Vietnamese goods make up high proportion of domestic supermarket system
Local products account for over 90% of domestic enterprises’ distribution systems, while they account for between 60% and 96% for foreign supermarkets, according to figures released by the Ministry of Industry and Trade (MoIT).
The data was given during a recent conference held by the MoIT aimed at reviewing plans to develop the domestic market in association with the “Vietnamese people give priority to using Vietnamese goods” campaign for the 2014 to 2020 period. In terms of traditional retail channels, the proportion of locals products at markets and in convenience stores makes up 60% or more, with key products reaching over 80% of the target set out in the plan.
Most notably, beginning early this year amid the spread of the novel coronavirus globally, many businesses have witnessed their export markets become disrupted, resulting in installed raw materials sources and orders. Indeed, the domestic market is viewed as a significant enough playground for local businesses to exploit whilst overcoming the various difficulties and challenges they face.
Statistically, despite the total retail sales of goods and services during the first seven months of the year falling by 0.4% in comparison with the same period in 2019, the total retail sales of goods during the reviewed period still accounts for 79.2%, an annual increase of 3.6%.
Therefore they are able to meet the essential needs of people whilst ensuring a consistent supply of raw materials, fuel, machinery, equipment, and goods to maintain production and business activities with regard to domestic and export markets.
Local gold prices fall
Local gold prices fell after the weekend and as of 10am on Monday, the prices had fallen to VNĐ55.45 million (US$2,403) per tael.
Compared to the end of last week, the prices decreased by between VNĐ500,000 and VNĐ700,000 per tael.
The Saigon Gold and Jewelry Company rated each tael of SJC gold at VNĐ53.8 million to buy and VNĐ55.45 million for sale (sell-buy).
Doji Group had its buying price at VNĐ54 million with a sales price of VNĐ55.7 million. Rated higher, Phú Quý Group listed each tael of gold at VNĐ54.2 million on the buying side and VNĐ56 million on the selling side.
Bảo Tín Minh Châu Gold Firm in Hà Nội had one of the highest buy prices at VNĐ54.3 million per tael while selling one tael at VNĐ55.9 million.
On August 7, local gold prices increased sharply to reach a record of more than VNĐ62 million per tael.
At the same time, on the gold exchange Kitco, prices fell $4.3 per ounce to close at $1,940 per ounce ($2,337 per tael).
Vietnamese shrimp sells like hot cakes in US in H1
Vietnam exported over 323 million USD worth of shrimp to the US in the first half of this year, up 29 percent year-on-year.
The US was the only market where Vietnam experienced positive growth in shrimp export during the period under review.
The Vietnam Association of Seafood Exporters and Producers said the US’s shrimp imports mainly serve retail channels and e-commerce, and suggested Vietnamese exporters focus on intensively processed products and those of added values.
In the first six months, despite the great impact of the COVID-19 pandemic, Vietnam still earned 2 billion USD from shrimp export.
The Vietnam Association of Seafood Exporters and Producers expects this year’s revenue will expand 20 percent against the previous year.
Real estate market adapting to COVID-19
The real estate market saw some signs of recovery in the latter half of the second quarter and early and mid-July before the second wave of COVID-19 struck in late July. The changing situation has forced property companies to adjust their business plans.
According to industry insiders, the real estate market was indeed picking up in the second quarter. Transactions in the high-end segment increased 38% against the first quarter while those in the mid-range segment rose 33%.
The recovery was driven not only by the resumption of “business as usual” nationwide but also by strong growth in online transactions.
Local real estate companies have been adapting during the pandemic and look forward to the Government assisting with legal procedures to help them survive these tough times.
The domestic real estate market is expected to fully recover by the end of the year as the pandemic is likely to be contained by that point. Between now and then, real estate companies and their clients must continue to adapt to the changing circumstances.
Support industries struggling with COVID-19
Tran Duy Dong, head of the Domestic Market Department under the MoIT, says that in the context of the Vietnamese economy joining several new generation FTAs, especially the EU-Vietnam Free Trade Agreement (EVFTA) which came into effect at the beginning of August, efforts must be made to improve the competitiveness of Vietnamese products. These moves should be co-ordinated in an efficient manner in the retail system in order to prevent Vietnamese products from being dislodged.There are few opportunities for businesses to develop support industries in Vietnam amid the global economic crisis caused by COVID-19, according to economists.
