By staff writers – Translated by Uyen Phuong
Kien Giang (VNA) – The Mekong Delta province of Kien Giang gained more than 103 million USD from exports in the first two month of the year, surging 12 percent from the same time in 2020.
This is a robust sign in the locality’s trade activities amidst complicated developments of COVID-19.
According to the provincial Department of Industry and Trade, growth was seen in the shipment of seafood (over 37 million USD, up 25.6 percent), and leather shoes (over 22.6 million USD, up nearly 3 percent). Meanwhile, export of rice fell 35.37 percent year-on-year to 17 million USD.
With a view to boosting exports, the province has sharpened focus on trade promotion activities, as well as worked to consolidate traditional markets and expanding markets for local key products, particularly rice and seafood.
In the meantime, the department keeps local exporters updated with the import-export situation and measures to contain the spread of COVID-19 through goods which go through border gates or unofficial border crossings.
It has provided local firms with domestic and foreign market information so that they can pen suitable production plan.
The provincial authorities have ordered the Department of Industry and Trade to join hands with competent departments and agencies to keep a close watch on the business and exports of local firms so as to remove bottlenecks for them in a timely manner.
Along with seeking more markets for local products, the department has worked to raise the firms’ awareness of the signed free trade agreement, helping them adjust their production to meet import demands of international buyers./.
HCM City (VNS/VNA) – The textile and apparel industry , which managed to survive three waves of COVID-19 thanks to its decision to produce face masks and personal protective equipment, will focus on sportswear and yarn, according to the Vietnam National Textile and Garment Group .
Le Tien Truong, its general director, said demand for face masks and personal protective equipment will shrink rapidly.
Armed with their experience of coping with the pandemic, many textile and footwear enterprises are quietly confident of altering plans when required and finding new markets to cope with new situation after COVID-19 is under control.
Sportswear has arguably been the most successful segment during the pandemic as awareness of physical exercise rose.
According to Euromonitor International, in 2020 the demand for sportswear world-wide decreased only about 8 percent, the lowest in an industry which saw an overall decline of 16 percent.
The compounded annual growth rate for the sportswear market in the last five years was 6.5 percent, 1.5 times the industry average, and it is expected to be worth 479 billion USD globally by 2025.
The Thanh Cong Textile Garment Investment Trading JSC is considered one of the most successful businesses in 2020 thanks to seizing opportunities to export COVID-19 related apparel products such as fabric masks and PPE.
But Tran Nhu Tung, its deputy general director, said the demand for cloth masks and protective gear is returning to pre-COVID levels with the advent of vaccines. This year his company has stopped taking orders for medical protective gear and antibacterial masks.
It is focusing on traditional products such as T-shirts and sportswear, demand for which would continue to increase, and there are already enough orders for sportswear for the first 6 months of the year, he said.
According to the Vietnam Textile and Apparel Association, many businesses now have orders for until the end of April, mainly for sportswear.
Dang Trieu Hoa, general director of the The Ky Yarn Joint Stock Company, said his company plans to focus on yarns with high quality and competitive prices.
The EU-Vietnam Free Trade Agreement (EVFTA) that took effect on August 1 last year has reduced tariffs on Vietnam’s garment exports by more than 70 percentage points.
The footwear and textile sectors also benefit significantly from tariff cuts, according to Bao Viet Securities Joint Stock Company.
With most other countries that export textile and garment to the EU not having a trade deal with the bloc, the EVFTA has opened up a great opportunity for Vietnam’s footwear, textile and garment exports if companies meet origin requirements, it added./.
As 2020 is coming to end, how do you evaluate the development of businesses that received recognition during the Vietnam Value Programme?
|Vu Ba Phu, director general of the Trade Promotion Agency under the Ministry of Industry and Trade|
After 17 years of running the programme with seven times choosing national brands, we have witnessed the continuous growth of many domestic enterprises. At the first selection in 2008, we saw only 30 chosen companies with their products. By 2018, this number had grown to 97, and this year we have recorded 124 enterprises and their brands.
