E-commerce anticipated to record stellar growth in 2021
With a population of over 95 million people, coupled with young demographics and high levels of Internet access, the local e-commerce market is set to enjoy growth in the future thanks to these solid foundations, according to the Ministry of Industry and Trade (MoIT).
Following the growth of e-commerce over previous years, in addition to the growth of electronic payment methods, the Ministry of Industry and Trade are set to focus on developing e-commerce infrastructure in the year ahead. This is in addition to fine-tuning institutions and legal frameworks for e-commerce in order to create a transparent, clear, and favourable legal environment for Vietnamese businesses and consumers.
The nation is currently considered one of the fastest growing e-commerce markets throughout Southeast Asia. Therefore, this year will see the MoIT accelerate the implementation of the National E-commerce Development Master Plan for the 2021 to 2025 period, which has been adopted by Prime Minister Nguyen Xuan Phuc.
Furthermore, the MoIT will continue to promote the increased use of information technology and digital transformation in management and administration, while also perfecting the foundations for e-Government development.
Last year e-commerce activities were largely considered, renewed, and focused on creating a new and stronger driving force for national commerce development moving forward.
The MoIT has managed to digitise the market information system and upgrade the export support platform of Vietnam ECVN.com. This marks the country’s first e-commerce platform to operate under the B2B model, with ECVN aiding many domestic enterprises to successfully export their products whilst becoming a reliable address for firms that need to export and seek international customers.
Last year saw approximately 53% of the population engage in online shopping. Despite suffering the impact of the novel coronavirus (COVID-19) pandemic, the nation’s e-commerce revenue grew by 18%, on from 25% growth in 2019, reaching US$11.8 billion and accounting for 5.5% of total retail sales and consumer service revenue nationwide.
Domestically, e-commerce represents a popular business form for enterprises and has enjoyed strong spread throughout the consumer community. Compared to other markets in Southeast Asia, the country boasts retail market share growth that is in the top three in the region.
Most notably, since 2015 the growth rates of the three largest Internet economies in Southeast Asia averaged between 35% to 36%, of which Indonesia ranked first at 41%, trailed by Vietnam at 36%, and the Philippines at 30%.
Construction of Cam Lam – Vinh Hao Highway to cost nearly 389.6 mln USD
The joint venture among Deo Ca Group, Hai Thach Investment Construction JSC and 194 Construction Investment Corporation was named the investor of the Cam Lam-Vinh Hao Highway – a section of the North-South Expressway.
Under Decision No.09/QD-BGTVT recently signed by Deputy Minister of Transport Le Anh Tuan, the joint venture will use the Build-Operate-Transfer (BOT) form to participate in the Public-Private Partnership (PPP) project.
The four-lane highway is expected to cost nearly 9 trillion VND (389.6 million USD), over 3.7 trillion VND of which is sourced from the investors, and the remainder from the State.
Construction of the 78.5-kilometre highway running through Khanh Hoa, Ninh Thuan and Binh Thuan provinces will last 24 months, while that of Nui Vung tunnel is said to take 30 months to complete. The highway.
The investors are entitled to collect tolls for 17 years and 15 days.
The North-South Expressway is a key national project that prioritises investment in the 2017- 2020 period, and has a total length of 654km.
The North-South transport corridor, with the North-South Expressway from Lang Son to Ca Mau acting as its “backbone”, plays an important role in the economic development of the country.
The expressway goes through 32 provinces and cities, connecting four key economic regions, including two major economic centres – Hanoi and HCM City.
Particularly, the Hanoi-HCM City section passes through 20 provinces and cities, affecting 45 percent of the population and accounting for 52 percent of the country’s total domestic product. It also has a major impact on seaports and economic zones of the country.
From October 2-5 last year, project management boards opened bids to select investors for five of the sub-projects. However, only three sub-projects with two investors submitted bidding documents, namely Dien Chau – Bai Vot, Nha Trang – Cam Lam and Cam Lam – Vinh Hao.
The two remaining projects did not have any bids from investors, including the National Highway No.45 – Nghi Son and Nghi Son –Dien Chau.
Thus, the Government proposed the National Assembly Standing Committee consider transforming the investment models for the two projects.
The NASC on January 11 agreed to change two Eastern North-South Expressway sub-projects from public-private partnership to solely public.
Investment for the sub-projects totals 100.8 trillion VND (4.3 billion USD), with 78.4 trillion VND sourced from the State budget.
The North-South Expressway project has 11 component projects, nine of which are expected to be completed by 2022./.
