Selling national grid shares

‘Buffalo’ represents hard work, persistence and stability in the Vietnamese people’s conception, and these characteristics are considered to apply to people born in the Year of the Buffalo [according to eastern zodiac]. According to many experts in ‘feng shui’, ‘buffalo people’ are more suited to traditional business than other lines.

Việt Nam News spoke with three entrepreneurs born in the Year of the Buffalo to see how they lead their businesses.

Though not the first to produce construction steel in Viet Nam, Long, born in 1961, made the Hoa Phat Group the leader in the industry in 2018.

He noted the demand for construction in Viet Nam and began leveraging his two businesses in machinery and furniture trading to produce construction steel in the late 1990s.

Industry insiders said at the time: “He knows nothing about steel, so how can he succeed?” They would never have guessed that, 18 years later, in 2018, Long’s group would become number one in the market and the person who “knows nothing” would be a billionaire.

Last year, amid the COVID-19 pandemic, Long’s group recorded a surge in both revenue and profit, earning more than VND91 trillion (US$3.9 billion) in revenue and posting VND13.5 trillion in after-tax profit, up 41 per cent and 80 per cent, respectively, against 2019.

While crude steel output doubled 2019’s figure, reaching 5.8 million tonnes, the group also produced about 3.4 million tonnes of finished construction steel, up 22.5 per cent. It currently holds a steel market share of 32.5 per cent in Viet Nam.

Its shares (HPG) also doubled last year, taking Long and his wife’s fortune to an estimated $1.9 billion.

He told Viet Nam News of three factors behind his success: “First is the right investment on a long-term path. Second is good management. And the last is the huge market demand for construction steel in Viet Nam, as a new industrialised country.”

Hoa Phat benefited greatly from the Government’s policy of increasing public investment during the pandemic.

With construction to begin next January to meet increasing demand for hot-rolled coil (HRC), its second Dung Quat steel complex will help boost annual revenue and profit by as much as 80 per cent, Long said.

The consumption of HRC last year totalled 12 million tonnes in Viet Nam, for growth of 8-10 per cent. As the country’s two steel mills — Hoa Phat and Formosa — supply only 8 million tonnes, “there is huge potential for a new complex,” Long believes.

With the character of a ‘buffalo’, which is earnest and serious, he always takes care of things in a gradual process. He told Viet Nam News about his success: “It’s no secret. The way we do things at Hoa Phat is to consistently follow the path chosen, carefully calculating the needs of the market and investing accordingly.”

Long is famous for telling the group’s shareholders some years ago: “I don’t say much, but when I do, I make it happen.”

Industrial zones (IZs) registered $5 billion worth of foreign direct investment at a meeting between Haiphong Party Committee and IZ infrastructure investors aimed to resolve difficulties and promote investment in IZs.

Notably, Sao Do Investment Group JSC registered an investment of $1 billion in Nam Dinh Vu Industrial Park (IP), while VSIP Haiphong JSC will inject $1-1.5 billion in VSIP Haiphong, Saigon-Haiphong Industrial Park JSC $1 billion in Trang Due IP, and Deep C IZs are expected to lure in $1-1.5 billion.

In order to support these IZs’ investors realise the above target to attract $5 billion in FDI capital, Le Van Thanh, Secretary of Haiphong Party Committee asked Haiphong Economic Zones (EZ) Management Authority, and relevant authorities to promote administrative reform to deal with difficulties facing IZs, as well as review their compliance.

“The city will create favourable conditions for investors to implement their projects. Investors also have to comply with the approved planning, expand operations in accordance with sustainable development, and avoid unexpected environmental impacts,” Thanh said.

Meanwhile, the authority proposed the province to accelerate land clearance to create a land fund for investors, while simultaneously allocating land for building housing for workers and building plans for training human resources.

In addition, the authority also proposed the province to build a policy to deal with enterprises’ difficulties caused by the COVID-19 pandemic, as numerous partners cannot enter Vietnam to appraise their projects, impacting business activities. The authority also requested the province to compile policies to support labourers who cannot go home to enjoy Tet.

Haiphong currently has 12 IZs, eight of which are located in Dinh Vu-Cat Hai EZ, and four others are located outside the EZ. These IZs attracted 570 projects, 403 of which come from foreign investors worth $17.1 billion. These IZs generated 158,000 jobs for local labourers.

According to the plan, the city will construct 15 more IZs with the total area of 6,418 hectares this year.

Vietnam’s GDP growth rate may expand at 5.8 per cent

The Vietnam Institute for Economic and Policy Research (VEPR) estimated the country’s GDP growth at 5.6-5.8 per cent – or 1.8-2 per cent if the worst comes to pass.

The most recent resurgence of COVID-19 has been brought under control in short order, with no new breakout expected for the best part of this year. Thanks to that, domestic economic activities will continue to recover and comply with the new normal of the global economy, where sporadic, small-scale resurgences are expected by the VEPR.

Consequently, the impact of COVID-19 will be felt less serious across economic sectors than in 2020, resulting in an estimated GDP growth rate of 5.6-5.8 per cent.

However, under a more pessimistic scenario, the local economy will see larger disruptions by the health crisis, resulting in slower economic growth of 1.8-2 per cent. The scenario includes continued travel restrictions and prolonged difficulties for catering and accommodation services.

The VEPR’s policy recommendations warned Vietnam not to follow other nations’ macro policies such as loosening monetary policy to mitigate prolonged budgetary deficits. Furthermore, preventing COVID-19 and ensuring social welfare are also setting a burden on national budgets.

However, the current priority should remain to assure social security, stabilise the business climate, lessen the pressure on businesses which have temporarily halted operations, and support those that are still operational.

In particular, social security policies should provide more support for labourers working in the informal sector because this group makes up a sizeable portion of the population and are more vulnerable to the crisis, while also having the hardest time accessing welfare packages.

High hopes for economic advances

Despite enduring a heavy toll caused by the global health crisis in 2020, the Vietnamese economy is expected to drive forward strongly thanks in part to a boost in domestic consumption and investment, which will continue being among prime priorities set by the government to achieve its new growth goal.

This impressive achievement, as noted by Deputy Minister of Planning and Investment Tran Quoc Phuong, resulted from the massive efforts of the Party, the state, the public, and enterprises.

“However, massive difficulties remain. While almost all economies in the world are struggling to recover, there is no certain evidence that the pandemic will end soon,” Phuong said. “Vietnam’s economy has also been seriously hurt.”

Two recent large-scale surveys by the General Statistics Office involving more than 130,000 businesses said that around 83 per cent of the respondents admitted they were negatively impacted.

However, Phuong said COVID-19 in 2020 has changed the game for the 2021-2025 period. “Many new trends have emerged, reshaping international financial flows, trade, and investment, especially supply chain shifts, creating many challenges but also opportunities for economic recovery in the long term,” he said. “Taking advantage of new prospects for economic recovery in 2021 and a breakthrough in the 2021-2025 period is important to achieve the goals set out in the Socioeconomic Development Plan for the period.”

Given COVID-19 and many other negative potential impacts from the global economy, the National Assembly (NA) cautiously set a target of 6 per cent in the country’s economic growth this year. However, now more optimistic about the economic outlook, the government says that greater efforts are to be made to reach a growth rate of at least 6.5 per cent in 2021.

The World Bank is expecting Vietnam’s economy to continue to flourish this year.

“By all standards, Vietnam has managed the COVID-19 crisis very well. Looking ahead, Vietnam’s prospects appear positive as the economy is projected to grow by about 6.8 per cent in 2021 and, thereafter, stabilise at around 6.5 per cent. This projection assumes that the COVID-19 crisis will be brought gradually under control, notably through the introduction of an effective vaccine,” said the World Bank in its most recent economic update for Vietnam.

According to the National Centre for Socioeconomic Information and Forecast (NCIF) under the Ministry of Planning and Investment (MPI), although the pandemic continues to expand, some positive signals have been seen. Vaccines have begun to be administered in many nations, and this will continue being expanded in 2021.

“Thus, the global economy will gradually warm up, helping increase investment and trade globally and this will have a positive impact on the Vietnamese economy,” said the NCIF’s deputy director Dang Duc Anh.

The Vietnamese economy has in recent years opened itself up further to the global economy. Last year, while GDP hit VND6.3 quadrillion ($273.9 billion), its total export-import turnover reached $544 billion, nearly doubling GDP.

According to the latest forecast by the Vietnam Economics Institute under the Vietnam Academy of Social Sciences, Vietnam’s GDP this year may grow 5.49 per cent (basic scenario), 6.9 per cent (high scenario), or 3.48 per cent (low scenario). The possibility for each scenario to become true would depend on the global situation and the Vietnamese economy’s internal strength in domestic consumption, production, and investment – including public investment.

According to the MPI, from now until the year’s end, boosting domestic consumption and public investment as well as attracting more foreign direct investment (FDI) will be among prime priorities for the government to achieve its new growth goal.

In 2020, the economy’s total retail and consumption service revenue hit over VND5 quadrillion ($217.4 billion), up 2.6 per cent on-year.

“Consumer confidence has gradually bounced back,” said an expert from the World Bank in Vietnam. “Many enterprises have found it difficult to boost exports and then turned to the domestic market. Many enterprises, already boasting a firm niche at the local market, have been expanding operations here.”

The World Bank said that retail sales also continued to grow, thanks to strengthening domestic demand for goods. Specifically, retail sales grew at 9.4 per cent on-year in December 2020, the highest growth rate since February 2020. Growth is driven by domestic demand with retail sales of goods 13.8 percent higher than in the same period last year.

According to the Asian Development Bank, in addition to spurring on local consumption, the government must find all ways to accelerate public investment as one of the key pillars for economic growth this year and beyond.

Figures from the Ministry of Finance showed that as of the end of 2020, nearly VND390 trillion ($16.95 billion), equivalent to 82.8 per cent of the plan allocated, has been disbursed, while the figure as of the end of November was only VND329.9 trillion ($14.3 billion), equalling 70.1 per cent. This is the highest ratio of disbursement in 2016-2020 – with 80.3 per cent in 2016, 73.3 per cent in 2017, 66.87 per cent in 2018, and 67.46 per cent in 2019.

Since early 2020, many state-funded projects, mostly infrastructure works, have been put into operation, fuelling socioeconomic development.

For example, on January 5, the first phase of Long Thanh International Airport in the southern province of Dong Nai commenced construction. The 5,580-hectare airport is expected to cost VND336.63 trillion ($14.64 billion), with the first phase needing over VND109 trillion ($4.74 billion). The airport is expected to relieve overloading at Tan Son Nhat International Airport in Ho Chi Minh City, currently the country’s largest airport.

In another case, in October 2020 the 5.37-km Mai Dich-South Thang Long flyover at Pham Van Dong street in Hanoi was opened to traffic, helping ease chronic traffic jams.

