VIETNAM BUSINESS NEWS SEPTEMBER 115:20 Market inches higher despite losses in many bank stocks Viet Nam’s stock market closed higher yesterday, marking the third straight gaining session. The market benchmark VN-Index on the Ho Chi Minh Stock Exchange (HoSE) rose 3.33 points, or 0.25 per cent, to 1,331.47 points. The index struggled during the session due to rising selling force in some large-cap stocks. However, investors’ risk appetite helped the index finished higher at the end. The market’s breadth remained positive as 206 stocks climbed, while 186 slid, and 40 stayed unchanged. The liquidity continued to improve compared to the previous session, with nearly VND22.9 trillion (over US$1 billion) being poured into the market, equivalent to a trading volume of more than 733.8 million shares. The benchmark’s gain was supported by pillar stocks, mostly in material and real estate sectors. But the VN30-Index, tracking 30 biggest stocks on HoSE, reversed course in the afternoon session, down 0.17 per cent to 1,428.66 points. Fourteen stocks of the VN30 basket increased, while 13 declined and three ended flat. Of the top five stocks dominating the market’s trend, Viet Nam Rubber Group (GVR) was the biggest gainer after rising 3.06 per cent. Other four stocks included PetroVietnam Gas (PVGas, GAS), Masan Group (MSN) and Hoa Phat Group (HPG), up in a range of 1.23 - 2.17 per cent. Many other stocks in real estate witnessed strong growth like Phat Dat Real Estate Development (PDR), up more than 2.8 per cent, Becamex CM), up 5.39 per cent, Kinh Bac City Group (KBC), up 6.1 per cent. The index’s gain was capped by stronger profit-taking activities in the banking sector, with many bank stocks extending their losses in the afternoon trade. Accordingly, a series of big-name posting losses of more than 1 per cent, including Vietinbank (CTG), Techcombank (TCB), BIDV (BID), MBBank (MBB), HDBank (HDB) and Sacombank (STB). Analysts from Saigon - Hanoi Securities (SHS) said that even though the index extended rallies, it still could not breach the resistance level of 1,335 - 1,340 points. Therefore, the market is still in the corrective wave. The securities firm suggested that investors with big stock proportion can reduce their portfolio in the technical recovery sessions. Meanwhile, investors who already took profit of the short-term portfolio should continue to take a wait-and-see approach to observe the market, avoiding buying in at the moment. On the Ha Noi Stock Exchange (HNX), the HNX-Index inched 0.44 per cent higher to close yesterday at 342.81 points. During the session, investors injected more than VND3.3 trillion into the northern bourse, equivalent to a trading volume of 151.59 million shares. On the other hand, foreign investors still net sold on the market with a total value of VND103.38 billion. They net sold a value of VND191.69 billion on HoSE, while net bought VND88.31 billion on HNX. LG Display Vietnam Hai Phong adds $1.4 billion in investment The LG Display Vietnam Hai Phong Co. Ltd., has recently raised its investment by 1.4 billion USD, bringing the total investment of the entire project to 4.65 billion USD. With this adjustment, it remains the foreign-invested project with the highest value in the port city. LG Display Vietnam Hai Phong’s project was first approved in April 2016 with an investment of 1.5 billion USD, specialising in the production of LG Corporation’s OLED and LCD screens, among others. Thanks to an improvement in Hai Phong’s investment environment, the company has increased its investment for four times. In 2020, it earned over 9 billion USD from exports, created jobs for 14,000 workers and contributed 19.4 million USD to the budget. According to the plan, the company will increase the output of OLED screens from 9.6-10 million units per month to 13-14 million products per month. It expects to pocket more 6.5 billion USD in export turnover, contribute additional 25 million USD to the budget and generate 10,000 more jobs. The company’s Director General SuK Myung Su pledged to make efforts to soon put the project into full operation. Projects of the Republic of Korea’s LG Corporation in Hai Phong city’s Trang Due Industrial Park include LG Display Hai Phong, LG Electronics Vietnam Hai Phong and LG Innotek Hai Phong, with a combined investment capital of 7.24 billion USD, accounting for 85.2 percent of the total FDI in the industrial park and 37.13 percent of the total FDI in the northern city./. Ministry tasked to report on noodles containing unauthorized substance The Ministry of Industry and Trade has been asked to submit a report to the Prime Minister before September 7, 2021 after several new agencies ran articles saying that Acecook Viet Nam’s Hao Hao instant noodles contain banned substance. Earlier on August 20, he Food Safety Authority of Ireland (FSAI) recalled certain batches of instant noodle products due to the presence of the unauthorized pesticide Ethylene Oxide which is not authorized for use in food sold in the EU. The aforesaid products include the Hao Hao and Good noodles made by Acecook Viet Nam, according to the FSAI. Vietnamese Ministry of Industry and Trade said it has requested Acecook Viet Nam to report on its production processes and procedures, explaining also the difference between products consumed domestically and those exported./. VASEP warns of risk of disrupted seafood production and export chains More than 50% of tra fish processing factories in the Mekong Delta and seafood processing factories in the east of Ho Chi Minh City have been closed, requiring urgent support measures from localities and the Government to avoid the risk of a breakdown in the entire production chain, the Vietnam Association of Seafood Exporters and Producers (VASEP) said on August 30. According to VASEP, the average rate of COVID-19 vaccination (the first dose) of seafood processing and exporting enterprises is about 40-50%. Of which, Ca Mau is the locality with the highest injection rate. Through a VASEP survey, enterprises in the Mekong Delta all say that the “3 on-site” production model is only a temporary solution for businesses to maintain production and many seafood factories in the locality have closed as they cannot afford to meet the “3 on-site” model. Enterprises had to close down due to the incurrence of high costs such as hotel rental, dormitory establishment, accommodations, wages, meals, medical care, COVID-19 testing and others. Social distancing also results in a lack of workers and makes travel difficult as workers from “green zones” cannot come to work at factories in “red zones”. Shrimp processing enterprises in Ca Mau, Soc Trang and Bac Lieu, the three leading localities in shrimp production, say that they have had to reduce their processing capacity by 60-70% and the shortage of shrimp material is projected to last until the end of this year or even into 2022. Meanwhile, tra fish processing enterprises in the Mekong Delta provinces have had to maintain production capacity at only 10-20% while tra fish is becoming oversized or dying out completely due to high density. Seafood enterprises in Da Nang, Binh Dinh, Phu Yen, Khanh Hoa, Ba Ria – Vung Tau, and Kien Giang have also had to cut down their capacity due to high costs, shortages of workers, and low vaccination rates. A number of businesses will consider a complete shutdown of their factories if the pandemic is not controlled before September 15 and social distancing measures are prolonged. Measures suggested for Vietnam’s
