VIETNAM BUSINESS NEWS FEBRUARY 15 16:01                Vietnam’s wood industry continues to grow Vietnamese wood and furniture products are expected to grow in 2022 due to the purchasing demand of the international market along with meeting necessary factors in Free Trade Agreements (FTAs). Despite experiencing a difficult year last year after being heavily affected by the pandemic, the country’s exports of timber and non-timber forest products in 2021 was predicted to reach 15.6 billion USD, up by 18 percent compared to 2020. In which, the exports of wood and products reached 14.5 billion USD, up by 17.2 percent compared to 2020. Vietnam’s timber and forest products are exported to over 140 countries and territories, of which the main markets are the US, Japan, China, EU and South Korea with a total export value estimated at 13.98 billion USD, accounting for 89.5 percent of the country's export value of forest products. The move will provide great momentum for the Vietnamese wood processing and export industry to develop with an export turnover value of 20 percent higher than that of 2021. The gains are attributed to the effects of FTAs such as the EU-Vietnam Free Trade Agreement, the UK-Việt Nam Free Trade Agreement (UKVFTA), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. Vietnamese customers buy most Korean cars in SEA Korean cars sold in the Vietnamese market in 2021 were four times higher than the total consumption of the brand in five Southeast Asian countries, including Thailand, Indonesia, Malaysia, the Philippines, and Singapore, reported by Vnexpess.net. Last year witnessed Hyundai and Kia of the Republic of Korea (RoK) rank second and third in the list of top three best-selling car brands in Vietnam with sales of 70,518 units and 45,592 units, respectively. According to details given by the Vietnam Automobile Manufacturers Association (VAMA), although sales dropped by 13.3% compared to 2020, Hyundai remained the brand that sold the most cars in the Vietnamese market. Furthermore, Kia sales soared by 6,352 vehicles compared to 2020. The best-selling models of this brand remained the Kia Seltos with cumulative sales of 16,122 vehicles. Moreover, Toyota of Japan topped the market with sales of 69,002 vehicles. Mazda continued to be a best-selling brand in 2021 with 27,286 units sold, marking a drop of 4,938 units on year. As one of the few brands recording positive growth in 2021, VinFast sold a total of 35,723 vehicles, representing a year-on-year of 21.2%. Government to support 10,000 private businesses for sustainable development A good 10,000 private businesses are to receive support from the government for sustainable development, which is the key target of the programme to support private enterprises in sustainable business development in the next 3-4 years. The government has issued a support programme, whose major objective is to boost private businesses' sustainable development in harmony with economic interest and cooperate social responsibility as well as environmental protection, thus contributing to completing the 17 Sustainable Development Goals laid out by the UN in 2030. In 2025, the government targets to support at least 10 tools and solutions to measure, evaluate, and recognise sustainable businesses. These tools will support about 10,000 private enterprises, helping to reach the target of saving 5-7 per cent of total power consumption of the country and raising labour productivity by about 7 per cent annually. The enterprises, which are recognised as sustainable businesses, will be supported. Another target of the programme is to support enterprises to approach financial resources and investment funds. Last but not least, enterprises will be supported in terms of telecommunication, trade promotion programmes, and expanding their distribution channels. SSI inks its largest loan agreement worth $440 million with VietinBank Vietnam’s prominent securities company SSI Securities JSC has just revealed its fresh loan agreement with VietinBank with a maximum loan amount of approximately $440 million. This is the biggest credit line contract signed by SSI with a joint-stock commercial bank in Vietnam to date, laying a concrete foundation for more extensive collaboration between the two major financial institutions in the country. The first instalment of the $440 million credit line contract with Vietinbank – with a duration of no more than 12 months and an interest rate based on the short-term market – has been partially disbursed. With its long-standing reputation and financial soundness, SSI boasts the largest foreign-backed unsecured capital, with up to $267.5 million available alone in 2021. The fresh deal of $440 million is not only SSI's biggest-ever contract with a joint-stock commercial bank but also the most valuable source of unsecured credit in the domestic securities business landscape. Vietnamese shrimp price in US remains high compared to competitors The price of local shrimp within the US market remained higher in comparison to other countries last year, according to figures released by the Vietnam Association of Seafood Exporters and Producers (VASEP). Statistics compiled by the US Department of Agriculture (USDA) indicate that the United States imported more than 897,000 tonnes of shrimp worth over US$8 billion last year, representing an annual rise of 24%. Of the figure, the US imported over 88,000 tonnes of shrimp from Vietnam worth US$969 million, representing an increase of 33% in volume and 39% in value compared to the same period from 2020. Last year witnessed the average price of shrimp imported into the US increase