The VND5.34 trillion ($232.1 million) project connects the inner city with Thang Long Bridge and Vo Van Kiet Road to Noi Bai International Airport, and also connects the city’s big industrial zones and Hanoi with northern provinces, making it easier to transport goods.

Not far from this flyover, another one was inaugurated last August with the total investment capital of VND560 billion ($24.3 million), crossing Hoang Quoc Viet and Nguyen Van Huyen streets. The flyover is lengthened by a new road that meets with Samsung’s $220-million research and development project.

Besides prioritising public investment projects in 2021, the government will also focus on attracting more FDI as one of the key pillars for economic growth this year.

Deputy Minister Phuong said that despite causing serious aftermath in Vietnam, the health crisis seems not to be able to prevent FDI inflows to Vietnam in the long term, and an increasing manufacturing industry in the country. These are big drivers of Vietnam’s economic growth this year and beyond.

“Many major foreign groups and companies are eyeing the Vietnamese market, which is succeeding in controlling COVID-19 – this has strengthened their confidence in the market,” Phuong said. “The pandemic is only slowing down FDI inflows into the country. Many projects are temporarily halted, and will be strongly implemented when the pandemic eases.”

He expected that there will be many foreign investors coming to Vietnam as the prime minister has allowed foreign experts into the country to implement projects. “FDI is also contributing greatly to boosting exports,” he said.

Vietnam attracted $28.53 billion in newly-registered, newly-added, and stake-purchased, and capital contribution-based FDI in 2020, with the total disbursed FDI hitting $20 billion.

According to Do Nhat Hoang, director of the MPI’s Foreign Investment Agency, nearly 300 enterprises from many nations are planning to expand their existing investment or exploring investment opportunities in the country. Of this, more than 60 groups have reaped initial results in new and expanded investment projects here. Initial information showed that the total registered capital of these projects will likely be over $60 billion.

“This is quite a good signal that international investors are showing big interest in doing business in Vietnam,” Hoang said.

Larger frame of mind for logistics

Throughout more than three decades of economic reform, Vietnamese companies from many sectors have been venturing abroad and become role models. Yet, the logistics sector remains too focused on the domestic market. Tran Thanh Hai, deputy director of the Ministry of Industry and Trade’s Agency of Foreign Trade, emphasised that local players should follow regional examples and take their business to international arena.

In this context, logistics activities were affected significantly, with railways, roads, and air transport being the most heavily affected, while waterways and warehouses remained largely unscathed and even saw growing business due to rising inventory.

Different from five years ago, logistics have been given due attention by all state levels, as shown in the directive documents of the government, ministries, and branches, that all considered logistics a crucial aspect of the economy. From there, policy changes and significant investments in infrastructure could be accomplished, along with the easing of administrative procedures for businesses in this sector.

However, one of the current challenges is the lack of large-scale Vietnamese enterprises with influence in the logistics industry, while large foreign-invested enterprises (FIEs) such as FedEx, UPS, and DHL from the United States and Europe dominating the country’s logistics sector.

In Vietnam, telecom, real estate, and manufacturing enterprises have built outstanding businesses that drive their respective industries. Within the logistics sphere, however, there is no such role model.

Companies like Saigon Newport, Gemadept JSC, Transimex JSC, and Sotrans Co., Ltd. are contributing their share but can hardly be called outstanding yet. The general picture of today’s businesses is stiffening, with competing FIEs operating in Vietnam, while those from other countries are integrating into global markets.

Additionally, the domestic logistics sector remains rather small with limited international operations, while this industry is really about going global and partaking in imports and exports. So far, the number of Vietnamese enterprises operating in foreign markets is also small, with even the bigger names not providing services to foreign markets. In the era of global integration, we must go to the world to develop, and thus this remains the Achilles heel of the domestic industry. Moreover, weak links with other service providers elsewhere have not been established and utilised sufficiently. Although Vietnamese manufacturers have been able to export goods to Europe in large volumes, there is no logistical presence of local companies.

As such, logistics groups stop all operations at Vietnam’s gates, after selling and delivering goods to customers, resulting in low added value and a lack of competitiveness against foreign counterparts.

Against this backdrop, the largest difficulties relate not to capital but to the awareness of Vietnamese entrepreneurs, who are typically shy in new environments, especially when confronting foreigners. Many businesses dare to run their operations but mostly focus on the domestic market as they feel that doing business in their own country is easier. Problems here can be handled the familiar Vietnamese way, while they would have to follow foreign rules outside and establish new personal networks and relations. Within the current logistics community, FIEs and state-owned enterprises are relatively stable, but the private sector consists mainly of small-scale businesses, with some newly established or separated from others.

In Vietnam, the number of FIEs is increasing constantly, with nearly 40 multinational corporations and many smaller ones present in the market. However, companies from Japan and South Korea are very ethnocentric and prefer to use the services of their country’s enterprises, which support and protect each other. Meanwhile, European and American businesses are somewhat more open-minded. They use traditional services but do not pay much attention to their partners’ country of origin. Multinationals have financial advantages, so it is easier for them to establish a foundation and attract high-quality human resources than it is for domestic ones. They also make great use of experienced CEOs.

The great advantage of FIEs is their cooperative relationship with partners worldwide. From these relationships, they provide most of the services requested by manufacturers at competitive prices. The service quality of these enterprises is often at a higher level than that of domestic ones, reflected in their professionalism, the assurance of standardised service quality, and strict rules and norms, which provide credibility for these businesses.

Those businesses also pay special attention to customer care and focus on the long-term benefits, instead of immediate returns. Therefore, at some stages, they even accept losses to win customers’ sympathy and build a reputation. Meanwhile, some Vietnamese businesses follow a fast-paced approach that aims for quick profits rather than long-term relationships and market presence. Such a mentality will also not pay attention to quality.

According to one of the prime minister’s decisions, it is a crucial task to form strong logistics groups and leading companies. Vietnam has a convenient location, with a long coastline, and the entire facade of the Southeast Asian peninsula serves not only as a service point for transit to and from China, Laos, Thailand, Cambodia, and Myanmar but is also a stopover transshipment point for major transports from Europe to Australia and from Northeast Asia to South Asia. Currently, the other regional countries take advantage of this though they do not have the same premises as Vietnam.

With a growth rate of 12-14 per cent per year, Vietnam’s logistics sector is growing, albeit merely gradually. It may take another 5-10 years to see strong differences today. As this speed remains slow, Vietnam’s logistics needs to go faster to avoid lagging behind other countries.

Up to now, Vietnam’s logistics growth has mainly relied on the scale of commodity production, consumption, and import-export, which are natural factors for growth advantages. However, these are not intrinsic factors of the logistics sector, they are just objective ones.

If one of these factors changes – such as COVID-19, natural disasters, and the declining domestic demand – the sector’s growth will suffer if it is not well established in foreign markets.

Thus, Vietnamese groups need to step out of their comfort zone, adapt quickly, and avoid thinking of themselves as small and inferior. Small does not mean weak.

At present, Vietnamese enterprises focus only on the domestic market, and give little thought to venturing abroad. Meanwhile, I am confident that Vietnam’s logistics can provide decent services to the regional market, such as Laos, Cambodia, and Thailand – all of which are close by and of similar development levels. Vietnam already has top enterprises in leather, footwear, steel, and automobiles. Thus, the logistics sector can build on their experience and develop leading groups from those sectors.

Singapore can also be a good example for Vietnam. Its government was determined to put all its advantages into developing the logistics sector and to turn Singapore into the largest transshipment port in the world. To do that, Singapore has largely sacrificed marine tourism. Nowadays, the island nation is housing some of the leading enterprises in logistics fields. It boasts PSA Co., Ltd., the world’s largest port operator, which also has a joint venture in Vietnam’s Cai Mep port complex in the south.

In the aviation industry, it has Singapore Airlines – a 5-star airline which for many years maintained its position as the world’s leading airline. Before the pandemic hit, Changi Airport was consistently one of the busiest airports in the world.

Another model is Taiwan, which has strong logistics development. Of course, there are also more developed economies like Japan or Germany whose level of development is already at a much higher level. The country needs it, the government needs it, and the businesses that want to grow strong also need to be bold and venture abroad with an outward-looking spirit. Vietnam opened its doors to global integration 35 years ago, but it is now up to businesses to step out or not. The government alone cannot do this.

Power structure balance required

Vietnam’s energy sector has been developing rapidly throughout the last few years, in which renewables show the strongest development. However, the existing imbalance between power generation and transmission threatens the national power supply. As such, relevant government agencies are now tasked with finding sustainable approaches to tackle the situation.

GENCO 1 has an installed capacity of over 7,120MW, which stems from several sources such as coal, hydroelectricity, and solar power. Nguyen Manh Huan, deputy general director of GENCO 1, said that his company is now facing risks of not being able to recover investment costs under the electricity price plan. This development left a huge impact on GENCO 1’s finances as the company added many new sources of renewable energy in a short time, causing its thermal power plants to not reach its designated 6,000 hours per year.

Becoming a leading corporation in the energy sector has become a more challenging target for GENCO 1 in the context of the complicated developments during the COVID-19 pandemic and decreasing water flows towards hydroelectric reservoirs due to climate change.

The scale of Vietnam’s electricity system ranks second in Southeast Asia and 23rd in the world, with total installed capacity by the end of 2020 reaching 69,300MW, an increase of nearly 14,000MW compared to 2019, according to the calculation of state-run Electricity of Vietnam (EVN).

The total capacity of renewable energy sources amounts to 17,430MW, a stunning increase of 11,780MW compared to 2019, which accounts now for a quarter of all national power sources.

However, the asynchronous development between renewable energy and the national power grid throughout the last few years has caused Vietnam’s lines to be overloaded, affecting the mobilisation of traditional power sources, peak hour changes, and transmission rates.

Specifically, La Hong Ky, an expert from the National Steering Committee for Electricity Development told VIR that the biggest disadvantage of solar power is its instability, due to its heavy dependence on weather.

“Meanwhile, the cost of this power source is still high, energy storage is difficult, and the necessary land area is often large, as one megawatt peak of solar power needs roughly 1.2 hectares,” Ky said.

He explained that many solar investors have asked for additional planning and quickened project implementation, leading to an asynchronous development of solar power within the overall structure of renewable energy. “For instance, up to now no document or guidance is regulating the percentage between solar and rooftop solar power sources,” Ky added.

The Ministry of Industry and Trade’s (MoIT) data from reviewing the implementation of the previous four years of power development shows that thermal power sources only grew by 57.6 per cent while renewable energy sources rose by up to 205 per cent. The completion rate of 500kV transformer stations came out at 73 per cent, while 88 per cent of 500kV transmission lines were established, 77 per cent of 220kV stations, and 84 per cent of 220kV transmission lines.

“Renewable energy has grown too hot,” claimed Bui Huy Phung, a senior expert from the Vietnam Institute of Energy Science under the Vietnam Academy of Science and Technology.

