Retail sales, consumer service revenue up ahead of Tet
|Shopping in a Vinmart outlet in Ha Noi. Total retail sales of goods and revenue from consumer services in January are estimated at VND479.9 trillion (nearly US$20.77 billion), up 3.7 per cent month-on-month.|
Goods retail sales totalled VND378.9 trillion, accounting for 79 per cent of the total and up 4.1 per cent month-on-month and 8.7 per cent year-on-year.
Revenue from accommodation and food service stood at around VND48.7 trillion, representing 10.1 per cent of the total. It increased 2.7 per cent against December but was down 4.1 per cent against January 2020.
Tourism revenue was around VND1.6 trillion, or 0.3 per cent of the total, up 0.7 per cent compared to December but down 62.2 per cent year-on-year.
Earnings from other services were estimated at VND50.7 trillion, accounting for 10.6 per cent of the total and up 1.1 per cent month-on-month and 7.3 per cent year-on-year.
The GSO said retail sales and consumer services have become more vibrant as the Tet (Lunar New Year) holiday nears.
Most enterprises, shopping centres, supermarkets, and business establishments have readied an abundant supply of goods and offered various promotional programmes to stimulate consumption ahead of the holiday, the office noted.
Vietnam Rubber Group posts rising revenue and profit in 2020
The Vietnam Rubber Industry Group JSC reported VND21.17 trillion (US$915.6 million) in revenue and VND5.23 trillion in post-tax profit in 2020, year-on-year increases of 6.9 per cent and 36.4 per cent, respectively.
It had earlier targeted over VND24.64 trillion in revenue and pre-tax profit of more than VND4.9 trillion for 2020.
The company reported consolidated net revenue and post-tax profit in the fourth quarter of more than VND9 trillion and nearly VND3.2 trillion, up 27.1 per cent and 90.1 per cent year-on-year.
As of December 21, it had total assets of over VND79.64 trillion, up 1.4 per cent compared to January 1, 2020. Fixed assets were valued at more than VND30.2 trillion.
It is now stepping up restructuring and rearranging its member companies.
It recently completed its divestment from the Sai Gon VRG Investment JSC by selling 9.34 million shares valued at some VND1.32 trillion.
Dak Lak approves two wind-power plants, worth $96 million
The Dak Lak People’s Committee has granted in-principle investment approval to two wind energy project, expected to cost over VND2.21 trillion (US$96 million).
Financed by VNM investment company from Singapore, the two plants have a combined design capacity of 70 MW, according to the provincial Department of Planning and Investment.
The 20 MW-Alpha VNM plant, valued at VND650 billion, will be developed in three communes of Ea Sol, Dlie Yang and Ea Hiao on an area of nearly 6.5ha.
Meanwhile, the 50MW-Beta plant will cover 10.9ha in eight communes of Dat Hieu, An Binh, Doan Ket, Thong Nhat, Binh Tan, Cu Bao, Ea Ngai and Ea Tul with a cost of VND1.56 trillion.
With attractive investment attraction policies and favourable natural conditions, Dak Lak has become a destination for many solar and wind power projects.
Businesses have to date registered to pump investment into 29 solar power projects in the province with a total capacity of 11,500MWp. Ten of the total have received the go-ahead from local authorities with a total capacity of 960MWp.
Meanwhile, 47 wind power projects have registered in the locality thus far with a total capacity of nearly 10,000MW.
In the future, Dak Lak is striving to become the second solar power capital of the country, only after Ninh Thuan Province, turning this place into a renewable energy “battery” of the Central Highlands, baodautu.vn reported.
According to local authorities, investors coming to the province would access transparent information and given enthusiastic and professional support because it always kept in mind how both businesses and localities would benefit.
Trade fair under-way in Thai Bình Province
A trade fair is under-way in the northern province of Thai Binh to meet the local people’s shopping demand for the upcoming Tet holiday.
Hosted by the provincial Department of Industry and Trade, the fair is showcasing farm produce, forestry products, seafood, processed food, electronics, textile and garment, footwear and other consumer goods at 200 booths.
In his speech at the event’s opening ceremony on Tuesday, Tran Huy Quan, director of the department, said the event was held as part of the province’s trade promotion programme in 2021, with the goal of stabilising the local market for Tet holiday and better meeting demand of local people.
Quan also described the event as a good chance for businesses to advertise their products, promote their sales and seek new trade partners.
The fair will wrap up on Sunday.
Food supplies, stable prices ensured for Tet holiday
A wide range of essential goods commonly consumed during the upcoming Tet (Lunar New Year) holiday have been adequately stockpiled and are now available for distribution at stabilised prices in HCM City.
The demand for essential goods is expected to increase by 10-20 per cent during the Tet holiday, said Phan Thi Thang, deputy chairwoman of the municipal People’s Committee.
