Banks set conditions to lower interest rates
The recent news by several Commercial Banks to lower lending interest rates can be considered good for businesses in particular and the economy in general.
However, lowering loan interest rates is difficult to achieve. Deputy Governor Dao Minh Tu of the State Bank of Vietnam had assigned the Vietnam Banks Association (VNBA) to gather consensus on reducing of interest rates. After VNBA held an online meeting, a record sixteen Commercial Banks agreed to reduce interest rates to support businesses facing difficulties during the current ongoing Covid-19 pandemic.
It is believed by many, that reduced interest rates at this time will prove to be a salvation for businesses, besides also providing support for banks. In a nutshell, it will be a boon for businesses, and also lend support to debtors in recovering from their debts. If enterprises are in trouble and unable to pay their debts, it causes more bad debts, besides increasing risk provisions, and as a result, reducing profits. Most interest rate cuts usually take place under such pressure. This time too, sixteen banks have agreed to simultaneously reduce interest rates because the State Bank of Vietnam intervened after recommendations from businesses and business associations.
However, although the banks have agreed, they have also set certain conditions. There will be no mass reduction in interest rates for all businesses in general, and banks will remain selective, only reducing for those businesses in real difficult crisis. This selection process will cause loan interest to decrease in nominal terms as compared to the needs of the business community.
It is understandable for banks to make such a proposal because the question of reducing loan interest when the period of low interest rates is coming to an end is a challenge for them. Lending and deposit interest rates in the world are increasing under the pressure of rising global inflation. Inflation in our country is higher than that of many countries in the region and the world, and this year as forecast, it has touched the risk factor.
If the State Bank of Vietnam reduces the operating interest rate at this time, it will be pouring more fuel on fire. Therefore, the State Bank of Vietnam must mobilize Commercial Banks. Most Commercial Banks are in a difficult position when the pressure to balance benefits for depositors increases when low deposit interest rates are maintained for more than a year, creating a trend of shifting idle money to other highly profitable investment channels such as real estate and securities.
Recently, some banks had to slightly increase deposit rates to hold their position to attract capital. As deposit rates increase, the risk of Vietnamese enterprises also increases in the context of the pandemic, so the loan interest rate cannot be too low. Therefore, the banks can only support a target group as per their criteria.
The calculation of the banks is not wrong, because they are in reality only credit institutions. They do business and earn profit by depositing and lending, while enjoying the difference in the interest rates. This difference is currently higher than usual, but it is the law of the market that high risk is high interest rate. The profit commitment to shareholders is still there, and it is wrong for shareholders to criticize. As a leader of a joint stock commercial bank shared, if the interest rate is reduced by 1% for the total loan balance of about VND 350,000 bn, the bank profit will decrease by about VND 1,000 bn, equivalent to 40% of the bank profit plan.
At this time, enterprises that are facing immense difficulties can hardly resolve their serious ongoing issues by just waiting for Commercial Banks to come up with solutions to bring down interest rates. What is needed now and immediately is financial support to help businesses with more liquidity to stay afloat and maintain their operations and retain their workers.
However, at this time with a raging pandemic and a tight and limited budget, the Government has to prioritize more towards its fight against the pandemic. Designing an economic support package for 2021 will be much more challenging than it was in 2020. Even the proposal to reduce interest rates by 2% on all existing loans for a term of at least one year, in which the budget provides 1% compensation and 1% support comes from Commercial Banks, is not an easy task at all, but extremely difficult to achieve.
Shares manage to rise but investors still cautious
Vietnamese shares ended Monday on a positive note thanks to the rise of some individual large-caps in the final minutes of trading but investors were still cautious about the market’s short-term outlook amid a lack of supportive information.
The VN-Index on the Ho Chi Minh Stock Exchange (HoSE) gained 0.31 per cent to close the trade at 1,272.71 points.
The southern market index had lost 2.34 per cent last week.
"The stock market has not shown any clear trend. Whenever a correction happens, buying demand, although not too strong, appeared," said financial news site cafef.vn.
"There is an absence of supportive information amid the complexity of the COVID-19 pandemic, which will undermine the business results of companies in the second quarter," said Nguyen Anh Khoa, specialist at Agribank Securities Co (Agriseco).
"The liquidity in recent sessions was just below VND20 trillion, showing that a large amount of money is being withdrawn. This trend is expected to continue in the short term when the number of new COVID-19 cases is still climbing," he said.
"However, with massive prevention measures implemented by the Government, this outbreak will soon be controlled, thereby helping to stabilise market sentiment," he said.
The market’s breadth was neutral with 190 stocks increasing while 182 stocks declined.
The liquidity was low as over VND16 trillion was poured into the market, equivalent to a trading volume of more than 508.5 million shares.