Dr Can Van Luc from the Research and Training Institute of the Bank for Investment and Development of Vietnam (BIDV) said the country is in the process of extensive and intensive global integration and many production chains such as mobile phones, electronic products, textiles and garments, footwear, farm produce processing, automobile, and oil refining, which are all key export sectors, are feeling the negative impact of COVID-19 due to the suspension of global supply chains and a shortage of materials.
Many production areas in Vietnam are heavily dependent upon material imports from China, the Republic of Korea, and Japan, so support industries have been unable to escape from the impact.
Pham Van Tai, General Director of the Truong Hai Auto Corporation (THACO), the largest automobile maker in Vietnam, revealed that the development of support industries in mechanical engineering is a strategic direction for localisation in global supply chains, enhancing competitiveness and increasing foreign direct investment.
Meanwhile, Deputy Director of the HCM City support industry development centre Le Nguyen Duy Oanh said there are not many opportunities for businesses in the field due to their limited capacity and low workplace skills. It is also difficult to manufacture diverse products due to a lack of technology.
To address this obstacle, she suggested enterprises push ahead with reforms and change administration mindsets while increasing their competitive edge.
German newspaper highlights Vietnam as attractive investment destination
German tape manufacturer Tesa plans to build a 55 million EUR (65 million USD) factory in Northern Vietnam in an effort to expand its production as from 2023, according to Germany’s Handelsblatt newspaper.
In an article published on August 13, the newspaper said the coronavirus has shown how companies have to face risks as supply chains rely on each single country.
Therefore, Telsa is not alone in choosing Vietnam. In recent years, the Southeast Asian nation has become a popular option for companies that want to expand their production network in Asia.
The virus is intensifying the trend, according to the article. ASEAN countries, including Vietnam, see themselves in a good position to benefit from the trend.
The article cited an analysis by consultancy firm BCG as saying that Southeast Asia is moving towards the centre of globalisation.
The trade volume between Southeast Asia and Europe as well as the America is expected to increase more than 20 billion USD by the end of 2023. Meanwhile, the movement of goods between Southeast Asia and China is set to expand more than 40 billion USD.
Vietnam, which has a population of around 100 million, is said to have particularly good prospects of taking advantage of the development.
The International Monetary Fund forecast that the country can expect economic growth of almost 3 percent this year, the article said.
The EU-Vietnam Free Trade Agreement (EVFTA) that has become effective since August 1 is a reason that makes Vietnam more attractive to foreign investors.
The article said Marko Walde, Chief Representative of the German Chamber of Industry and Commerce in Vietnam, expressed his belief that Vietnam will not only become more attractive as an investment destination, but will hold great importance in the development of alternative supply chains.
Apart from Europe, Vietnam has joined countries such as Japan, Canada and Mexico in a free trade area with since 2018 through the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The country has also participated in the negotiations of the Regional Comprehensive Economic Partnership (RCEP), including China and Australia. Another free trade agreement with the US is also under discussion.
Vietnam’s openness to globalisation has helped the country to lure numerous big corporations.
Apple moved around one third of its production of wireless headphones to Vietnam. Meanwhile, Google and Microsoft have accelerated their plans to relocate part of their hardware production to the country. As for Samsung, Vietnam has been an important production location for years as more than half of its phones are made in factories in the country, the article said.
Agro-tourism models improve farmers’ income
Agricultural production combined with tourism is offering higher profits for farmers in the south-central and southern provinces.
In recent years, the agro-tourism models have attracted many visitors and brought economic benefits to farmers and firms, contributing to new-style rural areas in many localities.
The farming model creates additional output for products and produces environmentally-friendly tourism products promoted to visitors.
The farms have become attractive destinations for visitors who like natural scenery and peaceful atmosphere in rural areas and who want to learn about the agricultural production process, and enjoy fresh fruit at farmers’ gardens.