economy to navigate pandemic Replying to the Vietnam News Agency’s questions, Shimizu Akira, Chief Representative of the JICA Vietnam Office, said it is unfortunate that the disruption of supply chains has occured while Vietnam has gained so much attention and been considered one of the most desirable countries for the global diversification of supply chains since the beginning of the pandemic. There are many Japanese suppliers of Japanese assemblers or manufacturers being affected. Although the impacted production items are limited only to those Japanese suppliers, since some of which are global companies, such structure of supply chain have given a significant impact on the global supply chain, including Vietnam. To the companies which are included in this supply chain, this issue is highly critical, and they have reportedly had to cut down the production as planned on global basis, Shimizu pointed out. The pandemic has given insights to the importance of the relavant support which has been carried out, he said, noting that firstly, it is important for Vietnam to strengthen its own enterprises so that they enhance their competitiveness by being able to produce high-quality parts, goods, and so forth by themselves. For this purpose, JICA is working closely with the Agency for Enterprise Development under the Ministry of Planning and Investment to enhance the capacity of local enterprises to be able to participate in the supply chain. Secondly, the disruption of corss-border movement shows how important it is for Vietnam to have an enough number of qualified manager/engineers/workers with proper knoweldge and skill without depending on external experts so that they can manage its business without any interruption. For this purpose, JICA cotinues its assistance in developing industrial human resources through trainings on Japanese business models and strengthening vocational schools, the Chief Representative said, expressing the belief that such efforts will help create a resilient supply chain in the Vietnamese industry. Shimizu also held that the Vietnamese Government should accelerate the disbursement of public investment, which is viewed as one of important tools to not only serve economic development but also cope with post-pandemic difficulties in the country. Goods exports soar by over 21% in Jan-Aug period Viet Nam’s goods exports in January-August period soared by 21.2 percent to US$212.5 billion, according to the General Statistics Office. Of the figure, export value of the State and foreign-invested sectors reached US$55.69 billion and US$156.86 billion, up 10.5 percent and 25.5 percent, respectively. As many as 30 export items gained export turnover of at least US$1 billion each, with six of which reporting turnover of more than US$10 billion. The U.S. remained the largest importer of Vietnamese goods with US$62.2 billion, up 32.5 percent, followed by China US$32.7 billion, up 19.8 percent, the EU US$26.1 billion, up 14.5 percent, ASEAN US$18.4 billion, up 23.3 percent, the Republic of Korea US$13.9 billion, up 9.9 percent and Japan US$13.5 billion, up 8.6 percent. During the reviewed period, Viet Nam’s import value hit US$216.26 billion, up 33.8 percent. China was the largest exporter with US$72.5 billion, up 47.1 percent. It was followed by the RoK US$34.6 billion, up 20.5 percent, ASEAN US$28.2 billion, up 47.4 percent, Japan US$14.5 billion, up 13.7 percent, the EU US$11 billion, up 17.1 percent and the U.S. 10.4 billion, up 12.3 percent. 14 associations call for help for workers and businesses On August 30, 14 associations sent a petition to the
Vietnam General Confederation of Labor (VGCL) to call for support for workers
and businesses in the context of the COVID-19 pandemic. Besides, they also requested the VGCL to continue waiving trade union fees for businesses where 15 per cent of employees had to temporarily leave their jobs until June 30, 2022. In addition, the associations proposed the VGCL to support meals for employees earning VND1 million ($43.50) or less a month. They also proposed allowing businesses to coordinate with their trade unions to use accumulated union funds to pay for COVID-19 testing for employees and support disadvantaged workers. According to these associations, only about 15-20 per cent of enterprises can operate under models issued by the government, others had to stop production. While many of these businesses have no revenue, they still have to pay large fixed costs such as renting warehouses and factories, inventory cost, bank interest, and salaries for employees. According to preliminary calculations, a medium-sized seafood company loses an average VND10 billion ($434,780) a month when stopping production. Meanwhile, a medium-sized textile and garment enterprise has to pay VND10 billion for their 4,000 workers in the first 14 days alone since suspending operations. “Most of our industries are labour-intensive, with high labour costs such as wages, social insurance, and union fees. Now we have to either stop production or produce at a reduced capacity, with output reduced by up to 70 per cent. However, the costs related to employees remain unchanged and enterprises still have to pay wages to employees who temporarily stop working, compounding difficulties over time,” a representative of the 14 associations said. COVID-19 could not stop Vietnam's economy: The Economist
Integration with global manufacturing has helped keep Vietnam’s economy humming during the pandemic, according to an article published on news site The Economist on August 30. The article wrote that, having impressed the world by taming the virus last year, Vietnam is now in the middle of its worst outbreak of COVID-19 by far. Parts of the country are in strict lockdown and a swathe of factories, from those making shoes for Nike to those producing smartphones for Samsung, have either slowed or shut down, disrupting global supply chains. In 2020, Vietnam’s GDP rose by 2.9 percent even as most countries recorded deep recessions. Despite the latest outbreak, this year could see faster growth: the World Bank’s latest forecasts, published on August 24, expect an expansion of 4.8 percent in 2021. The author said such performance hints at the real reason to be impressed by Vietnam. The nation’s openness to trade and investment has made it an important link in supply chains. And that in turn has powered a remarkable and lengthy expansion. Vietnam has been one of the five fastest-growing countries in the world over the past 30 years. Its record has been characterised not by the fits and starts of many other frontier markets, but by steady growth. The government is even more ambitious, wanting Vietnam to become a high-income country by 2045, a task that requires growing at 7 percent a year. The article said Vietnam’s deep connection to global supply chains and high levels of foreign investment makes it seem more like Singapore. Since 1990, Vietnam has received average foreign direct investment inflows worth 6 percent of GDP each year, more than twice the global level. As the rest of East Asia developed and wages there rose, global manufacturers were lured by Vietnam’s low labour costs and stable exchange rate. That fuelled an export boom. In the past decade, exports by domestic firms have risen by 137 percent, while those by foreign-invested companies have surged by 422 percent. The author concluded that the setback from COVID-19 aside, it might seem hard not to be rosy about a country that appears to be in the early stages of emulating an East Asian economic miracle./. Bien Hoa-Vung Tau Expressway to be developed under PPP format The Government Office on August 30 issued Document No.6000/VPCP-CN on the Deputy Prime Minister Le Van Thanh’s direction about the approval for an investment plan for the Bien Hoa-Vung Tau Expressway project under a public-private partnership (PPP) format. Accordingly, Deputy Prime Minister Le Van Thanh asked the Ministry of Transport (MoT) to base on the road development plan 2021-2025 and, once approved by the prime minister, to check the details of the project and then report to the prime minister. The first phase of the expressway project will run through the southern provinces of Dong Nai and Ba Ria-Vung Tau, with a total length of 53.7km, running in parallel to National Highway 51. In the investment plan that the MoT submitted to the government, total capital amounts to about $782.6 million, of which $521.7 million will be poured into the first stage and nearly $260.9 million will be used for site clearance. Under the build-to-operate (BOT) plan, the state will invest $260.9 million, while the remainder will come from investment attraction. Minister of Transport Nguyen Van The said that the MoT will strive to complete the project by 2025 to connect the already built Long Thanh International Airport with the Cai Mep-Thi Vai port area in Ba Ria-Vung Tau. Vietnam aims to develop additional 4,000km of expressways by 2030. Amid the state budget constraints, luring in domestic private and international investors is vital. Non-alcoholic beverage exports to Australia enjoy robust growth The growth rate of non-alcoholic beverage exports from
Vietnam to Australia during the first half the year increased by 59% to
US$9.5 million compared to the same period last year, according to details