Businesses in the city have made huge efforts to increase production to meet rising demand during Tet, and have strictly followed preventive measures for COVID-19, Thang said.
Pork and other fresh meat, eggs, fruits and vegetables, and processed food have been stockpiled to ensure supply to the market during Tet, Thang said during a visit to two food manufacturing businesses in the city on Monday.
Stocked goods have surpassed 30-40 per cent over the targets set by local authorities, making it impossible for a shortage of goods and unexpected price hikes before and after Tet, she said.
Nguyen Ngoc An, general director of Vissan JSC, said the company had stocked 5,183 tonnes of processed foods and 2,290 tonnes of fresh pork and beef, up 5 per cent and 10 per cent from a year earlier, respectively, to meet the rising demand ahead of Tet holiday.
The total value of stocked goods has jumped by 11 per cent from the same period last year to more than VND900 billion (US$38.9 million).
Around 90 per cent of the production plan for Tet stocks has been fulfiled, he said.
The company is now focusing on adequate goods for distribution at stable prices as well as compliance with food safety and hygiene standards.
Vissan has ensured food supply to the northern provinces of Bac Ninh and Hai Duong where thousands of people are under quarantine due to the COVID-19 outbreak, he said.
Nguyen Thi Thu Trinh, deputy general director of the Sai Gon Food JSC, said that around 2,700 tonnes of goods have been stockpiled to supply during Tet, an increase of 25 per cent compared to the same period last year.
The company has committed to ensuring stable prices during Tet, Trinh said.
Hoang Anh Gia Lai JSC posts biggest loss in 2020
The fourth quarter result of Hoang Anh Gia Lai (HAG) showed that the company lost nearly VND2.2 trillion last year as it struggled to manage businesses due to COVID-19.
Hoang Anh Gia Lai’s net revenue increased 52.7 per cent year-on-year to VND920.4 billion in the last quarter of 2020. The main source of its revenue came from selling fruits with a value of VND538 billion in the same period. Revenue from selling hogs also reached VND121 billion for the first time.
Despite an increase in revenue, its gross profit was zero as the selling price was affected by COVID-19. It had to sell products under cost prices. The company posted a gross loss of nearly VND168.5 billion in the fourth quarter.
However, its financial activities income surged up to VND784 billion in the last quarter of last year. The gain was boosted by liquidating investments and the decline of VND439 billion in financial activities expenses.
When the companies’ businesses were heavily affected by COVID-19, Hoang Anh Gia Lai’s executive board decided to review its previous data which related to estimation and provision for receivables under conservatism principles.
Accordingly, it applied a retrospective adjustment to its 2019 consolidated financial report by increasing provision for accumulated receivables, leading to a rise in general and administrative expenses and other expenses.
The result was Hoang Anh Gia Lai reported a loss after tax of over VND1.5 trillion in the fourth quarter, of which the parent comany’s loss after tax was nearly VND1.2 trillion.
In 2020, its consolidated net income gained nearly 49 per cent year-on-year to VND3.1 trillion and loss after tax was nearly VND2.2 trillion. In 2019, the company recorded a loss after tax of over VND1.9 trillion.
As of December 31, 2020, its liabilities were over VND26.6 trillion, of which short-term borrowing was nearly VND8.5 trillion and long-term borrowing was over VND9.6 trillion.
Recently, Doan Nguyen Duc, president of Hoang Anh Gia Lai, has registered to sell 21.78 million HAG shares for financial restructuring. After the deal, the number of HAG shares in Duc’s assets will decline to over 319 million units, equivalent to 34.5 per cent ownership.
Meanwhile Hoang Anh Gia Lai also registered to sell 75 million Hoang Anh Gia Lai Agricultural JSC (HNG) shares for loans restructuring. After the sale, the number of HNG shares that Hoang Anh Gia Lai owns is over 330.1 million.
Both of the deals are expected to be executed under the method of agreement from February 5 to March 5.
At current prices, the deals will bring over VND93 billion for Duc and more than VND800 billion for Hoang Anh Gia Lai.
On the Ho Chi Minh Stock Exchange (HoSE), HAG shares were traded at VND4,450 on Wednesday, up 4.46 per cent, while HNG share price gained 5.16 per cent to VND11,200.
From December 31, 2020 to January 19, 2021, Hoang Anh Gia Lai completed the deal to sell nearly 47.5 million HNG shares.
Mekong Delta looks towards sustainable tourism
The “Mekong Innovations in Sustainable Tourism” (MIST) programme has been launched in an effort to focus on innovations in sustainable tourism, resilience, and climate change in the Greater Mekong Sub-region (GMS) in alignment with the Sustainable Development Goals (SDGs).
The MIST scheme, part of the “Mekong Innovative Startups in Tourism” programme, is being jointly run by the Mekong Tourism Coordinating Office (MTCO), six member governments of the Greater Mekong Sub-region (GMS), along with partners in the Asian Development Bank (ADB) and Seedstars, a Swiss-based ecosystem builder.
