes, they will have to report the case to the Directorate for Standards, Metrology and Quality. On May 5, the Ministry of Science and Technology issued an official dispatch explaining the use of foreign QR codes, following which exporters can now present documents, emails or letters of authorization, processing contracts or other forms of authorization that are internationally recognized. Exporters are asked to sign, seal and assume responsibility for these documents. Before the official dispatch was issued, the Directorate for Standards, Metrology and Quality only accepted letters of authorization that foreign enterprises granted to Vietnamese exporters for using QR codes./. Toll collection to reduce by 26 months once My Thuan-Can Tho expy is ready At a meeting on June 11 with Deputy Minister of Transport Nguyen Nhat during his trip to Tien Giang Province to inspect the progress of the Trung Luong-My Thuan expressway project, BOT Trung Luong-My Thuan JSC pledged to reduce the toll collection period by 26 months if the My Thuan-Can Tho expressway project is developed. According to the firm, if the My Thuan-Can Tho Expressway is added to the Trung Luong-My Thuan expressway project, the time to recoup the capital for the entire project through toll collection will be reduced from 14 years and eight months to 12 years and six months. Even though the coronavirus pandemic has affected the transportation of materials for the construction over the past few months, the Trung Luong-My Thuan Expressway will still be put into operation this year, stated Ho Minh Hoang, chairman of BOT Trung Luong-My Thuan JSC. The expressway project is 50% complete. He, however, said that once the Trung Luong-My Thuan Expressway is in place, it will not contribute much to the economic development of the Mekong Delta region if the My Thuan-Can Tho expressway project is yet to be implemented. As such, the firm proposed adding the My Thuan-Can Tho Expressway to the entire project. Accordingly, the My Thuan-Can Tho expressway project will be funded by the State budget at VND2.4 trillion or 50% of the total investment and from the investor’s equity and other capital sources. BOT Trung Luong-My Thuan JSC also pledged to ensure that the My Thuan-Can Tho Expressway would be opened to traffic in 2021 and be completed in 2022, reducing the construction time by half./. EVFTA good opportunity for Indian investors in Vietnam The EU-Vietnam Free Trade Agreement is a good opportunity for Indian investors, in Vietnam, Vietnamese Ambassador to India Nguyen Sanh Chau said at an online conference on June 12. At the event, jointly held by the Vietnam Trade Office in India, the Associated Chambers of Commerce and Industry of India (ASSOCHAM), and the HCM City Trade and Investment Promotion Centre, Ambassador Chau said The deal was officially ratified by the Vietnam National Assembly at its ninth session, Chau told the event. He said that the garment-textile industry will be one of the five sectors that have opportunities to increase exports to the EU, while calling on Indian companies to boost investment and establish plants in Vietnam in areas India is strong in such as garment and textiles. Indian ambassador to Vietnam Pranay Verma, for his part, said the two countries’ embassies will intensify cooperation and information sharing, and set up joint working groups to facilitate the work. According to Verma, the Vietnamese market is potential for Indian businesses which have advantages in garment-textiles, pharmaceuticals, steel, agriculture and information technology. At the event, participants discussed various issues and assessed the impacts of the COVID-19 pandemic on economies worldwide, including Vietnam and India, and ways of weathering the crisis./. Thanh Hoa calls for investment of 12.5 billion USD The north central province of Thanh Hoa signed memoranda of understanding on 15 projects worth 12.5 billion USD during an investment promotion conference on June 12. Speaking at the event, Deputy Prime Minister Truong Hoa Binh said it is the first locality nationwide to hold such an event after Vietnam has initially brought COVID-19 under control. He expressed his hope that Thanh Hoa will capitalise on its advantages to gain prominent socio-economic achievements in the coming time and stay among the country’s leading localities by 2025. To realise the target, the province needs to complete its planning for the 2021-30, with a vision to 2045, he noted, urging local authorities to timely remove bottlenecks and