given by the International Trade Centre. Consuming health-related products has been identified as a growing trend in the Australian market, said a representative of Vietnam’s Trade Office in Australia, adding that the trade office and importers have worked alongside large distribution systems such as Coles and Costco to put the product up for sale. In line with this, an estimated 100 containers are expected to be sold annually moving forward. Furthermore, Betrimex's Cocoxim brand of Vietnamese coconut water has made great strides in major distribution systems in Australia recently. The Vietnam Trade Office in Australia is also joining efforts with the exclusive distributor Philinh Pty Company in New South Wales in order to elevate the image of the Vietnamese coconut water brand. Moreover, local mixed fruit and vegetable drinks witnessed growth of more than 50%, thereby reaching a turnover of US$564,000. In particular, non-fermented fruit juice enjoyed a growth rate of 57% to US$7.9 million, while drinking water from pineapples grew by 203% to US$100,000. Most notably, canned coffee brands King Coffee and Meet More have captured great attention from Australian consumers. At present, the trade office has been continuing to implement promotional schemes for non-alcoholic beverages and move to strengthen linkages to the distribution systems across states in Australia. HCM City offers tax breaks to household businesses hit by COVID-19 Ho Chi Minh City’s Tax Department has waived or reduced taxes worth 123 billion VND (5.37 million USD) for 86,197 household businesses affected by the COVID-19 pandemic. It has co-ordinated with local authorities and trade centres and markets to quickly complete procedures for the purpose. Household businesses can also seek other support from the people's committees of wards and communes for losses due to having to shut down. According to the General Statistics Office (GSO), by July 30 some 80,000 businesses in Vietnam withdrew from the market due to the negative impacts of the COVID-19 pandemic. The number of enterprises halting their business or waiting for dissolution increased significantly by 25.5 per cent compared to the same period last year with 79,700 enterprises. Of which, nearly 40,300 firms halted business, representing a 23 per cent year-on-year increase; 28,000 enterprises stopped operating and were waiting for dissolution procedures, up 28.6 per cent. Another 11,400 companies completed dissolution procedures, up 27.4 per cent. Thus, on average, nearly 11,400 businesses withdrew from the market a month./. Plastic tax proposal meets opposition Hyosung Vina Chemicals’ proposal to increase the imported tax for models of polypropylene is facing opposition from the Vietnam Plastics Association because they believe it will push manufacturing costs up and limit their expansion. In mid-August, Ho Duc Lam, chairman of the Vietnam Plastics Association sent a document to the Ministry of Finance (MoF) to protest a request from Hyosung Vina Chemicals to increase the import tax for two models of polypropylene (PP), which is used in a wide variety of applications. Two months previously, Hyosung Vina – a South Korean-invested chemicals company with about $1.3 billion investment capital in Vietnam – proposed to adjust import tax for the PP Homo model to 6 per cent and PP Copo type to 6.5 per cent compared to the existing 3 per cent. The company’s request is still waiting for the opinion of the MoF. According to Lam, the supply of PP production, which is a core material used in making plastics for packaging, automotive parts, and more, is currently 850,000 tonnes per year in Vietnam. The majority of the figure comes from Nghi Son Refining and Petrochemical LLC at 400,000 tonnes per year, Binh Son Refining and Petrochemical JSC, and also Hyosung Vina. The official supply for the domestic market is 550,000 tonnes per year because Nghi Son is committed to exporting an annual capacity of 300,000 tonnes overseas. Meanwhile, the demand for PP production in the domestic market in 2020 was 1.85 million tonnes, a figure that is forecasted to increase. According to the calculation of adjusted present value, the import cost of PP is an average of $1,300 per tonne. “The ability to meet the demand on domestic PP production for manufacturers in 2020 was 41.55 per cent only, and the figure in 2021 was forecasted at 26.89 per cent, thus, increasing the import tax for these products will cause pressure on manufacturers, especially as they suffer damage from the ongoing pandemic,” Lam said. “If Hyosung Vina Chemicals’ proposal is approved, the added expenditure for manufacturers’ import tax payment is estimated at VND3 trillion ($130.4 million) in the next five years, which not only impacts the selling price of finished products but also makes manufacturers more cautious in expanding their operations,” he added. Statistics from the General Department of Customs Vietnam showed that in the first five months of this year, the total import turnover of PP Homo was $600 million, up 23 per cent on-year, $315.6 million of which came from China and South Korea (0 per cent import tax). Meanwhile, the import value of PP Copo was $154.97 million, up 24 per cent on-year. Responding to the association’s concerns, Song Kyoo Tak, deputy general director for the trading segment at Hyosung Vina, told VIR that the company’s proposal is based on its facility’s manufacturing capacity, and is simultaneously expected to increase the localisation ratio of this production and encourage manufacturers to expand operations. This month, the company officially took into operation its PP5 manufacturing facility, which deals with both PP Homo and PP Copo, in the southern province of Ba Ria-Vung Tau, with an annual capacity of 300,000 tonnes. With its first PP plant in the region kicking off operations in April last year, the company’s combined annual output of PP in Vietnam jumped to 600,000 tonnes, the biggest PP supplier in the country. “The company forecasts that next year the demand on PP production in Vietnam will be 1.64 million tonnes, including 1.27 million tonnes of PP Homo and 370,000 tonnes of PP Copo. Thus, Hyosung’s two facilities will contribute to increasing the ability of the domestic PP Homo production to 72 per cent and PP Copo production to 68 per cent, and the supply ability will also continue to increase,” Tak said. “If the domestic PP production supply increases, domestic plastics manufacturers will reduce the cost for imported materials and they will also decrease the expenditure for customs clearance, saving time for delivery and storage materials, which often last between one and two months,” Tak added. “The entire benefit will contribute to improving the competition of plastic products compared to imports as well as those using imported materials. Furthermore, being proactive in raw materials will help plastics manufactures reduce their reliance on imports.” According to Tak, raising the import tax on these materials is also a way to protect PP manufacturers and encourage them to expand the operation. “For example, Indonesia’s domestic supply of PP is 51 per cent, which means the country depends on imported PP, however, it still issues an imported tax of 10 per cent on PP imports,” he said. PP production is a basic product of the petrochemical industry that can be used for a variety of applications, maintaining the production capacity of many high-quality products for medical masks, automobile/home appliance parts, and high-quality food containers, thus it is considered an important factor for the country’s long-term growth. Deputy PM orders boosting national,