Jens Thraenhart, executive director of the Mekong Tourism Coordinating Office and Chair of Destination Mekong, underscored the importance of encouraging the development of innovative idea as it helps the tourism industry to rise to challenges caused by changing needs, particularly during the period of the COVID-19 pandemic.
He also stated the need to maintain the powerful MIST brand, with a specific target to launching creative projects and concepts which drive sustainability and resilience, helping to recover tourism in the GMS.
During the first quarter of 2021, MIST is set to invite nominations from startups, companies, governmental organisations, NGOs, academia, media, as well as individuals, students, and partnerships from six member countries of the GMS region, namely Cambodia, Laos, Myanmar, Thailand, Vietnam, and China.
Nominations will be accepted from February 1 to April 31, 2021 at www.MIST.asia, whilst existing MIST nominations are to be considered based on the new criteria.
The MIST jury is to be made up of members of the Mekong Tourism Advisory Group (MeTAG – https://www.destinationmekong.com/mekong-tourism-advisory-group/) and Seedstars. This group will ultimately judge the final pitches during a hybrid MIST Forum planned to take place during the second half of the year in Bangkok.
Vietnamese goods dominate local market ahead of Tet
A variety of local goods have hit the shelves of supermarkets, shopping centres, and convenience store chains such as Vinmart, Bach Hoa Xanh, Co.opmart, and BRG Mart in an effort to meet the shopping demands of people ahead of the Lunar New Year, known locally as Tet.
According to reports, the main products include confectioneries, soft drinks, beer, and food from famous Vietnamese brands such as Kinh Do, Huu Nghi, Bibica, Cau Tre, and Vissan, with an abundant supply on sale at reasonable prices.
Alongside the diversification of goods, several domestic firms have carried out promotional schemes aimed at stimulating demand from consumers and attracting more people to go shopping.
Nguyen Thai Dung, general director of BRG Retail Company, said that in order to meet the shopping needs of local consumers, the company has provided sufficient sources of relevant items, with the quantity of goods increasing by roughly 30% compared to the same period from last year. In line with this, Vietnamese products also account for up to 90% of the supermarket chain.
Pham Thi Ngoc Lan, deputy director of Co.op Food in the north, said that domestic enterprises have given special attention to improving product quality and design, whilst striving to boost competitiveness in an effort to win the trust of consumers. This has been done after gaining insights into the tastes of Vietnamese shoppers in order to launch suitable products.
Amid complicated developments caused by the novel coronavirus (COVID-19) pandemic, aside from strictly-implemented preventive measures such as wearing face masks and using disinfectant, many consumers have chosen to do shopping online as a means of avoiding crowded places.
At present, the Ministry of Industry and Trade has co-ordinated efforts with localities across the country to organise a number of activities aimed at introducing local products, while also implementing the “Vietnamese people give priority to using Vietnamese goods” campaign. This is being done to support local production and stabilise the market during Tet.
Canada becomes ‘billion dollar’ export market for Vietnamese garments and textiles
The enforcement of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in 2019 served to turn Canada into a ‘billion-dollar’ export market for the local textile and garment industry.
Statistics compiled by the International Trade Center (ITC) indicate that domestic textile and garment exports to Canada in 2019 moved past US$1.1 billion for the first time, a rise of 20% compared to 2018.
These figures show that the nation has surpassed Cambodia to rank third in terms of textile and apparel exports to the Canadian market.
Most notably, the trade pact has helped foreign importers turn to place orders from Vietnamese suppliers and provided the country with a comparative advantage over rivals such as Bangladesh and Cambodia, with the nation enjoying tariff reduction of 0% after three years.
Despite a range of adverse impacts caused by the novel coronavirus (COVID-19) last year, Vietnamese textile and garment exports to Canada were still able to maintain robust growth.
Le Tien Truong, vice chairman of Vietnam Textile and Apparel Association (Vitas), said that among CPTPP members, Canada can be considered a market with strong potential moving forward, second only to Japan. Indeed, Canada’s import scale reached up to US$14 billion with Vietnamese garments and textiles, accounting for only 8% of the overall market share.
Experts have therefore advised local firms to meet rules of origin detailed within the CPTPP, with yarn and fabric being purchased from CPTPP member countries as a means of increasing exports to the Canadian market in the near future.
Vietnam continues to enjoy FDI inflows
Vietnam remains an attractive investment destination in Asia, wooing over 300 foreign enterprises to invest or expand their investments in the country during January, the Ministry of Planning and Investment reported.
These factors have served to become the driving force for foreign businesses as they strive to swiftly establish hi-tech product factories throughout the country.
The World Bank (WB) also pointed out that despite the State Bank of Vietnam lowering interest rates in October, the banking industry has maintained credit growth of 10.1% at the end of 2020.