HCM City backs Uniqlo’s expansion: Official
A leader of Ho Chi Minh City has pledged to support the expansion of the Japanese global apparel retailer Uniqlo in the southern largest economic hub.
Chairman of the HCM City People’s Committee Nguyen Thanh Phong made the promise while receiving Osamu Ikezoe, General Director and Chief Operating Officer of Uniqlo Vietnam.
Lauding the company’s decision to choose the city as the destination for its first store in Vietnam, Phong said Uniqlo’s presence offers more garment options for local consumers.
He unveiled that the city plans to build itself into a shopping centre of Southeast Asia in the coming years.
Having stressed that Uniqlo’s new investment plans will be a positive highlight in Vietnam-Japan ties, the official asked the company to consider cooperating with Vietnamese material producers.
For his part, Ikezoe thanked the local authorities for supporting Uniqlo’s operations and expansion and vowed to make efforts in supplying the Vietnamese market, particularly HCM City, with the best garment products./.
NEDI2 no longer a subsidiary of VINACONEX
Viet Nam Construction and Import-Export Joint Stock Corporation (VINACONEX) announced Monday that NEDI2 was no longer a subsidiary of the corporation.
VINACONEX has transferred nearly 17.5 million shares of NEDI2 to Toyota Tsusho Corporation.
After the transaction, VINACONEX holds more than 19 million shares of NEDI2, equivalent to 38.24 per cent of the company’s charter capital. However, with this ratio, NEDI2 is no longer a subsidiary of VINACONEX.
NEDI2 is the abbreviation for Northern Electricity Development and Investment JSC No 2, focusing on hydropower investment and real estate.
It is currently operating Ngoi Phat Hydropower Plant located in Ban Xeo and Ban Vuoc communes, Bat Xat District in the northern province of Lao Cat, with a capacity of 72MW.
In the first nine months of 2020, net revenue of NEDI2 reached nearly VND295 billion (US$12.7 million). Post-tax profit hit VND105.5 billion, up 4 per cent and 8.8 per cent, respectively over the same period in 2019.
NEDI2 aimed to earn net revenue of more than VND394.4 billion in 2020. Post-tax profit was estimated at VND132 billion, up nearly 34 per cent compared to the profit achieved in 2019.
In the first nine months of 2020, NEDI2 completed 75 per cent of the revenue target and 80 per cent of the profit target set for the year.
SeABank increases charter capital to nearly $526m
The Southeast Asia Commercial Joint Stock Bank (SeABank) is among 13 largest commercial joint stock banks in Viet Nam after increasing its charter capital to VND12.088 trillion (US$526 million) from VND9.369 trillion.
It also gained approval to list more than 1.2 billion shares, coded SSB, on the Ho Chi Minh Stock Exchange (HoSE).
The bank plans to officially list the more than 1.2 billion shares, equivalent to VND12.088 trillion of charter capital, in the first quarter.
The increase of charter capital is in line with SeABank’s development plan adopted at the 2020 General Shareholders’ Meeting and aims to turn it into Viet Nam’s most popular retail bank, facilitating operational expansion and promoting investment in technology application and the diversification of products and services.
The listing on HoSE is an important milestone for SeABank, contributing to affirming its position and improving its brand value for investors and partners.
It reported revenue of VND1.131 trillion in the first three quarters of 2020, a year-on-year increase of 65.6 per cent. The bank’s total assets rose by 6.37 per cent to VND167.426 trillion.
SeABank is the fifth bank in Viet Nam to complete all three pillars of the Basel II standards – a set of recommendations on banking laws and regulations issued by the Basel Committee on Banking Supervision, before the deadline. It was also rated B1 (long-term stable) for 2020 by Moody’s.
Hanoi disburses 88.1 percent of public investment by 2020’s end
The capital city of Hanoi disbursed close to 34.3 trillion VND (nearly 1.49 billion USD) in public investment last year, representing 88.1 percent of the goal set by the government.
The percentage was higher than to 2019’s 76.7 percent; and the city is among 17 cities and provinces with disbursement rates of 80 percent or higher.
However, it was reported that a number of local units have seen sluggish disbursement of public capital and failed to realise the goals.
In a recently-issued notice, the municipal People’s Committee has requested its departments, agencies and district- and town-level administrations to take more drastic actions to speed up the disbursement of public investment in the city by the end of January.
The entire city must make all-out efforts to increase the 2020 disbursement rate to the highest possible, the notice said.