During Vietnam’s electricity development up to 2020, the country has formulated two national energy development strategies; seven national electricity development plans; five coal industry development plans; three oil and gas development plans, and one renewable energy plan. According to Phung, these strategies and plans have guided and provided important contents for the development of the energy sector in Vietnam.

However, they also show the inadequacies of applied methodology, a lack of systematisation and computational data, and their appliance to the construction, appraisal, and implementation of power projects, which then usually lasted only a few years before they needed adjustment.

Although the aforementioned electricity plans were calculated meticulously, they still present inadequacies. The current energy intensity to GDP (kWh per US dollar) of many countries is currently at 0.3-0.6kWh per US dollar, while Vietnam’s is approximately as high as 1. During the past few years, the country was required to decrease this ratio from 1.5-1.6 to 1, with previous forecasts and actual results showing that the ratio cannot be further reduced without adjustments.

Additionally, the power grid had to be built in a rush, which was difficult to implement and led to many projects not meeting their desired progression. The plans of power plants for 2020 were behind schedule by 1-2 years, with the biggest slowdown happening in the projects of the country’s state-run oil and gas group PetroVietnam. Nevertheless, reports from the MoIT and EVN still stated that the entire national electricity supply in 2020 was basically guaranteed.

Meanwhile, the demand for coal as a resource for electricity is huge, with an estimated 78 million tonnes by 2020 and 190 million tonnes by 2030. Yet, it remains unknown where the supply is supposed to come from.

The total investment in the electricity sector in the 2011-2020 period amounted to $48.8 billion, of which 33 per cent was reserved for the national grid. In the 2021-2030 period, the total investment will be around $75 billion, of which 34 per cent is planned to be used for the national grid.

Thus, within 20 years with the total investment of $123.8 billion, only a third have and will flow into the grid, which, in turn, explains the transmission gaps in recent years.

Considering the data from the previous four years, the MoIT’s Institute of Energy is now making preparations for a new national power plan.

“Considering the previous plan, most power and grid projects have not met the set goals, with only renewable energy – mainly solar and wind – exceeding the plan by over 200 per cent,” Phung commented.

The impact of this imbalance, according to Phung, can lead to disturbances in regional and national planning, making it difficult for the transmission and control of the system, as some areas are overloaded during the day while at night it could be difficult to ensure electricity supply.

Meanwhile, in principle, ensuring energy security often needs to be based on several factors, such as forecasts of the power demand in relation to the country’s socioeconomic development plans, the domestic availability of energy sources, including renewable energy and import capacities, and a pricing scheme suitable for the development level of the country.

The issue of sustainable power source development has been recognised in all countries, especially as the consequences of climate change and depletion of many traditional energy sources become ever so visible. As a result, most countries are transforming their energy use structures towards a sustainable direction while increasing social equality in access.

To regain the balance in its power source structure, Phung said, “It is important to calculate Vietnam’s power grid planning and compliance with socioeconomic development. Vietnam can only achieve sustainable development when the contents of such plans are carefully calculated and define the demand and structure for optimal and rational use of electricity sources.”

Specifically, the MoIT is directing the creation of the Power Development Plan VIII – the master plan that will concretise the Politburo’s Resolution No.55-NQ/TW on the orientation of Vietnam’s national energy development strategy to 2030, with a vision towards 2045.

The Institute of Energy announced its initial results from the first workshop last July, which include methods, documents, and 11 electricity development scenarios for the country.

However, Phung, who has more than 40 years of expertise on energy, remarked that it is necessary to clarify the MoIT’s concept of “soft planning” in the next plan, while also considering specific solutions for the imbalance in national power development.

Economy shows positive signals at the beginning of the year

2021 has been identified as the year of economic recovery in Vietnam with a growth rate target of 6.5% set by the Government, 0.5 percentage points higher than thatassigned by the National Assembly, requiring the whole political system to drastically take part right from the first days and quarter of the year.

In the first month of 2021, the economic outlook showed positive signals. Specifically, the industrial production index in January 2021 increased by 22.2% over the same period last year; export revenue of goods increased by 50.5%, of which six items achieved revenue of more than US$1 billion, accounting for 67.3% of total export turnover. The disbursement of public investment capital increased by 24.5%.

Notably, business registration activity grew impressively on the index of newly established enterprises, registered capital and labour, thereby adding more than VND395 trillion in investment capital to the economy, up 10.5% over the same period last year.

In terms of the attraction of foreign direct investment (FDI), some localities continue to attract high-tech projects, such as Foxconn’s US$270 million project in the northern province of Bac Giang. The fact that Foxconn, one of the largest manufacturers of electronic components and computers in the world, specialising in Apple products, invested in Vietnam at this time has strengthened the confidence of international investors in the country’s investment and business environment.

Meanwhile, foreign enterprises investing in Vietnam are also more optimistic about their business prospects. For example, in its latest survey results, the Japan Trade Promotion Organisation (JETRO) have announced that 46.8% of Japanese enterprises will expand production and business in Vietnam in the next one to two years, thanks to optimistic forecasts about potential growth in domestic and export sales as well as high levels of growth in general.

However, the economy is also facing risk as the COVID-19 epidemic reappeared in the community at the end of January. Industrial production has not recovered as quickly as it did before the epidemic. Enterprises continue to lack production materials. Many export markets have not been able to recover because major economies in the world continue to restrict imports due to social distancing and border closures.

The service sector has not yet recovered and continues to face difficulties even before the new wave of the pandemic. According to calculations by the Ministry of Planning and Investment (MPI), if the COVID-19 epidemic is promptly controlled in the first quarter of the year, it is estimated GDP in the first quarter of 2021 will increase by 4.46%, 0.66 percentage points lower than the target set out in Government Resolution No. 1 on the main tasks and solutions to realise the socio-economic development plan and State budget estimates in 2021.

In order to achieve the set growth target, the MPI proposethe Government should continue to make disease prevention and control a top priority, ensuring the health of the people as well as limiting the negative impacts caused by the epidemic on the economy.

Socio-economic development solutions must be implemented by ministries, branches and localities in a more urgent and drastic manner. The independence and self-reliance of the economy should be enhanced in the new situation.

Specifically, new strategies and policies should be devised to promote innovation, apply science and technology to seizing opportunities opened by the Fourth Industrial Revolution; research, monitor and update new trends, models and policies from countries that impact Vietnam, improve the internal capacity, self-reliance and resilienceof the economy. The MPI is currently completing a master plan on improving the internal capacity and self-reliance of the economy and will soon submit it to the Government.

M&A activities still buoyant

At a recent seminar, Tran Thanh Tung, partner lawyer of Global Vietnam Lawyers, said with a range of regulations in the Investment Law, the Enterprise Law, the Securities Law and the Competition Law, businesses seeking M&A deals seem to be obliged to join a hurdle race, as they have to comply with many administrative procedures to reach the finish line. Each law has a different angle on M&A.

Of note, while the 2020 Enterprise Law, to be effective from 2021, has modifications towards betterment and openness for investors and regulations to protect them, the Competition Law restricts M&A activities with the requirement for reporting the threshold of economic concentration with criteria for total assets and total revenue from sale or purchase in Vietnam, the value of transactions and the combined market share of businesses in the relevant market, as stated in Decree 35/2020 effective since May 15, 2020. According to Mr. Tung, this threshold of economic concentration is low, and in reality, there may be abuse of the reporting, which makes M&A transactions more complex and costly.

Dr. Nguyen Quoc Vinh, partner lawyer of Tilleke & Gibbins, argued that many businesses will have to report on economic concentration, as the threshold is quite low. The risk for relevant parties who “forget reporting” is they will be penalized by State agencies.

Nguyen Thi Vinh Ha, deputy general director and head of the corporate advisory division of Grant Thornton Vietnam, told the Saigon Times that she has seen a number of cases where businesses are impacted by the regulation for economic concentration. Though their M&A deals are small, those businesses operate in the niche market (providing a certain product) within a larger market. In view of the niche market for that product, they hold a relatively large share. However, viewed from the larger market, they are completely out of the scope of economic concentration. Nevertheless, with the current regulation, they still have to submit a report on economic concentration, which has significantly obstructed the progress and the likelihood of success of the M&A deal.

Ms. Ha said the regulation has also caused difficulties for other cases of M&A activities. For instance, parties who have reached the threshold of economic concentration for the shares auctioned by divested State-owned enterprises must do the reporting. What matters is the compliance will cost businesses a lot but the success in the auction is still uncertain. Further, the time for assessment of economic concentration by the National Committee for Competition may be longer than the maximum time when the businesses joining the auction must make a public offer.

At the present time, Ms. Ha stressed, the fact that the National Committee for Competition is not yet established, concrete guidelines are not yet available, competent agencies do not have experience in assessment and interpretations about the concept of  “the market for relevant products” are not yet clear is causing many difficulties for M&A activities. Businesses are at a loss to determine whether their deals are subject to reporting and they may have to wait for a long time for feedback from competent agencies. “We observed that under the new regulation, the combined market share is not the only factor to determine whether an M&A deal is prohibited or not, as it needs assessment of many other factors. All has created a heavier obligation for demonstration for parties to M&A deals,” Ms. Ha said.

At the seminar, Dinh Anh Tuyet, director of the law firm IDVN, said businesses may feel uneasy to do reporting on economic concentration, but this is a necessary and not so fearful job. Besides criteria for assets, revenue from sale and purchase, and market share expressed by numbers, there are also other analyses. With a complicated M&A deal which takes a lot of time for completion, it’s regretful if it is subject to the regulation for abolishment due to failure to complete the procedure for reporting on economic concentration. In addition, the fine for violation by the business concerned amounts to 5% of its revenue in the relevant market in the year before the year of the violation.

A concrete example is Grab’s acquisition of Uber in Singapore. The two parties determined that they were not at the threshold to report on economic concentration and did not do the reporting. Afterwards, competent authorities in Singapore determined that they were at the threshold and fined them several million Singapore dollars.

Nevertheless, Ms. Tuyet commented that regardless of the new regulation, M&A activities will continue, as investors will consider the market prospect and M&A parties have strong legal teams to ensure compliance.

Justin Gizs, member of the legal council under the European Chamber of Commerce in Vietnam (Eurocham), said the legal factor must be attended to because it is the decisive factor to facilitate M&A deals, especially those with foreign involvement. EU investors highly appreciate the Vietnamese market and want to enjoy appropriate, favorable policies under the Vietnamese legal framework to boost M&A activities.

Ms. Ha from Grant Thornton Vietnam noted that apart from the legal factors, a more important factor is the market. Vietnam now has a significant position and advantages when the country has duly coped with Covid-19, maintaining safety for her economic activities. Further, Vietnam is emerging as a convincing alternative destination for foreign enterprises seeking to move their operations out of China. Therefore, she thought that M&A activities will continue to be buoyant in 2021.