Nguyễn Văn Chín, a farmer in the south-central province of Bình Thuận, has 1,700 pillars of dragon fruit grown to VietGAP standards in Hàm Thuận Nam District’s Hàm Mỹ Commune.
“I have begun harvesting off-season dragon fruit and have sold them at high prices,” he said.
However, his family has kept some of the fruit on his trees to welcome visitors from HCM City booked for sightseeing at his garden.
“We want visitors to be able to harvest the fruits and gain hands-on experience in farming activities,” Chín said.
In the south-central province of Ninh Thuận, the country’s largest grapefruit producer, many farmers have achieved positive results by combining grapefruit farming and eco-tourism.
Nguyễn Văn Mọi with his own brand Ba Mọi Grapefruit, for example, has earned a higher income by growing grapefruit on 2,000sq.m of cultivated land in Ninh Phước District’s Phước Thuận Commune, and has opened his garden for tourists.
Tourists can taste and learn how to take care of fresh grapes and other grape products such as syrup, wine and dried grapes, Mọi said.
“How to identify the differences between local grapes and other imported grapes is shared,” he said.
Each farmer household can earn an average income of more than VNĐ150 million (US$6,500) from growing grapes and tourism activities.
When the 105km coastal route connecting Ninh Thuận and Khánh Hòa provinces is completed, Ninh Thuận Province’s Ninh Hải District is expected to attract more tourists.
The district has encouraged local farmers to develop grapefruit orchards and other tourism products. There are 190ha of grape cultivation combined with eco-tourism in the district.
Taking advantage of fruit, pepper and cashew orchards, the southern province of Đồng Nai has also created favourable conditions for local farmers to expand the combined model of agriculture and tourism.
Lê Văn Thắng, deputy chairman of the provincial People’s Committee, said many farmer households in Tân Phú, Định Quán and Cẩm Mỹ districts and Long Khánh City are participating in this model.
Besides serving fresh fruit at the garden, most eco-tourism sites also provide food and drink services for visitors.
Long Khánh City has invested in infrastructure to serve a large number of tourists and organised many seminars to equip farmers with basic knowledge about tourism and fruit festivals.
More than 200 households in the city are developing the model. They have welcomed nearly 100,000 visitors in the last two years. The city’s total revenue from eco-tourism was estimated at VNĐ60 billion ($2.5 million).
Farmers can earn an average profit of VNĐ58 million ($2,500) per hectare a year from fruit farming, while they can earn a profit of up to VNĐ130 million ($5,600) per hectare a year from growing fruit in combination with tourism activities.
Many agricultural businesses are also using their farms and processing factories to serve tourism services.
Green Farm of 3T Plus Trading and Service Co Ltd in the coastal southern province of Bà Rịa-Vũng Tàu covers a 7ha area, including green-skin grapefruit garden, yellow melon cultivation area, wooden houses, stilt houses, a team-building campsite and restaurant.
The farm welcomes about 400 visitors every week. The average revenue is estimated at VNĐ270 million ($11,650) per month. It also links with other farms such as the US farm, Binon Cocoa and Thái Dương Avocado for a closed tour.
Thailand considers Safe & Sealed plan for foreign tourists
Tour operators in Thailand is planning to speak with the country’s Civil Aviation Authority (CAAT) about lifting restrictions on international commercial flights in the fourth quarter to allow the Safe and Sealed plan to take shape.
Local media cited Vichit Prakobgosol, president of the Association of Thai Travel Agents, as saying that state agencies and operators must cooperate to drive the economy forward during the coronavirus pandemic.
The Safe and Sealed plan is the result of collaboration between the Tourism Council of Thailand (TCT) and 13 tourism industries, including hotels, inbound tour operators and tour bus services.
While the private sector is awaiting a response from the government after proposing the scheme, TCT representatives in each province are working with locals to gain a better understanding of the idea.
Vichit said Phuket shows the strongest potential to receive the first group of international tourists, followed by islands in Krabi and Surat Thani provinces.
Bhummikitti Ruktaengam, president of the Phuket Tourist Association, said operators in Phuket suggested a similar idea by using alternative state quarantine hotels to welcome only long-stay tourists.