The VN30-Index, which tracks 30 biggest stocks on the southern bourse, witnessed a rise of 0.17 per cent to 1,403.96 points. Of the VN30 basket, 16 stocks climbed while 12 slid.
The best performers in VN30 group were real estate company Novaland (NVL) with a gain of more than 4 per cent, IT giant FPT Corporation (FPT), gaining over 3 per cent, Phat Dat Real Estate (PDR) and Khang DIen House (KDH) were the two advancers with over 2 per cent. Meanwhile Thanh Thanh Cong – Bien Hoa JSC (SBT), Vinhomes (VHM), Masan Group (MSN), Vinamilk (VNM) and Refrigeration Electric Engineering Co (REE) all gained over 1 per cent.
On the other side, many banking stocks dropped. VPBank (VPB) was the biggest loser in the group as it dropped more than 3 per cent, Military Bank (MBB) dropped over 2 per cent.
On a sector basis, 16 out of 25 sector indices on the market gained ground, including wholesale, insurance, real estate, IT, healthcare, mining, rubber production, seafood processing, logistics, and construction.
On the negative side, losers were retail, banking, agriculture and securities.
On the Ha Noi Stock Exchange (HNX), the HNX-Index also gained 0.36 per cent to 302.88 points.
The northern market index had plummeted 1.95 per cent last week.
Nearly 71.6 million shares were traded on the northern market, worth VND1.6 trillion.
Authorities crackdown on home-based businesses
Authorities in Ha Noi’s Thanh Xuan District have sent out inspection teams in a crack down on residential properties being used for commercial purposes.
Residents of the Viet Duc Complex in Nhan Chinh Ward have reported that about 100 of the 700 apartments in the complex are being used as offices, shops and spas.
A ward representative at Viet Duc Complex told local media that offending business have been given notice and are required to leave the building by the end of July.
“If they don’t leave on time, the ward will handle it in accordance with the law,” he said.
The Law on Housing 2014 prohibits the use of apartments for non-residential purposes. Authorities have the power to issue fines of up to VND40 million as well as shut down businesses in breach of the law.
According to the law, the ban is to ensure the security and safety for people living in the apartments.
Nguyen Thanh Quyen, who sells food from her apartment in Hoang Mai District and has just employed another person to take and process orders from Facebook, says that she should have the right to trade where she lives.
“It is unfair if they don’t allow me to trade in the building where I live. Sometimes people travel to mine to take their things but most of the time, I ship to them,” Quyen told Viet Nam News.
Quyen also says that shops like hers, during the COVID-19 pandemic, were so much better than the ordinary shops where people came into contact with several sellers or stalls.
One of Quyen’s customers, Nguyen Phuong Mai, says she prefers buying food from a shop in her building.
“I don’t have to pay for shipping or go down to the front desk to get the food I order from other places and I don’t need to travel to other places to buy too.”
Vu Minh Phuong, 26, says she prefers buying from inside of her apartment building because of her relationship with the sellers.
“I prefer buying food from a nearby house, even when I live next-door to Thanh Cong market, because she [the vendor] gives me recipes and her food is always clean too," she says.
The population density of apartment buildings, the ability to avoid the inspection of the authorities such as tax collectors or police, and the lower rental prices make opening a business in an apartment building an attractive option.
Vietnam parlays success of lychee exports to Singapore
The export of fruit and vegetables, especially lychees, contributed significantly to the Vietnam – Singapore trade in the first half of 2021, with Vietnam's shipments surging 37.6 percent. The success of its lychee exports to the fastidious market has been parlayed into other farm produce, to further boost exports.
Vietnamese lychees have gained a firm foothold in Singapore two years after first being sent to the choosy market. They are now found on the shelves of 230 FairPrice supermarkets – Singapore's largest retail chain.
According to the Vietnamese trade office in Singapore, the success of lychee exports is down to excellent marketing and sound coordination between the Ministry of Industry and Trade and localities in Vietnam where the fruit is grown.
This is the first time Vietnamese lychees have been labelled with QR Codes so their origin can be traced.
Despite the formidable challenges, Vietnam holds huge potential to boost farm produce exports if it capitalises on its advantages in cooperation, including the market networks of its partners as well as bilateral and multilateral free trade agreements./.
Apple recruits plenty of vacancies in Vietnam
Apple targets developing the supply chain in Vietnam through a large demand for local personnel undertaking the related positions.
Since June 4, Apple has posted 15 job advertisements in Vietnam. Previously, on May 21, the company was also looking for a regional manager in Ho Chi Minh City. The company was looking for someone with more than 12 years of experience in similar positions.
Applications for these positions are required to fulfill several requirements, including five years of working experience in related fields, good command of the English language, and willingness to work at factories in Shenzen and Shanghai, China.