The country’s initial breakthroughs in COVID-19 vaccine production has opened up bright prospects ahead for its economic recovery, especially in terms of the tourism and aviation industries, which have been the hardest hit by the COVID-19 pandemic.
Takeo Nakajima, chief representative of the Japan Trade Promotion Organization (JETRO), emphasised that with the COVID-19 pandemic under control in Vietnam, FDI inflows from global supply chains are expected to rapidly shift to the country in 2021.
Nakajima noted that Vietnam represents a location with a safe and stable investment environment, whilst there is plenty of room for development in the domestic market moving forward.
A representative from Panasonic Group indicated that the company decided to move its Thai factory to Vietnam from the beginning of 2020 as a result of the huge market potential that exists.
According to studies released by the company, Vietnamese consumers bought 2.8 million refrigerators and 2.27 million washing machines last year, a far higher rate than that of the Thai market.
Moreover, the Government’s investment incentives have facilitated greater FDI inflows into the country. Several high-tech firms are now exempt from import tax on raw materials and components, in addition to enjoying other preferential treatment.
Along with advantages of cheap labour costs, experts underlined the necessity of supplementing a high-quality workforce and fine-tuning the legal system to further attract FDI in the near future.
Pham Xuan Hong, chairman of Ho Chi Minh City Textile and Garment Association, underscored the importance of luring FDI in a selective manner, with priority given to high-tech production enterprises. Indeed, these could provide a fresh impetus for businesses to enhance production capacity whilst increasing their market share, as well as fully tapping into the benefits of FTAs.
National production development programme to 2030 launched
It also looks to help firms expand production scale and improve the quality of products as approved in the programme.
To such end, the programme offered measures such as choosing national products from key and priority ones in sectors, building outstanding enterprises in charge of producing national products, assisting firms in building trademarks, promoting trade and developing markets for national products.
Firms will be also helped with improving the capacity of their workforce and investing in technical equipment in line with the law.
National products must meet requirements such as adopting modern technology, having ability to register for intellectual property protection, having added value and high competitiveness, and tapping advantages in human and natural resources, and natural conditions of Vietnam.
Vietnam’s economic achievements surprise the world
Vietnam is said to be a global success story, with economic growth among the highest worldwide over the last decade.
It has enjoyed important and comprehensive economic achievements across fields, creating breakthroughs in the 2016-2020 period and highlighting the achievements during its 35 years of “Doi Moi” (renewal).
The achievements can be attributed to the sound leadership and direction of the Party Central Committee, the Politburo, and the Secretariat and Party Committees at all levels.
The Party’s leadership during this term has been clearly demonstrated through the principles, strategies, and official documents of the 12th National Party Congress as well as a series of other important decisions issued by the Party Central Committee and the Politburo.
Many important Party Resolutions were issued during the last tenure, with the two most outstanding relating to developing the private sector into an important driving force of the socialist-oriented market economy and to perfecting the socialist-oriented market economic institution.
The Politburo also issued three resolutions on building national industrial development policies to 2030 and a vision to 2045, on a number of guidelines and policies to actively participate in the fourth Industrial Revolution, and on the orientation of the National Energy Development Strategy to 2030 and a vision to 2045.
Among the Government’s priorities to implement the resolution of the 12th National Party Congress, improving the quality of the socialist-oriented market economy institution and promoting administrative procedure reform were placed at the top.
During its five years of implementing the resolution, Vietnam posted a range of achievements and breakthroughs.
The country’s economic restructuring and growth model transformation were conducted firmly, with more positive and practical changes made.
Vietnam basically completed and exceeded its set targets for four consecutive years, from 2016 to 2019, with results improving every year.
It has posted among the highest economic growth in the world and stable macro-economic factors, and promoted institutional reform. These are attributed to the joint efforts of the entire political system, business community, and people under the leadership of the Party.
Associate Prof., Dr. Dinh Trong Thinh said that although there were still some shortcomings, the last five years was a period of success for Vietnam’s economic development, with a strong change in the economic structure.
The private economy is gradually becoming a driving force in promoting national economic growth and now contributes 40% to the country’s GDP.
Digital transformation and the application of digital technology in the economy are developing strongly.
Beside its economic achievements, Vietnam also posted commendable results in socio-cultural development and ensuring social welfare. Living standards have been improving, with average per capita income now standing at US$2,750.
Vietnam has also recorded outstanding achievements in international integration over the last five years. It has signed 15 free trade agreements (FTAs) to date and negotiated two others. Strategic partnerships have been established with 16 countries, and comprehensive strategic partnerships with 11 others. It has joined over 500 bilateral and multilateral agreements across fields. Up to 71 countries have recognised Vietnam as a market economy.