Those long-term guests wouldn’t be kept in a specific area after completing a 14-day quarantine and would be allowed to travel freely in the country, which should contribute tourism income to other provinces, he said.
Meanwhile, the Thai Ministry of Tourism and Sports plans to propose the opening of five islands to foreign tourists, namely Phuket in Phuket province, Phi Phi in Krabi province, and Samui, Pha Ngan and Tao islands in Surat Thani province as those places could be easily regulated in terms of care, quarantine and monitoring of tourists in different areas to ensure the safety of both the community and the tourists themselves.
However, the CAAT said on August 13 that the ban on international commercial flights is set to continue since the COVID-19 pandemic remains serious in many countries.
CAAT Director Chula Sukmanop said this is an indefinite ban.
Thailand’s Centre for COVID-19 Situation Administration noted it would continue to monitor the situation around the world prior to making any decision on when the flights might resume.
In 2019, spending by foreign tourists accounted for 11.4 percent of Thailand’s GDP. In the first six months of 2020, the number of foreign visitors to this country stood at 6.69 million, a year-on-year decline of 66 percent.
The Tourism Authority of Thailand predicted that foreign arrivals this year may plunge to 7 million, compared to the record of 39.8 million in 2019, if Thailand remains closed for international travellers in the fourth quarter of 2020./.
Local businesses continue to suffer negative impact of COVID-19
Many economic experts believe this year will represent a huge challenge for firms and will require local businesses to quickly innovate in order to adapt to the realities of a new situation.
Truong Van Cam, vice chairman and General Secretary of the Vietnam Textile and Apparel Association, states that both the first quarter and second quarter of the year saw the textile and garment industry record a negative growth rate of 2% and 16.67%, respectively. Indeed, these figures can be put down to the significant impact of the COVID-19 pandemic, adding that the figures moving forward remain unknown.
Furthermore, several experts feel that the third quarter of the year will likely be the time that labour-intensive industries such as the textile and apparel sector will suffer greatly from the true impact of the COVID-19, thereby being a huge challenge for them.
Alongside the manufacturing industry in using a large labour force, the leather and footwear industry since the beginning of the year has had to “struggle” to maintain its operations. Due to difficulties with capital, output for products is still proving to be a burden for many businesses.
Phan Thi Thanh Xuan, vice president and General Secretary of the Vietnam Leather – Footwear – Handbag Association, says major enterprises have also seen their orders reduced by 50%. As a result, many big enterprises have cut 30% of their labour force, with some even laying off 70% of their employees.
“One of the other difficulties faced by the footwear industry is the capital issue. Footwear businesses have made policy recommendations, but have yet to be able to receive support from the Government. If the pandemic can be brought under control between now and October, businesses will be able to hold out and overcome it. But no one knows when the pandemic will be over. Therefore, both enterprises and the State should outline a response scenario,” Xuan says.
The impact of the COVID-19 epidemic has led to firms switching strategic policies in an unprecedented manner, according to economic experts, as some costs that were once considered fixed by business leaders are now being viewed as variable costs.
Moreover, capital capacity is rapidly being seen as creating a difference as it has now become a necessary condition for operating businesses. Simultaneously, enterprises must continue to balance strategies, cut costs without affecting their production and business activities, in addition to promoting investment shift towards growth factors in order to be fully prepared for future crises.
Ass. Prof. Dr. To Trung Thanh, an economic expert from the National Economics University, describes the COVID-19 pandemic as an opportunity for the country to re-examine mechanisms and institutions relating to the economy and view them with radical longer-term solutions in mind.
It can therefore be viewed as necessary to reshape production, business methods, and production processes, whilst also optimising value chains, and incentivising local firms to carry out a step-by-step digital transformation to ensure the dual goal of preventing and controlling the epidemic whilst also maintaining economic development, Dr. Thanh notes.
Indonesia to spend over 24 bln USD on stimulus funding in 2021
The Indonesian Government has announced that it will allocate 356.5 trillion Rp (24.04 billion USD) for COVID-19-related stimulus funding next year in an effort to continue supporting the country’s economic recovery and strengthen the health care system, including the provision of a coronavirus vaccine.