This recruitment drive shows that Apple is paying more attention to local manufacturing after reloacting some of its Macbook and Airpods production to Vietnam last year.
According to nhipsongkinhte.com, recruited personnel may be in charge of collaborating with and supervising electronic component suppliers in Vietnam and China to prevent supply chain interruptions.
In previous years, Apple has repeatedly posted recruitment notices for engineers and sales managers, among others, suggesting plans to expand in Vietnam. However, there have been no further signs of activity as the country has yet to have an official Apple Store like Thailand or Singapore.
Currently, the identity of Apple's personnel in Vietnam has yet to be revealed. Nevertheless, according to an unofficial source, many of the company’s employees are well-known in local industry circles due to long experience in working at other famous technology brands.
HCM City foodstuff demand volatile as consumers hoard
Supermarkets and food stores in HCM City continue to have abundant stocks of foodstuffs and groceries, but demand has been erratic.
Đỗ Quốc Huy, marketing director of Saigon Co.op, said due to the restrictions, people buy a lot of foodstuffs at one time to store for many days and then stop buying for a few days.
"The cycle is usually about five to seven days."
Huy said since foodstuff supply is abundant consumers play an important role in regulating prices, explaining that if they do not hoard, prices would gradually decrease.
Supplies to the city's markets and distributors are stabilising though some problems with shipments from other provinces still remain.
There is an abundance of essential goods including items such as vegetables and meat products.
Trương Chí Thiện, director of Vĩnh Thành Đạt Foodstuff Joint Stock Company, said people keep rushing to stock up and so his company has had to divert products away from its online channels to focus on its main distribution channels.
But demand has now steadied, and the market would soon stabilise, he said.
Prices are also returning to normal after hikes in the last few days amid the hoarding.
Petrol stations must operate
The city Department of Industry and Trade has ordered petrol and oil businesses not to arbitrarily stop operating to ensure supply is sufficient amid the COVID-19 prevention and control measures, pointing out, petroleum is an important strategic commodity needed for the transportation of essential goods and production.
To ensure uninterrupted and smooth supply of fuel amid the lockdown, it suggested that petroleum enterprises in the city should have plans to stockpile them.
Vietnam to grow into third-largest startup ecosystem in Southeast Asia
Vietnam will emerge in 2022 as the third-largest startup ecosystem in Southeast Asia along with Singapore and Indonesia, according to the Southeast Asia Startup Ecosystem 2.0 report report by Golden Gate Ventures.
There are five industries in Vietnam that are predicted to catch foreign investors’ attention, including e-commerce, financial services, online media, online travel, and food and transport. Emerging home-grown startups include Tiki.vn, Sendo, MoMo, Giaohangnhanh (GHN), Lozi, VNPAY, and others.
According to the report, capital flowing into the Southeast Asian startup scene grew phenomenally over the past decade with total capital invested per annum increasing 50 times from $130 million in 2010 to $6.5 billion in 2020 – with the close of the decade culminating in 15 mega-deals of over $100 million each that accounted for over half of the total capital invested. Food, fintech, and logistics were amongst the verticals that drew the most investment.
The number of IPOs in Southeast Asia is expected to cross 300 by 2030, as more local startups seek an exit in domestic public markets. There is also the emergence of “1.5 and second generation entrepreneurs” who will shape a decade dominated by a rise in social commerce, medtech, fintech-only unicorns, and an uptick in B2B SaaS startups.
Social commerce gross merchandise value will cross $5 billion in 2025 and $25 billion by 2030 due to a continued rise in e-commerce adoption, mixed with growing GDP per capita over the next decade. Meanwhile, medtech is on the rise as a means to provide healthcare access for a large demographic and improve infrastructure challenges in Southeast Asia, especially in a post-pandemic world.
A massive unbanked population in Southeast Asia creates a big opportunity fueling fintech players, providing opportunity for a fintech-only unicorn to emerge. Areas open for disruption include e-wallets, neobanks, buy now pay later, and other forms of financing.
In addition, media and entertainment startups will gain stronger following and funding as the industry is shifting its focus into a digital-first solution, including TV/film, live-streaming, and e-sports. Funding in this space will cross $700 million by 2030.
Int’l organisations launch programmes to help Vietnamese businesses improve operation
The programme to assist businesses in digital transformation for the 2021-25 period of the Ministry of Planning and Investment and the USAID-funded Linkages for Small and Medium Enterprises (LinkSME) project have announced a support package to help enterprises promote digital transformation.
The support aims to help at least 100 businesses successfully conduct their digital transformation process by 2025.
Its objectives also include enhancing all businesses' awareness of digital transformation, and the setting up of an expert network comprising 100 organisations and individuals providing consultancy and solutions to promote the process in enterprises and supporting them in developing digital platforms.