International economic integration has helped Vietnam’s international trade activities thrive, according to Dr Nguyen Duc Kien, Head of the Prime Minister’s Economic Advisory Group.
From an importing country, Vietnam has worked to balance its imports and exports and now regularly posts a trade surplus, Kien said.
Joining FTAs with major economies has helped it diversify its external economic relations and build a more reasonable market structure not overly dependent on any particular market. This contributes to improving trust among foreign investors in Vietnam’s stability and economic potential.
According to the UN Development Programme (UNDP), Vietnam has created a “legendary story” in poverty reduction, with a human development index (HDI) of 0.63 in 2019, ranking it 118th out of 189 countries and among the group of countries with the highest HDI growth.
It was also ranked 8th on a list of the world’s best economies to invest in 2019, up 15 places compared to 2018, while its competitiveness was ranked 67th out of 141 countries and territories by the World Economic Forum, up 10 places compared to 2018.
According to the UN Sustainable Development Report 2020, Vietnam is the only Southeast Asian country to achieve five UN action targets.
Amid the “gloom” of the world economy in 2020 due to COVID-19, Vietnam emerged as a remarkable and proud bright spot.
Party General Secretary and State President Nguyen Phu Trong has stressed that “never before has our nation had the fortune, strength, position, and prestige it has today”.
These successes are not accidental, but the result of self-reliance, self-resiliency, flexible policy responses, and tireless efforts by the Vietnamese Party, Government and State, as well as the entire business community and the people.
US becomes largest export market for Vietnamese goods in January
The United States was the nation’s largest export market in January with a turnover of US$7.5 billion, representing an annual increase of 57.4%, according to statistics released by the General Statistics Office (GSO).
China ranked second among the country’s biggest export markets with US$5.8 billion, a huge increase of 111.6% from the same period last year, followed by the EU, ASEAN, Japan, and the Republic of Korea.
January saw the import turnover of goods enjoy a strong surge of 41% to US$26.4 billion compared to the last year’s corresponding period.
In contrast, China remains the largest importer of Vietnamese goods with import turnover reaching US$9.6 billion, marking a rise of 72.7% on-year, followed by the Republic of Korea, ASEAN, Japan, the EU, and the US.
The nation racked up a trade surplus of US$1.3 billion during January, of which the domestic economic sector recorded a trade deficit of US$1.8 billion, while the foreign-invested sector run a trade surplus of US$3.1 billion.
The country also enjoyed a trade surplus of US$1.5 billion with the EU, while suffering a trade deficit of US$3.8 billion, US$3.4 billion, and US$1.1 billion with China, the Republic of Korea, and ASEAN, respectively.
HCM City’s industrial production index up 34.5 percent in January
January’s industrial production index in HCM City picked up 34.5 percent year-on-year as businesses stepped up operations in preparation for the approaching Tet (Lunar New Year) holiday.
Marked hikes were seen in wood, bamboo, and rattan processing (excluding beds, wardrobes, tables, and chairs) (up 97.4 percent), the production of metallic mineral products (87.6 percent), and motor vehicle manufacturing (86.4 percent).
Of major industries, electronics expanded 61.9 percent, pharmaceutical chemistry 51.7 percent, mechanics 44.3 percent, and food and beverages 27.3 percent.
The consumption index of the processing and manufacturing industry in the month increased 37.4 percent against the same period last year but its stockpile index rose 22.1 percent.
Nguyen Phuong Dong, Director of the municipal Department of Industry and Trade, said that thanks to COVID-19 prevention and control measures, the southern metropolis has gradually recovered its economic activities.
The city should, however, further study new policies, most notably the resolution on the EU-Vietnam Free Trade Agreement (EVFTA) and the EU-Vietnam Investment Protection Agreement (EVIPA).
He also urged enterprises to keep a close watch on the pandemic, keep in touch with customers, and raise proposals on market opening, while focusing on major exports.
The municipal Statistics Office reported that total export turnover of enterprises based in HCM City exporting via border gates around the country reached some 3.63 billion USD, down 15.2 percent against December 2020.
China remained the largest market for HCM City’s enterprises, buying over 716.6 million USD worth of goods during the month, up 20.3 percent year-on-year.
Meanwhile, HCM City’s exports to the European market stood at 463.9 million USD in January, a year-on-year increase of 23.7 percent.
Experts said these achievements will create a foundation for enterprises in the southern economic hub to conquer markets in 2021 and adapt to changes in their customer base./.
Bao Viet’s 2020 after-tax profit up 28.5 percent
Bao Viet Holdings and its affiliates reported positive growth last year with total turnover of 48.949 trillion VND (2.12 billion USD), up 9.1 percent year-on-year and surpassing the annual target by 8.9 percent.
After-tax profit hit 1.597 trillion VND, up 28.5 percent and equivalent to 135.3 percent of the annual target.
