VIETNAM BUSINESS NEWS SEPTEMBER 3
14:58
Bubbles heap pain on vital manufacturers
The high costs of arranging COVID-19
bubbles for employees, along with rising logistics fees, are placing a stiff
burden on manufacturers in the south of the country. Marko Walde,
chief representative of the Delegation of German Industry and Commerce in Vietnam,
told VIR the implementation of various models to help manufacturing continue
through pandemic restrictions has been more than challenging for German
companies, mainly because of the high expense. “It’s
estimated that the stay-at-work method costs about VND600,000 ($26) per week
per person and it is roughly VND600 million ($26,000) for a factory of 1,000
workers per week – a huge expenditure but it still does not guarantee
continuous production.” Likewise,
chip maker Intel Corporation has spent VND140 billion ($6.1 million) in just
one month implementing a “one road, two locations” plan to ensure that its
manufacturing site in Saigon High-Tech Park meets pandemic prevention
standards. According to
Ho Thi Thu Uyen, chief of External Affairs for Intel in Vietnam and Malaysia,
the costs cover accommodations and daily virus tests for both staff and
suppliers. “Intel’s budget strategy has been impacted by additional expenses
and, if it continues beyond September 15, it will have a significant impact
on Intel’s manufacturing schedule,” Uyen explained. Intel has
paid for 1,870 of its employees to stay in four- and five-star hotels, plus
bonuses, and for 1,500 of its suppliers to stay in less expensive hotels. Meanwhile,
Jabil Vietnam, a US-based multinational electronics solutions company, has
incurred VND4 billion ($175,500) per day for the “one road, two locations”
plan. However, the company only maintains operating capacity below 30 per
cent, leading to a revenue loss of $60 million per month. The company is currently
unable to deliver products on time, resulting in a loss of about $200 million
in orders. Gabor Fluit,
vice chairman of the European Chamber of Commerce (EuroCham) in Vietnam, said
that the current stay-at-work model in its current form is not a long-term
solution. “It is unreasonable to keep staff living, eating, and working on
site for weeks on end,” Fluit said. However,
EuroCham members face significant challenges replacing workers due to the
strict travel restrictions within and between provinces. “Meanwhile,
for those who want to return home to their families, it is difficult to
obtain approval from the receiving province. Furthermore, when positive cases
are detected, the local authorities are slow to isolate those who are F0.
This risks the virus spreading throughout manufacturing facilities and
industrial zones, halting essential production activities,” he added. EuroCham
members also report significant logistical issues at ports and administrative
challenges at customs offices. “Thanks to the quick action of the local
authorities, this issue is now solved. However, there is some confusion
around the circulation of goods that are not food and medicine – but are also
not on the list of goods banned and restricted – and the inconsistent application
of these regulations is causing difficulties for both companies and
consumers,” Fluit added. On the same
note, Walde added that German companies are also facing a lack of access
between cities and provinces. Further challenges are the component shortages,
production interruption, rising production, and transportation costs as the
pandemic escalates in many cities and provinces across Vietnam. The cost of
container transportation has also increased sharply, and according to a
logistics report by SSI Research, the severe congestion and disruptions
regarding the circulation and distribution of commodities have pushed freight
rates to record highs. In 2020, some long-distance routes connecting Asia
with Europe or North America increased by about 4-8 times and on some routes,
this year freight charges have settled around five times higher than
previously. “German
businesses are negatively impacted by increased freight rates on
long-distance routes,” Walde explained. “Overall, the rise of transportation
costs significantly affects domestic goods circulation, trade performance,
and hinders the global supply chain. In the long run, it would put pressure
on the domestic supply chain, and so put Vietnam’s position along the global
supply chain at risk.” The recent
coronavirus flare-up in Vietnam has also delayed the relocation plan of
multinational corporations like Apple and Google to Vietnam. Apple initially
planned to have third-generation AirPods made in Vietnam but two people
familiar with Apple’s plans told Nikkei Asia that Apple will have them
manufactured in China instead. The sources said that Apple still hopes to
move 20 per cent of new AirPod production to Vietnam eventually. Back in
2019, Apple did move some AirPod and AirPod Pro production to Vietnam as the
US-China trade war heated up. The same year, it was reported that Google
would aggressively move production of US-bound hardware out of China into
Vietnam. But this move was not finalised due to Vietnam’s limited engineering
resources and travel restrictions during the pandemic. The Delta
variant has also hampered sentiments around Vietnam for Google and Amazon.