Eligible companies should have 50-500 employees and at least five-year operations in one of the prioritised sectors such as mechanical engineering, electronics, agriculture and agricultural product processing, wood processing, furniture production, garment and textiles, pharmaceuticals and packaging, and have their own orientations in digital transformation and restructuring.
Enterprises engaging in supply chains related to export activities and having female owners and managers will be also prioritised.
Đỗ Hoàng Hải, a digital transformation expert, said that it may take several years to conduct digital transformation in a company depending on its scale and level of readiness. He advised businesses to design clear strategies and a detailed roadmaps in the work, while being prepared for difficulties and challenges during the process.
WB to support SMEs
About 600 small and medium-sized enterprises (SMEs) in Việt Nam will get support in applying technology solutions to improve labour productivity and their competitiveness as part of a project launched on July 22 by the World Bank (WB).
The project will focus on four contents including assessing the health of businesses to identify problems that cause a decrease in their performance and competitiveness; raising awareness of digital transformation and digital transformation strategies; applying technology solutions to help businesses digitise their operations; and measuring the effectiveness of digital transformation application.
In addition to supporting knowledge training on digital transformation and information access services, the project also provides financial assistance to SMEs in applying three technological solutions on sale and personnel management and internal communication.
There will be two digital transformation funding packages for Vietnamese SMEs, namely Digital Express and Digital Prime.
Speaking at the launching ceremony for the project, Shawn Tan, a WB expert, said the project focused on supplying a set of enterprise resource planning (ERP), allowing businesses to collect, store, manage and interpret administrative data from its operation.
$1.82 billion Thai Binh 2 Thermal Power Plant urged to begin operation in 2022
Deputy Prime Minister Le Van Thanh asked the investor and relevant authorities to complete the unfinished segment of Thai Binh 2 Thermal Power Plant in order to take the plant into operation in 2022.
The remaining construction work includes completing the coal transportation system, coal storage, slag discharge pipeline, bidding packages for several stages of test operation, and building out an online environmental monitoring system. The first turbine will begin commercial power generation in November 2022 and the second unit a month later.
While trial operation is being implemented, it is running behind schedule because foreign contractors could not bring experts in to the country to keep up with initial plans due to the COVID-19 pandemic.
The deputy prime minister said that delaying ycommercial operations will cause serious economic damage by increasing loan interests for the investor, the locality will draw no budgetary revenue from the project, and EVN will not be able to purchase electricity from the plant which is designed to generate over 7 billion kWh. In addition, the northern region’s electricity supply in the coming years is expected to face difficulties.
The Thai Binh 2 thermal power plant is an important project in Thai Binh Power Center. The plant was designed with two units with the total capacity of 1,200MW, invested by PetroVietnam. The plant is located in south My Loc commune, Thai Thuy district, about 20km to the east of Thai Binh city.
PetroVietnam Construction JSC (PVC) is the EPC contractor with a $1.2 billion contract.
The construction was started in 2011 and was expected to start operations in 2020 but has been delayed by the pandemic.
Local tea exports surge in first half
The nation exported 58,100 tonnes of tea worth US$94.9 million during the first half of the year, representing a rise of 0.3% in volume and 4.4% in value compared to the same period in 2020, according to data compiled by the Import and Export Department.
The average export value throughout the reviewed period enjoyed a surge of 4.1% to reach US$1,632.9 per tonne against the same period from last year.
Pakistan, Taiwan (China), and Russia continued to be the country's major export markets in the first half of the year, accounting for 55.4% of total tea exports.
In relation to the figure, exports to the Pakistani and Taiwanese markets witnessed robust growth, while exports to Russia endured a downward trajectory.
Most notably, tea exports to China and Iraq increased sharply in the reviewed period, with exports to the Indian market enjoying a significant rise.
According to statistics released by the General Department of Vietnam Customs, Vietnamese tea exports in June reached 11,000 tonnes, worth US$19.6 million, down 7.8% in volume and representing a fall of 2.4% in value compared to June last year.
Furthermore, the average export price of tea in June saw an annual rise of 5.8% to US$1,761.1 per tonne.
According to details provided by industry experts, local enterprises have been advised to invest heavily in production lines in order to launch high-quality tea products capable of making further inroads into the Russian market, which has seen a recent decline in exports.
This comes following the enforcement of a Free Trade Agreement (FTA) between Vietnam and the Eurasian Economic Union (EAEU) which is anticipated to boost the nation's tea export turnover to the demanding market due to import tariffs in the market being slashed to 0%.
Malaysia’s CIMB greenlit to increase charter capital for Vietnamese bank arm
Malaysian bank CIMB announced that the State Bank of Vietnam has approved its request to increase charter capital of its CIMB Vietnam One Member Limited Liability Bank from VND3.47 trillion ($150.87 million) to VND3.69 trillion ($160.43 million).