Bao Viet’s member companies also saw encouraging results. Bao Viet Life Insurance posted revenue of over 36.1 trillion VND last year, up 12.4 percent, Bao Viet Fund 114 billion VND, and Bao Viet Securities JSC 594 billion VND, surpassing the annual target by 23 percent.
Bao Viet now owns the largest assets in the insurance market, worth over 147 trillion VND (6.39 billion USD)./.
Ben Tre working to combat IUU fishing
The Mekong Delta province of Ben Tre is stepping up measures to address bottlenecks in fighting irregular, unreported and unregulated (IUU) fishing, in keeping with recommendations from the Ministry of Agriculture and Rural Development.
The province will strive to put an end to illegal fishing by local vessels in foreign waters by June 30, Deputy Director of the Department of Agriculture and Rural Development Nguyen Van Buoi said.
The department has also joined hands with relevant agencies to conduct regular inspections and keep a close watch on the implementation of measures to counter IUU fishing.
Local agencies were asked to further disseminate anti-IUU fishing regulations, intensify the supervision of fishing activities, and impose hefty punishment on violators.
All boats are required to install a vessel monitoring system by the end of March, so that off-shore vessels are traceable.
The European Commission (EC) has made a positive assessment of Vietnam’s fight against IUU fishing following two inspections in the past three years since it gave a “yellow card” to the country’s export of aquatic products to Europe.
Countries that fail to meet EC standards are given a “yellow card” followed by a “green card” if problems are resolved, or a “red card” if they are not. A red card can lead to a trade ban on aquatic products./.
Quang Tri: Wind power projects worth over 250 million USD given go-ahead
The administration of central Quang Tri province has approved in principle three wind power projects with total capital approximating 5.8 trillion VND (251.7 million USD).
They consist of the Phong Nguyen project, worth over 1.9 trillion VND in Tan Thanh and Huong Phung communes; Phong Huy, worth 1.913 trillion VND in Tan Thanh and Huong Tan communes; and Lien Lap, worth 1.973 trillion VND in Tan Lien, Tan Lap, and Huong Tan communes and Khe Sanh township.
All of these localities are located in the mountainous district of Huong Hoa.
Each project will feature 12 wind turbines with designed capacity of 48 MW and an operational lifespan of 50 years, the office of the provincial People’s Committee said on February 4.
Western mountainous areas of Quang Tri, especially border communes in Huong Hoa district, boast great potential for wind power development as wind speeds average 6 – 7 metres per second.
The province has already seen two wind power projects, Huong Linh 1 and 2, become operational.
The Ministry of Industry and Trade has approved planning for 31 wind power projects with combined capacity of over 1,177 MW in Quang Tri, 22 of which are scheduled to be put into commercial operation this year while seven others are currently under construction.
Studies and surveys are also being conducted on dozens of others in Quang Tri with total capacity of more than 3,600 MW.
Attracting investment to the energy sector, including wind power generation, is one of the priorities of Quang Tri province, which has also taken measures to support enterprises, such as developing e-administration, building an official database, and providing help relating to tax, insurance, land, and environmental matters.
Local authorities have committed that they will not sacrifice forest land for wind power development./.
Negative tourism growth of central region reveals economic weaknesses amid COVID-19
Tourism growth in a number of central localities, such as Da Nang city, Khanh Hoa, Quang Nam, and Quang Ngai is enduring a slowdown due to the impact of the novel coronavirus (COVID-19) pandemic, thereby causing lasting damage which will could linger for many years.
For the first time in decades severe challenges have emerged, including the budgets of these localities seeing a drop of tens of thousands of billions of VND, tens of thousands of workers losing their jobs, and people’s lives being heavily impacted by natural disasters and the COVID-19 pandemic.
This therefore reveals the limitations and weaknesses of the central region, with changes needed in the future development strategy.
Some local people said that over the past few months they have been forced to quit their jobs due to lack of pay and had to try to find new jobs by themselves, while many older workers find it difficult to apply for a suitable job.
Along with locals, many businesses also complain that the outbreak of the COVID-19 pandemic occurring in February, 2020, has adversely affected the local tourism sector, with the operation of transportation, hotels, restaurants, and catering services being severely disrupted.
Pham Minh Nhut, vice chairman of the Nha Trang Tourism Association and general director of Hon Tam Nha Trang Marine Joint Stock Company, says that previously his firm’s monthly revenue stood at approximately VND50 billion, but the enterprises has now suffered a loss of nearly VND200 billion in a year. Indeed, some 400 out of 600 employees are now out of a job, with the company becoming a “debtor” of social insurance and long-standing product supply partners.
According to a report released by the General Statistics Office (GSO), more than 32 million Vietnamese people aged 15 and over have been affected by the COVID-19 pandemic in 2020, leading to a significant amount of unemployment, layoffs, along with rotational leave, reduced working hours, and an unstable income. In line with this, the service and tourism sector was the most affected industry with more than 70% of unemployed and underemployed workers.