New Covid-19 outbreak dents Vietnam’s hospitality recovery

The latest outbreak of Covid-19, which began in late January, has put an immediate impact on Vietnam’s hospitality business with numerous cancellations across the country, not only in the affected destinations but anywhere with access via an airport.

The outbreak has seen preventative measures reinstated nationwide. In many localities, containment measures have been back, with greater focus on hygiene, mask wearing, hand washing, and restrictions of unnecessary travel and social gatherings, according to Savills Hotels APAC.

January started on a positive note, with city hotels seeing increased MICE (meeting, incentive, conference and event) bookings while in some resorts, corporate bookings started to return.

The market in 2021 is expected to be broadly similar with most of 2020, at least until borders reopen to leisure and business. Hotels have adapted by considerably reducing operating costs to establish lower breakeven points.

“Prior to these local transmissions, the industry was anticipating increased travel demand during and after the Tet holiday, which would have been a good start to the year. However, the situation has changed everything,” said Mauro Gasparotti, director of Savills Hotels APAC.

Travel interests are diminishing in a mist of uncertainty with air travel demand dropping 15% immediately after the news release. The Tan Son Nhat International Airport in HCMC estimated a sharp drop of 26.5% in air passenger traffic over the Tet holiday compared to last year. Online flight search demand to Danang and HCMC during this peak period of the year dropped over 30%, according to OTA Insight.

Some companies immediately enforced travel restrictions, with requests to limit attending events or large gatherings. This has directly affected MICE business in city hotels, where several conferences have been put on hold or delayed. Drive-to destinations have also been affected by weekend cancellations.

“The resurgence of local Covid-19 transmission once again demonstrates its immediate impact on the tourism industry. Travel agencies and hotels are no longer surprised with “the unexpected” but this happening right before the Tet holiday has hurt public travelling interests,” said Mauro Gasparotti.

“With the Government speeding up vaccine testing and imports, I hope the situation is soon under control. Hospitality is highly vulnerable to adverse effects. It will only be when people feel confident and safe enough to travel when recovery will truly be underway,” he added.

Covid-19 has caused significant disruption to the Vietnamese tourism industry. In 2020, international arrivals of just 3.8 million were down 78% compared to 2019, while the 56 million domestic travelers were down 34%.

Performance of hotels and resorts slumped, with many forced into temporary closure. Occupancy and average daily rates both dropped, resulting in revenues being down 70% compared to 2019.

In Hanoi, average occupancy of 32% compared to the average of 80% last year, while in HCMC it dropped from 72% in 2019 to 23%. The average occupancy of 62% country wide in 2019 collapsed to just 24% in 2020.

2020: A success, 2021: An unkown

Although it failed to fulfill the year’s targets, Vietnam’s export is not only a key growth driver for the economy but also a rising star on the international marketplace.

A government report submitted to the National Assembly last October projected the export growth in 2020 at only 3.5-4% In reality, the total export sales for the whole year might amount to US$281 billion, posting a growth rate of 6.5%.

Compared to the 7% growth target, Vietnam almost made it. This was the third time during the past 10 years the country failed to achieve this important goal. Nevertheless, in the context that the domestic market was gloomy due to Covid-19, export still played an important role in enabling the economy to reach an overall growth rate of 2.91%.

First of all, instead of attaining an average growth rate of 13.4% per year as in the past 10 years, Vietnam’s total retail sales and service and consumption revenue in 2020 are estimated to rise only 2.4%; and if compared to gross domestic product (GDP), export accounted for 82.6%, up 2.4 percentage points year-on-year, whereas the total amount of retail sales, services and consumption revenue were just 63.5%, down 1.1 percentage points.

In other words, instead of contributing 52% to the output of economic growth in 2019, export in 2020 made up 66.4% of the output economic growth, while the domestic market with nearly 100 million consumers contributed 33.6% (instead of 48%) because of Covid-19.

Vietnam’s growth rate higher than that of the top-40 exporting countries in the world during the past decade (2010-2019) helped Vietnam pick up a staggering 18 notches—from the 41st to the 23rd—in the list of 50 nations having the largest exports in the world compiled by the World Trade Organization (WTO). It is very likely that Vietnam’s position in 2020 will be further improved.

Secondly, while export growth rate was positive, import tended to be stagnant despite a year-on-year surge of 22.7% in December. As a result, Vietnam obtained a record high trade surplus of US$19.1 billion in 2020.

It should be emphasized here that the argument which asserts a decrease in import will give rise to an increase in trade surplus associated with a shortage of materials for production is probably groundless. Statistics show that the total import spending of 18 commodities was over US$51 billion, down 11.3% from 2019, but compared with 2019 prices, Vietnam benefited more than US$25 billion. That means if the price decrease was excluded, the import value would rise by 32.3% while import volume would rise by 12%.

This indicates that the record trade surplus comes from the fact that Vietnam has accelerated export plus the “basket of imports” includes many groups of goods having sharp price decrease, which help Vietnam earn huge profits from price fluctuations in the world.

Meanwhile, the “basket of exports” shows that the processing and manufacturing industry contributed a great deal to the record trade surplus. In 2017, Vietnam incurred a trade deficit of US$6.5 billion from these groups of goods; the country saw a trade surplus of US$4.7 billion in 2018; the figure soared to US$9.2 billion in 2019, and is estimated to reach US$14.5 billion in 2020.

Thirdly, viewed under the export market structure, the United States is perhaps a motive for Vietnam to obtain her export targets and trade surplus. It is estimated that export turnover to this market in 2020 will reach US$76 billion, accounting for 27.2% of the total export revenue to the world, whereas import spending will be around US$13.5 billion, resulting in a trade surplus of US$62.9 billion with the U.S.

Meanwhile, Vietnam suffered huge trade deficit with China and South Korea, US$35.4 billion and US$27.5 billion, respectively.

Unknown for 2021

It is forecast that the world economy post-Covid-19 will recover this year, but the recovery process will not be the same for all nations, especially less positive for the U.S. and European countries. The International Monetary Fund (IMF) has forecast that while GDP of the emerging economies and developing countries increases 6.05%, that of developed countries rises just 3.6%. This is not a positive signal for Vietnam’s export prospect in 2021.

The U.S. and Europe are the major export markets of Vietnam, so their slow recovery makes it hard for Vietnam to boost export into these countries.

In addition, the fact that the U.S. designates Vietnam as a currency manipulator—although it has not yet exerted any impact on Vietnam’s export stateside—will prompt Vietnamese exporters and importers to be cautious, not to mention the possibility that Vietnam will find it harder to enjoy a big trade surplus again after such allegation.

To cope with the currency manipulation label, Vietnam will have to prevent goods that are deliberately disguised in made-in-Vietnam brands from being exported to the U.S. Therefore, if the fight against origin fraud is more successful, exports will decrease proportionately.

Furthermore, though the EU-Vietnam Free Trade Agreement (EVFTA) took effect a few months ago, the possibility to increase exports to this market is still much to be desired because the downward trend in 2020 still continues and the economy in this bloc is still mired in trouble in 2021.

In such context, export increase should be focused on Asian markets, particularly the member countries of the Regional Comprehensive Economic Partnership (RCEP). However, this is a formidable mission.

Statistics show that in the first 11 months of last year, Vietnam exported goods worth some US$103 billion into these regional markets, but imported nearly US$167 billion from them. Her two major partners were China and South Korea, with tremendous trade deficit. Vietnam also suffered lower trade deficit with the remaining 12 partners. These were Vietnam’s problems for years, so the hope to increase exports into these regional markets is almost impossible, especially in the short run.

In other words, decreasing trade deficit in the short run should rely on the result of the fight against origin fraud. In the long run, it should rely on the development of supporting industries as well as industrial sectors producing materials to enjoy preferential tariffs as stipulated in the EVFTA.

Given the recovery of the world economy in 2021, it is likely that prices of goods on the world market will rise, and Vietnam’s exports will not suffer from low prices as in 2020. However, her imports will not enjoy advantages in terms of prices, and she will no longer attain high trade surplus as in 2020. The soar of import in the final month of last year might be a “reverse” signal in the balance of trade in 2021, or might at least indicate that trade surplus would not be as high as in 2020.

In short, if there is no breakthrough in the fight against Covid-19 around the world, it will be hard for Vietnam to accelerate export in 2021, whereas import will soar, resulting in a decrease in trade surplus.

HCMC’s tourism sector in distress

The average hotel room occupancy is less than 10% while travel businesses have reported massive Tet tour delays and cancellations, according to the HCMC Department of Tourism. Tourist sites and entertainment areas in the city are not as crowded as in previous years due to Covid-19.

Guests started to delay or cancel tours from January 28 when Covid-19 reemerged in the northern provinces of Quang Ninh and Hai Duong. Only a few agreed to reshedule their travel plans.

“The Tet tourism season this year is worse than that of last year,” according to the HCMC Department of Tourism’s report. Last year, when Tet came, Covid-19 also broke out in Vietnam. All inbound, outbound and domestic tours were gradually cancelled till March 2020.

The report also said that the average room occupancy of hotels in HCMC was less than 10%.

During the Tet holidays, the tourist sites such as Dam Sen, Van Thanh, Binh Quoi and Suoi Tien have been temporarily closed. Many entertainment areas have also scaled down their operations to ensure safety.

Indonesia imposes anti-dumping tariffs on cold steel sheet from Vietnam

It is the final conclusion of an Indonesian agency for cold steel sheet imported from Vietnam.

The Indonesian Anti-dumping Committee (KADI) will impose anti-dumping tariffs on cold-rolled steel imports from Vietnam and China after a 16-month investigation, according to the Trade Remedies Authority of Vietnam under the Ministry of Industry and Trade.

The anti-dumping duties of 3.01-49.2% on steel imports from Vietnam will affect Vietnamese major exporters including Hoa Sen and Ton Dong A Corporation which will pay 5.34% and 3.01%, respectively, according to the Trade Remedies Authority of Vietnam (TRAV).

Earlier, the TRAV was informed by the KADI that Vietnam’s cold steel sheet manufacturers are  selling their products in Indonesian market at less than fair value which has caused injury to Indonesian cold steel sheet companies.

In August 2019, the Indonesian committee announced an anti-dumping investigation on aluminum coated steel imports from Vietnam and China.

Immediately, the TRAV sent a letter protesting some contents in the draft conclusion of KADI which it said unreasonable. Specifically, some conclusions are inconsistent, not reflecting the actual situation of Vietnamese enterprises such as value added tax, duplication in calculations. These inaccuracies have led to a high margin of dumping and is detrimental to Vietnamese enterprises.

Then, on August 24 2020, KADI decided to extend the investigation for another six months as the agency needed more time to conduct thorough probe.

Hanoi tax revenue from e-commerce surges by five times

Increasing online shopping has resulted in higher tax revenue.

The amount of tax collected from e-commerce activities in 2020 was five times higher than in 2019, as online shopping has become more popular among Hanoi’s consumers, according to the Hanoi Tax Department.