However, the growth of the business community has not only happened in the number of participating businesses, but also export turnover, sales, and their contribution to the state budget, as well as their efforts in social responsibility and job creation. For example, firms recognised as national brands in 2018 reached a revenue of about VND907 trillion ($39.4 billion), with their export turnover amounting to VND130 trillion ($5.6 billion), contributing VND85 trillion ($3.7 billion) to the state budget and creating 340,000 jobs. Meanwhile, in this year, these numbers have climbed to VND975 trillion ($42.4 billion) and VND123 trillion ($5.34 billion) in 2020, respectively, with contributions to the state budget amounting to VND197 trillion ($8.5 billion) and 350,000 new jobs created – all this despite the pandemic.
What are the main differences between the 2020 programme and previous years’ iterations?
This year has been a special one as most of the businesses were affected by the health crisis, even making it difficult for the organisers of the Vietnam Value Programme to obtain applications, organise conferences, and disseminate information.
Facing these circumstances, the Ministry of Industry and Trade (MoIT) responded quickly and directed our Trade Promotion Agency (VIETRADE) to coordinate with relevant ministries and localities to implement online procedures for the programme. For example, we deployed online forms for the submission of applications, set up 24-hour consulting groups to assist businesses in completing their documents, and organised online conferences and seminars to support them with understanding the regulations and selection criteria of the programme.
This year was also the first that VIETRADE received applications and chose the national brands following the prime minister’s Decision No.30/2019/QD-TTg, under which applications were accepted no later than April 30. However, this was the most stressful time in our country’s fight against the pandemic, with enterprises facing many difficulties in complying with this deadline.
In this context, the MoIT has proposed to the government and related ministries to extend the application deadline and offered the aforementioned online services. In the end, more than 1,000 businesses still applied for the programme, more than in 2018 with only 900 applications despite the absence of an international health crisis.
How have the organising institutions handled the additional pressure from the pandemic during this year’s programme?
The pressure for the organisers and the chosen companies was very real. We had to effectively support businesses, overcome geographical distances, change the habit of meeting face to face, and redirect marketing and promotion efforts through online channels instead of traditional ones.
Nonetheless, everyone involved in this year’s programme has handled the situation flexibly and contributed to support businesses in promoting products in the domestic and foreign markets.
In addition to the introduced online procedures, we have also transmitted the data of the programme and the chosen companies and brands to Vietnam’s commercial counsellors in 63 countries to introduce this year’s businesses to these markets.
Some enterprises commented that the criteria of the programme were too strict compared to the general level of domestic enterprises. What is your view?
The criteria for selecting national brands are indeed very strict because this is a programme to select prestigious products that represent the image of Vietnamese goods in the domestic and international markets, especially high-end ones such as the EU, Japan, and the US. Therefore, we have referred to foreign exporting standards to research and build the criteria that were finally applied in the selection process.
How have chosen enterprises been supported to increase their competitiveness?
The Vietnam Value Programme is not an award, rather the government’s commitment to accompany business in their endeavour to grow and present our country’s high-quality goods and services inside and outside of our borders. An enterprise chosen as national brand receives the government’s threefold support.
Firstly, when participating in the programme, companies can use the national brand logo and the identification system in business administration and trade communication, according to the regulations.
In addition, the MoIT has been working closely with other ministries and localities to implement additional marketing campaigns and raise awareness within the society and business community, thus also supporting participating enterprises.
Furthermore, the ministry provides technical assistance on branding and development, thereby helping businesses protect their brand names, contributing to improving their competitiveness in the domestic and international markets.
VIETRADE is and will continue to carry out additional support programmes and help to promote national brands on mass media and invite these businesses to domestic and international exhibitions to raise their public exposure.