ASEAN one-stop-shop mechanisms As of June 30, the national one-stop-shop mechanism had connected 226 administrative procedures of 13 ministries and agencies. In the closing months of 2020 and the first half of this year, the Ministry of Finance coordinated with other ministries and agencies to officially launch the model, with 26 administrative procedures. Vietnam has joined the ASEAN one-stop-shop model to exchange the certificate of origin (CO) e-Form D with other members of the grouping. As of June 30, Vietnam had received a total of 375,646 certificates from ASEAN member countries, while sending 955,300 others to them. Apart from ASEAN, Vietnam has also exchanged CO with the Republic of Korea (RoK) and New Zealand, and negotiated with the Eurasian Economic Union (EAEU) for the exchange. Such agencies as the Ministry of Industry and Trade, the Ministry of Science and Technology, the Ministry of Information and Communications and the Ministry of Public Security have shifted to post-customs clearance inspections. Pointing out burdensome tasks in this regard from now to the end of this year, Minh asked the Ministry of Finance to urge other ministries and agencies to complete their tasks in line with the Prime Minister’s decisions on an action plan to boost the national and ASEAN one-stop-shop mechanisms, reform inspections over exports and imports, and facilitate trade activities for the 2018-2020 period. Joint efforts are needed to speed up the building and implementation of the master plan on building and developing an IT system in service of the mechanisms, he said, noting that the document should be submitted to the PM in the first quarter of 2022. Minh also ordered devising a plan of action to roll out the national one-stop-shop model, foster logistics and create optimal conditions for trading for 2021-2025, and sending it to concerned agencies. Who will participate in construction of the new $1.2-billion US Embassy in Vietnam? The new campus of the US embassy in Vietnam, worth $1.2
billion, marks an important milestone for both countries’ diplomatic
partnership. In early 2021, the Hanoi authorities approved the US to lease the site, issuing a decision for 99 years for the campus for an area of 3.2 hectares. The architecture of the campus, roughly costing $1.2 billion, will be designed by the US company EYP Architecture & Engineering. The company identifies itself as “an integrated design firm specialising in higher education, government, healthcare, and science & technology”. Uniquely situated on an urban boulevard, the 8-acre campus connects the bustling city with the tranquillity of the adjacent Cau Giay Park. Inspired by Halong Bay in northeast Vietnam, which is known for its shimmering waters and thousands of towering limestone islands, the building materials portray America’s forward-looking, reflective, and transparent approach to diplomacy, EYP said. According to the Washington D.C.-based company, diplomatic functions are organised under a grand civic canopy displayed along the boulevard, while community areas are oriented with views to the park. In the elevated gallery and outdoor terrace, visitors can join dignitaries at an afternoon reception in a secure environment. Cat Lai Port ensuring smooth goods clearance amid pandemic
Covid-19 has had an enormous impact on Vietnam’s import and export activities, causing congestion at many ports, including Cat Lai - the largest and most modern container port in the country. The Ho Chi Minh City Customs Department has introduced a number of measures to ensure smooth operations and goods clearance at ports. This is a quick response team for customs clearance, established in early August by the Saigon Port Customs Branch - Area 1 under the Ho Chi Minh City Customs Department. Through a hotline, the team receives information and answers questions from businesses about procedures so that goods can be cleared quickly. Amid Covid-19, Ho Chi Minh City and 19 other southern cities and provinces have been implementing social distancing measures under the Prime Minister’s Directive No 16, meaning that goods at Cat Lai Port - the largest and most modern container port in the country - have been processed slowly. To ensure smooth operations at the port, the Ho Chi Minh City Customs Department has implemented several measures to speed up goods clearance, introduced quick response teams, on-the-spot teams, and consulting groups, and encouraged online declarations. As of the end of August, Cat Lai was handling nearly 1,000 customs declarations each day. Ensuring quick customs clearance at Cat Lai Port helps to limit goods congestion, ensuring smooth import and export activities and facilitating production chains in Ho Chi Minh City and the southern region./. Pham Quang Dung becomes new chairman of Vietcombank Vietcombank has appointed CEO Pham Quang Dung as its new chairman. After the State Bank of Vietnam’s approval, Vietcombank’s Board of Directors has appointed Pham Quang Dung, member of the Board of Directors cum CEO, as the new chairman of the board. Previously, at the beginning of July, former chairman Nghiem Xuan Thanh was assigned to be Secretary of Hau Giang Party Committee. Pham Quang Dung, born in 1973, holds a Master's degree in Banking and Finance from the University of Birmingham (UK). He started working at Vietcombank in August 1994 and held many positions in the investment and financial guarantee, international relations, and leasing company departments. With over 27 years of experience in the banking industry, Dung was a member of the Board of Directors cum CEO of Vietcombank since November 2014. Vietcombank is one of the largest commercial banks in Vietnam. In the first half of 2021, the individual commercial banking arm of Vietcombank (compared to its group scale) is the largest beneficiary, with VND13.57 trillion ($590 million) in pre-tax profit. Japanese megabank Mizuho Bank is the largest strategic foreign investor holding more than 15 per cent in Vietcombank. Vietnam imports 14,000 Brazilian bulls A shipment containing a total of 14,000 bulls imported from Brazil is currently on its way to the nation and is anticipated to dock at Cai Mep-Thi Vai port in late September. According to Beef Central, the MV Nada, one of the world's largest live export vessels, has already departed from the Brazilian port of Vila do Conde and is en-route to the country with 14,000 bulls on board. This marks the first time that the nation has imported live cows from the Brazilian market. According to the website, the export deal is believed to involve a collaboration between an enterprise linked with the Vietnamese Government and an importer of Australian cattle. Beef Central also noted that Brazil has been striving to gain access to the Vietnamese market for its live cattle exports for several years. However, bulls imported from the South American nation will face fierce competition from ones imported from Australia. According to Beef Central, Australian cattle is able to enter the country under a preferential zero tariff rate, while Brazilian cattle incur a 5% import tariff. Exploring new markets to draw more FDI to Vietnam While the investment flow from traditional partners has shown signs of slowing down, the exploration of new markets will help Vietnam maintain success in attracting foreign investment. During the first eight months of 2021, foreign investment registered in Vietnam, at 19.12 billion USD, continued to decrease, but the reduction was less than 2 percent from the same period last year, reported the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment (MPI). The Republic of Korea (RoK), Japan, and Singapore remained the largest investors. The RoK continually topped the countries and territories investing in Vietnam for years, followed by Japan and Singapore. However, since the COVID-19 pandemic appeared, Singapore has replaced the RoK in this top position. It registered nearly 9 billion USD of investment in Vietnam in 2020, accounting for 31.5 percent of total foreign investment in the country. The respective figures were over 6.2 billion USD and 32.5 percent during January - August this year. Japanese enterprises channeled 3.2 billion USD into Vietnam so far this year, making up 16.8 percent of the total and rising 94.9 percent year on year. Meanwhile, the RoK’s registered investment fell 17.8 percent to over 2.4 billion USD, equivalent to 12.7 percent of the total, statistics show. Those three countries are expected to continue to lead the investment flows into Vietnam, according to FIA experts. It is noteworthy that an investment project worth more than 1 million USD from Albania was registered in August. Though Albania is not a major economy in Europe, that a new European investor pays attention to Vietnam despite the COVID-19 pandemic, which is taking its toll on global investment flows, is an encouraging sign and also a demonstration of the country’s attractiveness, according to the Dau tu (Vietnam Investment Review) newspaper. Facing a downturn in the foreign investment inflow, the FIA pointed to the complex COVID-19 situation in large investment partners of the country, underlining the need to tap into new markets. Given this, the MPI and the Ministry of Foreign Affairs recently held a webinar on investment cooperation with the Middle East. MPI Deputy Minister Nguyen Thi Bich Ngoc said the Middle East is always viewed as a potential region for investment cooperation, but its investment in Vietnam remains modest and has yet to match potential. Though 13 of the 16 Middle East countries have invested in Vietnam, the number of their projects here stands at only 136, worth 917 million USD in total. Opportunities are still ahead when Middle East countries are stepping up overseas investment, she said, suggesting studying cooperation with third partners to make major investments in Vietnam and connect the region’s big investment funds with large infrastructure projects in the country./. Standard Chartered Vietnam increases charter capital, reinforcing local commitment Standard Chartered Vietnam has been approved to