Rinaldo Pereira, senior business fundamentals analyst at GlobalData said,
“Companies continue to grapple with the chip shortage and shifting production
out of China has become complex. In Amazon’s 2021 filings, supply chain risks
were a key topic of discussion. Apple did mention AirPods as a keyword in
discussions around Vietnam. Apple might not be able to shift AirPod
production to Vietnam as quickly it hoped due to Delta variant – a case
similar to Google’s production shift intentions for newer Pixel models.” Five-year restructuring plan aims to improve national economic
competitiveness
The
objectives of the plan include improving the efficiency of resources, the
self-reliance and adapting capacity of the economy, heading to the formation
of a science-technology and innovation-based economy, ensuring fast and
sustainable growth. It also aims
to enhance the internal strength of the economy and domestic businesses,
forming suitable economic structure and upgrading the value
chains of sectors, while drastically implement digital transformation
and the building of digital economy, digital government and digital society. Specific
goals set by the plan for the 2021-2025 period include 6.5 percent rise in
labour productivity each year; 3.7 percent of State budget over-expenditure
each year averagely; less than 60 percent of annual public and Government
debts hitting ceiling rate; keeping the safe public debt level at about 55
percent of the GDP and Government debt ceiling at less than 50 percent of the
GDP. The ratio of
social investment is expected to reach 32-34 percent of the GDP, while public
investment management institution is raised to international standards.
Meanwhile, bed debts are subjected to be kept at under 3 percent. In 2025, the
scale of stock market capitalisation is expected to reach about 120 percent
of the GDP, while the outstanding balance of the bond market is hoped to
stand at 55 percent of the GDP. Vietnam
targets the acceleration of 10-15 positions in the quality of land
administration index in the Global Competitiveness Index by the World
Economic Forum in 2025 compared to that in 2019. The country
hopes to have about 1.5 million businesses in 2025, including 60,000-70,000
medium and large-scaled firms. In 2025, at
least 10-25 national products are expected to have trademark in the
international market, contributing to improving the position of the country
in the global value chain. Meanwhile,
digital economy is hoped to account for 20 percent of the GDP. In 2025, the
State-owned enterprises are expected to be restructured, basically settling
ineffective firms and improve State-owned businesses’ efficiency. In the draft
plan, the ministry also gave five major solution groups to complete the
goals./. Drugmakers prepare to offer home vaccines to the world As Vietnam
is stepping up its homegrown vaccine development, there is a high chance for
Vietnamese vaccine producers to expand their presence in the global
pharmaceuticals market. Nanocovax is
Vietnam’s domestically developed coronavirus vaccine, currently in phase 3
clinical trials. Once completed, Nanogen will seek out the World Health
Organization’s approval. The company already sent a sample to the
organisation in July. HLB chairman
Jin Yang-gon is among the Board of Directors at Nanogen, while his company’s
affiliate, NextScience, holds a 10.4-per cent stake in Nanogen as its
third-largest shareholder. HLB Pharmaceutical, another subsidiary, also inked
a deal with Nanogen last December to expand their presence in the global
market. We will open the doors to domestic and overseas markets by securing
the global rights of Nanocovax, which has proven its high efficacy and safety
amid the growing disruption in the supply worldwide,” Jin said. Also in
August, Nanogen signed an agreement with India’s Vekaria Healthcare LLP for
tech transfer, production, and distribution of Nanocovax. The agreement will
be the basis for both companies to enter into a deeper discussion on the
details of the cooperation related to the large-scale production and
distribution of Nanocovax when it receives its licence. Vekaria
Healthcare, a subsidiary of Vekaria Group, had also researched and studied
many potential vaccines before settling on Nanocovax. Phong Quach,
head of consulting at Ipsos Strategy3 Vietnam told VIR, “There are
significant opportunities for vaccines due to the need of herd immunity. The
more crowded a population is, the larger the market is. We expect that
Asia-Pacific is one of the major regions with substantial opportunities, with
an estimated value of up to $29 billion.” He added, “A
vaccine from Vietnam could earn benefits from accessing ASEAN as the market
might be more familiar to manufacturers, and already established relationship
between governments could help too. Based on the previous case study, we can
foresee that the success of the Vietnamese vaccine will depend on the
approvals, logistical requirements, and its efficacy.” Vietnam has
developed four COVID-19 vaccines. Nanocovax, produced by Nanogen in
partnership with the Vietnam Military Medical University, and Covivac,
created by the Ministry of Health’s Institute of Vaccines and Medical
Biologicals, are the frontrunners for success at this time. Once fully
tested, Nanogen stated that it could manufacture up to 100 million doses each
year to satisfy both domestic and export demands. However, so far Nanocovax
has not reached the final approval stage. Ipsos’ Phong
Quach said, “One of the critical factors is the timing of introducing the
coronavirus vaccine to the market. We foresee that the market size will
decline from 2023 onwards because most – if not all – countries are trying to