Thomson Fam Siew Kat, CEO of CIMB Vietnam, said: "Vietnam is deemed as one of the most dynamic finance and banking markets in Asia as well as one of our priority markets. The increase of charter capital will facilitate CMIB to expand our investment, focusing on providing Vietnamese customers with modern finance and banking products as well as improving their experiences with high-quality products and services. CIMB has also signed partnership agreements with some strong partners in Vietnam to complete our digital banking ecosystem."
CIMB Group is one of the biggest investment banks in Asia with more than 34,000 staff, providing services to over 16 million customers worldwide, including Vietnam.
CIMB Vietnam officially received a licence in 2016. The bank has two branches in Hanoi and Ho Chi Minh City. It focuses on developing a modern and creative digital banking model.
Vietnam’s young, digitally-savvy population is growing fast and showing huge demand for digital financial and banking services. The young generation with access to mobile devices and upcoming 5G technology are willing to use their disposable income beyond traditional banking. The government also targets the banked population to increase from 40 to 80 per cent in the near future. Therefore, there will be huge potential for digital banking service providers to thrive in Vietnam.
According to the Fintech & Digital Banking 2025 Asia-Pacific report published by Backbase and IDC, mobile transactions in Vietnam are expected to increase by 300 per cent between 2021 and 2025, led by an upsurge in mobile payments. With shifting demands for financial solutions amid an increasingly digitally savvy consumer banking segment, banks are faced with an urgent call to reinvent their banking infrastructure to provide their customers with value-added services and alternatives across multiple engagement touchpoints, including mobile.
Danang closes largest fishing port of Central Vietnam
From 3pm July 26, operations at Tho Quang Fishing Port, the largest fishing port in the central region, will be suspended for seven days to disinfect the area and carry out pandemic prevention measures.
Accordingly, ships have been notified to temporarily stop entering the port. There will be sample testing for people entering and leaving the port. In addition, there will also be testing for fish traders at local markets, to be completed on July 26.
For people associated with the port living in Danang, local authorities have ordered them to isolate themselves at home. Meanwhile, ships and personnel arriving from other provinces will be denied access to the port and will be instructed to return to their place of residence.
The amount of fish currently stored at the port was assessed tobe enough to supply people during the port’s closure. 250 tonnes of fish stocks and new fish imported in the morning of July 26 will be distributed to markets in the area by the Danang Department of Agriculture and Rural Development in collaboration with the Department of Industry and Trade.
Traders are not allowed to come directly to the port. Sale of fish in spontaneous markets is also banned.
If it is found safe after the 7-day pause, Tho Quang Fishing Port will be allowed to reopen.
Rosy half-year profits across the board at Vietnamese banks
In the first half of this year, most banks have fulfilled more than half of their full-year profit targets despite COVID-19 complexities.
Similarly, VietinBank counted an estimated VND13 trillion ($565.2 million) in pre-tax profit in the first six months of this year, reaching three quarters of its full year target which was pegged at VND16.8 trillion ($730.43 million).
Techcombank and VPBank, two leading players operating in the joint stock model, have also posted upbeat results. Along with this, Techcombank reported achieving VND11.5 trillion ($500 million) in its pretax profit against full-year target of VND20 trillion ($869.57 million). Particularly, the bank's call deposit volume with low mobilisation cost soared more than 55 per cent on-year.
On the same note, VPBank's consolidated pre-tax profit surpassed VND9 trillion ($391.3 million), up 37.2 per cent on-year and equal to 54 per cent of the full-year profit target of VND16.65 trillion ($723.9 million).
Not only large-scale banks, smaller banks have also reported very rosy first-half profit results.
Not only large-scale banks, smaller banks have also reported very rosy first-half profit results. PGBank posted VND175 billion ($7.6 million) in pre-tax profit during the period, up 58 per cent on-year and equal to 56 per cent of full-year plan.
Kienlongbank reached VND805.7 billion ($35 million) in pre-tax profit in H1, up 409 per cent on-year and reaching 80.6 per cent of the full-year profit target.
Ho Chi Minh City-based Saigonbank posted VND137 billion ($5.96 million) in pre-tax profit during the period, completely reaching its full-year target.
According to Vu Quang Lam, chairman of Saigonbank, as COVID-19 is showing no sign of ending soon, the bank has set a prudent profit target to ensure stable and efficient operations as well as stock value.
In the second quarter, Saigonbank scaled up spending on provisioning, bringing the total to VND31.4 billion ($1.37 million) in H1, more than five times that of the corresponding period last year.
Meanwhile, Tran Tuan Anh, general director of Kienlongbank, said that like for other banks, provisioning has been a growing pressure on Kienlongbank amid COVID-19 complications, Anh noted.
