VIETNAM BUSINESS NEWS MAY 19
16:00 US agrees to import
Vietnamese pomelos The Ministry of
Agriculture and Rural Development (MARD) has just received a notice from the
US authorities saying they have completed the appraisal of procedures of
importing Vietnamese pomelos.  The US is
putting the finishing touches to the opening of its market for Vietnamese
pomelos. During a recent meeting with
Vietnamese Minister of Agriculture and Rural Development Le Minh Hoan, US
Under Secretary of Agriculture Jason Hafemeister said the US was putting the
finishing touches to the opening of its market for Vietnamese pomelos. He went
on to say the US has been collecting public comments since February 2022 and
is currently gathering them for early announcement. Minister Hoan, who accompanied Prime
Minister Pham Minh Chinh on his May 11-17 working visit to the US, told his
host that Vietnam considers the US a leading partner in agriculture. Vietnam
is now transforming towards green agriculture, and it has engaged in many
initiatives with the US, other countries and international organizations in
this regard, Hoan stressed. Pomelo is Vietnam’s seventh fruit
eligible to enter the US after mango, longan, lychee, dragon fruit, rambutan
and star apple. According to the Vietnam Trade Office
in the US, the US is a potential market for Vietnamese fruits when it has
more than 330 million consumers with high per capita income and the culinary
trend is increasingly focused on vegetables and fruits. The
US was the largest consumer of Vietnamese farm products in the past four
months, with its import turnover reaching US$4.9 billion, up 27.3% year on year.
The import of Vietnamese vegetables and fruits continued to increase
significantly over the same period. Six more pangasius processing
factories eligible to export to US The
Food Safety and Inspection Services (FSIS) under the United States Department
of Agriculture has recognised six more Vietnamese pangasius processing
factories that are eligible to export products to the US, raising the number
of establishments to 19, according to the Ministry of Agriculture and Rural
Development’s National Agro-Forestry-Fisheries Quality Assurance Department
(NAFIQAD). It is expected to boost the export of
Vietnamese pangasius to the US market in the near future. The six facilities are the Hop Nhat
Seafood Corporation, Atlantic Seafood Freezing factory, Basa Mekong factory,
High grade pangasius product exporting & Processing Factory, Co May 2
seafood processing export factory and CK Frozen Food Vietnam Co. Ltd. Vietnam Blockchain Summit 2022 to take
place in July The
Vietnam Blockchain Summit 2022 will take place at the National Conference
Centre of Vietnam in Hanoi on July 21-22. The
event will bring together more than 2,500 delegates from management units,
enterprises, investment funds, domestic and international organisations and
individuals. The
summit is an annual event on a national and international scale. Being
organised for the first time by VINASA and Vietnam Blockchain Association,
the programme is oriented to become a prestigious annual destination, in the
chain of events of the blockchain world. Kien Giang calls for investments in 55
projects to mitigate natural disasters The
southern province of Kien Giang is calling for investment in 55 projects
meant to cope with climate change and prevent natural disasters and coastal
and riverine erosion. The
newly approved projects include 14 in transportation, 15 in agriculture and
irrigation, 20 in water supply, two in water drainage, three in wastewater
treatment, and one in solid waste treatment. One
of the transport projects will build a 3.1km road along the western coast of
Phu Quoc island at a cost of 2.2 trillion VND (86 million USD). Another
is an erosion-prevention embankment along Vinh Thuan Yen beach in Ha Tien
city. The
6.3km dyke will cost 640 billion VND (27 million USD) and help cope with
climate change and seawater rise, beautify the city’s urban area and foster
tourism. Kien
Giang has mobilised investment from various sources in recent years for
projects to cope with climate change and natural disasters, and they have
proven effective, helping improve people’s livelihoods and fostering
socio-economic development, according to its People’s Committee. It
has built 37 irrigation sluices in the western sea dyke, and they are
functioning effectively. Another
18 sluices and freshwater reservoirs are being built on Phu Quoc and islands
in Kien Hai district, and various saltwater prevention projects along the
coast in Rach Gia city and Chau Thanh and Kien Luong districts. The
province has asked the Government for funding for three urgent projects
required for coping with climate change and preventing saltwater intrusion in
rivers. To
cost a total of 2.85 trillion VND (122 million USD), they include a saltwater
prevention project in the western sea in Kien Luong and Chau Thanh districts,
construction of 16 sluices in An Bien and An Minh districts, and building and
upgrading water supply works in rural areas. Garment exports to major markets rise
considerably Vietnam’s
garment exports to major markets such as the United States, the European
Union and the Republic of Korea soared considerably in the first four months
of the year thanks to high demand fueled by the global economic recovery and