target herd immunity as soon as possible, and 2022 will be the year with
rising vaccine sales globally, particularly in Asia-Pacific. Thus, vaccine
developers need to time their global sales after complying with all approval
processes.” “Meanwhile,
Pfizer and BioNTech along with Johnson & Johnson have multiple agreements
with contract manufacturers and developers. Nanocovax likely needs a viable
strategy to leverage on established vaccines,” Quach added. Banks again urge telecoms operators to cut SMS fees Telecoms
operators still have not cut charges for SMS services in banking, even though
the banks have proposed reductions several times. The Viet Nam
Banks Association has proposed for the fourth time since last year that the
Ministry of Information and Communications makes moves to lower the charges. The
association said that the banking sector had reduced customer support fees in
order to effectively implement the Government’s direction on tasks and
solutions to remove difficulties for production and business and promote the
disbursement of public investment and ensure social order during the
pandemic. However, the
banking sector had not been supported by partners to reduce fees, it said. It said that
the SMS charges which telecommunications businesses were applying to banks
were 2-3 times higher than those for individuals. Accordingly,
MobiFone and VinaPhone were charging VND820 (US$0.035) per SMS for financial
transactions and VND500 for ads and customer care messages. Viettel’s
fee was VND785 per SMS for financial transactions and VND500 for others. Meanwhile,
charges for SMS between individuals were around VND250-300 each. The
association added that the current SMS charges were too high, adding it was
necessary to lower them to encourage the use of cashless payments. The
association said that SMS banking fees collected by banks were currently low
and only collected once per month, ranging from VND5,500 to VND11,000 per
month. Many banks
were adopting free policies to increase technology utilities for customers
and accelerate the conversion to online transactions, it said. Each money
transfer or payment transaction needs to send at least two messages to
customers. Each
customer has 15-20 transactions per month on average, equivalent to 25-30
messages per month, worth about VND20,000-25,000 per month. Can Van Luc,
chief economist of BIDV, estimated banks had to pay several hundred billion
Vietnamese dong of SMS fees each year for telecommunications operators. Specifically,
the value is estimated at about VND400 billion at BIDV, VND200 billion at
VietinBank, VND300 billion at Agribank and VND400 billion at VCB. Vietnamese dragon fruit enjoys advantages in international
market Vietnamese
dragon fruit continues to enjoy advantages in international markets, with the
diversification of dragon fruit products being considered the right direction
to expand consumption channels, whilst developing markets and brands. In the
nation, dragon fruit is classified as a key export fruit product which rakes
in billions of US$ each year. The largest consumers of Vietnamese dragon
fruit are China, Thailand, and Indonesia. In addition,
Vietnamese dragon fruit has also been exported to many other countries
globally, such as India, Australia, New Zealand, Japan, the EU, and Chile. Nguyen Tuan
Thanh, director of Long An province’s Department of Industry and Trade,
revealed that the southern province has been developing sustainable dragon
fruit cultivation areas and is in the process of applying high-tech solutions
to agricultural production. Apart from
red and white-flesh dragon fruit, the province has also developed varieties
of purple, pink, and yellow flesh-dragon fruit with high nutritional
composition, Thanh said. He added
that Chau Thanh dragon fruit has been granted a certificate of geographical
indication registration by the National Office of Intellectual Property.
Indeed, the Tam Vu dragon fruit trademark is protected in five countries,
including the United States, France, Japan, Singapore, and China. Meanwhile,
Binh Thuan province is also home 33,750 hectares of dragon fruit growing
areas, of which 11,936 hectares and 517 hectares have now been certified by
VietGAP and GlobalGAP standards, said Bien Tan Tai, deputy director of Binh
Thuan Department of Industry and Trade. Vu Ba Phu,
director of the Vietnam Trade Promotion Agency (Vietrade), said Vietnamese
dragon fruit makes up large market shares in Asia, Europe, and the US, with
the product being consumed by many Europeans and Asian Americans. However,
Vietnamese dragon fruit is currently facing increasing competition from some
other regional suppliers from Taiwan (China), Thailand, and Malaysia, Phu
noted. He also
pointed out that dragon fruit exports have tended to encounter numerous
difficulties in recent times due to the complicated nature of the COVID-19
pandemic, China’s strict control over farm produce at border gates, and high
logistical costs. Nguyen Phu
Hoa, trade counselor of the Vietnam Trade Office in Australia, revealed that
the office has deployed several schemes aimed at supporting businesses in
introducing their products in the Australian market. Whilst growers and
businesses must pay attention to consumer tastes and market requirements to
make further inroads into the demanding market. Ta Duc Minh,
trade counselor of the Vietnam Trade Office in Japan, has advised local firms
to take advantage of tax incentives from FTAs, including the Vietnam-Japan
Economic Partnership Agreement (VJEPA), ASEAN-Japan Comprehensive Economic
Partnership Agreement (AJCEP), and the Comprehensive and Progressive