create optimal conditions for businesses. At the event, as many as 34 projects with a combined investment of nearly 15 billion USD were granted permission. They were in processing and manufacturing industry, urban development, tourism and health care, among others. At a similar event held in 2017, some 31 projects of a total 6.3 billion USD were approved and six of them so far have been completed./. Vietnam’s ICT industry grows 26% annually in 2015-2019 Vietnam aims to have around 50,000 IT and electronic and telecommunications companies, of which 10 large companies will have revenues of at least US$1 billion each. Vietnam’s information and communication technology (ICT) industry posted average annual growth of 26.1% in the 2015-2019 period, according to the latest report from the Ministry of Information and Communications (MIC).  Deputy Minister of Information and Communications Phan Tam addresses the conference on June 2 in Tien Giang province. Photo: MIC In the past five years, the ICT industry has continued to be the major economic sector of the country, with estimated revenue of US$110 billion in 2019, a year-on-year increase of 9.8%, Deputy Minister of Information and Communications Phan Tam told the conference to review ICT development program in 2015-2020 held in Tien Giang province on June 2. The ICT industry also contributed VND53 trillion (US$2.1 billion) to the state budget and over 14% of total GDP, creating over one million jobs, Tam added.  Especially, mobile phones and computers ranked No.1 and No. 3 among Vietnam's top 10 export staples in 2019 with a combined value of US$28 billion, thus making Vietnam the world’s second largest manufacturer of phones and components, and the 10th producer of electronic appliances and components. Nguyen Thanh Tuyen, deputy director of the Department of Information Technology under the MIC, said there are four concentrated ICT zones nationwide, of which three are operational namely Quang Trung Software Park in Ho Chi Minh City, Danang Software Park in Danang, and Cau Giay IT Park in Hanoi with occupancy rate of 95%.  Major cities such as Hanoi, Ho Chi Minh City and Danang have planned and implemented IT, electronics and telecommunications development activities systematically, according to experts at the conference. However, the sector still needs to address certain shortcomings such as the heavy reliance on foreign-invested enterprises, Tuyen added. The foreign enterprises in the ICT sector made up to 98% of its total export revenue.  Despite the large number of domestic enterprises in the sector, 99% are small and micro ones. The domestic enterprises have participated in the global value chain but the scale remains limited. They mainly execute services and assembly outsourcing contracts.  The MIC has been rushing to submit a draft decision this month to Prime Minister Nguyen Xuan Phuc for approve of the IT development program by 2025 with a vision to 2030. Under the program, Vietnam will have around 50,000 IT and electronic and telecommunications companies, of which 10 large companies will play a leading role and be internationally competitive with revenues of at least US$1 billion each.  The program also aims to have 10 provinces/cities generating an average IT and electronic and telecommunications turnover of more than US$1 billion each./. Southeast Asian countries still record hundreds of new COVID-19 cases Several countries in the Southeast Asian region still recorded hundreds of new COVID-19 infections on June 14. The situation in Indonesia is considered the most complicated with 857 more cases and 43 fatalities, according to the country’s Health Ministry. The total number of infections and deaths in Indonesia hit 38,277 and 2,134, respectively. An additional 755 patients were recovered and discharged from hospitals on June 14, raising the total number of recoveries to 14,531. Meanwhile, the Philippine Ministry of Health reported 539 more cases and 14 deaths on the same day, bringing the respective tallies to 25,930 and 1,088. Singapore’s Ministry of Health confirmed 407 new infections, raising the total to 40,604. The death toll remained at 26, while 28,808 patients have given the all-clear. According to an opinion survey by Thailand’s National Institute of Development Administration (NIDA), 52.76 percent of respondents said they are not afraid of being infected with COVID-19 since the country has recorded no locally-transmitted cases for many consecutive days. VNS/VNA/VIR/SGT/VOV/ND/Hanoitimes/Dtinews/SGGP