by 4% to reach over US$8.9 per kilo. In line with this, the price of Vietnamese shrimp in the fastidious market edged up 4% to US$11 per kilo, while the price of Ecuadorian shrimp also surged by 19% to US$7.43 per kilo. Overall, the price of Vietnamese shrimp in the US is much higher than other countries, while the average shrimp price from regional peers such as India, Thailand, and Indonesia also saw a slight rise of 1%. Positive signs seen in footwear export With 80 percent of workers returning to work in factories and abundant orders right from the beginning of the year, the footwear sector has seen bright prospects for this year. According to the General Statistics Office (GSO), in the first month of 2022, domestic firms exported 390.3 million worth of handbags and umbrellas and over 1.93 billion USD worth of footwear products. Right from the beginning of the year, many giant brands such as Nike and Adidas have shown their interest to increase their output in Vietnam. According to the Lefaso representative, Vietnam has become the biggest production hub for Nike by producing 50 percent of its products. Production and export of Nike account for about 30 percent of the export revenue of the whole sector, and create jobs for about 300,000 labourers. It has also revealed its plan to expand operations in Vietnam. However, experts held that it is not easy to grasp chances to boost Vietnamese footwear exports in 2022 due to a high cost of material and logistics services. Meanwhile, Government’s support packages have yet to show effectiveness, while orders from large brands often have high quality standards. Vietnam’s steel import turnover up 42.8 percent in 2021 Vietnam imported 12.3 million tonnes of steel worth 11.52 billion USD in 2021, down 7 percent in volume and up 42.8 percent in value year-on-year, according to the General Department of Customs. The country mainly bought steel from China, with 5 million tonnes valued at 4.38 billion USD, accounting for 40.3 percent and 38 percent of the total volume and turnover, respectively. Japan was the second largest exporter of the product to Vietnam last year. The Southeast Asian nation imported 1.9 million tonnes totaling 1.73 billion USD from Japan, down 22.8 percent in volume and up 23.8 percent in value compared to 2020. The Republic of Korea (RoK) ranked third among the biggest steel exporters to Vietnam in 2021, shipping 1.5 million tonnes worth 1.59 billion USD to the Southeast Asian nation, up 24.4 percent in value year-on-year. China increases rubber imports from Vietnamese market Vietnam represented the second largest rubber supplier to China, with exports of this product reaching US$2.28 billion, up 27.8% compared to 2020, according to industry insiders. The nation's share of the rubber market as part of the total import turnover of China in 2021 accounted for 18.2%,  representing an annual rise of 16.3%. The Import-Export Department under the Ministry of Industry and Trade quoted statistics from the General Administration of Customs of China saying that last year saw China's rubber import turnover reach US$12.56 billion, up 14.8% compared to 2020. Thailand, Vietnam, Malaysia, the Republic of Korea, and Japan represent the five largest rubber markets for the northern neighbour. In 2021, the nation was the fifth largest natural rubber supplier to China with a turnover of US$257.58 million, marking a year-on-year rise of 1.2%. Trade surplus sees strong figure of US$1.4 billion in first month of lunar New Year The nation’s imports and exports achieved an impressive figure of more than US$60 billion during the first month of the lunar New Year, in which the country recorded a trade surplus of nearly US$1.4 billion. This represents a far better result than previously forecasted by the General Statistics Office (GSO), with exports reaching US$29 billion, imports at US$29.5 billion, and the country’s trade deficit at US$500 million. Specifically, export turnover hit US$30.845 billion, up 8.1% over the same period from 2021. There were seven groups of export goods with a turnover of US$1 billion or more in the first month of the year, in which some groups enjoyed high double-digit growth, such as textiles and garments, wood and wood products, means of transport and spare parts, seafood, coffee, pepper, and rice. In the opposite direction, import turnover in January reached US$29.45 billion, a rise of 11.3% over the same period from last year. In line with this, there were six commodity groups with a turnover from US$1 billion, with computers, electronic products and components achieving the highest figure of US$7.12 billion, representing an annual rise of 25.8%. ACV asked to establish Long Thanh airport project management board Deputy Prime Minister Le Van Thanh has ordered the Airports Corporation of Vietnam (ACV) to quickly establish a management board for the Long Thanh international airport project and report it to the prime minister before February 18. In an announcement released by the Government Office on February 14 on the conclusions of the deputy prime minister on the establishment of the steering committee for the big-ticket airport project, Thanh said the management board should have strong manpower and legal status. It is necessary to establish the management board as ACV was tasked with investing in the Subproject 3 project, which is the most important part of the airport project and composes multiple key components of the airport. The management board will be authorized to hire consultants on monitoring and appraising the project and highly-skilled experts to ensure the project’s progress and