The city earned a VND123 billion (US$5.3 million) tax revenue from e-commerce last year. Some individuals willingly declared their earnings and paid millions of dollars in personal income taxes.

Last year, the tax authorities have tightened supervision over e-commerce activities in accordance with the amended Law on Tax Administration, which requires individuals doing business via internet to declare income and pay tax. The law took effect  on July 1, 2020.

A 28-year-old girl, in Cau Giay district, declared an income  of VND330 billion (US$14.4 million) and paid VND23.4 billion (US$1 million).

A man, 30 years old, in Cau Giay district, earned VND260 billion (US$11.3 million)  from writing applications for Google Play and App Store, and paid tax of VND18.1 billion (US$787,342).

“Online selling has developed well in recent years. Among online businesses, a lot of young individuals, especially students have also applied technology to do business, profited from the model and paid a huge amount of tax,” Director of the Tax Sub-Department of Cau Giay district Le Quang Hung said. “In this difficult context, it is a great contribution of taxpayers to the socio-economic development of the city.”

This year, the municipal Tax Department continues to coordinate with commercial banks and trading platforms to collect data and instruct e-commerce operators to fulfill their tax obligations, Director of the Hanoi Tax Department Mai Son said.

The department will also enhance the supervision of income for better tax collection. The law  stipulates that credit institutions and commercial banks should provide information about taxpayers’ accounts to the taxation department.

In 2017, the department sent 13,000 messages to subscribers who posted physical addresses for selling goods on social media.  As the result, more than 2,000 traders on social networks have registered for tax filing.

Source: VNA/VNS/VOV/VIR/SGT/Nhan Dan/Hanoitimes

By Nguyen Thu

Vietnam’s export turnover during this Lunar New Year saw breakthrough growth, occupying nearly half of the total export-import turnover.

The latest data published by the General Department of Vietnam Customs showed that export volume over the seven days (February 10-16) of the Lunar New Year holiday reached $730 million, rising 79 per cent on-year and accounting for about 44 per cent of the $1.67 billion export-import turnover.

The main export articles include mobile devices and components valued at $332 million; computer and electronic products worth $251 million. The two categories accounted for 80 per cent of the total export value.

This Lunar New Year saw exports going to 80 markets, seven more than last year. China continues to be the leading export market with a value of $189 million (26 per cent). Following are the US ($152 million), South Korea ($67 million), and Hong Kong ($57 million).

According to statistics from the General Department of Vietnam Customs, there were 960 import-export businesses, up 59 per cent on-year. Nevertheless, importers still outnumbered exporters with an import turnover of $940 million, up 37 per cent on-year.

Thus, from early this year to February 16, the total export-import turnover reached $74.51 billion, up 31 per cent on-year. Of this, exports hit $38.57 billion, up 36 per cent on-year while imports reached $35.94 billion, up 26 per cent, resulting in a trade surplus of $2.63 billion.

Drug market forecast to grow by 15 per cent in 2021

The pharmaceutical industry grew by just 2.8 per cent last year, much lower than its average 11.8 per cent growth in the last five years.

It is expected to recover and grow by 15 per cent this year, mainly due to a rapidly ageing population and increasing incomes, analysts at SSI Securities Corporation said.

Last year there was a short supply of active pharmaceutical ingredients from China and India due to social distancing and lockdowns and higher demand for them globally, causing drug prices to rise.

According to the Ministry of Health, domestic drug production grew at 13.8 per cent per year in 2015 – 19 backed by Government policies and construction of new plants.

Vingroup fails to acquire LG Electronics smartphone business

Vingroup is unlikely to be able to realise its ambition to take over LG Electronics’ smartphone manufacturing business.

“LG had been negotiating with Vingroup to sell its smartphone-manufacturing facilities in Vietnam and Brazil, however, the discussions recently collapsed mostly due to different price expectations,” said an industry insider familiar with the matter.

Last month, the Asian media was in a huge stir over the rumoured take-over deal between Vingroup and LG Electronics, the fourth biggest “chaebol” in South Korea.

Accordingly, Vingroup has emerged as the most potential bidder to acquire LG Electronics’ smartphone production line as an important milestone for the Vietnamese group to penetrate the US.

LG reportedly aims to withdraw from the smartphone business due to difficulties, with intentions announced around a month after CEO Kwon Bong-seok said there would be a significant change in operations. The mobile communications business has witnessed losses of around $4.5 billion since 2015.

If the negotiation process is successful, Vingroup could take advantage of LG Electronics’ reputation, innovation, and sales network.

However, with the two sides unable to agree on a mutually acceptable valuation, LG will move on to find another buyer. Also, the company’s smartphone production lines in Vietnam and Brazil can be realigned to manufacture home appliances, noted an official from LG Electronics.He also added there would be no more negotiations with Vingroup, and LG would seek a new buyer, according to Korea Times. VIR

Danang: Mega IT projects to lift up growth

Danang city aims to become an innovative startup metropolis by 2025 by capitalising on a raft of mega IT projects.

Danang is now home to a pipeline of mega IT projects by leading local players, including privately-held CMC Group’s creative space.

According to Nguyen Trung Chinh,CMC chairman, the first phase of CMC Creative Space in Hoa Xuan ward with the investment value of VND12 trillion ($521.74 million) aims to bring jobs to about 2,000 people, which will increase to 10,000 people more in the second phase.

CMC’s target is to turn Danang into an international gateway and major data centre that is part of the strategy to turn Vietnam into a digital hub in the Asia-Pacific.

Through a survey, Danang has the potential to grow into the fourth regional digital hub, following Japan, Hong Kong, and Singapore.

“I am so happy that Danang People’s Committee has quickly released the decision approving the project’s detailed 1/500 planning,” said Chinh.

In light of the approved detailed planning, CMC Creative Space will consist of an R&D space; an IT and software production space; an internet transit station; a date centre; and housing blocks and associated services for experts and employees with a full suite of high-standard utilities.

Deemed as an important pilot project, efforts were taken to ensure speedy approval, paving the way to kick-off the project’s construction in March 2021.

Meanwhile in Ngu Hanh Son district, FPT Corporation, Vietnam’s leading IT firm, has come up with a string of capital-intensive IT projects.

Besides the 5.9ha FPT Complex which has been put into operation attracting more than 3,400 labourers, the company has pumped tens of millions of US dollars into building data centres and a system of educational facilities (schools for all grades and universities).

Nguyen Tuan Phuong, chairman of FPT Software in the central region, unveiled that in the next two years, FPT Group would inject about VND6.7 trillion ($291.3 million) into FPT Technological Urban Area (FPT City Danang) of which about VND1.5 trillion ($65.2 million) will be dedicated to building residential blocks and VND1 trillion ($43.5 million) will be earmarked for the second and third phases of its existing IT service centre to accommodate 10,000 programmers.

The company would further improve FPT City Danang’s infrastructure system with about VND800 billion ($34.8 million) set for building educational facilities.

A string of other projects are promptly in the legal setup phase, awaiting deployment such as VNPT’s IT space (Danang Bay) of more than 35,000 square metres of space in Lien Chieu district with an estimated investment value in the range of VND700 billion to VND1 trillion ($30.43-43.5 million) or the VND2 trillion ($86.96 million) high-tech and software centre of leading military-run telecom group Viettel in Hai Chau district.

These mega IT projects are anticipated to bring breakthroughs to Danang’s development in the upcoming time.

Along with this, the number of IT firms in Danang has been reportedly growing by 25 per cent annually, accounting for 20 per cent of the city’s total number of businesses.

Recent statistics show that Danang accommodates 2.1 IT firms over 1,000 residents, more than quadruple the country’s average. By the end of 2020, the city had 40,500 IT personnel, 20,000 of whom of them 20,000 have been working in the fields of software and digital content creation with per capita monthly wages averaging VND17.8 million ($770).

Nguyen Tuan Phuong from FPT Software shared that digital transmission is taking the whole world by storm, especially amid recent COVID-19 complexities.

“This movement is favourable for Vietnam’s IT industry generally and Danang in particular. The city needs to work on policies to accelerate the development of the IT sector, placing emphasis on training high-quality IT personnel. Availing itself of this opportunity effectively could bring numerous tailwinds to Danang in its digital transformation journey,” Phuong said.

Apt solutions sought for local solar power

The year 2021 will be characterised by an even bigger challenge for the authorities and developers to standardise the quality level of rooftop installations in terms of compliance to construction law, electrical standards, and fire safety, and to match grid availability and local consumption after the Vietnamese rooftop solar market skyrocketed last year.

Prime Minister Nguyen Xuan Phuc last week asked the Ministry of Industry and Trade (MoIT) and Electricity of Vietnam (EVN) to review issues related to Vietnam’s solar power development as well as avoid massive solar development without a proper plan, which could cause power grid overload.

According to the updated data, as of December 25, 2020, there were 83,000 rooftop solar power projects connected to the power system with a total installed capacity of nearly 4,700 megawatts-peak. The total power generation output to the grid from rooftop solar power has reached more than 1.13 billion kWh, contributing to ensuring power supply for the national power system.

Meanwhile, there is no new decision or guidance for implementation of the policy after Decision No.13/2020/QD-TTg issued last April on encouraging mechanisms for solar power development in Vietnam, which had its deadline set for December 31 last year for solar systems of any scale to attain a certificate of delivery and enjoy the feed-in tariff 2 (FiT2) rate, in which the price of each kilowatt-hour generated from ground-mounted, floating, and rooftop solar initiatives were 7.09, 7.69, and 8.38 US cents, respectively.

As a result, it remains uncertain which pricing mechanism will apply to grid-connected solar power projects reaching commercial operation date in 2021.

EVN announced its power companies had ceased buying rooftop solar power after December 31 to wait for further guidance from the government. It will also handle requirements for connection and signing power purchase and sales contracts from solar power systems started before the deadline.

Deputy general director of locally-invested Son Ha Group Hoang Manh Tan said the fact that there is no policy available will make it difficult for businesses to formulate strategies and implement them. Enterprises need continuous and consistent policies, and the gap issue creates difficulties for EVN, other enterprises, and their partners, Tan said.

Thus, ministries and authorities in the coming time must find the right supporting mechanism that enables an organic development of rooftop solar, and minimises loopholes and speculative projects, such as solar farms disguised as rooftop systems.

The prime minister also asked the MoIT to carry out the work of inspecting solar power development in localities and power companies, ensuring compliance with regulations.

It must promptly correct and handle any mistakes, especially operating policies that benefit outdoor voltage deployment over time as well as take measures to minimise the shutdown of renewable energy sources in operation, and minimise the economic losses of investors and waste of renewable energy sources.

At the same time, the boom in solar development also poses a question for the grid operator about how to optimise renewable electricity feeds into the grid, while considering the best interests of electricity producers.

Solar energy expert Mai Van Trung told VIR that in order to keep the average selling price there are several options, including increasing the curtailment or adding more solar power plants and rooftop solar systems with a very low FiT3 rate to compensate the subsidisation of EVN.