incentives from free trade agreements. The
General Department of Vietnam Customs reported that Vietnam’s garment exports
to the United States rose 26.8% over four months to approximately US$6
billion, accounting for 59% of the country’s total export value. Most
notably, garment exports to the EU market throughout the reviewed period also
surged by 34.6% year on year to nearly US$1.3 billion Strong
export growth was also recorded in the Republic of Korea, with turnover
reaching US$1 billion, up 8.7%, while exports to the Japanese market endured
a downward trend of 2% to US$1.05 billion compared to the same period last
year. Experts
forecast that there is a positive outlook ahead for garment and textile
exports to the US and EU markets that are continuing to place large export
orders. Furthermore,
foreign importers tend to work directly with production units as opposed to
intermediaries as part of efforts to reduce costs. Simultaneously,
customers are increasingly concerned that China's "Zero COVID"
policy will negatively impact the supply sources and disrupt supply chains.
Therefore, there is an increasing trend to shift orders to neighbouring
countries, and Vietnam is expected to benefit from the shifting. Vietnam should shift economic growth
model for further development: WB report For
Vietnam to realise its aspiration for reaching high income status by 2045,
the country will need to shift its economic growth model and sharply improve
the government’s capacity to coordinate and implement economic policy reforms
and public investments, a World Bank Group report says. The
World Bank Group’s Systematic Country Diagnostic Update, entitled "How
Will Vietnam Blossom? Reforming Institutions for Effective Implementation”,
emphasises that Vietnam's traditional growth model faces major challenges
from the COVID-19 pandemic, slowing globalisation, and the country’s
increasing vulnerability to external shocks, especially climate risks. After
identifying a series of policy responses and reform priorities, many of which
are not new, the report argues that adapting institutions will be the key to
success. Vietnam’s
GDP per capita has increased five fold over the past three decades, while its
institutions have not adapted at the same speed since the Doi Moi (Renewal)
of the late 1980s,” said World Bank Country Director for Vietnam Carolyn
Turk. Vietnam
has implemented its development priorities unevenly over the past 35 years.
It has exceeded expectations in trade openness and social inclusion but
lagged considerably in promoting green growth and upgrading national core
infrastructure. Such variability is explained by its institutions that have
not been always well prepared to address increasingly complex, often
cross-cutting development priorities, or to facilitate the transition to a
higher-income society. Adapting and modernising existing institutions is a
key priority of the socio-economic development strategy adopted by the Party
Congress in February 2021. Improving
Vietnam’s implementation performance will require five institutional reforms,
the report says. Vietnam will need to create a solid institutional anchor
that will transform development priorities into concrete actions; streamline
administrative processes to increase the effectiveness of government at all
levels; use market-based instruments to motivate public and private stakeholders;
enforce rules and regulations to enhance motivation, trust, and fairness; and
engage in participatory processes to secure greater transparency and
accountability. Vietnam
has already transformed itself from one of the most closed economies in the
world to one of the most open economies during the 1990s and 2000s. But the
road from lower middle income to high income will be far more challenging. By
adopting these institutional reforms more systematically, Vietnam will
underpin its vision for economic development, strengthen its capacity to
implement national strategies, and boost its motivation to produce results in
several key areas – green growth, digital transformation, financial
inclusion, social protection and infrastructure upgrading – that will help it
achieve its development goals. VietJet Air resumes Cam Ranh – Incheon
air route Cam
Ranh International Terminal Company announced on May 19 that budget airline
Vietjet Air of Vietnam will re-operate an air route connecting Cam Ranh
airport (Khanh Hoa) and Incheon airport (Republic of Korea). According
to the plan, VietJet Air will run two flights a week, every Wednesday and
Friday, on the air route, starting on May 20. Cam
Ranh airport is scheduled to receive plane coded VJ837 carrying approximately
160 passengers on board from Incheon at 13:15 on May 20, kick-starting the
resumption of the route. Meanwhile,
a Cam Ranh – Incheon plan is scheduled to take off at 02:55 on May 20,
carrying 33 passengers on board. Da Nang hosts Vietbuild 2022 The
International Vietbuild Exhibition 2022 is underway in the central city of Da
Nang with the participation of more than 200 domestic and overseas
businesses. The
exhibition showcases a wide range of products in construction, building
materials, exterior-interior decoration, solar energy machines, and smart
home technologies in 1,000 booths. In
his speech at the exhibition's opening ceremony on Wednesday, Deputy Minister
of Construction Nguyen Van Sinh praised the event's contribution to