Agreement for Trans-Pacific Partnership (CPTPP). This should be done while
focusing on the application of post-harvest technology in order improve
product quality, thereby meeting the distinct tastes of each target customer
group. Ventilator makers ramp up affordable development The
continuing task of trying to shut down COVID-19 outbreaks and save lives has
brought to the forefront the critical need for ventilators to provide
treatment for patients. In its
ventilator manufacturing facility in Ireland, Medtronic has increased the
number of employees dedicated to manufacturing – including transferring staff
from other Medtronic sites to support ramp up activities. Medtronic has also
introduced new shift patterns to bring the plant to 24/7 operation. In an
open-licence initiative, Medtronic has published design specifications for
its PB560 ventilator publicly, providing manufacturers around the world the
ability to rapidly accelerate production. The design specifications have thus
far been downloaded over 225,000 times. “We are
committed to getting more ventilators into the market and to the right
locations worldwide, to help the doctors and patients battling COVID-19,
including here in Vietnam,” said Verhulst. Meanwhile,
Tran Ngoc Phuc, the Vietnamese founder of medical equipment maker Metran Co.,
has teamed up with Vietnamese partners to transfer technology to produce
ventilators here. Metran Vietnam Co., Ltd, a subsidiary of Metran, is
operating a factory in Vietnam-Singapore Industrial Park II in the southern
province of Binh Duong to make artificial ventilators. According to
Phuc, the company has developed a slimmed-down ventilator that is more
affordable than conventional models. He hoped that producing simple and
low-cost devices in large quantities will help save countless lives. Since the
outbreak of the pandemic last year, Van Thinh Phat Holding Group and Van Lang
University have signed a contract with Metran to provide finance for
manufacturing 2,000 ventilators. As a result, Metran ventilators have been
mass-produced to save the lives of many patients. Meanwhile,
Vingroup has jumped on the bandwagon by producing the Vsmart VFS-510 invasive
ventilator. Specifically, Vingroup has flexibly altered its business and
production strategies to prioritise ventilator manufacturing from March 2020,
leveraging inherent industrial and technological strengths as well as
advanced production lines from its subsidiaries and research institutes. Vsmart
ventilators have been put into mass production and have been approved by the
Vietnamese Ministry of Health as meeting all criteria for quality, safety,
and operability. Nguyen Tu
Quang, CEO of local technology corporation BKAV, also announced that the
company has successfully produced high-flow nasal oxygen therapy devices for
COVID-19 treatment. It took BKAV nearly a year to research and develop both
the simple and advanced versions of the devices. “More people have contacted
the Delta variant in Vietnam. Thus, we have taken quick action to ensure the
supply of ventilators,” he said. Hua Phu
Doan, vice president and secretary-general of the Ho Chi Minh City Medical
Equipment Association told VIR, “Ho Chi Minh City has developed more field
hospitals amidst the spike in coronavirus patients. Each hospital has about
500 beds equipped with ventilators. As of present, companies have supplied
ventilators in a timely manner to support the city and neighbouring provinces
like Binh Duong and Dong Nai in developing field hospitals.” Doan added
that the majority of ventilators are imported. “We hope that custom
procedures will be relaxed to facilitate the import of ventilators into
Vietnam. This will help treat critically ill patients and help them recover
faster,” he added. Ventilators
are vital medical equipment in COVID-19 treatment so a ventilator
coordination group was established on August 2 to facilitate treatment. The
group will review and keep track of the number and types of ventilators
available at hospitals nationwide as well as the hospitals’ ventilator
demands. It is also engaged in distribution of the ventilators and nasal
oxygen devices for COVID-19 patients as well as training medical staff on
taking care of the machines. Likewise,
Medtronic has been hosting virtual webinar series led by medical experts on
mechanical ventilators. The series has attracted nearly 10,000 frontline
doctors in Vietnam to participate, learn, and share their experiences and
best practices. Medtronic has also hosted dozens of virtual physician forums
and medical education programmes to help physicians of various specialities
navigate the challenges of the pandemic. “It is
important to recognise that Vietnam will continue to grow and, in fact, it is
one of the fastest-growing markets for Medtronic in Asia-Pacific. We are
committed to serving our partners and patients here,” Verhulst said. EuroCham expects to raise US$500,000 to support Viet Nam’s
COVID-19 fight The European
Chamber of Commerce (EuroCham) expected to raise US$500,000 to support Viet
Nam’s COVID-19 fight through an ambitious fundraising campaign. Just ten
days after the “Breathe Again” campaign was launched on August 17,
individuals and businesses committed at least US$150,000. With cases
continuing to rise and healthcare professionals working around the clock to
treat patients, EuroCham is encouraging its members to donate to a new fund
which will be used to procure much-needed medical equipment for Viet Nam’s
hard-pressed hospitals. All funds
donated to the “Breathe Again” campaign will be used to purchase European
medical devices and equipment for hospitals in Viet Nam’s hardest-hit areas.