For example, for products related to food, we give priority to supporting enterprises to participate in major fairs and exhibitions around the world, such as the Sial Fair in Paris, certain exhibitions in Germany, and the Milan Fair in Italy – all important international fairs that exporting businesses cannot ignore.
At the same time, we are inviting international experts to research and develop specific strategies for each field to further support businesses and the promotion of their products on global media channels.
What are the MoIT’s plans to bring national brands to the global stage?
The ministry has proactively encouraged leaders of the Party, the state, and the government to further the negotiation and signing of new-generation free trade agreements, thereby expanding the scope of export markets for businesses, especially those with national brands here.
In addition, the MoIT is also developing a commodity import-export strategy for the next 10 years, which aims at identifying priority markets and avoiding dependence on several traditional markets to reduce risks related to trade remedies, while ensuring sustainable development for domestic enterprises. Accordingly, we will also see some specialised trade promotions to support national brands in international markets.
How has the MoIT been supporting businesses that struggled with exports and a forced return to the domestic market this year?
After the initial months of the health crisis, the domestic market had been redefined. From the beginning of the year, following the directions of the government, the MoIT has worked with ministries, agencies, and localities to implement supply and demand actions across the country to remove companies’ difficulties in production and distribution.
In addition, to support businesses with high-quality brands, we have also been integrating chosen brands in national promotions like the Clean Food Programme to endorse Vietnamese goods to locals. The integration of such programmes has helped the domestic market’s growth since the beginning of the year, despite the economic consequences of the pandemic. This shows that the communication, promotion, and support efforts of the MoIT and its agencies have so far been effective.
By Hai Van
|Much of Vietnam Airlines’ fleet has been grounded due to the pandemic|
According to Le Hong Ha, deputy general director of Vietnam Airlines, the carrier has been fully aware of its responsibility to preserve and develop its products and services to both maintain the economic vein of the country and promote its golden lotus logo to bolster Vietnamese aviation and promote the nation’s culture and tourism across the world.
As a bridge between regions and the world, Vietnam Airlines is committed to maximising its potentials to support domestic businesses in delivering their products to not only customers all over the country but also to numerous international friends.
In 2020, Vietnam Airlines has been reaffirming its position as the top-quality airline of the nation and continuously maintained its 4-star services according to international standards. At the emergence of the pandemic, the carrier immediately applied distinct solutions to ensure safety for passengers, such as limiting reusable items, disinfecting aircraft, and providing sterile towels on flights.
However, Vietnam Airlines has not been able to avoid business risks caused by the pandemic. After successfully reducing the spread of the disease, in the second quarter customers began to again pay for air services, while the company sought to generate crucial revenue from inland services. Hopes were high that the third quarter would be the time to make up for the initial losses of the year, but as the next wave of new infections hit, any expectations of recouping revenue had been diminished.
As a result, half of the 217 aircraft flying under the five brands under Vietnam Airlines’ patronage were grounded as nobody wanted to fly anymore. Ticket prices decreased by more than 50 per cent compared to last year. Dang Ngoc Hoa, chairman of Vietnam Airlines, also noticed that “a lot of complications arose from the airline’s status as a state-owned enterprise and the state’s intervention in the aviation market.”
According to Hoa, methods of managing domestic ticket prices, among others, are outdated and not suitable for Vietnam’s air transport market. Currently, airfares are being adjusted according to the Ministry of Transport’s Circular No. 17/2019/TT-BGTVT on issuing prices for passenger transport services on domestic air routes issued in 2019, with regulations for ceiling prices for domestic routes presenting hurdles and leading to a decreasing diversity of the market and deviations in competition.
This regulation, Hoa said, is affecting the “business efficiency of airlines and reducing their motivation during peak times.” Air services are strongly influenced by seasonal factors, with domestic flights during holidays like the Lunar New Year always seeing low-load flights in one direction. Thus, airlines complain that the application of ceiling prices makes them unable to adjust prices and balance out their revenue.
