VIETNAM BUSINESS NEWS FEBRUARY 24
16:14 VN rubber industry experiences strong
profit growth in 2021 Rubber is one of the industries
posting good performance despite many sectors struggling due to the COVID-19
pandemic. In its fourth-quarter financial
statement, Vietnam Rubber Group (GVR), one of the leading rubber companies in
Viet Nam, said that its net revenue rose 6,6 per cent year-on-year to VND9.6
trillion (US$4.2 million). Of which, revenue from producing and trading latex
still plays a key role, with a gain of nearly 19 per cent to VND7.46
trillion. Vietnam Rubber Group said that the
country's rubber industry will benefit from both export volume and value due
to tight global supplies, especially in Southeast Asia as the region is
severely affected by the weather, leading to a decrease in the production of
natural latex. Therefore, the price of latex is
expected to continue to rise sharply.  Structure of Vietnam's exports to Singapore stable The two-way trade turnover between
Vietnam and Singapore is estimated at 1.3 billion USD in the first two months
of 2022, up 6.3 percent year-on-year. According to the Ministry of Industry
and Trade, over the past time, the structure of Vietnam's exports to the
Singaporean market is relatively stable with numerous items earning high
turnover such as computers, electronic products and components, means of
transport and spare parts, phones and accessories, and glass and glass
products. In addition, agricultural and aquatic
products are potential commodities that Vietnam has strengths to promote its
export to Singapore. Vietnam is currently Singapore’s
fourth biggest exporter of aquatic products, accounting for 12 percent of the
country’s total import of this group of commodity. Meanwhile, Vietnam mainly imports
machinery, equipment, tools, spare parts, computers, electronic products,
chemicals, and cosmetics from Singapore. In January-February, the import
value is estimated at 643 million USD, down 2.3 percent year-on-year. Programme to help Vietnamese,
RoK firms beef up trade cooperation A trade promotion
programme between representatives of 58 enterprises from Incheon,
Jeonju, Daegu, Gyeongbuk of the Republic of Korea (RoK) and Vietnamese
potential firms will be held virtually on March 21-25 by the Korea
Trade-Investment Promotion Agency (KOTRA) in Hanoi. During the five-day event, Korean
businesses will introduce their high-quality products, including cosmetics
and beauty equipment, supplementary foods, foods and beverage, consumer
goods, household items, and mother and child products, KOTRA Hanoi said. The event will offer a good chance for
Vietnamese enterprises to expand partnership with RoK suppliers, watch
directly sample products sent from the RoK. Businesses of the two
countries will also receive consultancy from the KOTRA Hanoi. As many as 17 firms from Incheon will
attend the programme, while Jeonju - a culinary city of the RoK, will
send 10 typical businesses to the event. Following successful trade promotion
activities over the last two years, KOTRA Hanoi plans to host about 70-80
similar events in both face-to-face and online forms in 2022, which are
expected to contribute to speeding up economic recovery for the two
countries’ business communities. Pangasius exports exceed
expectations
Exports rose quite sharply
thanks to a surge in shipments to markets such as Brazil (48.6 percent
increase), Colombia (68.5 percent) and Russia (72.8 percent). The association said exports were up
also thanks to the US increasing buying amid an increasing Covid-19
vaccination rate and reopening of restaurants. Exports to the US in fact doubled from
2020 to 370.6 million USD. Meanwhile, exports to China were down
12.6 percent to 450 million USD, or 27.8 percent of total exports. Exports to
the EU declined for a fourth straight year, falling 17 percent to 106.2
million USD. VASEP said the pandemic had a major
impact on pangasius trade with many countries including France,
Italy and Germany. It forecast exports of the fish reach
1.7 billion USD this year. Businesses struggling due to
high gasoline prices As gasoline prices rose to the highest
level in eight years in February, the logistics industry is under increasing
pressure, forcing businesses to bump up service prices. Manufacturing enterprises are also
expected to face many difficulties as costs soar. On February 21, a litre of RON95