In his state of the nation speech to the People’s Consultative Assembly on August 14, Indonesian President Joko Widodo pledged to continue this year’s stimulus allocation until 2021, which will also include funding for social protection and micro, small and medium enterprises (MSMEs) support, while fiscal relaxation will be implemented again to support the government’s agenda.
The government will provide 25.4 trillion Rp next year for health care, including the procurement of coronavirus vaccines once they are available and to support laboratories and health care facilities.
It will also provide 110.2 trillion Rp for social aid, including for the Family Hope programme, cash transfers and the pre-employment card programme, among others.
Furthermore, the government will allocate 136.7 trillion Rp for ministries and regional administrations to improve tourism, food security, industrial areas, communication and technology development and provide loans for regions, among other projects.
Some 48.8 trillion Rp is being set aside for MSMEs, 14.9 trillion Rp for state-owned enterprises and corporations and another 20.4 trillion Rp for tax incentives.
Indonesia has allocated 695.2 trillion Rp in stimulus spending this year to support the cooling economy and fund the pandemic response with the state budget deficit expected to come in at 6.34 percent of gross domestic product (GDP).
The government expects next year’s budget deficit to amount to 971.2 trillion Rp, 5.5 percent of GDP, given the need to further boost the economy and provide social and health care assistance./.
Noi Bai airport planned to welcome 63 million passengers per year
According to the plan, the airport is projected to serve both civil and military purposes and capable of handling large long-haul aircraft such as B777-X, B747-8, B777-300ER and A380.
By 2030, the airport will have an estimated capacity of 63 million passengers and two million tonnes of cargo per year. To this end, the CAAV has proposed building a third runway in the south of the airport. The airport’s existing terminal T2 will be expanded so that the combined capacity of terminals T1 and T2 will reach 30-40 million passengers per year, and a new terminal T3 with a capacity of 30 million passengers per year will be built to the south.
By 2050, the CAAV estimates the airport to serve 100 million passengers and handle 5 million tonnes of cargo each year.
The airport’s planning scheme will therefore be adjusted with the addition of a fourth runway to the south as well as terminal T4 with an annual capacity of 25 million passengers at the site of the current terminal T1 and a new terminal T5 with a capacity of 25 million passengers when the demand rises.
The airport’s land use planning meanwhile will follow the approved master plan for Hanoi, which allocates about 2,230 hectares to the airport to ensure enough land for national defence purposes.
The number of passengers and cargo passing through the Noi Bai Airport has been increasing by an average of 10% per year, with the airport receiving nearly 26 million passengers in 2018 and about 29 million passengers in 2019.
However, the airport is only designed to handle 25 million passengers per year, with the domestic terminal T1 having a capacity of 15 million and the international terminal T2 is servicing the remaining 10 million passengers per year.
Southeast Asian M&As gathering momentum
Most recently, Thailand-based Banpu Pcl. acquired the El Wind Mui Dinh Wind Farm in the south-central province of Ninh Thuan. The purchase with a value of about US$66 million is subject to customary approvals and conditions precedents, with completion expected to take place in the fourth quarter.
The investment was made through associate company BRE Singapore Pte., Ltd. (BRES), in which the Thai company holds 50% of shares through Banpu NEXT Co., Ltd. For this project, Banpu secured a feed-in tariff of 8.5 US cents per kilowatt-hour for a period of 20 years, in accordance with the power purchase agreement with Electricity of Vietnam.
Somruedee Chaimongkol, CEO of Banpu said, “The investment in wind in Vietnam is a testament to Banpu’s continuous commitment to our greener and smarter strategy. The El Wind Mui Dinh Wind Farm is our latest addition that helps expand the company’s portfolio of renewable energies and generate more revenue and cashflow for Banpu.”
Thai investors are the most active in Vietnam’s mergers and acquisitions (M&A) market. As such, ThaiBev – one of Asia’s largest beverage companies – spent nearly US$5 billion in 2017 acquiring stakes in Vietnam’s leading brewer Sabeco.
Central Group made headlines by spending US$1.05 billion on Big C supermarkets, previously owned by the French company Casino Group in 2016. Prior to this deal, TCC Holdings, another conglomerate from Thailand, bought out the wholesaler Metro Vietnam Cash & Carry. The deal was valued at US$800 million.