The former option over a wide scale could however hurt financial indicators of many projects because of leverage from bankers.

Meanwhile, the latter option could distract potential investors to put the money down. Moreover, the capacity absorption of the national grid is limited due to the intermittency of solar power, Trung said.

There is a declining trend of engineering, procurement, and construction costs of rooftop solar systems over time that can be utilised if the absorption capacity of the grid is available even with the storage added.

Vietnam has plans for solar power auctions but the qualified projects are small and located in lower solar irradiance. Green and cheap credits from international institutions are ready to enter, but the room left for additional capacity is currently being narrowed.

According to the MoIT, there are currently 16 national standards promulgated by the Ministry of Science and Technology related to solar power in the country. However, there is a lack of specific standards for the two main components of rooftop solar power projects – panels and inverters.

In late 2020, the National Assembly passed the new Law on Environmental Protection, which stipulates extended producer responsibility (EPR) for businesses in Vietnam. This means that businesses and producers now bear the responsibility for the waste of their products, including solar panels.

EPR is intended to reduce the cost of managing end-of-life products by reducing waste volume and increasing recycling, thereby contributing to the prime minister’s new target of reducing the amount of waste that goes to landfills by 80 per cent by 2025.

EPR has the potential to create new economic opportunities and share the financial burden of solid waste management more fairly.

According to the new law, businesses can implement EPR in one of three ways including doing the recycle themselves, conducting recycling through a third-party product recycling organisation, and making a financial contribution to the Vietnam Environmental Fund.

According to the draft EPR decree, businesses that recycle themselves or do so via a third party will have to report through a national EPR data portal managed by the Ministry of Natural Resources and Environment.

If a business that does the recycling itself fails to reach the target over 3-5 years in a row, it will be forced to participate in one of the other two mechanisms.

A business that refuses to choose any mechanism will be fined; and if it exceeds its recycling target, it can sell credits to other businesses through a tradable credit system.

Auto imports reach nearly 12,000 units over past 1.5 months

Vietnam’s import of cars between January 1 and February 15 this year reached 11,791 units, worth US$280 million, soaring 84.7% in volume and 76.2% in value against the 2020 figures, according to the General Department of Vietnam Customs.

Of these, the country imported over 3,400 completely built-up units worth over US$66 million from February 1 to 15.

During the past 1.5 months, the number of imported cars with nine seats or less totaled 2,477 units worth US$42.5 million, while 812 trucks valued at US$15.9 million were imported in the period.

Earlier, the country imported more than 8,300 cars worth over US$212 million in January, including over 5,200 cars with nine seats or below and 2,230 trucks. These cars were mostly imported from Thailand, China and Indonesia.

SSI Research forecast that the auto consumption in Vietnam this year could rise some 16% versus last year’s figure. Specifically, SSI Research said that the country’s GDP per capita could improve 8-10% annually in the next decade, while vehicles are more affordable to many more people.

In addition, the volume of locally-made cars is on the rise and scores of companies are focusing on business expansion to lower car prices to attract more customers.

Also, many auto manufacturing and assembly plant projects are scheduled for completion in the next three years, which will add a vibrant atmosphere to the local auto market and offer more benefits to customers.

Further, taxes and surcharges on cars are being steadily reduced under free trade agreements between Vietnam and other countries. This will help cut down on auto prices and stimulate the demand for cars.

Growing concern over overload on Vietnam stock market

The problem if further persists in long-term will make investors become disillusioned on the fairness and transparency of Vietnam’s stock market.

The frequent overload of orders forcing the stock exchange to halt market trading is causing frustration among investors.

Insiders have said that the trading halts, which occurred on the Vietnamese stock exchanges recently, aim to correct an order imbalance as a result of a technical glitch or due to regulatory concerns. When a trading halt is in effect, open orders may be canceled and options still may be exercised.

“Investors want competent authorities to take responsibility for these incidents, not just an apology,” said Nguyen Bich Ngoc, an experienced investor in the stock market, adding the unstable system is putting investors at risks.

Both before and after the Tet holiday, the overload occurred multiple times on both the Ho Chi Minh City and Hanoi stock exchanges whenever liquidity in a trading session hit around VND14-17 trillion (US$608-738 million).

“The phrase of “unplug the power cord” has become a hot topic in every securities forum and social networks,” Ngoc added.

From her own experience, Ngoc said at a trading session on February 19, when she and other investors placed an order at 1pm, but until 2:48pm, the system notified their placement was expired while the transaction period had not ended.

“Orders for purchasing stocks after 1:30 pm or 2pm in the past month were often delayed in process and not submitted to the stock exchanges,” she continued.

“Investors were left to watch their stocks going up or down in values and do nothing,” Ngoc fumed, while saying a lack of solutions to resolve the matter substantially from the Ministry of Finance or the State Securities Commission of Vietnam (SSC) only makes the matter worse.

“We are now forced to live with a faulty system and bear all the risks when we could not sell or buy stocks in case of system overload,” Ngoc stressed.

Last year, the stock market has witnessed strong growth and beat a series of records in terms of the number of new investors and the amount of capital inflows. In contrast with such strong growth, the issue if further persists in long-term will make investors become disillusioned on the fairness and transparency of Vietnam’s stock market, Ngoc stated.

“Investors will not accept losing money in such way or any apology from the authorities when the situation remains unchanged,” she said.

“The SSC must give a clear deadline to resolve this issue one and for all,” Ngoc concluded.

Previously, the SSC attributed the overload issue on the Ho Chi Minh Stock Exchange to the transaction processing capacity of the stock exchange that limits the number of transactions per day, while a recent surge of orders has exceeded the expectation of the market.

To ensure the smooth operation of the stock market, the SSC requested related agencies to optimize the transaction process by increasing the minimum trading lot from 10 to 100 shares, starting from January 4, 2021.

The SSC also urged securities firms to prevent their internal errors or limit automatic transaction.

For mid-term, the HoSE is tasked with upgrading the transaction backup system to ensure the safety of the system until the new IT system for the stock market with support from the Korea Exchange (KRX), South Korea’s bourse operator, is put into operation.

Data from the General Statistics Office (GSO) revealed the amount of capital poured into Vietnam stock market surged 20% in 2020 to VND383.6 trillion (US$16.64 billion). The average transaction value in the stock market is estimated at VND7.05 trillion (US$304.8 million) per session, up 51.5% year-on-year.

Meanwhile, the number of new investors soared by 109% in 2020 against the previous year.

Lam Dong to get first wind plant

GE Renewable Energy has signed a contract with the Ocean Renewable Energy Joint Stock Company to supply 15 wind turbines to its Cau Dat Wind Farm, the first in the Central Highlands province of Lam Dong.

Construction is expected to be finished by the third quarter of 2021.

Gilan Sabatier, regional leader for GE Renewable Energy’s onshore wind business in South Asia and ASEAN, said: “We thank Ocean Renewable Energy Joint Stock Company and their leadership team for selecting GE for this project. The award of the Cau Dat wind farm further validates the great work we have done in Vietnam and reaffirms our contribution to the country’s energy transition.”

Do Van Binh, General Director of Ocean, said, “We are delighted to sign this important deal with GE Renewable Energy for our first wind farm project.”

GE is the only wind original equipment manufacturer in the country./.

Bac Giang betters master plan on IPs development

The northern province of Bac Giang is improving a master plan on the development of industrial parks (IPs) and complexes, as well as land use planning, according it its provincial Party Committee.

The province is also refining a master plan on urban areas for the 2021-2030 period to attract investment.

It built a project on supporting start-ups in the locality, towards strongly developing private economy, and issued a list of projects in need of investment in the fields of agriculture and rural development.

The locality considered building mechanisms to support investment in hotel construction projects and hi-end services.

In particular, Bac Giang will step up administrative reform, improve the provincial competitiveness index, pool resources to build key socio-economic infrastructure while enhancing the quality of human resources and State management on projects.

The province will actively assist investors and businesses in tackling difficulties and accelerating projects, especially those regarding infrastructure construction and business in IPs.

From 2016 to the end of 2020, the province drew 909 projects worth over 5.88 billion USD, marking a 3.5-fold rise from 2011-2015, 616 of them were domestic ones with total registered capital of over 55.7 trillion VND (2.42 billion USD), and 3.84 billion USD were foreign direct investment.

It is now home to 1,786 valid projects, including 1,311 domestic ones worth more than 92.2 trillion VND and 475 foreign-invested ones valued at over 6.2 billion USD. Projects are mostly in industry with 54.3 percent, trade and services 40.5 percent, and agriculture 5.6 percent.

Since 2016, Bac Giang has granted licenses to over 6,000 enterprises and 705 branches and representative offices, with a combined registered capital of more than 64.3 trillion VND. Its gross regional domestic product has expanded by 14 percent annually.

Cumulatively, there have been 10,837 businesses so far in the province, including 466 foreign ones with a registered capital of 3.542 billion USD and more than 10,300 others with over 84.9 trillion VND./.

Binh Duong among world’s outstanding smart communities for three consecutive years

The southern province of Binh Duong has made itself onto the list of 21 localities worldwide having outstanding smart city development strategies (Smart21) this year, which was unveiled on February 25 by the Intelligent Community Forum (ICF).

It is the third year in a row that the province has received the recognition. Binh Duong is also the first Vietnamese locality to be named in the Smart21.

Gaining a place among the year’s Smart21 is considered a badge of honour as well as the first step toward greater recognition as an Intelligent Community positioned to prosper in the broadband economy, the ICF noted.

Workers at a factory in Bau Bang Industrial Park of Binh Duong (Photo: VNA)

There are currently 180 members from different countries, territories, cities and regions participating in the ICF./.

HCM City aims to build AI centres at regional level

Ho Chi Minh City plans to build at least two centres for Artificial Intelligence (AI) research and development as well as technology transfer at ASEAN level.

It is part of the city’s programme on AI research and development for the 2020-30, which was recently approved by the municipal People’s Committee, aiming to turn HCM City into a hub of Vietnam and ASEAN in the field.

In addition, the city will look for qualified personnel in the spheres of data science, big data analysis, natural language processing, computer vision, speech recognition, information security and Internet of Things, among others.

The southern economic hub has set a target to raise the number of AI research papers and patents by 20 percent in the period.

Vietnam sets a goal of being listed in Top 4 in ASEAN and Top 50 of the world in terms of AI research, development and application by 2030.

The target was set in a National Strategy on AI Research, Development and Application by 2030 recently approved by Prime Minister Nguyen Xuan Phuc.

The strategy aims at stepping up AI research, development and application to make it an important technological industry of Vietnam./.

Investment funds in Vietnam remain optimistic despite poor performance

Despite negative performance due to strong fluctuations in Vietnam’s stock market in January, big investment funds in the market remain optimistic.