supporting the implementation of State guidelines and policies on
construction and real estate, trade promotion, technology transfer, brand
development and investment co-operation. It
would also help connect supply and demand, especially in the context of the
country's economic recovery after the COVID-19 pandemic, Sinh said. Meanwhile,
organisers said the event would be a good chance for local enterprises to
meet and exchange different experiences, seek greater investment
opportunities, and introduce their latest products and technologies. They
added it would also help affirm the abilities of participating enterprises to
provide all kinds of materials and services, thereby meeting the needs of
construction and development within the Vietnamese market. Seminars,
trade exchanges between businesses, and the introduction of new products will
also be held on the sidelines of the event which runs until Saturday. Forum held on digital transformation
for sustainable tourism Titled
"Green Light for Tourism to Take Off Part 2: Digital Transformation:
Diving Force for Sustainable Development", the forum gathered dozens of
experts from State management agencies, tourism authorities, localities, and
IT. Hoang
Quang Phong, deputy chairman of the Vietnam Chamber of Commerce Industry,
said at the end of 2018, the Prime Minister issued Decision No 1671/QD-TTg
approving the “Master plan on applying informatics technology in the tourism
field for 2018-2020, with orientation to 2025.” “Informatics
technology has been applied in various tourism companies, especially hotels,
resorts and big travel agencies,” Phong said. However,
he said there had been no uniform application in the whole sector. Phong
noted that the pandemic had seen the biggest ever purge in the field. “Digital
transformation has been proved to be crucial to all the fields if they want
to move forward in the Fourth Industry Revolution,” he said. "The
pandemic has pushed all tourism companies and localities to choose: digital
transformation or die.” Digital
transformation has helped tourism enterprises flexibly react to the changes
in the market, he said. Based on available data, tourism workers could still
communicate with customers to understand their psychology, behaviours and
demands to introduce suitable products. Phong
said not only enterprises but also locations needed to go through digital
transformation to bring convenient and safe experiences to customers, like
remote guide systems, QR codes introducing displayed objects, and automatic
facilities to help customers send comments on service quality to managing
boards. “We
can see that the tourism sector has been active in digital transformation and
the Fourth Industry Revolution, aiming to form a smart tourism ecology
linking participants from tourists, service providers to State management
agencies, he said. Nguyen
Le Phuc, deputy general director of the Vietnam National Administration of
Tourism (VNAT), shared the same idea that digital transformation will bring
an opportunity for the tourism sector to develop more sustainably. Phuc
said in the past few months, the VNAT has concentrated on establishing a
smart tourism ecology to create a “common playground” for localities and
enterprises. The
VNAT has built a data system for Vietnamese tourism; established information
connections among management agencies, localities and enterprises; applied
technology to ensure safe tourism; pushed up the use of apps among management
agencies, enterprises and tourists like the apps including “Safe Viet Nam
Tourism,” “Viet Nam Travel Guide,” and “COVID-19 Registration & Safety
Judgement;” and supported localities and destinations to embrace digital
transformation, such as Ha Giang Province and Thanh Hoa Province in 2021. Nguyen
Quyet Tam, director of Vietso, also the founder of TravelMasters, held that
to build the foundation for digital transformation, first and foremost, the
tourism sector should have a common technical criteria system so that
different platforms can share data. “Data
built at localities and enterprises are not following any same standard,” he
said. Do
Hong Xoan, chairperson of the Viet Nam Hotels Association, said
three-quarters of tourism enterprises are small and medium-sized and need
more support in the process. “Small
and medium-sized enterprises have been bogged down with various difficulties
as digital transformation should be uniformed across State policies, ministry
decisions, VNAT policies, association policies, and locality policies,” she
said. “They
need more help from agencies to apply the digital transformation,” she said. The
Selection for National Distinguished Tourism Service Providers 2022 was
launched at the same forum to praise enterprises making considerable
contributions to tourism market development. All tourists and enterprises throughout
the country can cast their votes. Livestock companies profit hit by
rising animal feed prices VNDirect
Securities Corporation said that the Russia-Ukraine conflict had a negative
impact on the animal feed industry as supplies of raw materials for animal
feed production like corn, soybeans and wheat, are disrupted, causing prices
to rise sharply. The
two countries are respectively the world's leading and third largest wheat
exporter, accounting for one-third of the total trade of this commodity.