gasoline was VND26,287(US$1.14); a litre of E5RON92 gasoline cost VND25,532. With added pressure on freight rates,
the price of many consumer goods increased, especially as businesses attempt
to recover after months of inactivity. The increase in gasoline prices has
also had an impact on consumer goods. At some markets in HCM City many small
traders said that prices increased sharply compared to early this year. In the bigger picture, the increase in
gasoline and oil prices will lead to an increase in transportation charges,
and an increase in the price of consumer goods will most likely affect CPI
and inflation. Shortage of spare parts puts
pressure on automobile makers The shortage of spare parts,
especially semiconductors, is seriously affecting the production and assembly
of domestic automobile makers. Reports of the General Department of
Customs showed in January 2022, automobile manufacturers and assemblers in
Viet Nam spent US$395 million importing auto spare parts, down 7.8 per cent
compared to the previous month. Currently, most spare parts for auto
companies are imported, so the global shortage greatly affects the domestic
auto industry. Though the domestic supporting
industry has also seen certain growth, the developments are still not as
expected. The country has so far had 21 enterprises that obtained
certificates to participate in the production of components for the auto
industry against five in 2017, but they have met only a very small part of
the local demand. Truong Thi Chi Binh, vice president
and general secretary of the Vietnam Supporting Industries Association, said
there are only 20-30 enterprises in the country qualified to produce auto
components and the components cost 10-20 per cent higher than that of other
countries in the region due to low output. Automotive expert Nguyen Minh Dong
said in order to encourage foreign enterprises to invest in the production of
auto components, the Government needs to impose high taxes on components that
are simple and easy to produce with small investment capital. As for
complicated components, they should be exempt from tax to help auto
manufacturers create products with reasonable prices. Gold prices set new peak of
VND64.6 million per tael Local gold prices passed historical
highs set a few days ago to reach more than VND64 million per tael on
February 24. At 10 a.m. the buying and selling
prices for gold bars quoted by Saigon Jewelry Company Limited (SJC) stood at
VND63.9 million and VND64.6 million per tael, respectively, representing
rises of VND600,000 and VND700,000 per tael compared to the prices recorded
the previous day. Simultaneously, DOJI Gold and Gems
Group were trading gold at VND63.6 million for buying and 64.4 million for
selling per tael, marking increases of VND400,000 and VND600,000 per tael
from the day before. The world’s gold prices are equivalent
to VND52.85 million per tael when converted in the domestic exchange rate,
VND11.4 million per tael lower than SJC gold prices in the Vietnamese market
at the same time. Vietnam car imports down
sharply in January The volume of imported completely
built-up (CBU) automobiles fell more than 70 per cent to 4,524 units valued
at US$127 million in January compared to December 2021 with imports from
Indonesia down sharply, reports the General Department of Vietnam Customs. Imported CBU automobiles reached
15,196 units with a value of $433 million in December. It is reported that the majority of
imported CBU vehicles in Viet Nam came from Thailand, Indonesia, China and
Japan. The volume of cars imported from these markets reached 3,653 units,
accounting for 87 per cent of the total number of imported vehicles into the
country in January. Of this figure, Thailand accounted for 2,595 units,
followed by China with 584 units, Indonesia with 474 units and Japan with
284. Vehicles with less than nine-seat and
buses, trucks, and specialised vehicles were imported into Viet Nam and were
down by 53 per cent to 4,528 units. Of this figure, buses, trucks, and
specialised vehicles reached 4,008 units for $99 million. The less than nine-seater cars were
registered for import in January, mainly came from Thailand with 2,488 units
or down 54 per cent, and Indonesia with 472 units, a decline of 76 per cent
compared to December. In January, only 12 vehicles with more
than nine-seat were imported into the country, mostly coming from Russia.