For instance, in Q2, provisioning cost at MB doubled compared to a year prior, reaching VND2.43 trillion ($105.65 million), bringing the bank's cumulative provisioning sum to VND4.25 trillion ($184.8 million) in H1.
MB reported having a total of VND2.53 trillion ($110 million) in non-performing loans (NPLs) by the end of June 2021, accounting for 0.76 per cent of the bank's total outstanding balance, a drop of 22 per cent on-year.
German wpd enters Vietnam with Kon Plong onshore wind energy project
German developer wpd AG in collaboration with Singapore’s Levanta Renewables is planning the Kon Plong onshore wind energy project in the Vietnamese province of Kon Tum, located about 780km southeast of Hanoi.
The development of the project, planned for a total capacity of up to 103.5MW, has been initiated by Levanta Renewables and advanced with support from its Vietnamese partners. The partnership with wpd will drive the next development stage for the Kon Plong project.
Wind measurements have confirmed attractive wind resources at the site in the central highlands. The Kon Plong project has been included in Vietnam's Power Development Plan 7 and is therefore well positioned to receive central government support for further development steps. According to current planning, construction is expected to start as early as 2022.
"Our market entry in Vietnam is part of the expansion of our activities in the Asia-Pacific region. The Kon Plong project and the good cooperation with Levanta will allow us to further expand our pipeline," said Hans-Christoph Brumberg, head of Business Development Asia-Pacific at wpd. "We will advance global decarbonisation with more projects in Vietnam and the Asia-Pacific region."
"Vietnam's potential for wind energy is a key element in the country's plan to double its use of renewable energy to meet rapidly growing electricity demand this decade and to reduce greenhouse gas emissions. With the Kon Plong project, together with wpd and our other partners, we aim to help meet this demand while supporting Vietnam's energy transition," said Sudhir Nunes, co-founder and managing director of Levanta Renewables.
A key role in the successful completion of the transaction was played by advice from 4initia, a Berlin-based independent engineering and consulting firm. Given the complex structure of the transaction, which was realised in parts in Singapore and Vietnam, the company's know-how and experience was a valuable support.
Vietnam Railways accelerates digital transformation to increase appeal amid COVID-19
Vietnam's railway industry is promoting IT application as part of the digital transformation drive to increase its attractiveness and competitiveness amid the COVID-19 pandemic.
"I found out about this online service through a friend. I find it cheaper and better than other services. It cost me only about VND150,000 ($6.52) while before I had to spend over VND600,000 ($26.08) to send things by air," she said.
Trang and other people in Hanoi have been trying out the new service and are showing a strong preference for it now.
This is one of the technology solutions that the industry is applying to attract clients, reduce costs, and increase competitiveness.
Phung Thi Ly Ha, deputy general director of Hanoi Railway Transport JSC (HARACO), said that the company has been applying technology both in transportation and administration to create better services and experiences for customers, especially during the COVID-19 period.
Specifically, in passenger transportation, in addition to selling electronic tickets, the company is cooperating with partners like MoMo, VNPAY, Napas, Vimo, Viettel, and others to offer smart phone payments while connecting with e-commerce platforms like Sendo. In cargo transportation, IT applications are also deployed.
Thanks to the solutions, railway cargo transportation grew high. In the first half of 2021, HARACO's cargo transport revenue reached VND501.6 billion ($21.8 million), up 14.6 per cent on-year.
Similarly, Railway Transport and Trade JSC (Ratraco) is also embedding IT solutions in its business activities. The company has already digitalised over 70 per cent of its processes, especially in cargo transportation.
"Digitalisation in administration and business improves the speed and efficiency of services and transactions while enabling the company's leadership to make timely adjustments to business strategies," said a Ratraco representative.
According to Nguyen Chinh Nam, director of the Planning and Business Department at state-owned railway giant Vietnam Railways (VNR), digital transformation and IT application are the cornerstones of the development and improving the competitiveness of the railway industry, especially during COVID-19.
In cargo and passenger transportation, and train operation, VNR applies an electronic ticket system, train operation software, as well as e-commerce and e-payment solutions, among others.
"We are working with powerful partners both at home and aboard to develop a digital ecosystem for e-ticket sales and e-payment for customers," Nam noted.
However, he admitted that while VNR has been rolling out digital transformation at its businesses, it has yet to have a centralised database system and analysis software to support monitoring and timely decisions.
"We continue to work on plans to accelerate digital transformation, with more IT application in business activities," he added. "The corporation will gradually transform the current business model into a digital economy model by strongly apply e-commerce, e-payment, e-invoice, e-contract, and e-transactions among others.”
