VIETNAM BUSINESS NEWS NOVEMBER 916:20 Domestic demand for gasoline to recover in fourth quarter
The demand for gasoline in the domestic market in the fourth quarter of this year will recover compared to the previous quarters but will be lower than the same period last year, the Viet Nam Oil and Gas Group (PVN) forecast. Accordingly, gasoline consumption demand is expected to recover, but still decrease by 30 per cent over the same period last year; demand for diesel oil will recover but still decline by about 16 per cent year-on-year. PVN also said that in the fourth quarter of this year, international organisations such as the US Energy Information Administration (EIA), Reuters Thompson forecasted that the world average oil price would be around US$75 per barrel. Market demand will be better in the last months of the year and the demand shortfall could be at 1 million barrels per day. The group said that the COVID-19 pandemic has strongly affected domestic gasoline consumption in the nine months of the year. The amount of traffic on the road decreased by 60 per cent compared to the normal level in Viet Nam from May to September. In the Mekong Delta region, where the market accounts for about 20 per cent of the total petroleum consumption of the country, fell by 80 per cent during the social distancing period. Therefore, the national petroleum inventories were at a high level at the end of July and the beginning of August; in which the inventory of Nghi Son Refinery is at 80-90 per cent of both gasoline and diesel oil, equivalent to about 260,000 – 280,000sq.m, and over 70 per cent for 95 petrol at Dung Quat Oil Refinery. Also in July and August, the market's discount remained at a high level when it increased from VND1,500 litre to about VND2,000 per litre, showing that sales are facing a lot of difficulties. For efficient production and business operations, PVN continues to build a synchronous data system from upstream, midstream, downstream at home and abroad as well as along the value chain to be able to ensure input for market forecasts. In addition, PVN has also increased the use and application of modern tools for forecasting; built and completed a team of in-depth forecasters for each field; strengthened information connection with forecasting organisations, domestic and foreign energy companies. Especially, from these baseline forecasts, PVN will develop oil price scenarios and mechanisms to implement these scenarios, especially in the short term to actively exploit oil and gas most effectively. Cam Ranh to reopen to int’l travelers this month Cam Ranh City of Khanh Hoa Province will pilot welcoming back international tourists with Covid-19 vaccine passports starting this month, according to the province’s recently approved plan to attract tourists at home and abroad to the south-central coastal province. Under the plan, the province would open to fully vaccinated international tourists in two phases. In the first phase, from this month to December 31, it would attract tourists to resorts and hotels at the Northern Cam Ranh peninsula tourist area. If the first phase sees good results, the province will go ahead with the second phase from January 1 to February 31. It would continue to choose lodging establishments at the Northern Cam Ranh peninsula tourist area and expand the pilot program in the subsequent phases depending on the Covid situation. Tourists under the pilot plan must have a vaccine passport and arrive in the province on package tours operated by charter flights under the travel bubble formula. They will be welcomed to the designated lodging facilities at the Northern Cam Ranh peninsula tourist area and at other places that meet the tourism authority’s requirements. The provincial tourism sector will focus on the markets in Japan, South Korea, Taiwan, mainland China, Hong Kong, North America and Europe. Up to now, 12 luxury hotels and resorts at the Northern Cam Ranh peninsula tourist area have met Covid safety requirements and are ready to welcome back foreign tourists. The provincial tourism authority also planned to propose that the provincial government allow tourists taking the package tours to visit tourist attractions such as VinWonders Nha Trang, Hon Tam and Ba Ho. Khanh Hoa, Quang Ninh, Kien Giang, Danang, and Quang Nam are the five localities that received the green light from the government to open to vaccine passport holders. Businesses upbeat about Vietnam's economic outlook: EuroCham Business leaders are more optimistic about Vietnam’s business environment following the ending of lockdowns and the ‘new normal’ of post-pandemic trade and investment. The growth in positive sentiment was revealed in the Quarter 3 Business Climate Index (“BCI”), a regular barometer of the perceptions of business leaders from the European Chamber of Commerce (EuroCham). The BCI saw a small but encouraging uptick to reach 18.3 points. That represents a three-point rise from its historic low of 15 points during the depths of the fourth wave outbreak in September Though the Index remains low, the BCI uncovered improving perceptions about Vietnam’s economic outlook. Just under half of business leaders and investors (49%) now predict a stabilizing and improving economic outlook next quarter, compared to less than a fifth (19%) in Quarter 2. However, business leaders remain cautious concerning their own recruitment, investment, and profit projections. Companies are taking a ‘wait-and-see’ approach to staffing, with around one-fifth planning to hire more workers in the next three months - a figure consistent with the last quarter. Likewise, the proportion of business leaders planning to maintain or increase their investment in Quarter 4 (69%) is just two points higher than in Quarter 3, with revenue projections seeing a similar increase. Meanwhile, around half of companies are still operating at reduced levels compared to before the pandemic, while prolonged travel restrictions and staff shortages continue to affect two-thirds of companies. This indicates that there are still issues to be addressed if Vietnam is to reach its full potential in post-pandemic trade and investment. Alain Cany, Chairman of EuroCham, said, “Though the BCI remains low in historic terms, the most important thing is that the Index is now moving in the right direction. With the pandemic now back under control in Vietnam, the confidence and optimism of European business leaders should continue to climb as companies get back to normal and consumer confidence rises.” “However, despite this positive progress, business leaders are still encountering challenges in their commercial operations. With two-thirds of companies suffering from the impacts of travel restrictions and staff shortages, this highlights the urgent need to speed up the entrance of vaccinated experts and accelerate the vaccination of domestic workers.” Commenting on the data, CEO of YouGov Vietnam Thue Quist Thomasen, added, “Beneath the headline BCI figure, some interesting trends are emerging. While confidence in the prospects for Vietnam’s business environment has seen a small but encouraging rise, companies are a little more hesitant when it comes to their own operations.” “This suggests that business leaders are waiting to see how conditions and regulations in the ‘new normal’ unfold before making significant commitments in terms of investment projects or recruitment plans. Nevertheless, the latest data should give us grounds for cautious optimism in the months ahead,” he noted. French expert pins high hope on foreign companies’ prospects in Vietnam Former French Ambassador to Vietnam Jean-Noël Poirier has highlighted the significance of Vietnamese Prime Minister Pham Minh Chinh’s freshly-ended visit to France, saying that it attracted French businesses’ special interest. In an interview granted to the Vietnam News Agency (VNA)’s correspondent in France, Poirier, who is now working as a foreign investment consultant in Vietnam and Southeast Asia, affirmed that PM Chinh’s trip was a great success and it achieved the set targets. The two sides expressed their desire to revive cooperation activities between ministries and sectors as well as between businesses, he noted. The French expert said after this visit by the Vietnamese Government leader, many French companies have begun to consider the possibility of returning to markets abroad and heading to the Southeast Asian countries, especially Vietnam, which promises a prosperous future and can bring them many cooperation opportunities. Vietnam’s political and social situation has been always stable, he said, noting that this is the reason why foreign businesses will not have to bear much risk when investing in Vietnam. However, he mentioned the cultural obstacle that the two sides need to solve, saying that to address cultural differences for better mutual understanding, French and Vietnamese partners should be open and show goodwill to cooperate with each other. The expert also expressed his belief that there will be more Vietnamese investors investing in France in the future. According to Poirier, the Indo-Pacific region is increasingly attracting attention from big countries in the world, including France, because this is a strategic area for international trade. He underlined the need to ensure freedom of navigation in the region because it is where most of global maritime trade activities take place./. Coffee exports to enjoy robust growth ahead in fourth quarter With social distancing measures being relaxed coupled with the impending arrival of the harvest season, the local coffee industry is anticipated to enjoy strong breakthroughs in terms of exports in the final quarter of the year. During the past10 months of the year, the country shipped 1.27 million tonnes of coffee worth US$2.42 billion abroad, a drop of 5.1% in volume but a rise of 4.1% in value against the same period from last year. Despite being heavily impacted by the fourth wave of the COVID-19 pandemic, Vietnamese coffee export value in the third quarter grew positively in comparison to the same period in 2020 thanks to high export prices. Statistics compiled from the General Department of Vietnam Customs indicate that Vietnamese coffee exports in the third quarter reached 334,300 tonnes, worth US$669.82 million, a drop of 14.4% in volume and 9.3% in value compared to the second quarter of the