Vietnam’s disbursement of public investment was estimated at 398 trillion VND (17.24 billion USD) as of the end of December, meeting 82.8 percent of the Government’s plan – the highest rate in the 2016-20 period, according to the Ministry of Planning and Investment.
In comparison, the disbursement rates were 80.3 percent, 73.3 percent, 68,87 percent and 67.46 percent in 2016, 2017, 2018 and 2019, respectively.
The disbursement of public investment sourced from the State budget was estimated at 91.1 percent of the 2020 plan, the highest rate in the past ten years.
Seventeen ministries, central-level agencies and 17 provinces and cities had disbursement rates of 80 percent or higher. However, 13 ministries and central-level agencies and five localities reported public investment disbursement rates of below 60 percent.
Still, the disbursement missed the Government’s target though public investment was identified as the key driver for economic growth in the context of the COVID-19 pandemic.
The ministry said that the COVID-19 pandemic was also significantly affecting the progress of public investment disbursement as well as the implementation of public-funded projects./.
Dairy groups pursue public funding
A string of dairy companies are tapping into public funds and eager to expand their presence in both local and regional markets, while European players are expected to take advantage of country’s stronger milk demand.
As of last month IDP had four major shareholders, including Blue Point JSC (60.56 per cent), Viet Capital Securities (15 per cent), Lothamilk JSC (10.18 per cent), and company general director Pham Minh Loan (5 per cent).
In July, VinaCapital Vietnam Opportunity Fund (VOF), the flagship fund of VinaCapital, confirmed completion of divestment of IDP.
The fund, along with co-investment partner Daiwa PI Partners, completed the divestment of the remaining stake in IDP to a consortium led by Blue Point at an additional premium relative to the previous partial exit value, and have received $45.4 million in net proceeds for the remaining 37 per cent stake in the company.
Meanwhile Vinamilk – the country’s largest milk provider – controls the majority stake (around 7 per cent) in GTNFood JSC, the parent firm of Moc Chau Milk, after a tie-up deal in 2019. Moc Chau Milk has demonstrated its public fundraising ambition on the Unlisted Public Company Market (UPCoM).
Specifically, the company raised its foreign ownership limit to 100 per cent, signalling its potential and allure to local and foreign investors. With assistance from Vinamilk, Moc Chau Milk is expected to accelerate its operational efficiency, profit growth, and brand awareness nationwide.
The processing and trading dairy industry in Vietnam is seeing considerable development potential. According to the General Statistics Office, Vietnam’s milk production in 2019 reached 986.1 million litres, accounting for 0.07 per cent of global milk production and reaching only 35 per cent of the domestic demand.
Despite Vietnam’s lower per-capita milk consumption compared to regional peers, positive economic development and stronger nutritional needs are the growth drivers of the landscape.
According to Euromonitor, Vietnamese cow milk demand grew strongly in the 2015-2019 period, with 12 per cent compound annual growth rate (CAGR) which is expected to continue to grow at 10 per cent CAGR over the next five years.
Moc Chau Milk has yet to take full advantage of the supply chain and brand, mostly due to ineffective management under the previous board. With the presence of Vinamilk in its governance, Moc Chau Milk eliminated several on-core segments and proposed 2020-2024 investment and restructuring plans, such as upgrading existing farms and implementing a high-tech farm with ecotourism.
In terms of Vinamilk, although milk export to the Middle East reached double digits in on-year revenue growth as of September 2020, milk export to the United States is likely to remain low, dropping approximately 22.4 per cent on-year due to the negative impact of the pandemic.
Once-iconic milk provider Hanoimilk, however, has encountered a bumpy road in recent years. In May, Hanoimilk was delisted from the HNX, before the firm filed for an initial public offering on UPCoM. In mid-December, Hanoimilk was once again labelled as “stock under trading restriction due to late disclosure of reviewed financial statement 2020 (over 45 days), and failure in overcoming causes that led to trading restriction status”, cited from the official announcement of HNX.
On the flip side, the dairy industry is expected to witness fiercer competition in the next few years. The decline in labour income and the rise of unemployment rate to 2.26 per cent has triggered an increase in price sensitivity, raised competition among dairy manufacturers, and slowed down dairy product premiumisation, especially in rural areas.
Anh Nguyen, analyst at Bao Viet Securities, noted that the consumption of milk alternatives such as nut milk will continue to grow in the future thanks to the healthy eating trend – however, nut milk growth will also fall under the influence of the COVID-19 pandemic.