EuroCham will work with the health authorities to make sure that the
equipment goes to where it is needed and will have the greatest impact. The
chamber will also be flexible, working with donors to ensure that wherever
possible their donation goes to a particular province or community. Agriculture groups open up to online training courses Many farmers
and agribusiness firms have come around to utilising training courses via
livestreams or agriculture apps to promote the consumption of their products
in the face of extended social distancing measures. Because of
inexperience and lack of training, the revenues of MD Queens JSC,
specialising in the distribution of celastrus hindsii tea, is only one-third
of what it was before shifting to an online business. General
director Trinh Minh Thu said that for many years MD Queens clung to a traditional
business model. Its products are often displayed directly at “One Commune,
One Product” (OCOP) stores and points of sale in Hanoi and neighbouring
provinces and cities, so it is difficult to ramp up the online sales mindset. “I
eventually did sign up for an online business course, but the cost is quite
high. The cheapest course I could find still costs around VND10 million
($435),” Thu said. The demand
for online sales courses to help promote and sell agricultural goods has
increased in the past two years, especially with the rise of the
livestreaming format. To accompany
that, in June a programme to deal with the subject was jointly held by the
Ministry of Agriculture and Rural Development, the Central Committee of the
Vietnam Women’s Union, and the Central Committee of the Vietnam Farmers’
Union. They, along with some famous artists, came together with the purpose
of boosting consumption of agricultural products to help farmers in
localities affected by the COVID-19, such as the northern province of Bac
Giang. Hundreds of
tonnes of agricultural products were sold in just a few livestream sessions,
which has become the motivation for many businesses and individuals selling
agricultural products to come online and utilise livestreams to be equipped
with new business skills and solutions at a time when more than 20 provinces
and cities in Vietnam are extending the social distancing campaign. However, not
all businesses and sellers can afford these expensive courses. Therefore,
free online sales training classes for farmers and small agricultural
business households have been introduced and have already attracted a large
number of learners. These
classes will provide skills in video recording and product broadcasting, and
offer full control of video content and product branding on social networks. At the last
lesson, the trainer will show each learner’s livestream programme for
comment. Graduated learners also perform livestreams to exchange and share
their experiences with their peers. According to
Nguyen Trung Thanh, founder of the ASEAN Digital Conversion Research
Institute, over 90 per cent of learners have overcome their initial
hesitances to take a video or appear on livestreams. Over the
past two months, the institute has also coordinated with the Hanoi
Coordination Office for New-style Rural Area Building to organise a free
online sales training course for farmers and small businesses to promote
online consumption of agricultural products, especially OCOP products and
regional specialities. “We are also
implementing the model of an internal exchange market so that sellers can
exchange and sell goods in the digital space in lessons through online
meetings,” Thanh said. Meanwhile,
after more than a year of gaining online sales experience, the general
director of MD Queens has also now imparted online business experience to a
group of over 2,500 students in provinces and cities across the country. Thu said, “I
am building a free online sales training series for my team members to both
create trust and build a brand, and promote the high-quality products of MD
Queens to the community.” According to
her, in the past, mainly young people preferred online shopping, but now many
middle-aged and elderly people from urban to rural areas are also
participating in online shopping platforms, making the virtual market more
vibrant and creating favourable conditions for people, organisations, and
businesses to have a more convenient and efficient shopping channel. In addition
to actively selling agricultural products through livestreams, farmers and
businesses are also supported to sell through apps on the App Store, Google
Play, and Zalo. Elsewhere,
many stalls have been set up to promote consumption of farming products on
online channels in Hanoi and Ho Chi Minh City, such as a stall from the Young
Businesspeople Association of Ho Chi Minh City to reduce the backlog of
agricultural products caused by supply chain issues due to COVID-19. Another form
of applying technology that also appears and may become a new trend in the
future is the self-checkout store model. In Ho Chi Minh City, such a
supermarket has started operating in Co Giang ward of District 1 since the
end of August and is expected to be deployed until the end of the social
distancing period. In Hanoi, the
supermarket system of Okono Vietnam Co.,Ltd. in South Tu Liem district also
opened a system of self-service stores. The store automatically operates
through the camera system, where the cashier will monitor online and guide
customers to pay for the order. Agricultural products will be packed at the
list price, and the buyer chooses and pays for him or herself. This model