year. Despite this, the figure represented a rise of 7.9% in volume and 18% in value against the third quarter of last year. October alone saw the nation export 90,000 tonnes of coffee worth US$193 million, representing a decrease of 2.2% in volume but an increase of 13.7% in value compared to October last year, according to data released by the Ministry of Industry and Trade. Vietnamese coffee exports moving forward are projected to enjoy a positive outlook as coffee growers enter a new harvest season. Furthermore, pandemic containments efforts across the country are anticipated to help facilitate production and boost consumption activities. Moreover, coffee export prices are likely to pick up due to concerns about supply source shortages, while free trade agreements (FTAs) are set to help boost Vietnamese coffee exports in the near future. Shares finish higher, bolstered by rubber and securities stocks Viet Nam's stock market had a good start on Monday, bolstered by strong gains in many stock groups including securities and rubber production. The market benchmark VN-Index on the Ho Chi Minh Stock Exchange (HoSE) gained 0.76 per cent to end at 1,467.57 points. The market's liquidity was positive with 288 stocks rising, while 174 slid. Investors poured over VND31.4 trillion (US$1.38 billion) into the southern exchange, equivalent to a trading volume of 1 billion shares. The 30 biggest stocks tracker VN30-Index rose 0.25 per cent, to end at 1,535.66 points. Seventeen in the VN30 basket climbed, while 12 decreased and one stayed flat. Gainers in the VN-30 group included SSI Securities Inc (SSI) with a gain of over 3 per cent, Masan Group (MSN) up by nearly 3 per cent. Vinamilk (VNM), The Viet Nam Rubber Group (GVR), Viet Nam National Petroleum Group (Petrolimex, PLX), Vietjet (VJC), HDBank (HDB) and Sabeco (SAB) were among those that gained more than 1 per cent. On the other side, Vincom Retail (VRE) and VPBank (VPB) fell slightly more than 1 per cent. Rubber stocks attracted cash flow in the session, supporting the market's bullish sentiment. Gainers in the sector were Danang Rubber Joint Stock Company (DRC), The Southern Rubber Industry JSC (CSM) and Sao Vang Rubber Joint Stock Company (SRC), rising by 5.44 per cent, 3.37 per cent and 2.87 per cent, respectively. Securities stocks outperformed as there were no losers in the sector. Petrovietnam Securities Incorporated (PSI), Guotai Junan Securities (Vietnam) Corp (IVS), Viet Nam Bank For Industry & Trade Securities JSC (CTS) and VIX Securities Joint Stock Company (VIX) all hit the ceiling prices. Other notable gainers included SSI Securities Inc (SSI), increasing by more than 3 per cent, VNDirect Securities Co (VND) up 5 per cent, Viet Capital Inc (VCI), Saigon-Hanoi Securities Co (SHS) both advanced more than 1 per cent. “At the beginning of today, VN-Index gained more than 8 points with high liquidity. However, the profit-taking pressure at the high price area then made the index stay flat throughout the morning. In the afternoon session, the market struggled, finally closing up 11 points compared to the previous session,” said BIDV Securities Co. “Market breadth tilted to the positive side. Regarding the transactions of foreign investors, today they were net buyers on both HSX and HNX. The market trend may still maintain a positive movement as the cash flow is still supporting the market's uptrend,” it said. Foreign investors net bought VND504.32 billion on HOSE. They were net buyers on HNX with the value of VND9.57 billion. On the Ha Noi Stock Exchange (HNX), the HNX-Index gained 1.04 per cent to 432.10 points. During the trading session, more than 159.4 million shares were traded on HNX, worth nearly VND3.9 trillion. Aquatic exports surge by 47% throughout October Vietnamese fisheries exports in October soared by 47% to US$918 million compared to the previous month, a figure nearly equivalent to the same period from last year, according to statistics released on November 8 by the Vietnam Association of Seafood Exporters and Producers (VASEP). These figures show that seafood exports enjoyed a gradual recovery following a sharp decline for two consecutive months due to the country implementing social distancing measures to deal with the impact of the COVID-19 pandemic. Most notably, major seafood export items have increased significantly, including tuna, squid and octopus (up 18%), crabs (up 13%), and shrimp (up 1.6%). Despite this growth, tra fish (pangasius) exports endured a fall of 18% due to a shortage of raw materials, with production and processing activities being negatively impacted by the COVID-19 pandemic. October alone witnessed the strongest export growth, with the United States, the EU, the Republic of Korea, and Canada all seeing an increase of 31%, 9%, 20%, and 17%, respectively. In contrast, exports to China continued to experience a downward trajectory of 43%. During the 10-month period, Vietnamese seafood exports expanded by 2.4% to US$7.1 billion against the same period from last year, of which shrimp, pangasius, tuna, and squid products also saw growth. Other types of aquatic products also dropped by nearly 1%, while bivalve mollusc exports maintained a high growth rate of 39%. Among the country’s major seafood export markets, the US accounted for 24% of export turnover with nearly US$1.7 billion, an increase of 25%, followed by the Republic of Korea, Japan, China, and the EU. Binh Dinh Province attracts nearly $3.2 billion investment in ten months The central province of Binh Dinh remains a magnet for domestic and foreign investors despite the complicated development of the COVID-19 pandemic, according to the province’s Investment Promotion Centre. The province has so far attracted more than US$72.5 million in foreign direct investment and over VND71 trillion ($3.1 billion) in domestic investment. Specifically, over $40.34 million was injected into newly-licensed FDI projected while $32.23 million came into operating projects. Besides, foreign investors registered to pump over $17.14 million into some projects in the province. The provinces has attracted 76 projects with total capital of nearly VND43.5 trillion and increased investment for 12 others with a total sum of VND27.5 trillion. Investment capital in the province mostly poured into the industrial sector with 44 projects, accounting for 55.6 per cent of total projects. It was followed by real estate, construction and infrastructure with 31.6 per cent and trade, service and agricultural sector with 12.8 per cent. The province is carrying out administrative reforms to reduce the time to settle investment procedures from 32 days to 25 days. It is striving to increase investment in transport and economic infrastructure to become an attractive destination for investors, focusing on technology. Cement companies' profit poor in Q3 despite higher prices, better sales Although sales are positive, rising input costs are weighing on cement enterprises’ business results in the third quarter. In the first nine months of 2021, the whole cement industry exported 32,687 million tonnes of cement and clinker, with an export turnover of US$1.25 trillion, up 16.3 per cent year-on-year and 20.9 per cent, respectively, according to the Ministry of Industry and Trade. In August and September, Viet Nam exported 4 - 4.3 million tonnes of cement each month, a sharp increase compared to the volume of 3.5 million tonnes in July and and 2.77 million tonnes in June. The third quarter was also the peak period of the COVID-19 outbreak in the country. Luong Duc Long, General Secretary of the Viet Nam Cement Association (VNCA) said that cement exports rose sharply in the past two months because major export markets such as the European Union (EU), Canada, US and China have returned to normal operation. Therefore demand for cement increased, while product prices also inched higher. Currently, Viet Nam is fifth biggest cement producer in the world, after China, India, US and Russia. The rise in cement exports offset a decline of 5 per cent in domestic consumption in recent months as many provinces and cities implemented social distancing orders to prevent the pandemic. For the first nine months, cement consumption was unchanged over the same period last year at 45.58 million tonnes. With an advantage of having a long coastline and many ports, Vietnamese cement exports are growing positively, especially to China. Meanwhile China, the biggest consumer in the world, is facing an energy crisis, leading to production restrictions of some large power consuming industries such as steel and cement. VNDirect Securities Corporation said that steel and cement inventories in China are at the lowest level since the beginning of the year, while selling prices climb. China is experiencing a temporary shortage of construction material supplies and the trend will last at least until the end of the fourth quarter of 2021 as China’s energy crisis shows no sign of ending. With export momentum in the past nine months, the Ministry of Industry and Trade expected that the total export volume of cement and clinker will exceed 40 million tonnes this year. In the domestic market, consumption volume is forecast to increase sharply in the last quarter of the year, as construction projects resume after many months of closure or operating in moderation to ensure disease prevention. The end of the year is also the peak of the construction season, leading to an increase in cement consumption. In addition, as the Government pushes disbursement of public investment capital, the construction materials industries, including cement, will benefit. Cement is one of a few industries that still can maintain production and consumption during the outbreak of the pandemic. However the profit picture of enterprises in the industry is not so bright. Viet Nam Cement Industry Corporation (VICEM) said that its profit before tax in the third quarter only reached 3 per cent of the quarterly plan, equaling 2.4 per cent over last year. The parent company's profit decreased by 62 per cent year-on-year, as subsidiaries posted losses of nearly VND80 billion. Of which, in the last quarter business statement, Vicem But Son Cement JSC (BTS) reported a fall of 14.6 per cent to VND657.3 billion, resulting in a loss of VND7.6 billion. In the same period last year, it recorded a profit of VND12.4 billion. For the first nine