“The EU-Vietnam Free Trade Agreement (EVFTA) outlines a schedule of tax elimination in the next 3-7 years for milk and dairy products imported from Europe, which are currently subject to 15-30 per cent tariffs. Three years after the EVFTA’s enforcement, tariffs on dairy items from EU players will fall 5-20 per cent. Domestic dairy products are expected to compete fiercely with imported products in the future,” said Nguyen.
Alice O’Donovan, legal and policy advisor at the European Association of Dairy Trade said, “Currently per capita consumption of milk in Vietnam is low. While there is dairy production in Vietnam, self-sufficiency in milk is still quite far off. We expect that the EVFTA will create a boost in exports to Vietnam, with investment by European companies in Vietnamese dairy production also being a possibility.”
Ho Chi Minh City puts priority on high rise building along metro lines
Ho Chi Minh City authorities will give priority to developing new high-rise apartment buildings along the metro line linking the city centre with the outskirt areas.
The five outskirt districts of Cu Chi, Hoc Mon, Binh Chanh, Nha Be, and Can Gio will be reserved for setting up large township including eco-urban areas, new urban areas, and satellite cities.
Due to decentralisation, the Central Business District in districts 1 and 3 will be limited with high-rise buildings to 2025. Other proposals will be considered after that on a case-by-case basis and must fit the city’s plan.
Other districts to limit high-rise buildings include districts 4, 5, 6, 11, and Phu Nhuan where population density is the highest and the infrastructure system cannot fully meet the population growth. If the infrastructure system is improved, other considerations will apply for these districts.
In the next five years, Ho Chi Minh City needs a capital investment of VND420 trillion ($18.26 billion) to build houses.
Ho Chi Minh City will need an additional 47 million square metres of housing to meet the demand of its 12 million population by 2030.
Evolving demands being met in high-end segment
Despite COVID-19 restricting the flow of foreign buyers and investors to Vietnam, positive signs were reported from local buyers in the last quarter of 2020 for high-end residences, brightening up 2021.
The astoundingly quick absorption rate of Celesta Rise proved that the market demand remains strong and developers who have good products can still attract buyers by the droves.
Indeed, Celesta Rise was one of the most sought-after residential developments in the urban Saigon South area thanks to its strategic location as well as unique and fascinating facilities.
Diversifying products and adding technology to serve customers from beginning to end are the way leading developers are now trying to attract customers’ attention.
Andy Han, CEO of SonKim Land, Corporation explained why the company’s luxury integrated development The Metropole Thu Thiem has been a runaway success.
“Vietnamese love buying property. From the central location to ongoing and planned infrastructure improvements, the development was popular from the onset,” he said at a talk held in Ho Chi Minh City last month themed “Real estate and tech sector in a changing world”.
“But what has been really driving sales is The Metropole’s ability to meet the demand of a post-pandemic world: non-touch design and the innovative 99 per cent dust filtering ventilation system. With people spending more time indoors, there is an increased demand for larger apartments of three bedrooms, too.”
In 2020, 65 per cent of apartment units launched in Ho Chi Minh City were in the high-end and luxury segment. Figures from CBRE show that the city’s east along with Thu Duc City have been contributing a major portion of property supply, including high-end and luxury products and is forecast to provide 44 per cent of the total supply until 2025. Meanwhile in Hanoi, nearly 70 per cent of launches were mid- and high-end products.
A primary trend putting wind in the sails of the Vietnamese residential property market is the increasing population and income levels. Local developers are also starting to look beyond the bounds of their northern and southern bases of power, with Ho Chi Minh City-based developers rolling out projects in the capital and vice versa.
According to Nguyen Van Dinh, general secretary of the Vietnam National Real Estate Association (VNREA), even if foreign investment flows into real estate have dropped due to the pandemic, the setback is only temporary as many foreign investors are still waiting for the opportunity to invest in Vietnam.
“The global supply chain has been disrupted and European and North American enterprises are considering leaving China, presenting an opportunity for Vietnam to receive a new wave of foreign investment, which will benefit the real estate sector,” he said.
The positive sentiment is shared by the largest global real estate developers. These investors from South Korea, Singapore, Taiwan, and Japan among others are all looking for assets and cooperation opportunities with reputable domestic enterprises.
However, the forecast recovery will likely be moderated by several factors, such as the prolonged legal difficulties that have been haunting the real estate sector this year.
Despite Vietnam’s strong showing in pandemic control, the coronavirus remains a living threat across the globe and even a working vaccine will take several months of clinical testing before it can be put into wide-scale use.
It is hoped that things can return to normalcy around the second or the third quarter of 2021, with intentional flights reopened, said Dinh from VNREA.