Besides, Ukraine is the second largest corn exporter, accounting for 22 per
cent of the world turnover. As
of early April, the price of imported corn at Cai Lan port, Quang Ninh
Province, reached VND9,200-9,500 per kg (US$0.4-0.41 per kg), an increase of
20-25 per cent compared to the end of 2021 and up 50 per cent over the same
period last year. The
average price of imported soybeans in the first quarter was $637.6 a tonne,
up 18 per cent year-on-year, while the price of imported wheat also increased
by 36 per cent to an average of $363.3 a tonne. Under
higher feed prices pressure, live hog prices also posted an increase, but not
significantly. The domestic live pig market in March fluctuated around
VND52,000-57,000 a kg, up 11-14 per cent compared to the beginning of the
year, while the farm-gate price of chicken declined by 11 per cent. However,
compared to the same period last year, live pork prices fell by 23-27 per
cent, while chicken prices climbed by 19 per cent. Due
to the pressure, many livestock enterprises reported a sharp decrease in
profits or even losses. Dabaco Group (HoSE: DBC) announced that its first
quarter net revenue increased slightly by 13.3 per cent on-year to VND2.8
trillion. But the sharp rise in cost of goods sold caused its gross profit to
dip by 60 per cent to VND254 billion. With other expenses did not fluctuate
much, profit after tax was only VND8.6 billion, equal to 2.3 per cent of the
same period last year. This is Dabaco's lowest profit since the second
quarter of 2019. The
company said that the complicated developments of the Russia-Ukraine conflict
had affected the supply chain of input materials such as corn, wheat and
soybeans, causing a serious shortage. The disruption of the supply chain and
obstacles due to the pandemic caused the cost of animal feed to inch higher,
while the price of livestock products did not increase. Similarly,
Hoa Phat Group (HoSE: HPG)’s agricultural segment also reported poor
performance in the first quarter of this year. Of which, revenue from
agricultural businesses fell 27 per cent over last year to VND1.6 trillion.
It lost nearly VND56 billion, while in the first quarter of 2021, the
agricultural segment brought in profit of VND392 billion. As
Masan MEATLife Corporation (UPCoM: MML) separated its animal feed segment,
the company’s net revenue in the first quarter dropped sharply to VND931
billion from VND4.7 trillion last year. However, the parent company's profit
after tax doubled to VND274 billion thanks to financial activities. A
report of the Ministry of Agriculture and Rural Development said that live
hog prices in regions across the country in April tended to increase again
due to the reopening of restaurants, schools and factories, boosting
consumption, while the supply decreased and prices of animal feed climbed.