is based on the honesty and self-discipline of customers. During the time of
social distancing, the store also offers a buy now, pay later policy for
people with difficult circumstances. Nguyen Hoang
Kiet, manager of a self-checkout store in South Tu Liem district, said that
the store mainly helps people to buy goods conveniently and ensure social
distancing to prevent the spread of the coronavirus. People freely choose the
products they need and all products are priced at VND10,000 (44 US cents). Vietnam's dragon fruit exports facing difficulties amid
prolonged pandemic As the
Covid-19 pandemic hit hard, lower volumes exported as reliance on China
continues to bite amid prolonged pandemic; Vietnam's dragon fruit exports are
currently facing difficulties; therefore, the country must find other
potential alternative markets. Dragon
fruits are classified as a key export fruit product and often in the groups
of commodities in Vietnam registered export sales of more than US$1 billion
each. Despite the
fact Vietnamese dragon fruit has access to several global markets, including
China, Thailand and Indonesia, and more, China still accounts for 80 percent
of overall exports, according to Vu Ba Phu, director-general of the Trade
Promotion Agency under the Ministry of Industry and Trade. However, the
Asia Africa Market Department under the Ministry of Industry and Trade said
that Vietnam's dragon fruit and fresh fruit exports to China are currently
facing difficulties due to the tightened customs clearance and quarantine at
some border gates between two countries due to the Covid-19 epidemic. But, many
experts believe that Vietnam's dragon fruit and fresh fruit exports have been
facing difficulties not only at present but prior also because Chinese
farmers have planted dragon fruit trees with a total area of up to 35,555
hectares. Mr. Phu
fretted Chinese farmers will apply technology to increase productivity
bringing competitive pressure to Vietnamese fruit not only in China but the
world’s market. According to
statistics from China Customs, in the first five months of the year, China's
imports of dragon fruit decreased by 21.6 percent over the same period in
2020. Vietnam’s imported dragon fruit decreased by 21.6 percent in volume and
21.1 percent in value. This shows that China has been reducing imports of
agricultural products that they can cultivate. Experts said
it is necessary to quickly find potential markets in the EU, North America,
Japan, Australia, the Middle East to help businesses build their branding and
promote export for the long-term plan. In fact, in recent years, Vietnamese
dragon fruits have been also exported to India, New Zealand, Japan, Chile in
addition to Chine. Lately, dragon fruit has been sold to Australia, India,
Pakistan. After the
Vietnam Trade Office in Australia has organized a Vietnamese dragon fruit
week in large Australian cities from July to October to promote the export of
the fruit, it said that the import demand for dragon fruits of distribution
partners in this country is quite high. Currently,
each dragon fruit is sold at Australia's leading supermarket chain Coles at
US$4.9 or VND80,000 while it fetches AUD9 – AUD 15 per kilogram at
supermarket chains such as MCQ and supermarkets, shops in Melbourne,
Adelaide, Sydney of Australia. According to
Mr. Pham Sanh Chau, Vietnamese Ambassador to India, the market is very
potential for dragon fruit and fresh fruit of Vietnam. India has a population
of 1.4 billion, of which 60 percent are vegetarians. Their food is mainly
vegetables. On average, each Indian person has 3 kilograms of fruit a month;
thereby, India will consume about 48 million tons of fruits each year. However, Mr.
Phu said, Vietnamese dragon fruit is facing fierce competition with other
suppliers in Taiwan, Thailand, Malaysia. To dominate the market, Vietnam
needs to improve the quality of the fruit and do not expand the cultivation
area. Mr. Phu shared a lot of foreign importers are interested in developing
a supply of high-quality dragon fruit from Vietnam at online trade events
over the past time. In addition
to fresh dragon fruit, Vietnam ought to diversify products such as dried
dragon fruit, dried fruit, syrup juice, dragon fruit snack, dragon fruit
wine, dragon fruit ice cream, dragon fish cake, bread dragon fruit for
domestic consumption, and export. In particular, dragon fruit powder (also
known as pitahaya powder) with nutritional content is considered a
"tropical superfood" for export. Diversifying value-added products
from dragon fruit is a good way to increase consumption and develop markets
and product brands. SHTP-based enterprises only resume operations when ensuring
Covid-19 prevention The Office
of the People's Committee of Ho Chi Minh City has just announced the
conclusion of Vice-Chairman Duong Anh Duc on the activities of enterprises in
the Saigon Hi-Tech Park (SHTP) in Thu Duc City. Accordingly,
the Management Board of the SHTP is required to coordinate with the People's
Committee of Thu Duc City, the Department of Health, and the HCMC Public
Security to review, make a minute, and propose measures to handle violations
leading to the suspended operations of Nidec Sankyo Company. The
Management Board of the SHTP needs to focus on implementing measures to
maintain production activities and create conditions for qualified
enterprises to continue operations without disrupting the production chain
following one of four safe production methods. Enterprises
that fail to meet the conditions must suspend their operations, fix
shortcomings, reassess, and only resume operations if they have met the