months, its revenue was VND2.1 trillion, down 5.7 per cent, while profit after tax slid 47.2 per cent to nearly VND25.1 billion. Similarly, in the third quarter, Vicem Hai Van Cement JSC (HVX)’s revenue fell 5.9 per cent over last year to VND152.8 billion, while it lost VND1.2 billion. In the third quarter last year, it recorded a net profit of VND798.7 million. As of September 30, the company only made a profit of VND404.9 million, down 90 per cent over the same period last year. Ha Tien 1 Cement (HT1) announced its third quarter consolidated net revenue of VND1.04 trillion, down 48 per cent, with a loss of VND19.7 billion. This marked the first quarterly loss in the past seven years. In the third quarter of 2020, it made a profit of VND148.6 billion. For the first nine months of 2021, HT1 recorded net revenue of VND5.04 trillion and profit after tax of nearly VND316.7 billion, down 14.1 per cent and 45.8 per cent, respectively. Vietcombank Securities Company (VBSC) said that the country's clinker/cement export structure is 63 per cent/37 per cent, so the export value is not high. Therefore, the increase in cement exports doesn’t translate into higher profit. Meanwhile, the price of raw materials, fuel and input materials for cement production jumped sharply in recent years. The disruption of global production and supply chains amid the pandemic has pushed up prices of basic commodities. A coal industry analysis report of SSI Securities Company said that the global coal price has risen strongly compared to the domestic coal price, therefore, industries with a high ratio of imported coal like cement will suffer the most from higher production costs. Of the production cost structure of cement enterprises, the cost of coal accounts for about 30 per cent, while limestone and clay account for only 12 per cent, and additive costs are 5 per cent. Therefore, even though selling prices have risen since the beginning of the year, cement companies still reported losses, or reduced profits over the same period last year. State budget contribution of PetroVietnam expands by 21% of yearly plan The Vietnam Oil and Gas Group (PetroVietnam) contributed a total of VND75.4 trillion, equivalent of US$3.32 billion, to the State budget throughout the first 10 months of this year, an increase of 23% from the same period last year and a figure 21% higher than the yearly plan. During the reviewed period, the State-owned corporation exploited 9.09 million tonnes of crude oil, thereby exceeding the annual target by 12.4%. It has also moved to cut VND2.39 trillion in costs, equivalent to 80% of this year’s plan. The firm has so far donated a total of VND784.8 billion in order to help the country combat the impact of COVID-19, of which VND554.9 billion has been given to the COVID-19 vaccine fund. Furthermore, PetroVietnam has been focusing on developing oilfields BK-18A and BK-19, both of which are expected to be put into operation in the coming days. It has also been working around clock in order to soon launch Song Hau 1 and Thai Binh 2 thermal power plants, with turbine No.1 of the Song Hau 1 scheduled to come into operation this month. Tien Giang supports businesses resume production and trade Various measures are taken by the Mekong Delta province of Tien Giang to assist businesses to resume their production and business in response to Government's Resolution 128 on safe, flexible adaptation to and effective control of the COVID-19 pandemic. The resolution aims to restore production nationwide. According to Nguyen Nhat Truong, head of the Tien Giang Industrial Zone Management Board, the management board has cooperated with relevant agencies in guiding production plans which are suitable to each enterprise, ensuring that it comply with pandemic prevention and control regulations. In addition to providing necessary information on COVID-19 pandemic situation in the locality where employees reside, it also arranged staff joining with the local health sector in supervising the vaccination and dealing with outbreaks at industrial zones. Enterprises are required to carry out tests for their workers in accordance with rules of the Ministry of Health. They are asked to strictly follow pandemic prevention and control regulations. Employees living in pandemic areas of level 3 or 4 or those related with suspected COVID-19 cases shouldn’t be allowed to return to work. As many as 129 enterprises at the province’s IZs have so far restarted their production with 53,422 workers, Truong said. The province is home to four operating industrial parks, attracting 107 projects with a total investment capital of over 2.73 billion USD, creating jobs for over 91,000 workers. It also has five industrial clusters with the operation of 79 projects with a total investment capital of over 251 million USD, generating job for over 17,000 workers./. Nearly 96 percent of firms in HCM City's IPs resume operations Nearly 96 percent of enterprises at 17 processing and
industrial zones in Ho Chi Minh City have resumed operations after over one
month after social distancing measures were lifted. Businesses are currently recruiting more labourers, and many factories are stepping up operations to meet demand and handle orders of their partners at home and abroad, particularly those in the year-end months. The number of workers at the processing and industrial zones of the southern hub fully vaccinated against COVID-19 has reached 94.4 percent so far, showing that the city’s workforce has met requirements to bolster operations and production in the new normal./. Office market opens its doors to more flexible work models As Vietnam enters into a new normal, businesses are
reorganising and relocating their workforce accordingly, leading to a more
diverse office market that is characterised by flexible solutions like
working from home and in coworking spaces. "I felt like an outsider when I come back to the office. During the social distancing period, I did everything online, such as meeting with my team and clients. I still prefer to work from home for the flexibility and convenience," she noted. Therefore, she has asked her boss to switch to full-time remote work. The pandemic has hastened a rise in remote work for several organisations. Nguyen Van Hau, CEO of Asian Holding, said that remote work has notable benefits. Companies can save on real estate costs and experience productivity gains, while workers can enjoy geographic flexibility, eliminate commutes, and report better work/life balance. On the other hand, many companies have the challenge of maintaining on-site work and volatility during the pandemic. In particular, they have to fulfil obligations such as rents, investments, and office operations following fixed-term contracts with landlords. Therefore, many businesses are changing the way they operate their offices to avoid risks and instead turn their monthly office rents into a flexible cost and switching to hybrid modes. Chuo Senko Vietnam, which previously rented an office area of 500 square metres in the Ruby Tower in Ho Chi Minh City's District 1, is now relocating to a coworking space. Another US-based real estate company is also seeking a suitable coworking space for its office. Commenting on this trend, Duong Do, founder and CEO of co-working space Toong said that, the biggest challenge for businesses after returning to offices is risk and cost management. Businesses need to ensure social distancing measures are executed well for their employees while managing fixed rents and monthly operating costs. "Maybe they have to arrange employees to work alternate days or rent more space to accommodate all employees to follow through with social distancing. However, due to the pandemic, businesses opt for flexible solutions to adapt to different market conditions and constantly changing policies by the government," Do added. Since last year, Toong has welcomed many prestigious companies such as KPMG, Deloitte, Connell Bros, Prudential, Dragon Capital, and Bayer. These multinational corporations have opted for separating their human resources into groups to work alternatively and reduce risks. Do pointed out that flexibility and quality are two factors driving the trends in Vietnam's office market after the social distancing period. Maximising cost flexibility is one of the key factors to help businesses adapt to the rapidly changing market. However, it could be difficult for businesses to adapt to the pandemic if they are tied to an office with high initial investment costs and a fixed contract for many years. In addition, through prolonged periods of social distancing, knowledge workers realise that mental health is extremely important, so they have higher requirements on workspace quality. This is the second factor that knowledge-based organisations should pay attention to to facilitate their employees in the new period. The quality of the workspace could also contribute to attracting and retaining talents, even affecting internal beliefs about the future of the organisation. Daan Van Rossum, CEO of Dreamplex, said that during social distancing, many companies found that employees can get things done efficiently, no matter if they are working from home or in the office. Thus, many business owners have changed their perception of spending large resources on rents. In traditional offices, businesses are paying rents based on size, whether employees are fully employed or not. Therefore, they are looking for a model with fewer desks, which translates to less space and lower cost. “Many business owners working with Dreamplex are looking for a solution for a more integrated and flexible workspace model where employees can work from home, close to home or in the office. This is also known as the work from anywhere model," Rossum added. Resources mobilised for green growth Vietnam will focus on moving over to clean production and green growth, adding value towards environmental sustainability. The national green growth strategy will contribute to the post-COVID-19 economic recovery. At the Climate Summit, held within the framework of the 26th United Nations Climate Change Conference of the Parties (COP26) in Glasgow, Scotland (the UK), Prime Minister Pham Minh Chinh reaffirmed Vietnam's strong commitment in responding to climate change in order to achieve zero emissions by 2050. According to economic experts, raising the