Vietnam Enterprise Investments Limited (VEIL), a closed-end investment trust managed by Dragon Capital and the biggest investment fund in Vietnam’s stock market, recorded negative growth during the period.

The fund’s performance was negative 3.61 percent in January. VEIL manages assets worth 1.7 billion USD.

As of the end of January, VEIL’s biggest investments were in the banking sector, accounting for 27.13 percent of its investment value, followed by investments in real estate (26.43 percent) and food and beverage (10.17 percent). However all investing sectors had poor performance with banking and real estate sectors posting the biggest losses.

After gaining points in the first half of January, the stock market witnessed some strong corrections as profit booking dragged down the VN-Index. The profit taking was magnified by panic over margin calls.

The market benchmark VN-Index declined 4.28 percent in the first month of 2021.

Dragon Capital said that recently, the fund restructured its investment process with the number of target stocks cutting down to 28 – 32 from 35 – 40.

Finnish equity fund PYN Elite also witnessed is its net asset value (NAV) drop 5.39 percent in January, mostly due to losses in Vietnam Engine and Agricultural Machinery Corporation (VEA), Vietnam JSC Bank for Industry and Trade (CTG) and PetroVietnam Power Corporation (POW). It marked the worst performance of PYN Elite since 2017.

The fund manages total assets worth 572 million USD.

In a letter to investors in February, Petri Deryng, portfolio manager of PYN Elite, said that Vietnam’s stock market began 2021 on a negative note, but the prospects for the whole year are still very positive.

Vietnam’s economy, which has obtained some achievements, rising profits of listed companies and appealing stocks’ valuation are factors contributing to the bright prospects of the market.

The market saw strong fluctuations after the VN-Index surged quickly from 900 points to 1,200 points in just ten weeks.

During the turbulent month, PYN Elite used all of its resources to buy Vinhomes JSC (VHM) shares, making it the biggest investment of its portfolio. At the moment, VHM shares account for 9.82 percent of its portfolio, worth 1.5 trillion VND.

Another investment fund posting negative performance in January was AFC Vietnam Fund, with growth of negative 1.9 percent.

The fund assessed the plunge of the market after rising over 20 percent in the fourth quarter of 2020 and gaining 8 percent in the first seven trading sessions of 2021 was a healthy movement. And reaching the 1,200 point level by the VN-Index was really attractive, luring new strong inflows to the market.

Top five investments of AFC Vietnam Fund were Agriculture Bank Insurance JSC (ABI), accounting for 8.1 percent of its investment value, LienVietPost Joint Stock Commercial Bank (LPB), Dinh Vu Port Investment and Development JSC (DVP), VNDirect Securities Corporation (VND) and Phu Tai JSC (PTB).

As of the end of January, the fund invested most in the financial sector (35 percent of its portfolio) and industrial sector (23.5 percent)./.

Bac Giang: 771 mln USD raised for transport infrastructure development in five years

The northern province of Bac Giang has raised a total of over 17.8 trillion VND (771.54 million USD) in investment for local transport infrastructure development since 2016.

The capital has been injected into a number of key projects, notably a section of Hanoi’s Belt Road No.4 crossing Bac Giang, worth 1.23 trillion VND; upgrade of Provincial Road 295 crossing Voi – Ben Tuan and Ngoc Chau – Thang township, 245 billion VND; and a 5-km road connecting Provincial Road 293 and My An Port in Luc Nam, 115 billion VND.

Over the last five years, the province has developed 11 transport projects under Public-Private Partnership (PPP) scheme, with a total investment of more than 7.5 trillion VND. They include two Build-Operate-Transfer (BOT) projects managed by the Ministry of Transport and eight Build-Transfer (BT) by the province. A majority of the funding, 4.2 trillion VND, has been spent on developing Bac Giang – Lang Son Expressway under a BOT contract.

In addition to private funding, Bac Giang has used Official Development Assistance (ODA) loans for transport infrastructure projects. The largest among ODA-funded projects were 272-billion-VND Dong Bac Belt Road and Tran Quang Khai Bridge project in Bac Giang city financed by the Asian Development Bank (ADB) and the 135-billion-VND Local Bridge Construction and Road Asset Management (LRAMP)’s local bridge component funded by the World Bank (WB).

The province has also spent over 2.18 trillion VND from its budget and close to 1.75 trillion VND from private funding to concrete more than 4,210 km of roads, mostly rural roads.

Thanks to such efforts, Bac Giang is now home to about 153km of expressways which are more than 8m in width, accounting for over 46.4 percent of the total.

It has also concreted over 97.3 percent of district-level, 98.1 percent of commune-level and 92.3 percent of village roads.

In the coming time, Bac Giang plans to attract private investors in transport services, such as inland ports, parking, bus stations, and rest stops. The province will also jointly develop inter-provincial roads with neighbouring localities and by 2025, cooperate with the Ministry of Transport and BOT investors to expand Xuong Giang and Nhu Nguyen bridges on the Hanoi – Bac Giang Expressway./.

Vinh Long works towards sustainable export growth

The Mekong Delta province of Vinh Long is striving to boost sustainable export growth during 2021-2025.

The province has set the target to reel in 870 million USD from exports by 2025, with key export markets including ASEAN, Japan, China, China’s Taiwan, Russia, East European countries, Africa, the EU and the US.

According to Director of the provincial Department of Industry and Trade Nguyen Trung Kien, seeing rice as a key export, Vinh Long plans to ship average 100,000-200,000 tonnes of high-quality rice per year abroad until 2025, and work to increase price of local rice while diversifying rice products to branch out markets.

Holding a huge advantage of tra and basa fish farming, the province eyes to sell some 20,000 tonnnes of frozen tra fish to foreign markets by 2025.

Kien said Vinh Long is making efforts to gain 35-40 million USD from exports of grape fruits, canned fruits, dried fruits, and vegetables by 2025, adding areas were zoned off for cultivation of vegetables and orchards such as grape fruit, orange, tangerine, longan, and mango, among others.

Additionally, the locality targets 530-600 million USD in export revenue of leather footwear and garment-textile, and 60 million USD in export revenue of handicraft products by 2025.

In a bid to realise the set goals, an array of measures were outlined, Kien said, stressing due attention will be paid to developing agricultural processing industry and finished goods to better the products’ value and their competitive edge in the market.

Kien said along with support policies for local production, the province will improve technical services to promote mechanisation of agriculture, particularly post-harvest processing and preservation.

Investment promotion will be given priority so as to attract investment in supporting industries for footwear, garment-textile, electronics and engineering sectors, helping local producers and exporters improve their products’ competitiveness.

On the other, the province encourages local businesses to develop materials zones to ensure stable input for production, apply advanced technology to better products’ quality, while building brands to gain foothold in the market.

According to the Department of Industry and Trade, the province is now housing 40 export firms, including 15 foreign-invested businesses.

During 2015-2020, the locality’s export revenue rose significantly, from 302 million USD in 2015 to 570.5 million USD five years later. The North America accounted for the lion’s share of the province’s export, accounting for 37 percent of the total shipments, followed by Europe (31 percent), and Asia (29 percent)./.

Vietnam offers numerous investment opportunities for Indian businesses

The increasing importance of Vietnam in global supply chains is great potential helping to enhance the Vietnam-India relations, particularly between small- and medium-sized enterprises (SME) that are considered the main drivers for economic growth in each country, heard an online conference on February 25.

The bilateral trade-investment promotion conference titled “Boosting trade-investment cooperation opportunities between Vietnamese and Indian SMEs” was jointly organised by the Trade Office of the Vietnamese Embassy in India, Uttar Pradesh state government, the Indian Industries Association (IIA) and the Hanoi SME Association.

IIA President Pankaj Gupta said that several major enterprises of India such as Adani Group, Mahindra, SRF and Suzlon have shown interest in investing in Vietnam.

He suggesting Indian enterprises invest in Vietnam in the fields of energy, mineral exploration, agricultural chemicals, sugar production, tea, coffee, information technology, and automobile components.

Vietnam is currently holding a lot of advantages for investors such as favourable investment policies, numerous free trade agreements, rapid economic growth, stable political situation, cheap labour costs, and young labour force, he stated.

However, participants pointed to several challenges for foreign investors in Vietnam, including high corporate tax rates of 32-50 percent for companies operating in oil and gas exploration and exploitation and other valuable natural resources, complicated administrative procedures, and dependence on cash transactions.

Meanwhile, Vietnamese Ambassador to India Pham Sanh Chau proposed the two countries’ enterprises expand cooperation in supporting industry, automobile and motorbike spare parts, garment and footwear materials and household appliances.

According to the Vietnam Foreign Investment Agency, as of December 2020, India had nearly 300 valid projects in Vietnam with total investment of nearly 900 million USD, ranking 26th among countries and territories pouring capital into the Southeast Asian nation./.HCM City keeps shutdown of certain services in place

Fruit & vegetable exporters should tap into Northern Europe’s niche market: Newspaper

Vietnamese businesses are believed to possess opportunities, especially in niche markets, when exporting fruit and vegetables to Northern Europe, according to the Cong Thuong (Industry & Trade) newspaper.

The Vietnamese trade office in Sweden said that due to unfavourable weather conditions, Northern European countries very much depend on imported fruit and vegetables, with over 90 percent of fruit and 40 percent of vegetables coming from foreign sources.

The importation of tropical fruit has been growing quickly in recent years, opening up opportunities for both existing and new exporters from developing countries, including Vietnam.

Developing countries account for more than 50 percent of the supply of fruit such as papaya, mango, pineapple, dates, tamarind, and passionfruit imported to the market, and 30 percent of avocado, figs, melons, and grapes.

The EU-Vietnam Free Trade Agreement (EVFTA), which took effect on August 1, 2020, has also generated considerable advantages for Vietnamese firms, as most tariffs on fresh fruit and vegetables have been slashed to zero percent, the trade office noted.

Despite the optimistic outlook, Cong Thuong wrote, the market is relatively small compared to others in Europe. It’s also not easy for new exporters to compete with multilateral fruit and vegetable providers, logistics firms, and packaging companies with a long presence there.

Vegetables grown in Europe now account for 90 percent of those imported into Northern Europe, while those from developing nations stand at less than 10 percent.

Off-season produce like tomatoes and bell peppers are often provided by countries near Northern Europe. Geographical distance and a lack of direct air routes to the region also pose certain difficulties for Vietnam’s fruit and vegetable exports.

The newspaper suggested Vietnamese companies consider producing organic and convenience products, pointing out European consumers’ increasing preference for healthy diets with clean and natural food, as well as those that serve their busy lifestyles.

To make use of this trend, they should ensure that product quality meets requirements, the article said.

It also noted that more attention needs to be paid to sustainable and responsible production and business practices, adding that products will be accepted by Northern European consumers if they comply with sustainability standards.

Brand building and product storytelling are also tools necessary for marketing new products, particularly those for niche markets, according to the paper./.