Most notably, the number of businesses which halted operations after getting into debt is on the rise, with more than 3,000 firms temporarily suspending operations in the central city of Da Nang, while more than 1,600 enterprises have suspended operations or dissolved in the south-central province of Khanh Hoa.
Thousands of touring cars have been forced to remain unused and a series of stores based in busy streets have been closed for nearly a year, with no prospects of resuming operations.
Da Nang city, Khanh Hoa, Quang Nam, and Quang Ngai provinces used to represent bright spots for national tourism development and early integration with the international economy. But when tourism activities in these localities was impacted by the enforcement of social distancing measures to combat the pandemic, production, business, and tourism services were also heavily affected, resulting in many social damages.
Upon facing up to the adverse impact caused by the pandemic, the tourist hotspots have shown their shortcomings and weaknesses.
Nguyen Khac Dinh, secretary of Khanh Hoa Provincial Party Committee, states that the dependence on tourism and services has resulted in the local economy suffering negative growth when the pandemic happened.
Questions are now being asked at why Khanh Hoa has the lowest growth rate in the country and what is the cause behind this. One key factor is the economic structure of Khanh Hoa not being balanced, with major priority given to tourism-service development. The outbreak of COVID-19 has therefore had a strong impact on the tourism service sector, while no other industry is able to balance this growth.
According to Dr. Tran Dinh Thien, former director of the Central Institute of Economics and a member of the Economic Advisory Group of the Prime Minister, for a long time, advantages in terms of climate, natural landscapes, and places of interest have served to help central provinces and cities develop local tourism. This saw tourism becoming the spearhead economic sector of these localities, thereby creating a breakthrough for socio-economic development.
However, the COVID-19 pandemic has forced these localities to seek ways of dealing with the limitations and weaknesses of the local economy in order to readjust their development strategies and economic structure, Thien emphasizes.
Digitalisation aiding supply chain strength
More Vietnamese companies have signalled the need to embrace digitalisation of domestic supply chains in efforts to overcome the disruptions caused by the global health crisis.
James Christopher, president of TM Insight Asia, cited the company’s latest report that 98 per cent of business leaders in Vietnam plan to adopt more forms of digitalisation in supply chains. This is to enable them to better overcome challenges and changing consumer trends presented not only by the ongoing pandemic but also other significant events from 2020 including trade disputes.
Christopher added that the digitalisation of supply chains will allow businesses in Vietnam to better cope with the upswing in demand, which cannot always be covered with increasing manual operations. It will also allow for better visibility of what is happening within their supply chains, and potential challenges can be anticipated better before they arise.
According to the December report from TM Insight, which surveyed over 250 business leaders across various sectors in five ASEAN member states, going digital also helps to build resilience of supply chains against potential shocks, allowing companies to remain competitive even in an ever-changing landscape.
Indeed, Vietnamese manufacturers and companies are planning their next technology investments to optimise their supply chain as global markets continue to recover. VinFast in particular has made significant investment in robotics and automation, helping the group improve productivity and build supply chain resilience. Retailer Saigon Co.op has also increasingly implemented online-to-offline business to accelerate digital transformation in management and operation of its supply chain.
Kurt Binh, CEO of Smartlog, a technology startup for logistics industry said, “We realise the huge potential of the Vietnamese market. By digitalising supply chains, companies can cut hundreds of millions of US dollars. At the same time, digital transformation can make supply chain more agile and closer to end users. It also increases the interaction within supply chains to improve services and reduce logistics costs.”
Binh added that most Vietnamese companies consider supply chain digitalisation as expenses rather than profitability. “Thus, Vietnamese businesses need to change the leadership mindset, culture, and attitude to remove these barriers,” he said, adding that Smartlog will help local companies implement the digitalisation process with an end-to-end logistics ecosystem.
According to Grant Thornton’s Business Pandemic Resiliency Diagnostic, conducted in the summer of 2020, the supply chain was the factor which contributed most to a drop in business, more so than cash flow, demand, regulation, or technology. The survey also revealed that companies with a higher level of digitalisation were more resilient and weathered the pandemic storm better than companies with a low level of adoption of digital adoption.
“Digitalisation allows greater market reach and more efficient price discovery, both for buyer and seller.,” explained Claude Spiese, senior advisor of Digital Advisory Services at Grant Thornton Vietnam. “Whereas traditionally businesses were limited in their supplier and distributor relationships, with digital they may discover and then buy and sell to a much larger pool of business partners, often at more favorable price levels.”.
Observing this trend, Elizabeth Fuller, head of Growth at WeWork Southeast Asia, told VIR, “The investment in digital infrastructure and connectivity has also played an important feature both in the management of the pandemic and the functioning of the economy. As a data and technology enabled company, we are seeing companies developing new business models and engagement across emerging sectors like e-commerce to traditional sectors such as banks. The pandemic will accelerate such trends even further and savvier companies will turn towards an integrated digital experience to hit their customer base.”