commitment to reduce greenhouse gas emissions will benefit Vietnam in many ways, helping it be able to attract green resources from the financial package committed by countries for developing green economy, circular economy and renewable energy. And in fact, within the framework of the COP26 activities, financial institutions have signed commitments to pour billions of US dollars into green growth programmes and projects in Vietnam through domestic private economic groups. In order to fulfill this commitment, the energy sector and investment resources from the private sector will play a very important role. A report released by the Central Institute for Economic Management (CIEM) has shown that, in recent years, private sector investment in green growth has increased significantly. Dr. Ho Cong Hoa, Team Leader of the project "Improving the role of private investment in green growth in the period of 2021 - 2030" said: In the period 2010 - 2019, the number of private enterprises investing in the energy and environment sectors has increased sharply. Specifically, in the field of energy (producing wind power, solar power), there were 69 enterprises investing in 2010, accounting for 59%; this increased to 777 enterprises in 2019, accounting for 94.8%. In the field of the environment (water supply and drainage and wastewater treatment, solid waste and environmental treatment), there were 693 enterprises participating in investment in 2010, accounting for 81.5%; this increased to 2,713 enterprises in 2019, accounting for 95.8%. Notably, in 2010 and 2015, private enterprises completely owned the "playground" of solar power investment, without the participation of state enterprises. This positive growth is due to the promotion of policies to mobilise private investment for green growth towards sustainable development. However, Dr. Ho Cong Hoa also pointed out that there are still many barriers to attracting private investment resources into green growth projects, making the development scale of the green economy quite small. It is asynchronous and unstable in its mechanisms and policies, the most noticeable being the price of solar power changing continuously in a short time; lack of reciprocal capital and capital for public investment in infrastructure projects. Many ministries, branches and localities still have the mentality of relying on budget capital instead of mobilising private capital. In many fields, the process of licensing investment, development, construction, and operation of projects takes time and is complicated. From the actual development and implementation of the green growth action plan of Hanoi city, Dr. Nguyen Diem Hang, Head of Urban Research Department under the Hanoi Institute for Socio-Economic Development Studies, said that although Hanoi issued the plan two years ago, its implementation is still very confusing. As the policies promulgated by the State but implemented by private enterprises and the community, there are no annual statistics on the results of green growth implementation of localities to serve as a basis for assessment and to draw from the experience in its implementation. In order to develop a green growth strategy, the role of the each locality must be clearly defined. Risk sharing between the State and enterprises is considered an important issue in attracting private capital for green growth. According to Dr. Nguyen Anh Tuan, Director of Renewable Energy and Clean Development Mechanism Centre under the Ministry of Industry and Trade, there will be a sudden growth in renewable energy from private capital, especially wind power, in 2020. In just ten days, power capacity has spiked from 300 to 600 MW to nearly 1,000 MW due to investors promoting the project to take advantage of incentives from the change in electricity price policy. Investors have poured money into increasing the source capacity, but then, the consumption of renewable energy in general and wind power in particular was cut suddenly as the demand for electricity dropped sharply due to the Covid-19 pandemic, stalling production. This greatly affects the economic efficiency of clean energy projects. “The risk-sharing mechanism between the State and private investors is very important. The private sector participates in clean energy investment but does not have a risk-sharing mechanism, so when the demand for electricity dropped sharply, investors have to bear all the risks, making them cautiously consider investing in the future", said Dr. Nguyen Anh Tuan. On October 1, the Prime Minister approved the National strategy on green growth for 2021-2030, with a vision to 2050, to promote economic restructuring associated with growth model innovation, contributing to the post-COVID-19 economic recovery. In order to attract private investment resources for green growth, the CIEM research team believes it is necessary to issue a preferential mechanism by the State. But most importantly, it is necessary to improve the investment and business environment in the field of environment and energy, gradually creating a transparent, equal and fair environment among the economic sectors. Besides this, it is necessary to apply economic tools such as green banking development and green credit to help businesses access green financial resources; promote the implementation of green public procurement policy; study the possibility of applying a carbon tax according to an appropriate roadmap to orient the production, business and consumption of society in the future. Legal corridors, mechanisms and policies must be both mandatory and encourage businesses to invest in green growth, enforce social responsibility for the environment, and develop sustainably. SBV warns of fake bank messages Banks recommend users keep their personal information, account numbers, and especially OTP codes confidential to avoid losing money. The State Bank of Viet Nam (SBV) has just issued official dispatch No 7611/NHNN-TT to payment service providers on strengthening measures to ensure security and safety of payment activities. Through monitoring and supervising payment activities, the State Bank has noticed that high-tech crimes have recently emerged, in which fake SMS messages are sent to trick customers into accessing and transacting at fake bank websites set up by criminals. To prevent and reduce the risk of fraud in the provision and use of payment services, the SBV requests payment service providers develop an appropriate roadmap and implementation plan on measures to check and verify customer identification information when performing transactions. For those that open electronic Know Your Customer (eKYC), they must comply with regulations. As noted, in addition to fake messages, a series of other tricks are being used by high-tech criminals to appropriate money in customers' accounts. Sai Gon – Ha Noi Commercial Joint Stock Bank (SHB) has also warned of tricks used to steal personal information and transaction information to withdraw money via e-wallets. In addition, the criminals can impersonate the authorities, bank staff and e-wallet employees to call and ask customers to provide personal or transaction information to appropriate customers' information and money. Interest rate forecast to continually decline at year-end Deposit interest rates at commercial banks will continue to decrease and remain at low levels in the coming months, analysts forecast. In a recent report, Bao Viet Securities Company (BVSC)’s analysts said the average deposit interest rate continued to inch down last month for both 6-month and 12-month terms. Accordingly, the average rates for 6-month and 12-month deposits in October decreased by 0.01 and 0.06 percentage points to 4.70 per cent and 5.50 per cent against the previous month, respectively. Compared with the same period last year, the average interest rates of 6-month and 12-month deposits declined by about 0.5 percentage points. According to BVSC’s analysts, Viet Nam's consumer price index in the first ten months of 2021 increased by only 1.81 per cent, the lowest since 2016. They forecast the index would increase by only around 2.5-3 per cent for the whole of 2021. “The low inflation rate would create favourable conditions for the State Bank of Vietnam (SBV) to continually maintain a loose monetary policy with an aim to stimulate the economy for recovery in the last months of the year. Deposit interest rates therefore would continue to remain low in the coming months,” they said. In the context that deposit interest rates hit the lowest levels, the deposit growth at banks is slowing down. According to the SBV, by the end of August, deposits at banks increased by only 4.17 per cent compared to the beginning of the year to more than VND10.4 quadrillion, the lowest growth rate since 2012. Currently, four State-owned banks Vietcombank, VietinBank, Agribank and BIDV and some large-sized banks such as Techcombank and Military Bank are listing the lowest interest rates in the banking system. The highest savings interest rate for 12-month deposits at Vietcombank, Agribank and BIDV is 5.5 per cent per year while VietinBank is capping the rate at 5.6 per cent per year. Previously, banks often raced to increase savings interest rates and launched promotional programmes to attract depositors in the last months of a year to meet rising capital demands in the peak business season ahead of the country’s biggest holiday Tet (Lunar New Year). However, due to the adverse impacts of the COVID-19 pandemic, the savings interest rates have been dropping and remained stable since last year. According to the SBV, though banks cut lending interest rates significantly this year, credit increased 7.42 per cent in the first nine months of this year. The credit growth is expected to reach 12 per cent by the end of the year. Footwear giants a step ahead in production restart Foreign footwear producers are maintaining their
commitment to sourcing products from Vietnam as factories enjoy resumption of