Experts suggest HCMC develop low-cost housing projects in new urban areas
There is a severe shortage of housing projects in HCMC for medium- and low-income earners, experts said at a conference early this month, suggesting that the city should develop low-cost housing projects in new urban areas.
The experts said the real estate market will rebound this year and social housing projects will offer a boost to the market.
They spoke highly of the HCMC government’s plans to develop new urban areas to the east of the city, especially after the establishment of Thu Duc City. The local authorities, researchers and investors need to work together to ensure the sustainable development of new urban areas. Besides, these areas should have sufficient social housing projects for medium- and low-income people.
Data of the HCMC Department of Construction indicated that the city needed up to 80,000 low-cost houses from 2016 to 2020. However, there were only 23 social housing projects with some 17,900 homes in existence during this time.
According to Pham Dang Ho, head of the Housing and Real Estate Market Development Division under the HCMC Construction Department, the major reasons for the city’s short supply of low-cost houses are the shortage of land and complicated legal procedures.
Nguyen Anh Tuan, head of the General Planning Management Division under the HCMC Department of Planning and Architecture, said the districts of Thu Duc, 2 and 9 will be officially merged to become a city called Thu Duc under the jurisdiction of HCMC in early March. The new city will have a financial center connected to the Thu Thiem new urban area, a sports center, a hi-tech production center, an education-training and science research center, an eco-technology center and a new urban area. The development of social housing projects for Thu Duc City and HCMC as a whole should be the priority.
Dr. Pham Hoai Chung from the Institute for Transport Development and Strategies under the Ministry of Transport, said the city’s transport infrastructure remains underdeveloped with overcrowded roads and poor seaport connectivity, while metro line projects have lagged behind schedule. The underdeveloped transport system will hamper the development and connectivity of new urban areas.
Nguyen Xuan Quang, chairman of Nam Long Group, said it’s not always feasible to apply urban development models that have been successful in other countries to HCMC. Quang suggested the city conduct careful research to ensure three factors —sustainability, feasibility and logicality.
Arnon Snapir, member of the American Institute of Architects, said the major challenges in developing urban areas comprise agricultural land preservation and appropriate residential development. He suggested HCMC prevent discrete development, reduce traffic congestion and ensure harmony and balance in developing urban areas. Besides, prices also play a key role in urban area development, he noted.
According to Snapir, a city worth living in should not be expensive. It must create strong connectedness between the citizens and offer diversified services and public amenities. More importantly, there must be high quality jobs offering a good income in new urban areas to attract people to live there.
North-South expy’s Cam Lam-Vinh Hao section finds investors
A consortium comprising Dep Ca Group, Hai Thach Construction JSC and 194 Construction Investment Corporation has been selected as the investors of the Cam Lam-Vinh Hao expressway, a subproject of the North-South Expressway.
The Ministry of Transport has approved the choosing of investors for the project executed under the public-private partnership (PPP) format with a build-operate-transfer contract, making it the second PPP subproject of the North-South Expressway to secure investors, after the Nha Trang-Cam Lam expressway project.
The Cam Lam-Vinh Hao expressway project, which is set to be 78.5 kilometers long and have four lanes, will run through three provinces, Khanh Hoa, Ninh Thuan and Binh Thuan, the local media reported.
The project’s total investment of VND8.9 trillion will consist of some VND3.8 trillion from investors and over VND5.1 trillion from the State budget.
The projected expressway is set to be carried out within 24 months, but the Nui Vung Tunnel component will be completed after 30 months of construction. In addition, the project is allowed to collect tolls for 17 years and 15 days.
In December last year, the Ministry of Transport approved investors for the Nha Trang-Cam Lam expressway. Son Hai Group was named as the investor.
The Nha Trang-Cam Lam expressway project, with a total investment of VND5.5 trillion, will be constructed within two years, while its toll collection time will be 16 years, three months and 28 days.
Agricultural sector improves value of Vietnamese rice
In recent days, farmers in the Mekong Delta have been flexibly sowing the winter-spring rice crop early to avoid drought and saltwater intrusion at the end of the rice crop. Not only using high-quality rice varieties, but the percentage of farmers using certified rice varieties has also increased rapidly. These are important turning points in improving the quality of rice to enhance the value of Vietnamese rice in the international market.