She noted that the Vietnamese market has also shown an increase in activity. Many international enterprises have invested and expanded their presence here in recent years, which has created a need for companies to continue being nimble and agile to maintain their competitive edge, which often leads them to embrace flexible workspace solutions.
In the last quarter, WeWork also signed on a fast-moving consumer goods company along with some regional startups looking at Vietnam as a huge market for their future strategies.
Eyes on the prize in IZ development
Good indications of national economic development and a suitable strategy to combat the pandemic has increased the inflow of foreign manufacturers and industrial developers to Vietnam – however, local authorities are urged to be cautious in handing out new licenses in order to avoid the asynchronous growth of industrial zones.
Moreover, local authorities also have to harmonise the improvement of the infrastructure system along with the development of industrial zones (IZs) as it is the most significant factor in deciding the success of any project.
Meanwhile Su Ngoc Khuong, senior director of investment at Savills Vietnam, added that the government is prioritising the high-tech industries so the issue of manpower and skilled workforce to meet the demand of foreign investors in IZs is another problem that needs to be addressed.
According to Khuong, in order to effectively and sustainably develop industrial real estate, the interests between the government and businesses must be harmonised.
Specifically, the government can invest in transport infrastructure, warehousing, as well as logistics and supply chains under the form of public-private partnerships, because the government budget cannot cover it all.
Meanwhile according to Nguyen Tho Tuyen, chairman of BHS Group, the development of industrial property will be in a more important trend this year.
Different from the past when IZ developers simply levelled land sites and then handed them over to tenants, now only synchronised zones can attract good tenants. They must have an all-in-one facility system for manufacturing, accommodation, and entertainment facilities to serve for different demands of the tenants, Tuyen said.
In a January report published by VARS, positive forecasts were made for industrial property, with the market strong and vibrant in many localities. Some outstanding provinces include Long An, Dong Nai, Binh Duong, Binh Dinh, Thanh Hoa, Quang Ninh, and Bac Giang.
As of the end of 2020, Vietnam boasts 260 IZs in operation and 75 others under construction.
The MPI’s Department for Economic Zones Management released that rentals are at a high level in 2020, at $147 in Ho Chi Minh City, $107 in Binh Duong, $98 in Dong Nai, $123 in Long An, and $65 in Ba Ria-Vung Tau.
In the south, rentals are reported around $130 in Hanoi, $95 in Bac Ninh, $83 in Hung Yen, $76 in Hai Duong, and $96 in Haiphong.
Commenting on prospects for 2021, Dinh of VARS said that the movement of manufacturers to Vietnam will continue and so does the demand for industrial real estate in the country.
With positive development prospects, in 2021, a series of new IZs are forecast to open their gates offering completed infrastructure, along with a series of new projects to develop the infrastructure of industrial parks being approved.
Vietnam’s export turnover of steel soars in 2020
Despite the COVID-19 pandemic, Vietnam exported 9.86 million tonnes of steel worth $5.26 billion in 2020, up 47.9 per cent on-year. However, the average selling price dropped by 15.5 per cent to $533 per tonne.
According to statistics published by the General Department of Vietnam Customs, Vietnam exported 9.86 million tonnes of steel in 2020 and acquired $5.26 billion, signifying increases of 47.9 and 25 per cent on-year.
Among the 10 largest export markets, the export turnover to China, the Philippines, Taiwan, and India hiked by at least 30 per cent. Especially, a breakthrough was reported in trade performance with China.
China was the largest export market with the total export turnover of 3.54 million tonnes worth $1.48 billion, up 717 and 670 per cent compared to the figures for 2019.
Cambodia is the second-largest export market, however, the export value to this country plunged in 2020. Notably, the total steel exported to Cambodia was 1.56 million tonnes worth $840 million, with an 8 per cent drop in turnover and 7.5 per cent in selling price compared to year prior.
The third-largest market is Thailand with 675,482 tonnes worth $390.5 million, accounting for 7 per cent of the steel export turnover for the whole year.
According to a report by Vietnam Steel Association, in 2020 the steel industry still reported positive results in spite of being impacted by COVID-19.
Global steel demand will contract 6.4 per cent in 2020 as a direct result of COVID-19, according to the World Steel Association’s Short Range Outlook, but will bounce back in 2021.
The World Steel forecast is that 1.65 billion tonnes of crude steel will be produced this year and that production will increase by 3.8 per cent to 1.71 billion tonnes in 2021.
The forecast assumes that most countries’ lockdown measures continue to be eased during June and July, with social distancing controls remaining in place. It is also dependent upon major steelmaking economies not suffering from substantial secondary waves of the pandemic.
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