Commenting on this trend, the representative of the Thai Business Association said that Thailand has expertise in consumer goods production and food processing. Meanwhile, Vietnam has abundant resources and the government is promoting exports. Therefore, the agribusiness industry is a perfect match, similar to consumer goods.
In addition, Thai businesses have expertise and potentials in renewable energy. As Vietnam is promoting green development, it also attracts Thai investors in the respective sectors.
Likewise, Singaporean investors are also interested in M&A deals in Vietnam. For example, state-owned investment company Temasek Holdings and US private equity manager KKR are among a group of investors that acquired a 6% stake in Vietnam’s property developer Vinhomes for VND15.1 trillion (US$650 million) from its parent Vingroup in June. Temasek is very active in Vietnam’s M&A market.
In March 2019, Temasek also invested about US$100 million to become a major shareholder of VNG – the only unicorn to date in Vietnam. Last October, Temasek funded Vietnam-based logistics platform Scommerce, a leading e-logistics services company that is the parent of delivery startups AhaMove and Giaohangnhanh (GHN).
Ong Tiong Hooi, transaction services partner of PwC Vietnam, told VIR that over the past five years, he noticed a significant increase in investments from ASEAN countries, notably Singapore and Thailand.
Specifically, almost all investments made via Thailand have come through corporates looking to expand their value chain both horizontally and vertically into sectors such as beverages, retail, construction, packaging-related materials, and industrial products.
However, investments made via Singapore are mainly sovereign wealth funds into sectors such as last-mile delivery, commercial real estate, financial services, and e-payments.
“In the last two years, some notable deals with values exceeding US$100 million are GIC’s stake acquisition in Vietcombank, VNPay, and VinMart, Temasek’s participation in Scommerce, and Stark Corporation’s stake in Thinh Phat Real Estate Cables JSC,” Hooi said.
Samuel Son Tung Vu, partner at law firm Bae, Kim & Lee Vietnam, said that Singaporean investors have been very active in Vietnam since the early years of the renovation in the 1990s with a strong presence in real estate projects, and industrial zones.
“Vietnamese companies are growing strong in fast-moving consumer goods and services, including finance, technology, and fintech thanks to the large and young population. That, together with steady economic growth, is an attractive feature for Singaporean buyers,” Vu added.
Despite such robust activities, Hooi believed that the scale of investors from the ASEAN has yet to match the diversity and volume of those coming from the Republic of Korea and Japan.
“For most of the ASEAN buyers, our general observation is that they do understand the general business practices in an emerging country, like Vietnam, as most of their countries underwent the same business trajectory before,” Hooi said.
“Nonetheless, with the revelation of financial scandals in Europe in recent years, there is still a sense of caution among global investors – including ASEAN ones. Therefore, it is expected that they look for improvements in corporate governance, reporting standards, and business ethics in the near future.”
With the ongoing pandemic, it has been challenging for foreign investors to enter the country to conduct on-site visits and meetings. Although this has dampened the overall M&A market, there are increased activities by local corporates and funds as they are on-the-ground and able to move around freely.
Nonetheless, according to the PwC expert, it may be interesting to see developments over the coming months, especially as many countries are now facing new COVID-19 waves. Foreign corporates may now need to decide whether to continue expanding value chains or focus domestically on managing internal affairs.
Thailand urged to increase exports to prevent global food shortage
The Organisation of Petroleum Exporting Countries (OPEC) has urged Thailand to increase food exports to prevent global shortage.
According to Poj Aramwatthananont, vice chairman of the Thai Chamber of Commerce, the OPEC’s recent meeting, which was attended by 21 member countries, had estimated that the COVID-19 outbreak will cause disruptions to the global food supply chain and affect global food security until 2022.
The Nation of Thailand on August 15 quoted Poj as saying that this is a good opportunity for Thai exporters to expand the markets, which will require strict compliance with international food safety standards.
The private sector is preparing to sign Memoranda of Understanding (MoUs) with ministries of Commerce, Public Health, Agriculture and Cooperative, and Interior to obtain related certifications for Thai products to be exported overseas, to increase the confidence of foreign customers, he added.