production following heavy delays and restrictions. Nguyen Chi Trung, vice chairman of the Vietnam Leather and Footwear Association (LEFASO), said that groups like Nike continue to believe in Vietnam as one of the best places to provide quality footwear products to meet the needs of their customers. Having placed trust in Vietnam’s strategy to fight against the pandemic, according to Trung, major footwear groups are signing contracts with Vietnamese partners rather than moving orders out of the country. Trung added that about 70-80 per cent of workers have returned to work at factories in Vietnam’s southern industrial zones in provinces such as Binh Duong, Dong Nai, and Long An. However, the lack of human resources will hinder factories from achieving full capacity. “There is also the risk of potential outbreaks as factories revive operations, and anxiety among workers about the pandemic will likely affect the quality of products,” Trung warned. Vietnam’s footwear industry is labour-intensive, so many companies were forced to temporarily halt operations because they failed to accommodate large amounts of workers under stay-at-work models. The supply chain was disrupted for four months during social distancing measures, ultimately causing delays in product delivery and dampening buyers’ trust in Vietnamese market. Le Quoc Thanh is general director of Feng Tay Group, which boasts five factories in Dong Nai with over 64,000 workers. After one month of resuming production in October, after all its factories were forced to close, Thanh noted that 80 per cent of workers had returned. “We don’t lack year-end orders from foreign brands but our challenge now is to recruit enough workforce to achieve 100 per cent capacity,” Thanh said. In the same vein, a representative of Gia Dinh Footwear said that the company has reopened five factories in southern Vietnam to supply products to overseas buyers like Mango, Clarks, and Polo. The company, which employs 5,000 people, was able to produce up to half a million pairs of shoes per month for export before the pandemic emerged. However, it can only currently fulfil 70 per cent of its orders. Meanwhile, 70 per cent of the workforce has so far returned to Pou Chen Corporation, a major Nike manufacturing partner. Pou Chen closed its factory in Ho Chi Minh City in July because of rising infections among its workers, and the company could not comply with stay-at-work methods due to the huge number of workers at its disposal. Many factory owners have said they only expect to fully resume operations from the second half of 2022. At the moment, they are striving to fulfil a moderate number of orders for the Christmas and New Year seasons in overseas markets. Trung from LEFASO stated that the main challenges for Vietnam’s footwear industry when reopening is to maintain orders and retain foreign buyers. “The country must keep the supply chain undisrupted in upcoming outbreaks,” he said. “If Vietnam can contain the pandemic and ensure safe living with COVID-19, foreign brands will be here to stay with Vietnam rather than moving orders to China, India, or Bangladesh.” Trung noted that, for example, Ho Chi Minh City Department of Health announced guidance to separate F0 coronavirus cases at factories so that production activities can be continued – which reflects the efforts of the government and health ministry to avoid further supply chain disruption and offers up a positive outlook. “Indeed, we have seen positive signs for Vietnam’s footwear industry. Exports should recover by year-end thanks to rising orders. In 2022, the industry is expected to rebound strongly from the pandemic brought by a wide range of free trade agreements Vietnam has signed,” Trung added. A well-functioning NPL market key to a healthy banking sector Improving the non-performing loan (NPL) resolution framework is a high priority for the banking sector to ensure efficient and effective bad debt resolution, as forecasters predict bad debts will rise post-pandemic. To cope with the current COVID-19 crisis, Vietnamese banks have been implementing loan forbearance measures over the past two years to help businesses weather the storm. Alongside temporary payment relief, the State Bank of Viet Nam (SBV) has also relaxed regulations regarding bad-loan provisioning and the classification of loans as non-performing. While these crisis responsive solutions are necessary to maintain business operations, it may cover potential vulnerabilities and non-performing loan ratios are expected to increase, imposing risks on financial institutions’ safety and efficiency once the extraordinary relief measures are withdrawn. Improvements in NPL resolution framework is seen as an urgent task as the current regulation on secured collateral resolution, Resolution 42, will expire in less than a year after a pilot five-year implementation period. Strengthening the legal framework for NPL resolution is very timely and important for Viet Nam, especially in the context of COVID-19, Nguyen Kim Anh, SBV Deputy Governor told a workshop on Thursday. We welcome perspectives from international organisations and the private sector to continue improving the NPL resolution practices, mitigating increasing credit risk and potential material negative consequences, Anh said. The SBV is reviewing the Resolution 42 and working towards strengthening the legal framework for NPL resolution. The workshop was attended by around 100 Vietnamese policymakers as well as international and domestic experts, including private sector representatives, to exchange cross-country experiences on the recognition, management and resolution of NPLs. Kim See Lim, IFC Regional Director for East Asia and the Pacific said: “We appreciate the opportunity to share best practices and lessons from our experience in NPL resolution framework and private sector participation in developing the NPL market. "We know from past crises that strong preparation and timely action are key in preventing the accumulation of NPLs and consequently, in aiding the resilient recovery from the pandemic, strengthening the banking sector to ensure efficient and effective allocation of capital for continued economic growth and job creation.” According to Vietnam Banking Association, as of August 31, 2021, the total amount of NPLs classified by Resolution 42 in the banking system was VND424.1 trillion (US$18.4 billion), 70 per cent of which was resolved. On average, about VND7.15 trillion was resolved a month, more than doubling the monthly resolved amount in the period 2012-17. This has kept the NPL rate in the banking sector stably less than 3 per cent between 2016-20. However, businesses impacted by COVID-19 are unlikely to recover quickly enough to be able to pay back, possibly leading to high increase of NPLs from the third quarter of 2022 when Resolution 42 has expired. In addition to strengthening the NPL resolution regulations, development of a strong bad debt market, where private investors can buy and restructure distressed assets and help recapitalise the banking system should be a long-term solution to manage the NPLs and ensure a healthy banking sector. Keith Pogson, a senior expert at NPL resolution from Ernst & Young Asia Pacific, said: “Viet Nam's NPL market is not yet attractive to foreign investors due to the under-developed legal and regulatory framework, unclear and complex process about transferring assets to foreign ownership, inability to take land use rights titles; high risk of certainties because of lack of high-quality information to help make decision and mitigate risks, and the volume of NPLs to be offered to investors not at scale. “Once a market-based infrastructure for NPL resolution in Viet Nam is in place, foreign investors will enter and NPL resolution will become an industry with many business opportunities for related partners including lawyers, accountants, tax officers, etc.” The workshop also discussed important legal considerations, including a framework for NPL Resolution, debt enforcement, out of court workouts and insolvency that all contribute to viable market solutions. Experts from IFC and international distressed asset recovery agencies presented best practices in resolving NPLs in Serbia, Slovenia, Thailand, South Korea and China, and how such lessons could be replicated in Viet Nam. Private sector perspectives on the development of markets for distressed assets, including sales of NPLs to investors were also examined. “A strong and stable banking system with a solid NPL resolution framework is critical for Viet Nam to continue to grow, promote financial inclusion and build back better after the pandemic," said Kyle Kelhofer, IFC Country Manager for Viet Nam, Cambodia and Lao PDR. "With its global knowledge and experience in resolving more than $33 billion face value NPLs in emerging markets, IFC will help Viet Nam strengthen its legal framework for NPL resolution, attract more investment in the new market, and continue building a sound and robust financial sector.” Banks call for increase in foreign-owned shares limit Vietnam Banks' Association (VNBA) has been calling for an increase in the foreign-owned shares limit in Vietnamese commercial banks, starting with those who have implemented Basel II successfully and are on their way to upgrade to Basel III. VNBA, in a recent meeting with the Central Institute for Economic Management (CIEM), has advocated increasing the foreign-owned shares limit to as much as 30 per cent. The association said during 2017-20, the number of foreign investors in Viet Nam's 16 commercial banks have jumped from 42 to 90 with a vast majority internationally recognised and deep-pocket investors, who have been bringing their expertise to the table and helping the banks improve their ability to compete internationally and speed up the bad debt handling process. Banking experts, however, said there was still a lot of room to grow for foreign investors as some 15 commercial banks in the country have yet to find their foreign strategic stakeholders, especially during a time when IT and digitalisation have been put at the forefront of the banking industry development agenda. Commercial banks have voiced concerns over the challenges they faced in finding the right partnership and over the lengthy and complicated negotiation process, which has been bottlenecked by the limit on share percentage owned by foreign investors under current regulations. Government decision 01/2014/ND-CP, which went into effect in February 2014, dictated the limit of shares owned by foreign investors in commercial banks in Viet Nam as follows: no more than 5 per cent of the bank's chartered capital for individual investors, 15 per cent for organisations and 20 per cent for strategic investors. CIEM's experts have been