Vietnam, Laos enjoy growth in two-way trade in H1
Vietnam and Laos continued to enjoy growth in import-export revenue in the first half of 2021 compared to the same period last year.
According to the Vietnamese Trade Office in Laos, in the first half of 2021, two-way trade hit over 671 million USD, up 36.5 percent year on year, including Vietnam's exports of over 329 million USD, and imports of more than 341 million USD, respective rises of 19.1 percent and 58.9 percent.
Compared to the first half of 2019 before the COVID-19 outbreak, two-way trade increased 16.6 percent, with Vietnam’s import revenue rose 49 percent and exports dropped 5 percent.
In June 2021, two-way trade reached over 100 million USD, up 22.1 percent from the same period last year and 18.1 percent from June 2019.
Meanwhile, Vietnam mainly imported good and wooden products from Laos, along with ore and minerals, and rubber.
In July, two-way trade is predicted not to rise due to complicated developments of the COVID-19 pandemic./.
Higher clinker export duty proposed to restrict export of natural resources
The export duty on clinker has just been proposed to be doubled from 5 to 10 per cent to reduce the exports of non-renewable natural resources.
In fact, boosting cement and clinker exports would help the local cement industry to take advantage of abundant local production, but it is not a sustainable solution on the long term as the production of these two items mainly leverages the use and exploitation of non-renewable natural resources.
The MoF argued that the increasing exports of clinker have depleted local natural resources, causing detrimental impacts on the environment.
The annual report of the Vietnam National Cement Association shows that by the end of 2020, Vietnam was home to 90 clinker and cement production lines with a total capacity amounting to 106.6 million tonnes.
Local cement consumption has seen almost no growth in recent years and has even dropped three million tonnes last year against 2019. Consumption still surpassed 100 million tonnes thanks to a sharp rise in export volume.
According to the MoF, Vietnam exported nearly 33 million tonnes of cement and clinker last year, including 24 million tonnes of clinker, representing 73 per cent, and 8.7 million of cement (27 per cent).
While Decree 57 set an export duty of 5 per cent on clinker, Vietnam’s building material development strategy for 2021-2030 with a vision to 2050 set the orientation of restricting the export of products made from materials or fuel that is non-renewable.
Particularly, the strategy mandates that the proportion of clinker and cement export must not exceed 30 per cent of the total designed capacity of the sector in 2021-2030 which will be reduced to 20 per cent during 2031-2050.
It is noteworthy that clinker and cement exports have already reached this limit.
According to a report by FPT Securities, in the past decade (2010-2019) Vietnam's cement exports rose 30-fold, accounting for 32 per cent of the whole sector's total output and turning Vietnam into a top cement exporter.
However, while export volume grew, Vietnam has remained at the lower reaches of the supply chain, with exports mostly consisting of clinker, the raw form of cement with very low added value.
The Free on Board (FOB) price of one tonne of clinker costs only $38.5 at Vietnam's ports, about 10 per cent lower than the price of cement in the domestic market.
Nguyen Cong Bao, managing director at Malaysian-backed cement firm Fico-YTL, one of the leading cement firms in the southern market, noted that amid escalating pressure to ensure energy security and the government's commitment to protecting the environment, it is important for the cement industry to focus on serving the domestic market. Once domestic supply is secured, the government will be able to present suitable policies on balancing supply and demand.
Long Thanh Airport at risk of delays due to slow land clearance
Long Thanh International Airport is facing a very real risk of falling behind its construction schedule as land clearance and relocation is only half completed against the deadline at the end of June.
Compensation payments are 47 per cent completed. 2,106 households have yet to accept compensation to relocate.
Regarding the construction of resettlement areas, which is conducted in five component projects, the second component is running behind schedule with only one of seven sub-component projects on schedule.
Dong Nai province has originally planned to complete land clearance compensation and resettlement of households affected by the construction of Long Thanh International Airport by the end of June.
"If the land clearance is not completed on time, the overall construction of the first phase of the project will be impacted," the MoT noted in the report.
Along with delays in land clearance, Dong Nai People's Committee is also facing difficulties in answering questions from the State Audit Office of Vietnam about the adjustment of the framework of compensation for resettlement.
Currently, Airports Corporation of Vietnam (ACV), the investor of the third component of the project (essential facilities at the airport) is implementing a number of items such as removing bombs and mines at the site (about 30 per cent of the work) and building fences (about 20 per cent).
Vietnam Association for Logistics Manpower Development makes debut
The Vietnam Association for Logistics Manpower Development officially made its debut on July 24 with the mission of training qualified human resources to support future industrial development.
Mai Xuan Thieu, who has been elected as chairman of VALOMA in the 2021-2024 term, added that the number of teachers and training infrastructure for the logistics industry remains weak. Meanwhile, training curricula and contents are in high demand but remains unstandardised, making it unable to meet current demands and international trade.