increase its charter capital to over VND6.9 trillion ($300 million) from
VND4.2 trillion ($182.6 million) by the State Bank of Vietnam in accordance
with Document No.1343/QD-NHNN dated August 23, 2021. This follows previous
increases made in 2018 with around $49 million and in 2019 with $100 million. Standard Chartered has been investing significantly in Vietnam over the last few years and growing its business across the country. In April 2021, the bank inked an agreement with Capital Place to open the bank’s new head office and branch in Hanoi. Capital Place is a modern international Grade A office complex located in the heart of the city at 29 Lieu Giai, Ba Dinh, Hanoi. Standard Chartered Vietnam’s head office and its branch are expected to begin operations by the end of 2021. The investment in more resources and infrastructure in the bank's local franchise aims to better serve its clients and deliver solutions that enable customer choice and access to the best and most innovative solutions to both private and public sector. The bank also aspires to build a stronger community in Vietnam, where it has been present and making an impact for 117 years. Last year, Standard Chartered launched a $50 million COVID-19 global assistance fund, in which $200,000 and other in-kind donations are donated to the COVID-19 prevention and relief efforts in Vietnam through multiple non-profit organisations and hospitals. The bank also introduced a series of relief measures to support its clients. Under Standard Chartered’s $1 billion COVID-19 financing commitment across the globe, the bank extended credit limit of $22 million to nine Vietnamese clients in 2020. This year, amid the worsening COVID-19 situation in Ho Chi Minh City, where Standard Chartered business hub is based, the bank has launched the “Companion with HCMC” social campaign together with Saigon Children’s Charity to support children whose families are affected seriously by the outbreak. Sustainability and accelerating zero commitments of Standard Chartered to help emerging markets like Vietnam to reduce carbon emissions as fast as possible, without slowing development, putting the world on a sustainable path to net zero by 2050 remains a focus. The bank will support and mobilise finance needed to provide people with clean energy, drive carbon-free transport, and facilitate the decarbonising of the manufacturing industry. Hanoi licenses 12 new FDI projects in August A total of 12 foreign direct investment (FDI) projects were granted new licenses in Hanoi in August, with a combined registered capital of US$17.6 million, according to statistics released by the Hanoi Department of Industry and Trade. In relation to the figure, two projects adjusted investment capital of roughly US$47,000, while capital contributions and share purchases made by foreign investors reached a total of US$1.1 million. During the opening eight months of the year, the capital has attracted US$841.8 million of FDI. The Hanoi Department of Industry and Trade informed that the COVID-19 pandemic had a strong impact on the index of industrial production (IIP) and export turnover of the capital in August. Most notably, IIP for August recorded a decline of 8% compared to the previous month and a drop of 6.7% from the same period last year. Despite the IIP for August seeing a sharp decrease, the IIP during the eight-month period increased by 6.3%, of which the processing and manufacturing industry rose by 6.3%. Elsewhere, electricity generation, production, and distribution went up by 7.1%, water supply, garbage, and wastewater treatment increased by 6.3%, and mining saw a 5.5% boost. Throughout the reviewed period, key export items such as computers, electronic goods and component endured an annual drop of 5.2% to US$9.785 billion while there was also a 16.2% drop in agricultural products. Furthermore, phones and components, means of transport and spare parts, along with wood products enjoyed an upward trend, with respective increases of 67.8%, 44.2%, and 36.6%. Dam Tien Thang, deputy director of the Hanoi Department of Industry and Trade, therefore attributed the decline in IIP and export turnover in Hanoi to the complicated nature of the COVID-19 pandemic, along with the implementation of social distancing measures in the capital which have been in place since July 24. Vietnam's exports of non-alcoholic drinks grow impressively in Australia Vietnam's exports of non-alcoholic drinks to Australia rose 59 percent in the first half of 2021, with the products (excluding canned coffee) reeling in over 9.5 million USD in revenue. The outcome was attributed to efforts made by the Vietnamese Trade Office in Australia and Vietnamese enterprises. Particularly, Fujiwa alkaline ion drink produced by Fujiwa Vietnam have secured a foothold in the Australian market, with the first four imported containers of 160,000 bottles sold out in a short time. As the Vietnamese Trade Office has identified consuming health-related goods as an emerging trend in Australia, it is working with Australian importers and big distribution chains like Coles and Costco to introduce the ion drink product in hope of pushing its import volume to over 100 containers a year. The bottled coconut water segment in Australia, dominated by low-priced Thai products, has recently seen Vietnamese products available in many large retail chains. 100 percent-pure coconut water brand Cocoxim produced by Ben Tre Import and Export Joint Stock Corporation (Betrimex) has recorded good sales and strong impression so far. As a result, the office is coordinating with Philinh Pty company as an exclusive distributor in New South Wales, to promote the 100 percent-pure coconut water to enhance the value of the brand. Canned coffee products from Vietnamese brands King Coffee and Meet More are also warmly welcomed by Australian consumers. Meanwhile, the export value of Vietnamese mixed fruit
and vegetable drinks grew by more than 50 percent to reach 564,000 USD. Phu Tho takes initiative in drawing foreign investment The northern province of Phu Tho has set a target of luring 2-2.5 billion USD in foreign direct investment (FDI) and disburse up to 70 percent of the sum by 2025. Director of the provincial Department of Investment and Planning Trinh The Truyen said to catch the wave of FDI influx, the province has striven to improve its business and investment climate, particularly simplifying administrative procedures, and reducing costs and processing time for investors. It has taken the initiative in calling for investors with modern technologies and quality products, as well as drawing investment for transport infrastructure development, with a priority given to projects in industrial parks, tourism complexes and urban areas. Phu Tho has built planning schemes and support policies for investors, along with developing high quality human resources. It will work to attract investment projects in high technology and supporting industries, which are projected to greatly contribute to budget collection and socio-economic development of the province, as well as projects using less energy and land. Phu Tho has been a bright spot in FDI attraction in the northern region over the years with a favourable traffic system and modern infrastructure. As of August 2021, the province had drawn 180 FDI projects with a total registered capital of over 1.7 billion USD, ranking second in the northern region in terms of valid project number. However, the figure remains low compared to the province’s potential and advantages./. World Bank and Australia partner to strengthen Vietnam’s capital market As Vietnam seeks increased capital to sustain economic