supportive of the proposal, saying the current cap has been a limiting factor to the banks' ability to seek and successfully negotiate the best possible partnerships for them. Therefore, CIEM has advised the country's banking authority to consider an increase to the limit and make necessary adjustments to current regulations that oversee the role of foreign investors in the banking sector to ensure a level playing field for all. Nguyen Quoc Hung, secretary-general of the VNBA, urged policymakers to make changes to the country's current regulations to keep them in line with the industry's international norms and standards, as a key foundation for the development of Viet Nam's banking sector in the future. RCEP agreement to take effect in January 2022 The Regional Comprehensive Economic Partnership (RCEP) Agreement will officially take effect starting January 1 next year, according to the Ministry of Industry and Trade. The trade pact was signed by 10 ASEAN members and their five partner countries on November 2020 on the sidelines of the 37th ASEAN Summit chaired by Vietnam. It will come into effect 60 days after it is ratified by at least six ASEAN members and three other signatory countries. As of November 2, six ASEAN nations, including Vietnam, and four signatories - China, Japan, Australia and New Zealand - had submitted documents ratifying the agreement to the ASEAN Secretary-General. The RCEP agreement taking effect from January next year is expected to multilateralise free trade agreements that ASEAN signed with partner countries, harmonise commitments and regulations in the trade pacts, maximise economic interests, particularly origin principle and trade facilitation, and strengthen regional supply chains and economic recovery in the post-pandemic period. The agreement, gathering the 10 ASEAN member nations and Australia, China, Japan, New Zealand and the Republic of Korea, will cover a market of 2.2 billion people, accounting for about 30 percent of the world’s population, and a total GDP of 26.2 trillion USD./. Reference exchange rate down 14 VND on November 9 The State Bank of Vietnam set the daily reference exchange rate at 23,109 VND/USD on November 9, down 14 VND from the previous day. With the current trading band of +/-3 percent, the ceiling rate applicable to commercial banks during the day is 23,802 VND/USD and the floor rate 22,415 VND/USD. The opening-hour rate at commercial banks remained stable. At 8:30 am, Vietcombank listed the buying rate at 22,530 VND/USD and the selling rate 22,760 VND/USD, down 10 VND from November 8. BIDV cut both rates by 15 VND, listing at 22,560 VND/USD (buying) and 22,760 VND/USD (selling)./. Construction begins on Danish-funded garment factory in An Giang province Denmark's Specter Real Estate A/S has begun construction of a garment factory in Mekong Delta province of An Giang’s Chau Thanh district with a total investment of 253 billion VND (about 11 million USD). The plant, built on an area of over 38.000 sq.m at the Binh Hoa Industrial Park, will produce 2 million products a year. It is expected to be put into operation in January 2024 and create jobs for more than 1,200 local workers. Nguyen Thanh Cuong, head of An Giang province’s Economic Zone Authority, said the implementation of the Specter An Giang Garment Technology project is hoped to not only bring about huge benefits to the investor but also positively improve An Giang's industrial production and export value as well as boost local socio-economic development. Specter Real Estate A/S specialises in manufacturing outdoor sports apparel for export to Europe, North America, and Japan. The new factory in An Giang is its third project in Vietnam, following those in the northern provinces of Thai Binh and Nam Dinh./. HCM City export businesses gradually return to normal Export companies in Ho Chi Minh City are recovering well following the lifting of COVID-19 restrictions as workers from other provinces gradually return to work. Tran Thanh Son, a manager at Song Ngọc Garment Co., Ltd, said his company decided to invest in an additional production line to help meet US orders after nearly four months of suspended production. It has orders from the US for until April next year, he said. Chu Tien Dung, the HCM City Union of Business Associations chairman, said companies have worked with their employees and partners to speed up production to fulfil order backlogs and accept new orders. Nguyen Van Be, chairman of the HCM City Export Processing Zone and Industrial Park Authority Business Association (HBA), said 1,500 companies, 500 foreign-owned, in the city’s industrial parks and export processing zones have resumed operations, with 60 percent going back to more than 80 percent capacity. “Walking around the factories, we realised that the city's decision to ‘live with the pandemic’ has proven effective.” For instance, a company that used to stop production when workers were found infected, has in the past 15 days found 20 infections, but, with support from authorities, disinfected the factory, sent the infected workers to medical facilities for treatment and continued production, he said. According to the HCM City Export Processing Zone and Industrial Park Authority (HEPZA), nearly 216,000 out of 288,000 workers at industrial parks and export processing zones have returned to work, and many of the companies are operating at 95 percent capacity. Companies in labour-intensive sectors such as textile and garment and footwear are now basically back to normal. Dr Tran Du Lich, a member of the National Assembly Economic Committee, said for companies to get up to speed needs Government financial support and simplification of procedures for them to access the funding. The HCM City Department of Industry and Trade said it would offer a credit support package worth 70 trillion VND (3.07 billion USD) this year to help businesses access preferential loans and resume production. The State Bank of Vietnam’s HCM City branch said banks would provide credit to businesses at supportive interest rates this quarter. Nguyen Hoang Minh, its deputy director, said his office took measures to mitigate the difficulties faced by businesses in line with directions from the central bank and the city People’s Committee. Demand for funds increases normally at the end of the year, but there would be no shortage, he assured. The banking industry is committed to ensuring sufficient loans at preferential interest rates to help businesses revive production and trading, he said. The industry has become a reliable partner for businesses, implementing a number of policies to enable them to overcome difficulties caused by the pandemic, including debt restructuring, waiver and reduction of interest and fees and preferential loans to supporting industries and those that use technology, he added./. Vietnam’s first farms join global cage-free movement Two Vietnamese farms were the first in the country to gain the Certified Humane label with support from the Humane Society International – a global organisation working to protect all animals. The project is freeing thousands of hens from cages in the first year and will expand in the years to come, with the assistance from the Humane Society International. To earn the label, the farms meet specific requirements on health, nutrition and management of cage-free hens under the Humane Farm Animal Care standards. Since its establishment in 2003, some 1,000 enterprises and farmers have engaged in the Humane Farm Animal Care programme, helping improving life of over 1.5 billion farm animals by expanding consumer awareness and driving the demand for kinder and more responsible farm animal practices./. PV GAS’s market cap exceed 10 billion USD PetroVietnam Gas Joint Stock Corporation (PV GAS) has become one of the five businesses with market capitalisation of over 10 billion USD in November. The rest four enterprises in the list are Vinhomes, Vingroup, Vietcombank, and Hoa Phat Group. Statistics from the Ho Chi Minh City Stock Exchange (HoSE), the market capitalisation of companies listed at the floor reached over 5.6 quadrillion VND (247.7 billion USD) in late October, up 9.1 percent over the previous month and accounting for 89 percent of the national GDP in 2020. Particularly, the HoSE reported that it has seen 45 enterprises with market capitalisation exceeding 1 billion USD, up 15 percent compared to that in September with some new names. With its stock price rising 48 percent since the beginning of this year, PV GAS has made a record in the price at 125,000 VND per share in October, pushing the firm’s market cap to 238.28 trillion VND (10.54 billion USD). Closing the November 8 session, the PV GAS share price reached 123,000 VND per share. Earlier this year, PV GAS has been named among the top 50 listed companies 2021 by Forbes Vietnam for the 9th consecutive year. Forbes Vietnam said despite the COVID-19 pandemic, the companies included in the list have sought business opportunities, achieved good results and contributed to the country’s economic development. The firms have made the best performances on the Ho Chi Minh City Stock Exchange (HoSE) and the Hanoi Exchange (HNX). Forbes Vietnam made the assessment based on such indicators as Compound Annual Growth Rate (CAGR), Return On Equity (ROE), Return On Capital (ROC) and Earning Per Share (EPS) during the 2016-2020 period. The companies have recorded combined post-tax profits of over 174.48 trillion VND (7.58 billion USD), a year-on-year increase of 26 percent. Other firms in the oil and gas sector were also named in the list, including PetroVietnam Power Corporation, PetroVietnam Technical Services Corporation, PetroVietnam Drilling and Well Service Corporation, and PetroVietnam Ca Mau Fertiliser JSC. Despite the recovery of petrol prices, profits of many businesses in the oil and gas sector dropped in the third quarter of this year due to impacts of the COVID-19 pandemic. In September this year, PV GAS and US-based AES Corporation signed a joint venture agreement on the establishment and operation of Son My LNG port warehouse limited company in New York under the witness of President Nguyen Xuan Phuc. The joint venture agreement was based on the main terms of the joint venture contract of Son My LNG (liquefied gas) port warehouse project signed in October 2020. The Son My LNG port warehouse is one among