Meanwhile, 260 trucks were imported worth $11.7 million with a 93.5 per cent
decrease in volume and 90.5 in value compared to December. And some 244
specialised vehicles were imported, worth $16 million with a decline of 90.6
per cent in volume and 86.3 per cent in value. Timber and wood products
cross US$1.5 billion in January Timber and wood products in January
surged by 8.3% to reach US$1.55 billion compared to December, 2021, and were
up 14.3% from the same period last year, according to the General Department
of Vietnam Customs. This also marks the third time that
the export of timber and wood products has exceeded the threshold of US$1.5
billion per month. The export value of timber and wood
products to the majority of major markets increased in January, of which the
United States took the lead with US$928.2 million, up 12.8% on-year. This was
followed by Japan with US$153 million and China with US$134.4 million. With an export turnover of over US$1.5
billion, timber and wood products are among seven groups of export
commodities which saw a turnover of more than US$1 billion in January. These products are also among the top
three commodity groups that have witnessed double-digit growth, behind only
garments and textiles. Digitalisation fuels
Vietnam’s economic growth
Vietnam’s fast-growing digital
economy is likely to help the country become a high-income economy by 2045,
according to an article recently published on eastspring.com. According to the author, Vietnam is
popular for its golden demographic population, with nearly 56 percent of its
people are under 35, the highest among countries in the region with similar
income levels. The article also wrote Vietnam’s
middle-income class earning above 700 USD a month is estimated at one third
of the population and expected to double its size by 2030. Such growth will
underpin domestic consumption for services and higher value-added products. Vietnam to get highest trade,
income gains among RCEP members: WB Vietnam is expected to register the
highest trade and income gains among Regional Comprehensive Economic (RCEP)
members, according to a World Bank (WB)’s working paper. To estimate the economic and
distributional impacts of RCEP in Vietnam, WB constructed a baseline and four
alternative scenarios. The baseline reflects the business-as-usual conditions,
where the tariff schedules of previous agreements, including the most recent
CPTPP, have been implemented, in parallel with the US-China trade war. In the baseline, between 2020 and
2035, the average trade weighted tariff imposed by Vietnam declines from 0.8
percent to 0.2 percent, while the tariffs faced by Vietnam are reduced from
0.6 percent to 0.1 percent. To measure the effects of RCEP, the policy
scenario will be compared against this baseline. The four policy scenarios will measure
the RCEP implementation incrementally. The first scenario, the Tariffs
scenario, is exclusively the implementation of tariffs according to the RCEP
tariffs’ reduction schedules. In the second scenario, the RCEP
scenario, WB implemented reductions of tariffs and of non-tariff measures,
including the tariff reduction of 35 percent on agricultural goods; 25
percent on manufacturing goods; and 25 percent on services. Reference exchange rate up 1
VND The State Bank of Vietnam set the
daily reference exchange rate for the US dollar at 23,131 VND/USD on February
24, up 1 VND from the previous day. With the current trading band of +/-3
percent, the ceiling rate applicable to commercial banks during the day is
23,825 VND/USD and the floor rate 22,437 VND/USD. The opening hour rates at commercial
banks stayed stable. At 8:30am, Vietcombank listed the
buying rate at 22,650 VND/USD and the selling rate 22,960 VND/USD, unchanged
from February 23. Visa, VNPAY join hands to
speed up digital payments in Vietnam Visa, the world’s leader in digital
payments, and VNPAY, Vietnam’s prominent fintech company, inked a strategic
partnership to enhance the digital payments experience in Vietnam during a
ceremony held in Hanoi on February 23. The two companies will make cashless
payment more accessible in Vietnam through expanding and strengthening the
fintech company's affiliate network of accepting merchants, as well as
rolling out new services including Visa’s Tap to Phone acceptance solution,
virtual Visa prepaid cards, fund transfers powered by Visa Direct service,
and the Visa Instalment Solution (VIS), among others. According to Visa’s Consumer Payment
Attitudes study 2021, 80 percent of consumers in Vietnam are interested in
using mobile contactless payments like tap to phone, said Dang Tuyet Dung,
Country Manager of Visa Vietnam and Laos. VNPAY operates a network of nearly
200,000 locations nationwide, which accepts payment through the VNPAY-POS,
VNPAY-QR and VNPAY-QR payment gateway. Ample room remains for