activities to continue strong growth in the wake of COVID-19, IFC, the World
Bank, and the Australian government have partnered to promote the development
of the country’s equity capital market. A conference jointly held by the World Bank Group (WBG) and the State Securities Commission (SSC) discussed the Draft Securities Market Development Strategy 2021-2030 prepared by the SSC and a multi-phased roadmap proposed by the WBG for equity capital market development with a focus on improving investor accessibility. Regulators from the Ministry of Finance, the State Bank of Vietnam, the Ministry of Planning and Investment, the National Finance Supervisory Commission, development partners including Australia and Switzerland, and market stakeholders also discussed the regulatory implementation progress and proposed cross-work among multiple ministries and government agencies to facilitate market development. “The aim of the strategy is to build the capital market into an important medium and long-term capital conduit for the economy, unlocking the market’s potential to effectively serve the economic growth and opening up reasonable and well-balanced sources of capital to the economy and enterprises. The plan is developed in line with international best practices and standards, ensuring investor protection and market confidence,” said Vu Chi Dzung, general director of International Cooperation Department at the SSC. The proposed roadmap addressed key constraints to foreign investor accessibility by including new mechanisms to ease the pre-funding requirement for securities trades, solutions to address limitation of foreign ownership of stocks, and improvements in disclosures in English. “Deep, efficient, and well-regulated local capital markets create access to long-term, local-currency finance necessary for the development of a thriving private sector – the key driver of jobs and sustainable growth,” said Lam Bao Quang, IFC acting country manager for Vietnam, Cambodia, and Lao PDR. “Accelerated reforms are urgent and more critical than ever to enable a broad and diversified investor base for Vietnam’s capital market as public resources become scarce and the country will need large volumes of long-term, local currency financing to recover and continue investing in sustainable growth given the impact of COVID-19.” IFC and the World Bank, in partnership with the Australian government, are implementing a multi-year advisory programme to facilitate Vietnam’s stock market development by improving the regulatory framework, market infrastructure, capacity of regulators, and new product development. This programme is part of the Joint Capital Market Development Program (J-CAP) – a WBG initiative working on local debt and equity capital market development in selected countries worldwide, including Vietnam. The J-CAP initiative was established in 2017 to help developing countries realise the benefits of strong local capital markets. “Mature, well-regulated capital markets that meet international standards are critical for diversifying financing options and will be pivotal for Vietnam's next development phase. More sophisticated capital markets will be a crucial source of domestic financing and also support higher levels of higher quality foreign investment,” said Mark Tattersall, deputy head of Mission of the Australia Embassy in Vietnam. “Following Australian Prime Minister Morrison’s announcement in January 2021 of A$2.2 million to support Vietnam’s capital market development, Australia is pleased to announce our partnership with the World Bank Group and SCC through the J-CAP programme to support equity market development and reform.” Support from the Australian government that enables J-CAP’s work on equity market development in Vietnam comes alongside support from the government of Switzerland which enables closely related work on bond market development. JCAP’s wider work elsewhere is also supported by the governments of Australia, Germany, Japan, Luxembourg, Norway, the Netherlands, as well as Switzerland. Hanoi’s August CPI continues to rise Hanoi’s consumer price index (CPI) in August was up 0.77 percent against the previous month and 2.81 percent year-on-year, according to the municipal Statistics Office. The index recorded in the first eight months of this year increased 1.49 percent from the corresponding period last year, the office said. In August, eight out of 11 commodity groups saw month-on-month hikes, with restaurant and catering services up 2.21 percent. Of which, prices of food rose 3.27 percent and foodstuff was up 0,74 percent. The rise was due to the imposition of social distancing amid COVID-19 spread, causing difficulties in the transportation of food and foodstuff in the city, and the scarcity of fruits and vegetables. The group of housing, electricity, water, fuels and constructional materials also experienced a rise of 0.5 percent. Slight increases were recorded the groups of beverages and tobacco; culture, entertainment and tourism; household utensils; medicines and medical services; and education, and post and telecoms. Only transport; and garment, headgear and footwear recorded declines of 0.24 percent and 0.05 percent, respectively. In the eight-month period, such groups as transport; housing, electricity, water, fuels and constructional materials; education; and beverages and tobacco posted year-on-year increases. Meanwhile, culture, entertainment and tourism; post and telecom; and restaurant and catering services reported decreases. The price of gold climbed by 12.47 percent, while the price of US dollar reduced by 0.96 percent in the eight months. Hanoi is under the third consecutive period of social distancing as a measure to contain the spread of the COVID-19 pandemic./. HCM City sees sharp drop in disbursement of public investment in eight months Ho Chi Minh City disbursed 13.26 trillion VND (583.55 million USD) of public investment capital in the first eight months of this year, fulfilling only 37.1 percent of its target for the year and representing a drop of 27.4 percent over the same period last year, reported the city's Statistics Office. In August, the city disbursed only 567 billion VND, equivalent to 42.4 percent of the figure in July, 23 percent of the sum in June and only 13 percent of the amount in last August. The reason behind the fall was the slow down of operations of the majority of projects due to impacts of the COVID-19 pandemic in the city. HCM City has applied social distancing measures under the Prime Minister’s Directive 16 for many weeks, while the surge in prices and the shortage of construction materials have also caused difficulties for the implementation of projects. Local authorities reported that major projects, including Thu Thiem 2 bridge and Nguyen Van Linh - Nguyen Huu Tho tunnel, have been halted or seen slow progress due to impacts of the pandemic. Meanwhile, only construction of Ben Thanh station of Metro Line No. 1 (Ben Thanh - Suoi Tien) project is underway. The project has seen 88 percent of its workload completed. It is likely to fail to reach the target of becoming operational at the end of this year, and is re-scheduled to be put into use in mid-2022. In 2021, HCM City has allocated over 35.47 trillion of public investment capital to projects, of which more than 3.82 trillion VND comes from the central budget and the rest from the city’ budget./. Hanoi attracts over 840 million USD in FDI in eight months Hanoi lured more than 18.7 million USD of foreign direct investment (FDI) in August, raising the total FDI poured into the city in the first eight months of 2021 to 841.8 million USD, according to the city's Statistics Office. In the period, the city attracted 243 new projects with total investment worth 157.3 million USD. Meanwhile, 486.8 million USD was injected into 91 underway projects, and 145.6 million USD was poured into share purchase deals. At the same time, the capital city, which has applied social distancing since July 24 to prevent COVID-19 spreading, saw slow disbursement of disbursement of public investment capital, which reached over 3.67 trillion VND in August, down 18.9 percent year on year and 27.5 trillion VND in the first eight months of 2021, up 3.4 percent over the same period last year and fulfilling 54 percent of the yearly target. In August, the city saw 1,293 newly-established firms, down 46 percent year on year, with total capital of 20.6 trillion VND. The total new enterprises in the city so