quality of work, according to the deputy prime minister. Speaking of the design and appraisal aspects, the deputy prime minister asked ACV to submit a report on the design of a passenger terminal to the Ministries of Transport and Construction before February 18 to get their feedback. HCMC earns almost US$9 billion from exports in two months HCMC has ranked first in the country in terms of export value, earning US$8.9 billion from exports over the past two months, according to the latest statistics from the General Department of Vietnam Customs. In January this year, the city’s export revenue amounted to some US$4.1 billion, making it the number one in the country for export value. This is the second straight month that the city has taken the lead in export value after Bac Ninh Province surpassed it for several months after the fourth wave of the Covid pandemic hit HCMC in 2021. In December in 2021, after the pandemic was brought under control and firms restarted their business and production activities, HCMC saw the export value reach US$4.8 billion, regaining the number one ranking. Although Bac Ninh Province ranked first in export revenue due to large foreign direct investment projects, mainly the one from Samsung, for several months during the fourth wave in 2021, HCMC exported goods worth over US$44.9 billion last year, the highest among other localities. Bac Ninh Province came second with a value of US$44.8 billion. HCMC to resume work on Ring Road No. 2 project The HCMC government will resume work on the Ring Road No. 2 project this year after a two-year suspension.  Nearly 14 kilometers of the project has yet to be completed. In the 2021-2025 period, the city will mobilize resources to complete the project, Tien Phong newspaper reported.  The Ring Road No. 2 project was planned 15 years ago with a total length of over 64 kilometers. The 14 kilometers of the half-done sections comprised four components: the Phu Huu Bridge-Hanoi Highway, the Hanoi Highway-Pham Van Dong Street, the Pham Van Dong Street-Go Dua Intersection and the National Highway 1-Nguyen Van Linh Street. They are 3.82, 2, 2.75 and 5.3 kilometers, respectively.  In a report about the project by the HCMC Department of Transport in late 2021, the first and second components were under appraisal, the third component was some 44% complete, while capital for the fourth segment was not allocated.  The third component, whose investor is Van Phu Bac Ai JSC, has been put on hold for nearly two years due to site clearance and land handover delays. The component was executed under the build-transfer model and required an investment of over VND2.7 trillion.  Khanh Hoa-Buon Ma Thuot expy project requires nearly VND22t in investment The Khanh Hoa-Buon Ma Thuot expressway project, which links the south-central province of Khanh Hoa with the Central Highlands province of Daklak, will cost around VND21.93 trillion in investment, according to the Ministry of Transport. The ministry has submitted the pre-feasibility study of the project to the prime minister, reported the Vietnam News Agency. The four-lane route will be over 117 kilometers long, with the section passing through Khanh Hoa being nearly 32.7 kilometers long and the other running through Daklak over 84 kilometers long. The project is slated for completion in 2026. The ministry proposed tapping the State budget to develop the project. Of the total investment, construction and equipment costs will account for over VND15.6 trillion. Besides this, the ministry also studied dividing the project into three subprojects and considered tasking the provincial authorities with implementing one road section that does not have complicated technical works. Ministries connect with overseas Vietnamese to promote investment in agriculture The first forum organized by the Ministry of Agriculture and Rural Development to connect with overseas Vietnamese to promote investment in agriculture was held yesterday in Hanoi. Speaking at the forum, Deputy Foreign Minister Pham Quang Hieu emphasized that every year, overseas Vietnamese not only send remittances home and support their relatives contributing to the country’s development but also invest in technology in addition to knowledge during the country’s building and consultation of policies. Furthermore, overseas Vietnamese can help turn Vietnam into an agricultural powerhouse with technology application by providing knowledge, technology and mobilizing financial resources. According to statistics carried out by the State Committee on Overseas Vietnamese Affairs, approximately 5.3 million overseas Vietnamese are currently living and working in 190 countries and territories. So far, roughly 3,500 projects and businesses have been established by overseas Vietnamese in Vietnam with a total registered capital of up to US$11 billion, of which many overseas Vietnamese have invested in agriculture.  