“At present, over 80 percent of Hau Giang farmers have focused on using fragrant rice varieties and high-quality rice varieties. Of which, for some rice varieties, such as Dai Thom 8 and ST24, many traders have made deposits to buy rice from farmers,” said Mr. Tran Chi Hung, Director of Department of Agriculture and Rural Development of Hau Giang Province. According to Mr. Tran Chi Hung, fortunately, the percentage of farmers using certified rice varieties provided by prestigious seed producers and agricultural extension centers is increasing day by day. This is an opportunity for rice farmers to use certified rice varieties and select high-quality rice varieties to meet the need of exporting enterprises.
More than five years ago, the proportion of low-grade rice varieties in the Mekong Delta was quite large in the production structure when farmers used to have the habit of using IR50404 rice variety, which accounted for 30-40 percent or more. Now, low-grade rice varieties, such as IR5040, merely account for 10-17 percent. Provinces in the Mekong Delta have shifted their rice production structure to focus on the segment of premium rice, creating higher added-value. According to Mr. Nguyen Trung Kien, CEO of Gentraco Company in Can Tho City, the rice export situation in the first days of this year was excellent, especially for the segment of premium rice. The price of 5-percent broken rice is ranging from US$505 to $525 per ton. This price level is as high as Thai rice. Enterprises expect to export about 300,000-400,000 tons of rice in January this year.
Currently, the prices of rice in the Mekong Delta in early-2021 remain at high levels. Accordingly, the prices of paddy range from VND6,800-VND7,200 per kilogram, depending on the variety of rice. Mr. Pham Thai Binh, CEO of Trung An High-Tech Agriculture Joint Stock Company, said that the company was cooperating with farmers to establish high-quality rice-growing areas in Kien Giang, Ca Mau. Hau Giang provinces, and Can Tho City with a total area of 8,000 hectares. In this winter-spring rice crop, about 1,400 hectares of rice would adopt a strict production process without using chemicals to produce clean rice for export to fastidious markets, like the EU.
According to Mr. Pham Thai Binh, local authorities need to find solutions to encourage farmers and enterprises to associate in production in large-scale rice fields. This is a prerequisite for farmers and enterprises to join hands to produce rice following the need of international markets. Only in this way can the restructuring of the rice industry be sustainable. And the income of farmers will also increase.
In the first days of this year, many people were shocked by the information that Vietnam imported rice from India. However, through research, this is a normal response to the need of the market. Many enterprises explained that Vietnam currently lacks low-grade rice for the processing of animal feed, so it is normal to import low-grade rice from India. This also partly explains the first success in the restructuring of rice production in Vietnam. Accordingly, the percentage of high-grade rice varieties is increasingly dominating, whereas low-grade rice varieties, such as IR50404, are decreasing day by day, which partly causes a shortage of raw material for the processing of animal feed.
Hanoi’s real estate supply in 2020 falls 27.4% on-year
The occupancy recorded in apartments and house was 48% in 2020.
Supply of real estate in Hanoi in 2020 fell 27.4% from 2019 and 58.2% from 2018, according to the city’s Department of Construction.
The supply that includes apartments and low-rise houses offered in the market reached 28,818 units.
In the year, more than 13,800 units were reported in transactions, recording the average occupancy rate of 48%.
The agency attributed the decline of both supply and occupancy rate to tightened control over credit for real estate sector, leading to a decrease in transactions among secondary investors.
Economic slowdown and falling income are also reasons hurting the demand and long-term investment in this sector.
In another move, the department said the city finished 89 commercial housing projects in 2020 providing 53,644 units or 6.57 million square meters.
In the upcoming time, the department will focus on several tasks, such as completing the pilot project on repairing downgraded apartment blocks and relocating residents out of dangerous blocks; developing affordable housing segment; selecting investors for new projects; checking land resources for social housing projects; and speeding up commercial and resettlement housing projects scheduled for completion in 2021.
Vietnam curbs illegal timber import following US probe
Hanoi doubles fine and applies the maximum prison sentence of 10 years for violators of illegal timber trade.
The Vietnamese Government is cracking down on illegal timber imports from countries such as Laos and Cambodia after the US initiated investigation on the allegation of Vietnam’s illegally-harvested or -traded timber.
The Government has doubled its fine for such activities to about US$22,000 with the jail sentence as long as 10 years, according to Do Xuan Lap, chairman of the Vietnam Timber and Forest Product Association.
In another move, Vietnam has been buying more timber from the US, Mr. Lap said in a recent interview with Bloomberg. He said the import might increase by 15% this year.
Meanwhile, Nguyen Do Anh Tuan, the spokesman for the Ministry of Agriculture and Rural Development said Vietnam bought about 40% of its timber from the US in 2020.
In early October, the US Trade Representative (USTR) announced the timber investigation.