far this year to 16,600 with total registered capital of 224.8 trillion VND, a fall of 7 percent in number and 7 percent in value. In the period, 2,200 firms were dissolved, while 9,300 others halted their operations, and 7,400 resumed their operations./. Ben Tre aims to have four agricultural value chains reaching 1 billion USD by 2030 The Mekong delta province of Ben Tre has set goals to have at least four agricultural value chains worth 1 billion USD, according to a recently-approved project on promoting the export of agro-forestry-fisheries products in the province to 2030. The project rolls out specific targets, including achieving 1 billion USD in production value from coconut products and shrimp while gaining 500 million USD from seedlings and ornamental flowers by 2025. The province will have at least 43 agricultural cooperatives taking part in the value chains, bringing the total number of cooperatives to 167. Of these, ten co-operatives obtain revenue of over 100 billion VND and 100 others achieve revenue of 10 billion VND. The export turnover of the province’s key agricultural products like green-skin pomelo, durian, rambutan, and longan is predicted to attain 165 billion USD by 2025, an average increase of 6,99 percent per year. The province's hi-tech shrimp farming area reaches 4,000 hectares, with an output of 144,000 tonnes. The export turnover of aquatic products such as pangasius, clams, and shrimp is expected to achieve 1.2 billion USD by 2025, a year-on-year rise of 72.64 percent. Ben Tre province will continue to build material areas towards the direction of circular agriculture, contributing to completing a closed and sustainable value chain. According to Nguyen Minh Canh, vice chairman of the provincial People’s Committee, to realise the goals, the People's Committees of districts, cities, and related agencies are asked to provide update on the information and regulations relating to the export of agro-forestry-fishery products to enterprises engaged in the production and trading. Businesses are also encouraged to participate in production-consumption chains of the products, he said. The province will continue to speed up the completion of the value chain of key product groups. It will continue to study and develop mechanisms and policies to promote the development of the processing industry, attract businesses to invest in forming closed, high-tech processing clusters in the specialised farming areas to increase efficiency in connecting production and markets as well as developing logistics services systems with the application of information and communication technology to serve trade in key agricultural products, Canh said./. Measures sought to promote role of co-operatives Co-operatives in the capital city of Hanoi have affirmed their role in “One Commune, One Product” (OCOP) programme and rural economic development, with 282 out of 1,054 products have been evaluated and recognised as OCOP goods. However, they are facing difficulties in accessing capital, science and technology and markets. Therefore, it is necessary to find solutions to bring into full play the role of co-operatives. According to the Hanoi Coordination Office for New-style Rural Development Programme, 64 co-operatives have taken part in the OCOP Programme since 2019 and their products have been well received by consumers. Thanks to detailed and comprehensive evaluation criteria and guidance from authorities, the co-operatives have understood shortcomings and strengths of each product. Thus, they can make some adjustments, innovate and perfect the production and processing processes in a more scientific manner. In addition, the OCOP Programme has helped co-operatives to develop strategies for new market segments as well as improve products’ quality and brand. Phung Van Ha, Chairman of the Board of Directors of Nui Be Grapefruit Cooperative in Chuong My district’s Nam Phuong Tien commune, said he hoped to receive support from the city authorities in terms of capital, land, access to science and technology advance to enhance management and production capacity to meet the increasing demand of the market. Representatives of many co-operatives proposed that the city promote communication about OCOP products to make it easy for consumers to access, choose and use them. The Hanoi Coordination Office for New-style Rural Development Programme said that the city had 1,054 OCOP products by the end of last year, mainly agricultural produce, food, beverages, and handicrafts. The promotion of these products was particularly important: Participating in e-commerce, online sales and livestreams to promote the products is an effective solution to help maintain the supply chain of agricultural produce during the pandemic, said the office. Deputy head of the office Nguyen Van Chi said that even in the days when the city is implementing social distancing to prevent and control the COVID-19 pandemic, it still organises many trade promotion activities to support the consumption of OCOP products and online training programmes to improve knowledge and sales skills for sellers. Currently, the office is preparing for "2021 Hanoi Online Forum connecting supply and demand of OCOP products and safe agricultural produce and food” which will take place in early September. Pham Thanh Do, head of Economic Division of Me Linh district, said that in the coming time, the district will focus on supporting co-operatives to apply high technology and connect chains for sustainable production. The co-operatives will be assisted in selecting and perfecting products participating in the OCOP Programme, he added. Deputy Director of Hanoi Department of Agriculture and Rural Development Ta Van Tuong said along with improving the efficiency of agricultural cooperations towards enhancing cooperation and association in production and consumption of products, the city will promote the development of general service co-operatives combined with tourism activities. It aimed at helping the cooperatives have more products verified, rated and recognised as OCOP goods this year and in the following years. Hanoi targets to evaluate and classify at least 400 OCOP products with three-star and above ratings this year. To achieve the goal, the city will set up 30-40 new showrooms displaying and selling OCOP products. The city authorities will ask departments and agencies to boost dissemination to enhance the people’s awareness on the OCOP products and urge broader participation. It will strengthen supervision on the deployment of OCOP programme and organise promotional activities to boost consumption of the products./. Forum connects agricultural production, consumption The Ministry of Agriculture and Rural Development on August 31 launched a forum connecting agricultural production and consumption. Representatives from 63 cities and provinces, and nearly 200 businesses, associations, cooperatives and production facilities nationwide participated in the online ceremony. The forum is grounded on the operation of the ministry’s southern working group, aiming to create connectivity and cooperation between management agencies, businesses and farmers. The working group has stepped up IT application to boost agricultural connectivity and consumption in the context of southern cities and provinces under social distancing in line with Directive No. 16/CT-TTg. With 1,300 supply sites established by the group, up to 1,000 tonnes of food are sold out each day in Ho Chi Minh City. According to Nguyen Ngoc Thach, editor-in-chief of Agriculture Newspaper and a member of the steering committee for agricultural market development, the forum’s central task is to provide information about trade promotion and connect the supply and demand for farm produce, farming materials and agriculture-based tourism products. The form will also focus on digital transformation, training, and proposals to remove difficulties to agricultural production and consumption. It will be held according to sectors and crops in association regions and agriculture and rural area-based tourism. Minister of Agriculture and Rural Development Le Minh Hoan said through the forum, farmers, cooperatives and farmers will get insight into market rules and signals. “Firmly grasping the market would help businesses expand their reach abroad,” he said./. Rubber exports enjoy growth during January-July Vietnam exported nearly 919,000 tonnes of rubber, earning 1.54 billion USD in the