a series of LNG power projects in the south central province of Binh Thuan, with an estimated total investment of 1.31 billion USD, and a capacity of 3.6 million tonnes a year in the first phase and up to 9 million tonnes in the next phase. The port will receive, process and supply LNG reprocessed as fuel for Son My 1 and Son My 2 power plants, expected to be put into operation by the end of 2025. AES Corporation (AES) in Virginia State, the U.S, is named in the Fortune magazine’s (500 Fortune) list of 500 largest US companies and among the world's leading power companies. AES has many experiences in building electrical and gas infrastructure. In Vietnam, AES has been operated successfully and effectively since 2010 and has invested in the Mong Duong 2 coal-fired thermal power plant with the capacity of 1150 MW in Quang Ninh Province. Currently, AES has also been approved by the Government to be the investor of Son My 2 Power Plant Project using LNG. AES Corporation has contributed the capital with PV GAS to establish Son My LNG Terminal Co.Ltd. The two corporations’ formation of the Son My LNG port warehouse limited company to carry out the construction of the Son My LNG port warehouse project will contribute to ensuring reprocessed LNG to serve power demand of the key southern economic zone in particular and Vietnam in general. The signatories pledged to conduct procedures to put the company into operation in November./. Fisheries sector sees recovery signs in October Positive signs have been seen in fisheries production, processing and exports in many localities since early October. According to the Vietnam Association of Seafood Exporters and Producers (VASEP), fisheries exports reached 918 million USD in October, equal to the figure of the same period last year and a rise of 47 percent over last month. Upturn was seen in exports of the majority of products such as tuna, squid, octopus and shrimp. The increase showed that the sector is become more stable and on the road to recovery, according to the association. In the first 10 months of this year, fisheries exports were estimated at 7.1 billion USD, a slight rise of 2.4 percent. Highest rise was seen in export revenue of bivalve molluscs at 39 percent to 113 million USD. Exports of tuna posted an increase of 10 percent to 598 million USD, squid and octopus at 4.5 percent to 475 million USD, and shrimp at 2.6 percent to 3.2 billion USD. Due to a shortage in material, export revenue of tra fish in October dropped 18 percent year on year to 139 million USD. However, the figure in the first 10 months of this year remained unchanged at 1.2 billion USD. The US remained the major market of Vietnamese fisheries products, accounting for 24 percent of the total export value at 1.7 billion USD, up 25 percent year on year. It was followed by Japan with 1.08 billion USD and China and Europe with 872 million USD and 864 million USD, respectively./. Vietnam among countries to help Indonesia pursue overseas taxpayers Thirteen countries, including Vietnam, have agreed to assist Indonesia with collecting taxes overseas, allowing the country to go beyond its borders in pursuit of tax evaders, the taxation directorate general has said. The countries in the reciprocal deal are Algeria, Armenia, Belgium, Egypt, India, Jordan, Laos, the Netherlands, the Philippines, Suriname, the US, Venezuela, and Vietnam. Yon Arsal, expert staff on tax compliance for Indonesia’s finance minister, told a recent media gathering held by the Bali tax office that these tax payables will be reciprocal and Indonesia has to assist the countries in the same matter. Indonesia's parliament introduced a new “omnibus” law – known as the Harmonised Tax Law in October. The country has signed treaties to avoid international double taxation with 67 countries. The Indonesian government is mulling over tax exemption mechanisms and assistance, aiming to significantly reduce taxes and attract investment./. EU remains promising market for Vietnamese fruit European consumers have been increasingly interested in tropical fruits, especially healthy ones with novel taste, according to the Vietnamese Trade Office in Belgium and the EU. According to the office, tropical fruits have been highlighted by cuisine bloggers and restaurants, prompting consumer to try them. While some kinds of tropical fruit have become common such as pomegranate, passion fruit, lychee, and rose apple, but rambutan and dragon fruit are still considered specialties, which provides opportunities for Vietnamese firms. The office underlined that organic certificate may be an additional advantage, adding that high technology in processing and packaging and sea transport will help maintain the original taste of fruits. It advised that the perquisite condition for fruits and
vegetables in the market is to meet requirements in pesticide residues and
contaminants, and exporters must strictly abide by plant quarantine
regulation. PetroVietnam’s State budget contribution surpasses yearly plan by 21 percent The Vietnam Oil and Gas Group (PetroVietnam) contributed 75.4 trillion VND (3.32 billion USD) to the State budget in the first 10 months of this year, up 23 percent from the same period last year and 21 percent higher than the yearly plan. During the period, the State-owned corporation exploited 9.09 million tonnes of crude oil, surpassing the yearly target by 12.4 percent. It has cut 2.39 trillion VND in costs, equivalent to 80 percent of this year’s plan. The firm has so far donated 784.8 billion VND to help the country fight COVID-19, of which 554.9 billion VND went to the COVID-19 vaccine fund. PetroVietnam has been focusing on developing oilfields BK-18A and BK-19 which are expected to be put into operation over the next few days. It has also been working around clock to soon launch Song Hau 1 and Thai Binh 2 thermal power plants, with turbine No.1 of the Song Hau 1 scheduled to be operational this month./. Work starts on Nha Trang city sub-project’s key items Construction of several key items of the Nha Trang city sub-project of the Vietnam Coastal Cities Sustainable Environment Project began on November 7 in the southern central coastal province of Khanh Hoa. The project, funded by the World Bank (WB) has been implemented since 2017 in coastal cities of Vietnam, comprising Dong Hoi in the central province of Quang Binh, Quy Nhon of the central province of Binh Dinh, Phan Rang - Thap Cham of the central province of Ninh Thuan, and Nha Trang city in Khanh Hoa. The total investment for the Nha Trang city sub-project is 72 million USD, including 60.6 million USD provided by the WB and 11.4 million USD from Vietnam's counterpart fund. It has been implemented since 2019, including four components: expanding sanitation infrastructure, improving urban connectivity, land clearance, and supporting institutional reform. Speaking at the groundbreaking ceremony on November 7 for a waste water treatment plant, roads and dykes along Cai river, and a pump station, WB Country Director for Vietnam Carolyn Turk emphasised that over the last 18 years, the WB has accompanied and supported the development of Khanh Hoa province, especially in Nha Trang city. According to Turk, once completed, the sub-project will contribute to improving the quality of the environment and the living conditions for about 400,000 people in Nha Trang city. These works are expected to be completed in 16-18 months. The Nha Trang city sub-project is hoped to help solve flooding and environmental pollution in the northern part of the city, improve environmental sanitation, enhance flood drainage and prevent landslides on both banks of the Cai River – the section flowing through Nha Trang city, and upgrade transport infrastructure. So far, five construction bidding packages of the sub-project have been completed and ready for putting into use in the coming time./. THACO’s plastic components serve both domestic production, export The shortage of raw materials due to the COVID-19
pandemic has disrupted supply chains, raised logistics costs and lengthened
transportation time, making many businesses to face difficulties in
production. According to THACO, with the development of the auto industry, car manufacturers tend to look for suppliers of components which are strong enough to increase the localisation rate, in which plastic components are one of the “key cards” to promote the development of the domestic spare parts industry, accounting for 30-50 percent. In order to actively supply plastic components to increase the localisation rate, the THACO Plastic Components Manufacturing Company was put into operation in 2018. As most automotive plastic enterprises mainly produce simple components or only process a few stages, the company has built a value chain from research, product development, mold processing to production and supply. Notably, in the production of plastic components, mold plays a very important role. As the company has a mold factory, it has taken the initiative in making molds for the production of spare parts in accordance with specific requirements of customers. Thanks to technology mastery and production activeness, the company has contributed to increasing the localisation rate for THACO AUTO's vehicle lines, and participated in the supply chain of plastic components for major automobile and motorbike manufacturers, thus helping to increase the domestic production content and localisation rate, meeting the criteria of Regional Value Content (RVC). From experience and technology background in manufacturing automotive plastic components, the company has developed a variety of plastic products, serving many industries such as household appliances, electricity - electronics, and mechanics. 