Chicken and egg prices also edged higher as consumer demand gradually
recovered. Institutional reforms key to reaching
high-income status The
report emphasises the major challenges faced by Viet Nam's traditional growth
model during the COVID-19 pandemic, slowing globalisation and the Southeast
Asian economy's increasing vulnerability to external shocks, especially
climate risks. The
key to addressing said issues, according to WB, is for the country's
institutions to adapt and improve. “Viet
Nam's GDP per capita has increased fivefold over the past three decades,
while its institutions have not adapted at the same speed since the Doi Moi
(Renewal) course of the late 1980s,” said World Bank Country Director for
Viet Nam Carolyn Turk. “A series of institutional reforms can help the
country avoid the middle-income trap by increasing its efficiency to respond
to new and complex global and domestic challenges.” Reforming, modernising SoEs a key
objective: minister Phoc
said governmental agencies have been working around the clock with SoE’s
leaders and managers to seek out optimal solutions in restructuring and
improving the enterprises for the long run. The
minister, however, said many SoEs-related projects have fallen behind
schedule. For example, the amount of State capital recovered from
equitisation in 2021 was a measly VND2 trillion, or just 5 per cent of the
VND40 trillion target set by the National Assembly (NA). A
key issue, according to the Ministry of Finance (MoF), was how SoEs’ assets
are calculated. Phoc said SoEs are often undervalued. Once properly audited,
the SoEs value would increase by 280 per cent on average. This indicated
major risks of losing State capital, especially on lands and properties. “The
main issue here is a significant discrepancy between their estimated value
and market value. Even if the gap was not significant now, it will have
changed in the next 10-20 years,” said the minister. “Another
issue is how to correct the estimates after the intended purposes for said
properties were changed,” he said. He
called for greater responsibility and accountability by SoEs’ leaders, who
should play a more active role in restructuring and modernising the
enterprises. Other
challenges included how to produce an estimate for traditional trademarks and
brands, said Le Thanh Tuan from the State Capital Investment Corporation
(SCIC). He said in many cases it’s difficult to collect sufficient data to
determine brand values, especially with smaller SoEs with limited recognition
and market share. Another
difficulty experienced by SCIC, according to Tuan, was the lack of
cooperation from SoEs’ management and leadership. This has been particularly
severe in enterprises in which SCIC held fewer shares. Pham
Van Duc, deputy head of the corporate finance department under the MoF, said
SoEs must be given more autonomy as well as tighter inspection and
supervision to improve their transparency. Duc
said during the 2016-20 period, only 39/128 SoEs started the equitisation process.
He said a major hurdle was the SoEs’ lack of active participation in the
process’s preparation and implementation. He
advised the Government to impose higher management standards and to employ
modern technologies to help improve SoEs’ competitive capacity and the
preservation of capital. Meanwhile,
priority should be given to investment in key industries and remote regions
by SoEs as they were often neglected by the private sector. In addition,
greater effort was required to cut losses in cases of SoEs' poor financial
performance. More low-income housing projects to be
carried out Low-income
housing projects will be prioritised in major cities, particularly Hanoi and
HCM City. Real
estate giant Vinhomes has announced plans to build 500,000 social housing
apartments priced below VND1 billion across the country over the next five
year. In August this year, the firm will start its first project. Housing
and Urban Development Corporation has recently started work on a social
housing project in the northern province of Hanoi to offer 564 apartments
priced at just VND380 million (USD16,521) each. Thanh
Hoa provincial authorities have approved a low-income housing project in
Thanh Hoa City which will provide up to 2,400 apartments. Meanwhile,
Ninh Binh Province has agreed on a project to build 2,153 apartments at Gian
Khau Industrial Park and neighbouring areas. Four
low-income housing projects in the country were completed in the first
quarter of this year according to the Ministry of Construction. During the period,
only three projects of the same kind were licensed with a total number of
1,200 apartments in Lang Son, Phu Tho and Quang Ninh projects. In contrast,
up to 39 commercial housing projects providing 18,700 apartments in total
were licensed. By
the end of 2021, 266 low-income housing projects in Vietnam were finished
with 142,000 apartments in total, slower than the target of the national
housing development plan by 2020 and a vision until 2030. Until
now, only 116 of 214 housing projects have been completed, while the
remaining 98 are behind schedule. As a consequence 575 industrial parks
nationwide are facing a serious shortage of housing. Vietnam
will need VND220 trillion to build 294,600 low-income apartments during the
2021-2025 period. Source:
VNA/SGT/VNS/VOV/Dtinews/SGGP/VGP/Hanoitimes |
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