first seven months of 2021 with the price of 1,677 USD per tonne, up 34.2 percent, 74.5 percent and 30 percent respectively, according to the General Department of Vietnam Customs. In July alone, rubber exports enjoyed increases of 25.3 percent in volume and 22.8 percent in turnover, but experienced a decrease of 2 percent in price compared to the previous month. Compared to those in July 2020, the export of Vietnamese rubber saw growth in all three aspects, with 1 percent, 38 percent ad 35.7 percent, respectively. China is Vietnam’s biggest rubber importer, with over 643,000 tonnes worth 1.04 billion USD, equivalent to 70 percent of the total volume and 67.4 percent of the total turnover. The figures represented year-on-year rises of 26.4 percent in volume and 62.7 percent in value. It is followed by the EU with nearly 50,000 tonnes and 89.8 million USD, and India with over 47,000 tonnes and 85.5 million USD./. Vietnamese GDP growth to slow down during remainder of year Vietnam’s GDP growth rate is unlikely to achieve the target of between 6% and 6.3% set for this year due to the impact of the fourth wave of COVID-19 infections across the country, according to industry insiders. Due to these changes, the Vietnam Institute for Economic and Policy Research (VEPR) has therefore lowered its forecast for GDP growth by between 1% and 1.5% compared to the projection made during the first quarter of this year. Similarly, the World Bank has also lowered its forecast for Vietnamese GDP growth to 4.8%, despite the national economy recording robust achievements back in the first half of the year. In line with these changes, Michael Kokalari, chief economist of VinaCapital, pointed out that these can be viewed as optimistic forecasts compared to the real situation, adding that it is not feasible to achieve the EPS (earnings per share) growth of 38% this year. Rahul Kitchlu, acting country director at the World Bank in Vietnam, emphasised that the country’s economic recovery during the second half of the year is largely dependent on COVID-19 containment efforts, the efficiency of the vaccine rollout, and fiscal policies aimed at supporting affected local businesses and households. He projects that Vietnamese GDP growth rate is likely to achieve between 6.5% and 7% from 2022. Sharing this viewpoint, Kokalari expressed his belief that the EPS profit will increase sharply moving into next year. Joining hands to leave no one behind in COVID-19 fight The fourth wave of the pandemic and social distancing extension are bearing down on all sectors, with Ho Chi Minh City, Vietnam’s largest city, a major epicentre putting millions of Vietnamese at risk. However, people are also rallying to aid those vulnerable to overcome this unprecedented times, with many corporations leading the charge and lighting the fire of hope. VIR’s Nguyen Thu reports. Thao and her husband, owners of a small restaurant in Ho Chi Minh’s District 8 with eight employees shared, “It has been more than two months since we had to close the restaurant. Our entire family works for this business and there are eight employees, but now I have no income and I have to pay rent, food, and my employees’ wages, which is really difficult." Thao and her husband moved to Ho Chi Minh City to start the small restaurant, dreaming about a stable life. Ever since the business closed due to the lockdown restriction, costs and concerns have been racking up with each day. "We understand that everyone is struggling, so even though we are taking a break, we continue to help our employees with VND1.5 million ($65) a month so they can continue working with us when the pandemic is over. There is an employee who is staying with us. He is stuck here since his hometown is too far away,” she said. In the same boat, Luan, a businessman in District 7, has had to shut down his restaurant. Before the restrictions, his restaurant's was operating stably with up to 19 employees from rural towns who came to Ho Chi Minh City for work. Luan now has to use his savings to get by. “Every month, I pay 75 per cent of the rent, I still need to eat but I have no earnings. I don’t have a lot of money and so I cannot help my employees. I can only allow them to stay here, saving whatever cost I can," Luan shared. Thao and Luan are among many local companies in Ho Chi Minh City who are badly impacted by the COVID-19 pandemic. Nobody anticipated the lockdown to stretch on this long and hardly anybody was prepared for added troubles from rapidly changing restrictions, economic uncertainty, and rising COVID-19 cases. "We desperately need support from charities or the government, but everyone is struggling at the moment, so we can't ask for anything," they added. Along the streets, advertisements for sublease and transfer are pasted on close-fitting iron doors. Behind closed doors, concerns rise among owners and devoted consumers alike. Will they still be able to pull through and reopen once the epidemic is over? Small businesses are in dire need of help from the community. Many MSMEs have suffered huge revenue losses while
others have shut down due to pandemic At the same time, they are disproportionately affected by pandemic-related shocks. They are overrepresented in non-essential services sectors hardest hit by confinement measures. Many MSMEs have suffered huge revenue losses while others have shut down. According to the Ministry of Planning and Investment, 85,500 businesses have shut down in Vietnam so far this year due to the pandemic, an increase of 24.2 per cent on-year. 43,200 of these enterprises suspended operations temporarily. 24,000 were in Ho Chi Minh City, accounting for 28.1 per cent of total closures in the city. Compared to the bigger conglomerates and restaurant chains, small, independent businesses are undoubtedly at higher risk of losses and failure. Often, these businesses do not have a large war chest of savings to depend on, especially in times like these. While the situation is expected to be improving, small companies must face the immediate difficulty of several expenditures such as renting premises, retaining staff, and even other everyday expenses with no input income. In related news, late last week a number of SMEs in Ho Chi Minh City, the largest coronavirus hotspot in Vietnam, have called for immediate assistance from the government to cushion the impact of the pandemic. Most notably, businesses wished to stop paying social insurance for employees for a period of at least six months until the pandemic is fully brought under control. Additionally, they called for the deployment of a loan scheme with a preferential interest rate package of at least 4 per cent , while also deferring taxes, debts, and land rent for them. Besides support from governments, groups are offering different types of assistance to small businesses, while also highlighting the need for wider support. As Vietnam's leading brewery, SABECO has endeavoured to share the burden of SMEs through the Collecting Million Stars programme while inspiring people to stay positive. The programme also drove engagement and loyalty from small business customers and consumers who will not who helped them during the difficult time. Under Collecting Million Stars, for every public post on social media that features a creative star image, accompanied with the hashtags #GopTrieuNgoiSao #DiLenCungNhau as well as tagging Bia Saigon Fanpage, SABECO and its Bia Saigon will donate VND10,000 (43 US cents). The company will contribute for the first 300,000 valid posts. All donations collected will go to hundreds of the most affected small food and beverage (F&B) businesses in-need in Ho Chi Minh City where each outlet will receive support worth VND 5 million ($220) in cash. The dream of the pandemic ending and normalcy returning would bring joy to many people, especially workers, the homeless, and restaurant owners. "I'm not sure if customers will visit our restaurant when we reopen. Fewer customers would be a challenge," Luan said, while remaining hopeful they can reopen soon. This is the time, more than ever, when individuals and small businesses and hundreds of thousands of small businesses need the community’s help and support, not only to provide strength during this tough time but also to secure the lives of so many workers who rely on businesses to remain in this big city. Source: VNA/VNS/VOV/VIR/SGT/SGGP/Nhan Dan/Hanoitimes |
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