He stressed that these MoUs are also a start of aggressive measures to prevent the contamination of food products with the COVID-19 virus and other germs that could unexpectedly disrupt our food industry.
Meanwhile, Anong Phaijitpraphaphorn, director of the National Food Institute, said the institute expects food exports in the second half of 2020 to expand by 3.6 percent year on year to around 519.4 billion THB (16.54 billion USD), as the demand for food will start climbing once economic activities return to normal globally.
Thailand’s total food export revenue in 2020 is expected to hit 1.025 trillion THB, 0.8 percent higher than last year, provided the baht does not get too strong or fluctuates too much, she said.
Hung Yen promotes sales of agricultural products
In 2020, Hung Yen province has organized several trade promotion conferences where businesses, supermarket managers, and Vietnam Airlines could meet with managers, cooperative members, and gardeners from Hung Yen province.This year, the province organized a longan festival, a seminar on safe, sustainable agricultural production, tourism activities and visits to longan gardens, a week of Hung Yen longans in Hanoi, and a longan competition. These activities have made Hung Yen agricultural products better known around the world.
Hung Yen province’s trade promotion activities are aimed at strengthening the domestic market and expanding the export market. The province has provided local farmers with up-to-date market information, and helped them improve their product quality, expand their export markets, and increase their advertising.
Vice Chairman of the Hung Yen provincial People’s Committee Nguyen Minh Quang said the province has focused on improving the quality of local products to maintain the trust of customers and distributors with the aim of securing firm foothold in the domestic market and expanding the export market.”
The province has introduced Hung Yen longans and other agricultural products at safe food and local specialty promotion programs in other cities and provinces.
Thanks to increased application of the VietGAP standard in production, Hung Yen longans have been included in flight menus on domestic and international routes of Vietnam Airlines.
Ngo Hong Minh of Vietnam Airlines elaborated, “Since 2018, we have cooperated with the Department of Industry and Trade to serve longans on flights of Vietnam Airlines. Our passengers really like longans. Applying VietGap production standards qualifies Hung Yen longans to be served on our planes.”
Stable consumption thanks to strict application of the quality assurance process has assured Hung Yen farmers a stable income.
“Vietnam Airlines acknowledged the quality of our products and gave us a big order. I’m very happy that farmers have effectively applied the VietGap standard”, Nguyen Quang Dien of the Hung Yen Longan Cooperative noted.
Hung Yen province expects to harvest 11,000 tons of longans this year, 3,000 tons more than last year. The yields of other agricultural products like oranges and bananas have also risen now that even the Party Committee and administration of Hung Yen have engaged in trade promotion activities.
The Farmers’ Association has regularly organized events to introduce local products, diversified distribution channels, and helped producers participate in trade fairs and online seminars.
“The Farmers’ Association has asked the vocational training and farmers’ support centers to organize activities to connect farmers with businesses to help expand the market for local agricultural products like vegetables and fruits”, said Nguyen Tuan Viet, Chairman of the Hung Yen provincial Farmers’ Association.
The province intends to work with Vietnamese Trade Councilors overseas and participate in international trade promotion events to seek new markets, focus more on building trademarks, brands, packaging, and labels, and promote geographical indications of local products.
With these measures, Hung Yen hopes its agricultural products will find their way to more markets at home and abroad.
Indonesia spends 3.8 trillion IDR to revise tourism industry
The Indonesian government will allocate 3.8 trillion IDR (257 million USD) from its budget to revive the tourism sector through granting several incentives to tourism operators in the country.
The incentives include subsidy and income tax cut, deputy chief of the presidential office Febry Calvin Tetelepta said at a webinar on tourism during the COVID-19 pandemic on August 13.
The tourism industry, including hotels, restaurants, travel companies, and creative economic businesses engaged in advertisement and film production, can benefit from the incentives, he added.
According to the World Tourism Organisation, tourism has been the most-affected sector during the coronavirus crisis.
The Indonesia’s Ministry of Tourism and Creative Economy expects that the number of foreign tourists to Indonesia will plunge to 5 million this year compared to 16 million last year.