“A high tariff will seriously damage our wood industry, but it will also hurt US companies,” Mr. Lap said.
A 25% US tariff on Vietnamese wood products will “devastate” the industry and its 10,000 workers,” he noted.
The US is the biggest market for Vietnamese wood products, representing an estimated US$6.5 billion in 2020, about half of the nation’s total agricultural shipments to America last year, said Mr. Tuan.
Vietnamese wood-furniture makers, whose customers include Walmart Inc. and Ashley Furniture Industries Inc., will buy as much as 1.3 million cubic meters of wood in 2021, up more than 60% from that in 2019, according to Mr. Lap.
In a phone talk with US Trade Representative Robert Lighthizer last week, Vietnam’s Minister of Industry and Trade Tran Tuan Anh said the investigation could cause many undesirable effects, damage bilateral relations, and have negative impacts on thousands of businesses, and millions of workers and consumers in Vietnam and the US.
Vietnam aims for average annual growth of 7% in 2021-30
Administrative reform and higher quality of legal framework will be key for Vietnam to enhance efficiency in economic development and integration.
Vietnam targets to attain an annual GDP growth rate of 7 in the next 10-year period, marking it a high-middle income country with modern industrialization in the world.
Director of the Vietnam Institute for Development Strategies under the Ministry of Planning and Investment Tran Hong Quang referred to the country’s draft socio-economic development strategy for the 2021-30 at the conference themed “Shaping Investment and Business Strategies in the new context” on January 11, 2021.
By 2030, the GDP per capita would rise to US$4,700-5,000 from the current US$3,521, laying a foundation for the country to become a developed country of high-income status by 2045.
“Vietnam will ensure its sustainable and rapid economic growth based on science, technology, innovation and digital transformation,” stated Mr. Quang.
During this process, administrative reform and higher quality of legal framework will be key for Vietnam to enhance efficiency in economic development and integration, he continued.
Under the draft strategy, the Government identifies three breakthroughs for the next 10 years in terms of institutional framework, human resources and infrastructure.
According to Mr. Quang, Vietnam will continue to finalize the socialist-oriented market economy, in which all resources for development are mobilized based on market mechanism.
In a modern world of Industry 4.0, Vietnam continues to pursue innovation and technologies to develop high quality manpower to realize the national digital transformation process.
In terms of infrastructure development, Mr. Quang expected Vietnam to continue upgrading the current infrastructure system focusing on transportation, energy, IT, urban and climate-resilient infrastructures.
“The country places a great focus on digital infrastructure to ensure the rapid development of digital economy and society,” he added.
In 2020, Vietnam’s added manufacturing value per capita was estimated at US$900, which is expected to rise to US$2,000 by 2030 as it becomes a newly industrialized country.
The United Nations Industrial Development Organization (UNIDO) sets criteria for a newly industrialized country with the added manufacturing value per capita at US$1,000-2,500, or equivalent to 0.5% of the total manufacturing value globally.
Real estate accounts for 7.6% of Vietnam economy
Local experts list real estate the most important sector in many countries, including Vietnam.
Real estate industry accounted for roughly 7.62% of Vietnam’s gross domestic product (GDP) in 2019, information has been released by the Vietnam National Real Estate Association (VNREA).
The percentage is likely 13.6% if land is included, VNREA said in a research released last week.
In terms of assets, real estate likely accounted for 20.8% of the total assets of Vietnam’s economy in 2020. The percentage is equivalent to US$205.26 billion out of the country’s total assets at US$986.82 billion in 2020.
The ratio is forecast to reach 21.2% or US$462.7 billion in 2025 and 22% or US$1.23 trillion by 2030.
The research, which is an independent scientific study, showed that real estate has impacted on 40 important economic sectors in Vietnam, mostly construction, manufacturing, tourism, lodging and restaurant, finance and banking.
In terms of job attraction, real estate is just behind tourism and manufacturing and ahead of agriculture, forestry and aquaculture.
Commenting the research, economist Vo Tri Thanh, member of the State Bank of Vietnam’s Financial and Monetary Policy Consultation Council, said it has prioritized policies that should be put into practice, greatly contributing to the healthy and sustainable development of real estate sector.
Nguyen Manh Ha, deputy head of VNREA, emphasized the role of real estate in the country’s economy, listing it the most important industry in many countries.
VNREA plans to submit the research and recommendations to the government, the Central Economic Commission, the National Assembly’s Economic Committee, the Ministry of Construction, the Ministry of Finance, the Ministry of Natural Resources and Environment, and related agencies for the long-term policy making toward real estate sector.