“Ceiling prices alter the flexibility of the market and lead to additional cost for the airlines,” Hoa said. Vietnam Airlines has invested in new generation aircraft, such as the A350 and Boeing 787, and its 4-star services are aiming to compete in the region and the world. But the governmental price ceilings limit the carrier’s efforts to attract those customers willing to pay higher fares, ultimately affecting service quality – an important factor in the sustainable development of airlines.
“Rarely does a country manage domestic airfares with ceilings like they are applied here in Vietnam,” Hoa explained.
Vietnam has been deeply integrating itself into the global economy, so it may be necessary to minimise the participation of state management in enterprises’ business activities. “The state should only manage flight fares for monopolistic airlines but should not apply these measures for competitive domestic routes. Let the market self-regulate,” Hoa suggested.
“The domestic market is oversupplied, but international airlines are still entering the domestic market,” he said, adding that in his opinion, Vietnamese airlines have not received “equal treatment” in foreign markets, where even technical barriers are imposed to restrict the operation of in- and outbound flights. For instance, Vietnam Airlines has opened flights to Beijing for many years, with a frequency of five flights per week. “We have proposed to increase these by two per week, but the Chinese side only allows flights at midnight, when no passengers are willing to fly,” Hoa added.
In the context of extensive international integration, maintaining an airline’s brand seems vital for the competitive edge of domestic carriers. Vietnam Airlines has been creative and sought new directions to maintain production and business.
As nearly all passenger flights had been suspended during the social distancing period, the airline quickly made full use of its wide-body fleet and removed seats for the first time to increase cargo capacity in both the aircraft’s dedicated cargo and passenger compartments.
Vietnam Airlines has also been coordinating with the Vietnam National Administration of Tourism, the Vietnam Tourism Association, and tour operators to build stimulus packages across the country. In a short time, the airline added 22 domestic routes to meet and boost travel local demand and developed new products and services such as the Flight Pass offering customers bundled tickets with discounts to several domestic destinations.
Along with the over 120 other national brands, Vietnam Airlines has not only maintained production and business activities amid difficult circumstances but also participated in community activities.
Up to now, the airline has carried out nearly 150 flights to safely repatriate 50,000 people from other countries, transported more than 60 tonnes of goods to support pandemic prevention measures, and nearly 150 tonnes of cargo to aid people in the central region affected by storms and floods.
By Van Nguyen
The total support from GCF also includes a US$75 million guarantee. US$8.3 million from the grant will be used to build capacity in the private sector to identify, appraise and execute energy efficiency projects.
It will also provide technical assistance to the Ministry of Industry and Trade and the relevant authorities to further strengthen policy frameworks and regulations and create a helpful environment aimed at accelerating the energy efficiency market in Vietnam.
The remaining grant funds and guarantee will be used to establish a risk-share facility to provide partial credit guarantees to local banks who may risk potential default on loans for energy efficienct projects.
By reducing lending risks, the facility is expected to mobilize around US$250 million of commercial financing, to be provided to industrial enterprises and energy service companies at competitive terms and with low collateral requirements.
Scaling up energy efficiency is the single best and lowest cost option to achieve multiple goals at once: meeting energy demand, preventing pollution and reducing greenhouse gas emissions while also increasing industry competitiveness, Carolyn Turk, Country Director for Vietnam said.
In a context of limited public financing for energy, the risk-share facility is an innovative financial instrument in private sector investment financing for a greater uptake of industry-wide energy efficiency measures, she added.
The grant and guarantee are to be executed under the Vietnam Scaling up Energy Efficiency Project which aims to support Vietnam in achieving the energy efficiency targets set out in the Green Growth Strategy as well as emission reduction objectives pledged under the National Determined Contributions.
The World Bank’s Low Carbon Study estimates that Vietnam could save up to 11 GW of new generation capacity by 2030 if comprehensive demand-side energy efficiency investment takes place. The energy efficiency investment need for key industries in Vietnam has been estimated at around US$3.6 billion.