Meanwhile, the number of domestic visitors is predicted to fall to 120 million in 2020 from 303 million last year.
The country’s foreign exchange earnings from the tourism sector are projected to fall to 15 billion USD from the target of 21 billion USD for this year.
Singapore investors want to buy Newcastle United
Singaporean entrepreneurs Terence Loh and Nelson Loh are now spearheading a bid to take over the English football club Newcastle United.
The cousins are co-founders of Bellagraph Nova (BN) Group, which owns over 30 entities across 100 countries in major business spheres, including finance, sports, healthcare, luxury goods, entertainment and robotics. The Paris-based group is worth an estimated 12 billion USD.
Bellagraph Nova Group’s founders are at an advanced stage of negotiation after having already provided a Letter of Intent as well as a Proof of Funds earlier this month, said the group’s statement released on August 15.
The group also enlisted help of England captain Alan Shearer and former player Michael Chopra.
Last month, a proposed Saudi takeover for Newcastle United collapsed. If the business deal is sealed, the cousins will become the first Singaporean billionaires to own an English football club.
Industry firms benefits from HCM City’s investment stimulus programme
In nearly two years since it began, Ho Chi Minh City’s investment stimulus programme for the supporting industries has enabled a number of businesses to acquire new technologies and equipment, upgrade their factories and enter the supply chains of global large corporations, according to the Centre for Supporting Industry Development (CSID).
Trinh Mai Hung, Deputy Director of the CSID, said the programme for 2018-2020 sought to help local companies invest in new technologies and equipment to make products that satisfy the requirements of manufacturing enterprises and take more supporting industrial products into global supply chains.
Under the programme, the city fully subsidises loan interest for eligible businesses. So far 24 projects with a total investment of nearly 1.8 trillion VND (77.4 million USD) have received loans of 1 trillion VND for up to seven years.
“The investment stimulus policy has created conditions for enterprises to boldly invest in renovating machinery and equipment to participate in the supply chains of foreign corporations in Vietnam. Enterprises have risen to become tier- 1, 2 and 3 suppliers.”
The programme has significantly increased investment in priority sectors such as mechanical engineering, chemicals, plastic, rubber, food and foodstuffs, electronics, IT, textiles, and footwear.
In the last two years, the city’s Department of Industry and Trade has directed the CSID to apprise businesses directly and indirectly about policies.
Businesses have numerous benefits from the programme, but also some difficulties in terms of conditions for participating.
To participate in it, a business must have a new factory and machinery and equipment and must get a loan from a bank. The latter is the most important condition, but most supporting industry businesses are small or medium-sized and lack collateral, and so find it hard to obtain loans.
Many also complain about the programme’s time-consuming procedures, which causes them to lose market opportunities and makes them reluctant to participate.
They include allotting land to them, building high-tech industrial clusters and providing more support for industrial development and to innovative start-ups, he said.
At the same time the city regularly organises a programme to connect businesses with banks to ensure credit, develop key products, carry out trade promotion and other activities to promote exports and support businesses in the field to expand their market share in and outside the country.
Japanese companies shift focus on Southeast Asia: JETRO
More and more Japanese firms are expanding business in Southeast Asia and scaling down operations in China due to its escalating tensions with the US, according to the Japan External Trade Organization (JETRO).
The organization’s new trade and investment report quoted its survey conducted late last year as saying that 41 percent of Japanese companies are considering expanding operations in Vietnam in the next three years or so, up 5.5 percentage points from a year earlier, and 36.3 percent of respondents had given a similar answer for Thailand, up 1.5 percentage points.
Meanwhile, 48.1 percent said they would boost business in China, down 7.3 percentage points.
According to the report, since 2018, an intensified confrontation between the US and China has pushed up Japanese companies’ investment in the Association of Southeast Asian Nations (ASEAN).
The gap between the amount of Japanese investment into ASEAN and China increased to 20.4 billion JPY (191 million USD) in 2019 from 10.2 billion JPY in 2017.
The COVID-19 pandemic has significantly reduced Japanese investment in the Asian market, as well.
In the first five months of 2020, Japanese investment in ASEAN dropped by 35.5 percent.
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