EU investors keen to build US$1 billion logistics centre in Phu My
Several major financiers from the EU have proposed pouring approximately US$1 billion into a logistics centre project in Phu My of the southern province of Ba Ria – Vung Tau, according to information released by local authorities.
VietnamNet.vn quoted sources from the provincial administration as saying Cai Mep Ha logistics centre has recently attracted significant investment from the Netherlands and Belgium. Indeed, both countries have sent documents to Prime Minister Nguyen Xuan Phuc to ask for permission for the consortium of EU and local investors, including Besix Company – IPEI Company of Belgium, Hateco Company of Vietnam, and Boskalis Company of the Netherlands, to implement the project.
It is the view of European investors that the successful deployment of a US$1 billion logistics centre will serve to receive large container ships, therefore making it far easier to introduce Vietnamese goods to other markets globally. In addition, the move is anticipated to promote inland waterway transport, whilst also bringing goods and agricultural products from the Mekong Delta region to Cai Mep Ha port and the wider world.
Most notably, following the recent enforcement of the EU-Vietnam Free Trade Agreement (EVFTA), the construction of a large and modern logistics centre is expected to transform Phu My into the leading commercial port and major logistics hub in Southeast Asia.
Statistics indicate that the country has increased its berth space by over eight times during the past 20 years to a total of 588 berths across 34 ports as of early 2020.
These increases can be seen as Cai Mep port in Phu My is now capable of receiving the largest container ship of up to 214,000 tonnes, followed by Hai Phong port with 132,000 tonnes.
Vietnam aims to increase the annual cargo capacity at ports to between 1.14 billion tonnes and 1.42 billion tonnes, with a specific focus on developing Hai Phong and Cai Mep ports in order to reach international standards.
The moves will ultimately contribute to saving logistics costs, increasing competitiveness, and greatly reducing shipping times, as Vietnamese goods are able go directly to major markets such as Europe and North America without having to go through transit ports such as Singapore.
Airlines offer cheaper airfares ahead of Tet
Unlike in previous years, travelers are poised to enjoy cheaper airfares and an abundant supply of tickets on several domestic routes ahead of this year’s Lunar New Year holiday, known locally as Tet.
In line with this, budget-airline VietJet Air has offered its cheapest tickets at approximately VND5.7 million for return tickets, while national flag carrier Vietnam Airlines is offering VND5.9 million on a similar route.
Elsewhere, Bamboo Airways has launched the highest prices on airfares, with a round-trip fare reaching VND6.3 million during the peak of Tet.
With flights from Ho Chi Minh City to Da Nang, departing on February 10 before returning on February 16, local airlines have put tickets on offer at over VND3.6 million.
Meanwhile, tickets for a round-trip flight from Ho Chi Minh City to Vinh during Tet by Vietjet Air, Vietnam Airlines, and Bamboo Airways will cost VND5.6 million, VND5.8 million, and VND6.3 million, respectively.
As the industry’s newest carrier, Vietravel Airlines has not deployed a regular ticketing channel for commercial flights. It plans to launch a ticketing channel in January to coincide with the peak of the Lunar New Year festival.
Vietnamese people will have seven days off during this year’s Tet holiday, starting on February 10, according to a proposal drafted by the Ministry of Labour, Invalids and Social Affairs and later approved by the Prime Minister.
Vietnam exports 1.37 billion medical masks in 2020
Domestic firms shipped over 1.37 billion medical face masks of various types abroad throughout 2020, according to statics compiled by the General Department of Vietnam Customs.
December alone witnessed over 30 major local businesses ship medical face masks overseas, with the total export volume reaching approximately 71 million units, representing a sharp decline of 59% compared to figures from November.
The volume of export activities returned to normal after May, 2020, following a resolution implemented by the Government regarding licensing for the export of medical face masks, with items being granted permission to be exported without facing any caps on export quantity.
After these changes came into effect, the country exported more than 181 million and 236 million medical masks in May and June, respectively. Despite this, the export volume of medical masks during July and August endured a downward trajectory caused by a second wave of novel coronavirus (COVID-19) cases in the nation.
These drops saw the country export 153.82 million units in July and 135.44 million units in August, representing falls of 34.9% and 11.9% respectively.
Following this period, September witnessed the recovery of medical mask exports with 142.88 million units shipped abroad, a rise of 5.5%, with growth momentum being successfully maintained in October and November, with the export of 143.33 million units and roughly 173 million units, respectively.
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