Worse still, cooperation between schools and businesses remains loose in training and labour recruitment.
The establishment of the association is expected to help solve these shortcomings to facilitate industrial development in the future.
Nguyen Thu Thuy, director general of the Higher Education Department of the Ministry of Education and Training (MoET), said that the association will gather modern knowledge, rich experience, and advanced technology for manpower training for the logistics industry to meet its development demands and global integration.
At the event, the VALOMA signed cooperation agreements with other associations, including the Vietnam Logistics Business Association, the Vietnam E-Commerce Association, and others to increase cooperation, collaboration, and support among them for the sustainable development of the association.
HCM City supermarkets to close early as social distancing rules tighten
Many supermarkets in HCM City have announced to close early following tightened social distancing rules imposed in the area.
Most supermarkets now open between 30 minutes and one hour earlier than usual and close by 6 pm instead of 9.30 pm.
Big C and Top Market said the opening hours have been set to 7 am to 7 pm. MM Mega Market now opens from 6.30 am to 5.30 pm. Aeon Mall opens from 8 am to 4 pm and suspended all online services. Vinmart and Meat Deli are open from 5 am to 5.30 pm.
Satra Foods, Satra Pham Hung and Saigon Supermarket under HCM City Commercial Company now close at 4 pm.
Meanwhile, Co.opmart, Co.opXtra and Lotte Mart said they were still waiting for the official directives from the authorities about the opening hours and operating methods. Before then, they will still open as usual.
Since July 26, residents in HCM City have been issued food tickets which state on which day they can go out to buy food and the locations of the supermarkets, convenience stores and groceries stores in the areas. The stores will only serve customers on their given days.
However, many businesses said they haven’t been informed about the details of the plan yet.
HCMC reduces number of petrol stations to ensure strict measures against Covid
The Department of Trade and Industry of HCMC has asked the Petrol and Oil Retail Enterprise under the Single-Member Petroleum Company Region 2 (Petrolimex Saigon) to temporarily suspend the operations of a number of petrol stations across the city to ensure strict infection prevention and control practice.
Accordingly, Petrolimex plans to close 16 stores and maintain business activities of 53 others from now until the end of Directive No. 12 of the HCMC Party Committee on tightening restrictions to curb the spike in Covid-19 cases.
The municipal Department of Trade and Industry has also aksed petrol companies to ensure regular supply of fuel to consumers amid social distancing order and have plans for stockpiling to guarantee uninterrupted supply.
HCMC hotels encouraged to act as paid centralized quarantine facilities
The Department of Tourism of HCMC cooperated with the municipal Department of Health on July 25 to mobilize hotels and accommodation units to serve as paid centralized quarantine facilities to meet the growing demand.
The city has currently more than 72 hotels providing 5,564 rooms that have been approved as paid medical isolation areas.
The HCMC Department of Toursim has also coordinated with the People's Committee of Thu Duc City and districts across the city to call on 395 hotels offering 13,426 rooms to register as quarantine sites for F1 cases, including 117 units with 5,328 rooms that received approvals and met the safety and isolation requirements to be put into operation.
In addition, the tourism department announced that customers could find hotels with Traveloka mobile travel booking app providing an extensive price comparison since August 1.
Michael Lohscheller appointed as CEO of VinFast Global
Vietnam's conglomerate VinGroup announced on July 27 that it has appointed Michael Lohscheller as CEO of its automotive division VinFast Global.
Lohscheller, who used to be Executive Vice President of the Volkswagen Group of America and CEO of Opel, will be responsible for scaling up VinFast's operations and presence around the globe.
During his leadership, he led Opel to sustainable profitability after decades of suffering losses. He also oversaw Opel's transformation into an electrified car brand.
When he starts his new job in Vietnam, Lohscheller will lead VinFast's operations in its current markets, namely Vietnam, the US, Canada, France, Germany and the Netherlands, with a clear goal of promoting strategic initiatives to turn VinFast into a global smart electric car company.
Vingroup's Vice Chairwoman Le Thi Thu Thuy said Lohscheller's participation in VinFast's senior management team reaffirms Vingroup's long-term plan in attracting outstanding talents and acquiring management expertise from elite circles of the global automotive industry.
On his decision to join VinFast, Lohscheller said during his career, he has always been attracted by new challenges. When the opportunity came to join VinFast, he was immediately attracted because of the growth opportunities. He looked forward to working with the leadership team to grow the company and establish it as a global smart electric car company.
With more than two decades of working in the automotive industry, Lohscheller is expected to play a key role in VinFast's bold steps in global expansion and towards becoming a leading global smart electric car company./.
Source: VNA/VNS/VOV/VIR/SGT/SGGP/Nhan Dan/Hanoitimes
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