Digital technology helps enhance transparency at border gates Digital transformation is being promoted at border gates, helping settle procedures more quickly while reducing travel time and costs, Nhan Dan (People) newspaper reported. Vu Van Tuan, deputy head of the Lao Cai International Border Gate Customs Office, said the unit has implemented e-customs declaration at Kim Thanh and Lao Cai Station border gates since 2014. It takes only two to three seconds for customs clearance in the green lanes, ensuring fast and safe customs clearance and improving the law observance of individuals and enterprises, he said, adding that the Lao Cai Economic Zone Management Board strives to complete the digital transformation at the border gates by the end of 2022. Pham Duy Hung, deputy head of Hoanh Mo Border Gate Customs Office in Quang Ninh province, said most of the administrative procedures are done on the online public service system. This does not only reduce travel time for businesses but also helps solve customs-related paperwork more quickly as well as minimise negative phenomenon, he said, adding that the Vietnam Automated System for Seaport Customs Management (VASSCM) system has been deployed at two seaports and 23 customs free warehouses. Hung said that since the beginning of this year, the Quang Ninh Customs Sub-department has implemented a customs declaration software for businesses at https://e-declaration.customs.gov.vn:8443. Enterprises only need to have an internet-connected device to access to customs declaration. Lang Son is with the most breakthroughs among the localities promoting the application of digital technology at the border gates. The province piloted the digital border gate platform at Huu Nghi and Tan Thanh from mid-January. Nguyen Khac Lich, director of the provincial Department of Information and Communications, said the digital border gate platform is developed base on modern technologies such as artificial intelligence (AI), big data (Bigdata), Cloud computing. The platform is shared between various authorities, helping cut down the time for conducting neccesary procedures and improving transparency in management activities. Pham Tuan Hoan, deputy director of Xuan Cuong Friendship JSC, an enterprise specialising in providing wharf and transshipment services at Huu Nghi International Border Gate, said the commissioning of the platform facilitates information confirmation. Deputy Director of the Lang Son Customs Sub-department Vi Cong Tuong said with about 700,000 vehicles entering and leaving the border gate each year, the Digital Border Gate Platform has brought about great benefits as it minimises the workload, time and costs, adding that it can reduce the risk of infection for officials working there given the complicated development of the COVID-19 pandemic. Reference exchange rate up 20 VND on Feb 15 The State Bank of Vietnam set the daily reference exchange rate for the US dollar at 23,116 VND/USD on February 15, up 20 VND from the rate on the previous day. With the current trading band of +/-3 percent, the ceiling rate applicable to commercial banks during the day is 23,809 VND/USD and the floor rate 22,423 VND/USD. The opening-hour rates at commercial banks rose. At 8:15am, Vietcombank listed the buying rate at 22,550 VND/USD and the selling rate at 22,860 VND/USD, both up 40 VND from February 14. BIDV raised both rates by 40 VND to 22,590 VND/USD (the buying rate) and to 22,870 VND/USD (the selling rate). PetroVietnam’s crude oil output surpasses target by 24.2 percent in January The Vietnam Oil and Gas Group (PetroVietnam)’s oil exploitation output in the first month of 2022 reached 0.93 million tonnes, exceeding its set target by 24.2 percent. The figures were released at a regular meeting of the group held virtually on February 14. As heard at the event, with overall business and production achievements, plus high oil prices, PetroVietnam’s financial indicators in the month grew significantly compared to the same period last year. The group's total revenue was estimated at 60.8 trillion VND (2.67 billion USD), exceeding 36 percent of the monthly plan and increasing by 43 percent on-year. Meanwhile, the firm’s contribution to the Government’s budget was around 8.4 trillion VND, up 44 percent and 42 percent compared to the monthly plan and the same period in 2021, respectively. Its consolidated pre-tax profit was about 6.2 trillion VND, 2.9 times higher than the monthly plan and 2.5 times higher than the same period last year. Article assesses Vietnam’s economic prospects, challenges in 2022 An article recently published on the East Asia Forum site assessed prospects and challenges facing the Vietnamese economy this year. Per the article, 2021 was a tough year as shutdowns made life difficult and GDP slowed to 2.6 percent. Increasing supplies of vaccines eventually allowed more normal activities in the last few months of the year. Vietnam’s GDP shrank 6 percent in the third quarter before bouncing back in the fourth quarter. According to the author, despite factory closures, exports rose 19 percent in 2021 to an astonishing 336 billion USD, while GDP was only 271 billion USD in 2020 and grew only slightly in 2021. The high level of foreign direct investment (FDI) did not grow nor shrink much. The article noted that prospects for Vietnam in 2022 are good. As factories and services approach normal, there will be a jump in output. Most projections are for 6–7 percent real GDP growth. Tourism should start to recover from its over 95 percent decline from 2019 levels. Exports should grow about 15 percent and the trade balance will remain modestly positive. Inflation will remain low and the VND will continue to appreciate slightly against the USD. The author also pointed out that one side effect of Vietnam’s rapid export growth has been a lag in domestic value-added in exports. Much of the work has been simple assembly rather than the development of a dense network of supplier industries that would make the FDI ‘stickier’ as wages rise and labour supplies tighten. The COVID-19 pandemic slowed progress on this front, as fewer new enterprises opened and many more temporarily closed. Many firms that are still in business are financially weaker and will need time to accumulate resources to improve machinery, training and marketing. Source: VNA/SGT/VNS/VOV/VGP/SGGP/VNN