Vietnam-Singapore trade growth Vietnam is anticipating a great chance
to further promote its trade with Singapore, which has yet to be on par with
the potential of both nations, as President Nguyen Xuan Phuc is scheduled to
pay a State visit to the city-state from February 24-26. Despite adverse impacts from the
COVID-19 pandemic, bilateral trade hit 8.3 billion USD in 2021, up 23.3
percent from the previous year. In January 2022, the figure reached 783.9
million USD, an increase of 6.8 percent year on year. As of February this year, Singapore
had 2,860 valid projects worth 66 billion USD, ranking second among 140
nations and territories worldwide pouring capital into Vietnam. Notably, in
2021, Singapore took the lead among all foreign investors with combined
registered investment of over 10.7 billion USD, accounting for 34.4 percent
of the total capital attracted by Vietnam. Guidelines on supervision,
assessment of foreign investment issued The Minister of Planning and
Investment has issued a circular giving guidelines on the supervision and
assessment of foreign investment activities in Vietnam. Accordingly, Circular 02/2022/TT-BKHDT
is applicable to state management agencies related to foreign investment
activities, including ministries, ministerial-level agencies,
provincial-level People's Committees, investment registration agencies,
agencies tasked with state management of investment in accordance with legal
regulations on investment, foreign-invested economic organisations and
projects operating in Vietnam. The circular stipulates the principles
for foreign investment management, one of which is not to hinder or affect
the normal operations of foreign-invested organisations and projects during
the process of supervision and evaluation. The circular will take effect on April
1 this year, replacing Circular 09/2016/TT-BKHDT dated June 30, 2016. Capital market development
helps raise confidence in investor protection The capital market will continue to play
a vital role in national development moving forward, according to
international investors at the recent Vietnam Business Forum (VBF). Despite this optimism, a number of
solutions have also been proposed by various experts to accelerate the
development of the Vietnamese capital market. In particular, it remains
necessary to focus on solutions aimed at strengthening investor protection,
thereby increasing confidence in the market, as well as its overall
attractiveness for foreign financiers. According to an assessment conducted
by the Capital Market Working Group of the VBF, it can be viewed as essential
to continue to improve the hardware and software infrastructure of the
market. The country boasts a solid legal
system, although it still requires improvements to be made to ensure the
consistency of legal provisions applicable to the debt and securities
markets. Outbound tours set to rise in
March and April The demand for outbound tours is
projected to grow once the nation fully reopens its borders to international
tourism on March 15, according to tour operators. Some of the destinations that
Vietnamese tourists can consider include Thailand, Cambodia, Dubai in the
United Arab Emirates (UAE), India, and the United States. Many outbound tours in March and April
have already been fully booked with travel firms urgently preparing to launch
European tours or Australian tours. In the near future, Dat Viet Tour Company
is set to organise a group of tourists to Cambodia in support of the Vietnam
U23 national team, along with a group of tourist heading to Dubai in April. Furthermore, Hanotours company will
kick off eight delegations to Dubai in March and April, while tours to the
Western Europe will begin in March. Nguyen Nguyet Van Khanh, deputy
director of the Marketing Department at Vietravel Company, said the firm is
gradually restoring foreign markets, adding that outbound tourism will
flourish in the summer season this year. Vu Giang Bien, director of PATTOURS,
predicts that the international destinations, which will attract Vietnamese
tourists will be Asia, along with the European, Russian, and African markets. Promising start to the year
for wood exports After a trade surplus of $11.8 billion
in 2021, the wood industry brought in export revenue of approximately $1.6
billion in the first month of 2022, heightening expectations for the
remainder of the year. According to the latest data from the
General Department of Customs, in January the total export value of wood and
wooden products stood at just over $1.5 billion, a 14.3 per cent jump
on-year. Along with March and June last year,
this is the third time the sector’s monthly export turnover has exceeded the
$1.5 billion mark. As a result, wood and wood products
have made it into a shortlist of export items with a turnover surpassing $1