criteria. The Management Board of the SHTP should check the warehouse and
factory areas to assist enterprises in carrying out the three-on-site
production method. Besides, the
Management Board of the SHTP must coordinate with the authorities to deploy a
field hospital for Covid-19 treatment at the Labor Culture House of the SHTP
to ensure the needs to treat and care Covid-19 patients in the area and
support Thu Duc City. Workshop highlights efficiency of Vietnam’s consistent macro
policies Vietnam’s
economy has achieved stable growth thanks to consistent macro policies,
contributing to promoting the role of the private sector, heard a workshop on
Vietnam's economic situation and stock market held by Dragon Capital company
on September 1 in London. Addressing
the event, Ambassador Nguyen Hoang Long affirmed the Vietnamese Government’s
determination to renovate and open its economy and speed up the privatisation
of state-owned enterprises. With the
goal of achieving a per capita income of 4,500 USD by 2025 and 7,500-8,000
USD by 2030, Vietnam will need to post economic growth of 6.5-7 percent per
year, Long said, adding that this is a big challenge, especially in the
context of the crisis caused by the COVID-19 pandemic. According to
him, Vietnam's transition to a high-quality economic growth model, and its
selective attraction of investment to high technology and "green"
growth is a good opportunity for British investors in particular and foreign
ones in general. Dragon
Capital Chairman Dominic Scriven said that Vietnam’s advantages to attract
foreign investment include good human resources, laws and policies favourable
to foreign investment, a highly reliable investment environment and stable
growth since Vietnam began implementing the Doi Moi (Renewal) 35 years ago. He pointed
out that the Vietnamese government has reasonable support packages to help
people in localities ease difficulties caused by the pandemic, emphasising
that this will directly support the resilience of the economy after the
pandemic. Founded in
Vietnam in 1994 with a total investment of 16 million USD, Dragon Capital is
currently the oldest independent asset manager in the country with assets
totaling 2.9 billion USD (as of December 31, 2019)./. Vietnam a bright spot for UK investors: Ambassador Vietnam is
still a bright spot for foreign businesses, Ambassador to the UK Nguyen Hoang
Long has affirmed with representatives of British business circle He also
presented the highlights of the Vietnam-UK strategic relationship, especially
the positive impacts on trade and investment brought by the Free Trade
Agreement between the two countries on bilateral relations, and Vietnam's
role in the global supply chain. On this
occasion, the ambassador called on businesses, investors and individuals to
share and help Vietnam with medical equipment, medicines and vaccines to deal
with the pandemic in the current difficult period. He expressed
his believe that Vietnam will quickly control the pandemic, further boosting
investors' confidence in the market. Participants
appreciated the information provided and said they look forward to updates in
the future to further promote relations between the two countries, especially
in the fields of trade, investment, education and tourism./.  Moody's extends upgrade review for VPBank and FE Credit Moody's
Investors Service has extended its review for upgrade on all long-term
ratings and assessments of Vietnam Prosperity Joint Stock Commercial Bank
(VPBank) and its subsidiary VPBank Finance Company Limited (FE Credit). The rating
review was initiated on May 12 following VPBank's announcement on April 28
that it had concluded an agreement with Sumitomo Mitsui Financial Group, Inc.
(SMFG, A1 stable) to sell a 49 per cent equity stake in FE Credit. The
transaction is expected to close by the end of 2021. The planned sale will be
to SMFG's consolidated subsidiary, SMBC Consumer Finance Co., Ltd. (SMBCCF). Moody's is
extending the review process because the transaction is pending external
approvals and has therefore not yet been completed. Upon the completion of
the transaction, it expects the standalone credit strengths of VPBank and FE
Credit could improve, thereby placing upward pressure on their ratings and
assessments. On a
pro-forma basis, VPBank's capital, as measured by tangible common equity as a
percentage of risk-weighted assets, will increase to around 15 per cent from
10 per cent at the end of 2020. The bank has indicated that it will retain
the proceeds from the stake sale for use on new organic growth and investment
opportunities. It is
expected that FE Credit to benefit from funding, technology and risk
management support from SMBCCF, which has a long history in consumer finance
in parts of Asia. Currently, Moody's incorporates a very high probability of
affiliate support for FE Credit from VP Bank in times of need. Moody's will
reevaluate the affiliate support assumptions for FE Credit, considering the
large shareholdings of SMFG and VPBank in FE Credit, as well as SMFG's
involvement in setting the company's strategic direction. Moody's
could upgrade VPBank's ratings if the transaction is approved by the relevant
authorities, and if the bank's capital improves as anticipated. If the
transaction is not approved, Moody's will confirm VPBank's current ratings. Moody's
could also upgrade FE Credit's rating if the transaction is approved by the
relevant authorities, and if the company's standalone credit strength
improves as anticipated. A strong probability of support from the company's