2021 marks the first year that the company’s non-automotive plastic products are supplied abroad. Many products such as door lock covers, stadium seats and plastic bottles have been exported to the US, Australia, and Canada. Currently, the company is entering into joint ventures with major partners to gradually join the global plastic supply chains, and also promoting cooperation with foreign direct investment enterprises to develop the domestic market, and expand exports to the EU, the US, Australia and Japan./. Vietnam spends US$63 million on importing Chinese garlic The export value of Chinese garlic to Vietnam climbed to over US$63 million during the past 10 months of the year, according to statistics released by the Vietnam Fruit and Vegetables Association. This figure makes up 20% of China's total fruit and vegetable exports to the Vietnamese market, followed by mushrooms at 13%, mandarin and potatoes at 5% each, along with onions, carrots, and pears at 4% each. Chinese garlic is said to hold a great advantage, particularly as it is cheap and easy to peel, therefore it is preferred by restaurants and eateries. However, the taste is considered to be not as good as Vietnamese garlic. Figures released by the Vietnam Fruit and Vegetables Association indicate that Vietnamese fruit and vegetable imports from China during the reviewed period soared by 14.7% to US$1.201 billion compared to the same period from last year. China represents the largest supplier of fruit and vegetables to Vietnam, making up roughly 30% of the overall market share, equivalent to US$317.4 million, an increase of approximately 32% year on year, according to the data as of September 30. Domestic gold prices reach one-year high Local gold prices continued to climb on November 8, with the figure even passing historical highs seen over the past year to reach more than VND59 million per tael. Throughout the morning trading session, buying and selling prices for gold bars quoted by Saigon Jewelry Company Limited (SJC) stood at VND58.35 million and VND59.05 million per tael, respectively. This thereby represents a rise of VND300,000 per tael compared to the prices recorded during the weekend. Simultaneously, DOJI Gold and Gems Group were trading gold at VND58.35 million for buying and 58.95 million for selling per tael, marking a similar rise of VND300,000 per tael from the previous day. Phu Quy Group therefore listed each tael of SJC gold at between VND58.2 million and VND58.9 million for buying and selling, adding an additional VND100,000 from the prices recorded the previous day. In terms of the global gold market, prices reached US$1,815.9 an ounce on November 8. In relation to the local forex market, the State Bank of Vietnam also moved to adjust the exchange rate of major foreign currencies, in which US$1 could be exchanged for VND22,650. Localities quickly restore production As localities have gradually eased social distancing and reopened economic activities, many enterprises have accelerated the resumption of production chains. However, enterprises are still surrounded by many difficulties, including capital shortage, lack of raw materials, market contraction, high transportation costs, and others. Businesses have also had to rearrange production lines to ensure distancing and COVID-19 testing for workers, facing the risk of shortage of human resources due to the fracturing of the labour market after the COVID-19 pandemic. According to the Southern Special Working Group of the Ministry of Industry and Trade, 100% of enterprises in industrial clusters in Binh Duong province have returned to operation, but their capacity is less than 50% compared to that before the pandemic. The Binh Duong Department of Industry and Trade has agreed to give rights for enterprises to actively reopen and state management agencies will review their performance. The province has also allowed enterprises to self-test their workers and issue certificates for the workers to travel while introducing test kits with reasonable prices for enterprises. Enterprises are also allowed to combine three to five samples to reduce testing costs. Currently, workers in Binh Duong have been injected with the first dose of COVID-19 vaccine and 100% of them will have received the second dose by the end of November. Enterprises in Dong Nai province are also making efforts to restore production while ensuring safety against the pandemic. About 1,176 enterprises in industrial zones are implementing the “three-on-the-spot” production model with a total of 154,699 resident workers. Meanwhile, 139 enterprises are allowing 42,000 workers to go home every day. In areas outside industrial zones, 253 enterprises are implementing the "three-on-the-spot" plan with the number of resident workers at 18,500 while 104 enterprises are implementing the “one road, two locations” plan with more than 10,000 workers and 12 enterprises with nearly 3,000 workers implementing both the aforementioned plans. In Hanoi, since the city eased social distancing, more than 95% of businesses are now operating normally across nine industrial parks. About 97% of Hanoi workers have been administered the first dose of COVID-19 vaccine while 48% of workers have been given a second dose. Hanoi recorded more than 13,100 newly established enterprises in the past eight months with total registered capital of VND165.73 trillion while the number of enterprises returning to operation was 5,687, up 74% over the same period last year. Despite great efforts to quickly restore production, enterprises are facing many difficulties. After months of stagnation, many businesses are at risk of running out of cash flow while they are facing increasing prices of imported materials, transportation, and logistics as well as the cost of pandemic prevention and control. Human resources are also a difficult problem for enterprises. According to the Employment Department under the Ministry of Labour, Invalids and Social Affairs, there is a risk of a shortage of labour in big cities and provinces, industrial parks and export processing zones. Deputy Director of the Institute for Economic Policy Research under the University of Economics (Hanoi National University) Tran Quoc Viet said that it is necessary to continue to build more solutions to protect the maintenance of business activities in the context of the pandemic remaining unpredictable. First of all, the Government and localities need to find solutions to get workers to return to work by providing them with social security support or help them overcome difficulties caused by the pandemic. Another important solution is to help enterprises maintain working capital flow, reduce banking interest rates, and extend or postpone the payment of taxes and fees. The Ministry of Industry and Trade has also said that the ministry's top priority is to coordinate with all parties to come up with solutions to support businesses to maintain production, facilitate the convenient circulation of goods, and promote the connection of supply chains. In the long term, the ministry will continue to perfect the legal framework to promote the potential of the industry and its role as the lifeblood of the economy while supporting the capacity building of domestic industrial enterprises and raising the localisation rate, so that domestic industry can develop sustainably. Prices of vegetables, fresh foods escalate On November 8, the prices of goods at some points of sale and traditional markets in Ho Chi Minh City were recorded to have increased compared to a few months ago. Accordingly, prices of vegetables, meat, and fish surged by VND3,000-VND15,000 per kg, depending on the type. Some businesses trading vegetables, fruits, and fresh foods in District 12 said they had received notification about the price increase from suppliers from the end of September this year. The reason for the price increase is that production costs and input materials all climbed compared to half a year ago. The Director of an enterprise in HCMC admitted that after negotiating many times with suppliers, his company was forced to raise the selling prices for about 70 percent of its products. The remaining 30 percent, although the contracts still committed to the old price until the end of 2021, it was not guaranteed that prices would not increase at Lunar New Year because several contracts would be signed again by the end of December. In Da Lat, after a period of stagnation due to difficult consumption, lately, prices of vegetables and flowers in Da Lat and surrounding areas, such as Don Duong, Duc Trong, and Lac Duong districts of Lam Dong Province, have risen sharply. Specifically, broccoli fetched VND20,000 per kg, an increase of VND2,000 per kg; chayote VND6,000 per kg, up VND3,000 per kg. The sharpest increases were in green coral lettuce with VND17,000 per kg to VND35,000 per kg and bell pepper with VND23,000 per kg to VND45,000 per kg, compared to the previous week. According to many vegetable granaries in Da Lat, prices of vegetables increased due to scarce supply and strong market demand. Especially, large vegetable gathering points in HCMC, such as Binh Dien, Thu Duc, and Hoc Mon, have reopened. Small traders import vegetables to the inner city and southern provinces, causing prices of vegetables to go up. On average, vegetable growing areas in Lam Dong Province supply more than 5,000 tons of vegetables and tubers to the market every day, consumed mostly in HCMC and Southern provinces. According to the HCMC Department of Industry and Trade, the source of goods arriving at the city at the end of the year is quite diverse, so consumers should not worry about the shortage of goods. Currently, the selling prices of goods at supermarkets, trade centers, and traditional markets have been committed to stabilizing by some units. Besides, many promotional and shopping stimulus programs will also be activated on the occasion of the New Year and the Lunar New Year, helping consumers to have more choices. While the prices of pork, poultry, and waterfowl are still at a very low level (although they have recovered compared to more than two weeks ago), the prices of vegetables on the market in Hanoi and some places in the North are still unusually high. According to farmers in vegetable growing areas on the outskirts of Hanoi to supply wholesale markets in the inner city, such as Hoai Duc, Dan Phuong, Phuc Tho, and Dong Anh districts, the main reason for high vegetable prices is due to prolonged rain and severe weather. This year, it has more rain than the previous year. Specifically, choy sum is sold at VND15,000-VND17,000 per kg, cabbage VND15,000 per kg, water spinach VND8,000-VND9,000 per bundle, and Napa cabbage VND13,000 per kg. The prices of herbs tend to increase sharply or remain at high levels, such as scallion at VND120,000 per kg, coriander at VND150,000 per kg, and dill at VND170,000 per kg, 5-6 times higher than before. Source: VNA/VNS/VOV/VIR/SGT/SGGP/Nhan Dan |
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