billion in the first month of the year and are in the top three of goods with
double-digit growth, ranking second after textiles and garments. Air passengers rebound in
early 2022 The number of air passengers in
February reached over six million, up 57.8 per cent on-year, according to the
Civil Aviation Authority of Vietnam (CAAV). The number included 105,000
international arrivals, up 350 per cent from the same period last year, while
the rest was domestic tourist travellers, up 56.1 per cent on-year. During the month, cargo transport by
air rose 27.6 per cent on-year. The recent positive signals stir hope
that the sector is likely to strongly rebound this year after suffering a bad
2021 due to the pandemic. Hoa Phat ramps up medical
oxygen supply Due to the rising demand for medical
oxygen for Covid treatment, Hoa Phat Group has announced that it is reducing
the oxygen volume for steel production to ramp up its supply of medical
oxygen from January to March. This plan is aimed at sharing the
difficulties of the health sector and following the Industry and Trade
Ministry’s call to enhance medical oxygen production and supply for Covid treatment. During the period of reducing oxygen
for steel production, the group will be increasing the consumption of
pulverized coal and foundry coke to not affect its steel production target. Due to its change, the group’s
production cost is expected to increase some VND40 billion in the first
quarter of 2022. Khanh Hoa eyes VND4t in
tourism revenue in 2022 The tourism sector in the
south-central province of Khanh Hoa is looking to earn VND4 trillion in
revenue this year, up 80% year-on-year, according to a local tourism
official. The coastal province is expected to
welcome over 1.2 million tourists this year, up 100% year-on-year, with 1.16
million domestic visitors and 40,000 international ones, Nguyen Thi Le Thanh,
director of the provincial Tourism Department, told a tourism conference held
in the province on February 22. Domestic tourism would also be
developed into a spearhead economic sector under the province’s tourism
recovery program. Therefore, the province will ramp up efforts to promote
local tourism and attract tourists throughout 2022, the official said. The provincial tourism sector had
earlier made the most of opportunities to overcome challenges posed by the
Covid-19 pandemic and made preparations to recover in the new normal. As a
result, in the last three months of 2021, the province served nearly 122,000
visitors, with some 4,600 of them being international travelers, and achieved
over VND450 billion in revenue. Hanoi ready to assist
businesses in developing supporting industries With the advantage of technology and
manpower, Hanoi is poised to be a pioneer in helping local businesses develop
supporting industries, becoming an example for other localities nationwide,
Dam Tien Thang, Deputy Director of Hanoi Department of Industry and Trade
said. At a recent meeting with the Ministry
of Industry and Trade on mechanisms and policies for the development
ofsupporting industries, Thang said, the city’s authorities have approved the
supporting industry development program for the 2020-2025 period with the
goal of increasing investment attraction and improving the capacity of
supporting industries in Hanoi. Under the program, the city will form
a supporting industry network, which will promote linkage among multinational
corporations, manufacturing and assembly enterprises in Hanoi and nationwide,
especially in the fields of automobile and motorbikes, mechanical
engineering, and mobile phones. The city will enhance the investment
of local enterprises in the Hanoi Southern Supporting Industrial Park, other
industrial and high-tech zones, and industrial clusters in the area.
Especially, the city will speed up the investment progress and complete the
technical infrastructure of Hanoi Information Technology Park and industrial
zones in Soc Son and Dong Anh districts. Ministries urged to mull over
new environmental tax on fuel Prime Minister Pham Minh Chinh has
requested the Ministry of Finance to coordinate with the Ministry of Trade
and Industry in mulling over reduction of environmental tax on fuel and
report to the Prime Minister prior to February 28. The Government chief made the request
as fuel prices are now at historic high. The new policy on environmental tax
shall be decided by the Standing Committee of the National Assembly at the
proposal of the Government. Under current regulations, the
environmental tax on RON 95 gasoline is VND4,000 per liter. In addition to the environmental tax,
gasoline is also subject to special consumption tax (8-10 percent), import
tax (8 percent), and value-added tax (10 percent). Source: VNA/SGT/VIR/VOV/VNS/Hanoitimes |
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