shareholders will also be positive for the ratings. If the transaction is not
approved, Moody's will confirm FE Credit's current ratings and revise the
outlook to stable. Online trade promotion - Leverage to boost connectivity, improve
brands Online trade
promotion is currently considered as an effective solution for businesses to
maintain contacts with their export markets and also a tool to learn about
market trends, developments and demand. The outbreak
of COVID-19 in many countries has forced Vietnam’s import and export markets
to take strong measures to contain the spread of the pandemic. This has
hindered the organisation of traditional trade promotion activities of
enterprises. Therefore, a
change in the work is a must to create a leverage for industries and
businesses to connect with and build brands in their export markets to
overcome the pandemic. In fact, a
shift from offline fairs to online promotion has helped increase export
turnover and exploit new markets in the new situation. According to
the Ministry of Industry and Trade, Vietnam’s total trade turnover in July is
estimated at 55.7 billion USD, a month-on-month rise of 1.5 percent. Demand for
imports remains high, as countries are speeding up vaccination against
COVID-19 and reopening their doors, thus helping raise the demand for
textiles, footwear, furniture and electronics from Vietnam. In addition,
free trade agreements are being implemented in a more comprehensive and
effective manner, and expected to continue promoting Vietnam's exports. Therefore,
online trade connectivity is a golden key for the goods of Vietnamese
enterprises to reach out to the world. General
Director of the Hanoi Trading Corporation Vu Thanh Son said, with the cost
equal to one tenth of that of face-to-face contact, online connectivity is
currently a solution for businesses to maintain contacts with their export
markets, as well as a tool to learn about market trends, developments and
needs. Moreover,
enterprises can do marketing globally, access information and conduct
transactions with customers around the clock. However,
experts advised enterprises not to rely only on state promotion programmes,
but actively trade and connect online with partners around the world through
the use of e-commerce platforms or social networks./. Vietnamese stock market will be back to uptrend momentum In its
market strategy note for September, VNDirect Securities Corporation forecasts
the Vietnamese stock market to regain its upward momentum with daily COVID-19
cases peaking out. Market
valuation is currently attractive, VNDirect reported, and the market will be
supported by increasing retail participation and abundant cashflow shifting
away from deposits amid low interest rates. Positive
factors for September include that infections likely peaked in late August
and will slow down thanks to drastic movement restrictions and rising
vaccination. Additionally, liquidity rebounded strongly in August, suggesting
that investors are willing to jump into the stock market when the opportunity
arises. Ho Chi Minh
City has imposed stricter movement controls since August 1 with nearly all
non-essential businesses closed, while factories operate with reduced staff
on-site. At the same time, Hanoi, Danang, and other southern provinces have
also banned public transport and intercity bus services, and closed all
non-essential businesses. So far
Vietnam has fully vaccinated around 2.5 per cent of its population, and
partially vaccinated around 17.4 per cent. The country expects to receive an
additional 80-90 million doses by the end of 2021, lifting the vaccination
rate to 50-60 per cent. Additionally, the "Made in Vietnam Nanocovax
vaccine is nearing the end of phase 3 clinical trials. The
securities firm expected the VN-Index to recover in September and fluctuate
within the 1,280-1,380 points range. “Investors could raise the proportion of
stocks in their portfolios if the index drops to the support zone. We prefer
leading companies in real estate, including both residential and industrial
park real estate, building materials, logistics, port, and export-oriented
companies," VNDirect said. For 2022,
VNDirect expects the earnings per share growth on the Ho Chi Minh City Stock
Exchange (HSX) to grow 21 per cent on-year. The index for 2021 is expected to
drop to 26 per cent (instead of the previous forecast of 30 per cent) due to
heavy disruptions from the fourth wave of the pandemic in the second half. The market
witnessed turbulence in August as the VN-Index bounced back to 1,370 points
then corrected and closed the month at 1,328, up 1.4 per cent month-to-date
on August 30. Investor sentiment remains weak as longer and stricter
nationwide lockdown protocols have been adopted. Liquidity
rebounded strongly in August as market valuation turned more attractive.
Total trading transactions of three main bourses rose 15.3 per cent on-month
to VND30.2 trillion ($1.3 billion) per day, up 363.2 per cent on-year. In August,
the money ran into small and mid-caps. The liquidity of small caps surged
90.1 per cent on-month, resulting in an impressive increase of 10.6 per cent
month-to-date for the VNSML Index. The liquidity of mid-caps rose 69.9 per
cent on-month to bring the VNMID Index up 0.4 per cent month-to-date. On the
other hand, the daily trading volume for large caps dropped 4.1 per cent
on-month, leading to a 2.4 per cent month-to-date decline for the VN30 Index. Source:
VNA/VNS/VOV/VIR/SGT/SGGP/Nhan Dan/Hanoitimes |
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