Vietnam lures 5.46 billion USD in foreign investment

As much as 5.46 billion USD worth of foreign direct investment (FDI) was injected into Vietnam as of February 20, equivalent to 84.4 percent of the figure recorded in the same time last year, according to the Ministry of Planning and Investment.

As many as 126 foreign projects were granted investment licences with total registered capital of 3.31 billion USD, a year-on-year fall of 33.9 percent.

Meanwhile, 115 existing projects adjusted their investment capital with a total additional sum of 1.61 billion USD, or 2.5 times higher than the same time last year.

Capital contributions and shares purchases by foreign investors stood at 543.1 million USD, down 34.4 percent.

Japan topped the list of 46 countries and territories landing investment in Vietnam, with 1.64 billion USD, equivalent to nearly 30 percent of the total. Singapore came second with 1.07 billion USD, and the Republic of Korea third with 1.05 billion USD.

The ministry said the southern province of Can Tho lured the lion’s share of FDI with 1.31 billion USD, accounting for 24.2 percent of the total. Hai Phong city was the runner-up since it attracted nearly 918 million USD, or 16.8 percent. Bac Giang came third with nearly 573 million USD (10.5 percent)./.

An Giang boasts strengths in hi-tech agricultural development: Deputy PM

The Mekong Delta province of An Giang boasts strengths in economic development, especially high tech agriculture, Deputy Prime Minister Truong Hoa Binh said while attending a ground-breaking ceremony for a high tech dairy farm project of TH Group in Tri Ton district of the province on February 27.

The dairy cow farming model of TH Group, the largest scale in the region, is expected to become an exemplary model to be multiplied, he said.

The farm is hoped to help fulfil the target of having 500,000 milch cows across the country five years ahead of the deadline set in the master plan on agricultural development to 2020, vision to 2030, he noted.

Spanning 178.4 ha across Tri Ton district’s Vinh Gia and Vinh Phuoc communes, the project is carried out with an investment of nearly 2.66 trillion VND (115.2 million USD), making it the largest closed-loop system dairy project in Mekong Delta.

It includes a fresh milk factory capable of producing 135 tonnes daily.

On the same day, Deputy PM Binh paid a visit to a hi-tech hog farming project of the Truong Hai Auto Corporation (THACO)’s agricultural arm in Tinh Bien district.

The 50-ha project has been basically completed after nine months of construction. Its first phase will become operational by June while the construction of the second one is set to begin later this year, raising its capacity to 11,200 pigs in total.

On the occasion, a New Year tree-planting festival was held in the province in response to a campaign to grow 1 billion green trees between 2021 and 2025 launched by the Prime Minister./.

Deputy PM asks Thai Binh to facilitate Lien Ha Thai IP development

Deputy Prime Minister Trinh Dinh Dung has asked the northern province of Thai Binh and investors to create favourable conditions to draw projects to the Lien Ha Thai industrial park (GREEN iP-1).

During a conference announcing the Prime Minister and the provincial People’s Committee’s Decisions on the GREEN iP-1 on February 27, the Deputy PM instructed Thai Binh authorities and the IP investor to complete procedures in line with the law, including those regarding site clearance, compensation for resettlement, and social housing for workers.

He suggested Thai Binh review its economic structure with a view to adjusting it based on its strength as a coastal province and market demand at home and abroad, select priority projects regarding transportation, urban and rural infrastructure while stepping up administrative reform and creating a pro-business environment.

Deputy Prime Minister Trinh Dinh Dung hands over the PM’s Decision on GREEN iP-1 development (Photo: VNA)

Invested by Green i-Park JSC, the GREEN iP-1 is located in Thuy Lien commune and Diem Dien township of Thai Thuy district. It has a total investment of over 3.88 trillion VND (168.3 million USD).

Once operational, the 50-year project is expected to contribute to the development of the nation as well as Thai Binh and the Red River in particular.

Source: VNA/VNS/VOV/VIR/SGT/Nhan Dan/Hanoitimes

The Ho Chi Minh City tourism sector this year plans to focus on digitalisation of the industry and promotion of domestic tourism amid a downturn in tourism because of the COVID-19 pandemic.

The sector will continue its efforts to boost domestic tourism as the main factor driving the recovery of the tourism industry.

The tourism communication and stimulus campaign, ‘Hello Ho Chi Minh City,’ has been implemented to promote the city as a safe, vibrant and friendly destination.

Tourism cooperation and linkages between HCM City and the Northeast, Northwest and the Central regions will also serve to boost domestic travel.

The city aims to receive 33.5 million domestic visitors this year if COVID-19 remains under control in the country./.

Tet sales increase sharply on low prices

With a week to go for Tet (the Lunar New Year) sales of goods bought to celebrate the Lunar New Year have increased by 30-40 percent from normal times, according to market observers.

They attribute it to prices remaining steady and people’s increasing income at the end of the year.

Saigon Co.op’s supermarket chains have managed to meet market demand thanks to early preparation of goods, accurate forecast of demand and discounts, Nguyen Anh Duc, its permanent deputy general director, said.

In January sales increased by 37 percent compared to the same period in the previous month, with growth of fresh and processed foods, cosmetics, kitchen appliances, and garments being high, he said.

There have been no shortages of goods, especially pork, and no price hikes, he said.

Dinh Quang Khoi, head of marketing and customer care at MM Mega Market Vietnam, said customers have bought Tet goods earlier than usual, and retail sales increased by more than 10 percent compare with same periods of last year, while the increase is 5 -6 percent if the wholesale segment is included.

Shopping malls in Ho Chi Minh City like Vincom Central Dong Khoi, Takashimaya and Aeon Celadon Tan Phu are crowded, especially at weekends.

Sales of processed foods are expected to go up by more than 20 percent.

People are switching more and more to poultry meat and eggs instead of pork because the pork price is rising to the delight of companies like San Ha, Ba Huan and Vinh Thanh Dat.

According to experts, the prices of many items have never been so stable as this year as the Covid-19 pandemic caused global demand to shrink.

Many products could not be exported, and so producers and distributors switched their focus to the domestic market, increasing supply.

To sustain demand in this scenario enterprises have had to improve quality and keep prices competitive./.

HCM City in top six most preferred markets for investment: CBRE

There was an increase in interest in Ho Chi Minh City which ranked sixth among Asia Pacific investors’ most preferred property markets for investors, according to a survey by market research firm CBRE polling more than 490 Asia Pacific-based investors in November and December 2020.

With the diversification of supply chains encouraging more manufacturing investment in the city, industrial and logistics assets are keenly sought after, said the CBRE’s 2021 Asia Pacific Investor Intentions Survey.

“HCM City has already been on the radar of investors in recent years, especially those who are looking to invest in Southeast Asia, as the city is viewed as having the potential for greater appreciation in property values and higher yields,” said Dang Phuong Hang, CBRE Vietnam Managing Director.

The survey outlines top 10 Preferred cities for cross-border investment, with Tokyo (Japan) in the first place, followed by Singapore, Seoul (the Republic of Korea), Shanghai and Beijing (China), HCM City, Shenzhen (China), Sydney (Australia), Osaka (Japan) and Melbourne (Australia).

Investors who expressed interest in investing in Southeast Asia indicated that they are willing to pay more for real estate purchase. 39.4 percent of these investors are comfortable to pay more than 10 percent higher this year than what they are willing to pay in 2020, while 19.7 percent are willing to paying up to 10 percent higher.

In the search for returns, investors looking at Southeast Asia are turning to value-added and core assets, even though there are some who are starting to look at distressed assets. Industrial/logistics and office remain their preferred sectors, while the hospitality sector is gaining favour.

Henry Chin, CBRE’s Global Head of Investor Thought Leadership and Head of Research, Asia Pacific, said: “stronger interest in core investment reflects investors’ greater emphasis on tenant credit and stable cash flows.”

“Assets with a solid rent roll of three years or longer typically attract far more bidders than those lacking this type of security,” he added.

Logistics was the most popular sector for investment as the pandemic-driven acceleration of e-commerce consumption boosted demand for this asset class. While interest in the office sector weakened, investors retain an optimistic view towards this sector, expecting a contraction in office purchasing activity of no more than 10 percent over the next three years./.

January sees largest capital injection into stock market since early 2020: SSI

January saw the largest amount of investment capital poured into Vietnam’s stock market since the beginning of 2020 on the back of strong exchange traded fund (ETF) inflows, according to a report by SSI Securities Corporation.

Vietnam is Asia’s only stock market with non-stop capital injection over the last four week as it attracted more than 100 million USD last month thanks to massive ETF inflows, outweighing the net capital withdrawal of around 23.5 million USD, said SSI’s February strategic stock market report entitled “Co hoi trong bien dong” (Opportunity in volatility).

ETFs have also raked in about 129 million USD, or two third of the total inflows in 2020, mostly into VFM Diamond ETF (1.31 trillion VND or 57.15 million USD) and VFM VN30 ETF (860 billion VND).

The market also experienced strong foreign buying in the last three days of the month, raising foreign players’ net purchases of shares in January to about 127 billion VND.

SSI stated that Vietnam has become a quite attractive market largely owing to the country’s successful containment of COVID-19, positive economic growth and the fact that it remains a destination of the ongoing global production shift.

Though the pandemic has been a key contributor to the market volatility during this period of time, capital injection from ETFs into Vietnam remains a positive driver of the stock market, SSI said, adding that this also means increasing level of volatility.

According to the report, more than 81 billion USD was poured into stocks in both developed and emerging markets across the worrld last month, also with the domination of the ETFs./.

Vietnam increases pork imports to cool off rising domestic prices

Vietnam imported more than 141,000 tonnes of pork worth 334.4 million USD in 2020, representing a rise of 382 percent and 500 percent over the previous year, respectively, customs statistics showed.

The increase in imports was to make up for the shortage in pork supply caused by African swine fever which pushed up domestic prices in the first months of 2020.

The pork was mainly imported from Brazil, Russia, Poland, the US and Canada. Brazil was the largest exporter of pork to Vietnam last year, accounting for 24.5 percent of the import volume.

The average pork import price was 2.2 USD per kilo.

According to the Ministry of Agriculture and Rural Development, Vietnam approved 25 countries to export livestock and poultry meat to Vietnam, including more than 800 enterprises from 19 countries allowed to export pork to Vietnam.

Vietnam imported more than 43,300 pigs for breeding, mainly from Thailand, Canada, the US, Denmark and Taiwan (China).

Live hog prices tended to increase in many provinces across the country from early January due to increases in consumption demand ahead of Tet (Lunar New Year) to around 80,000 – 84,000 VND (4 USD) per kilo, around 5,000 VND higher than the end of December.

However, in recent days, pork prices decreased by around 1,000-5,000 VND per kilo.

Nguyen Van Trong, Deputy Director of the ministry’s Department of Livestock Production, said pork prices dropped in recent days because processing companies reduced their purchases as they had enough goods for consumption during Tet.

The enhanced prevention against smuggling of pork to China together with the increase in supply also helped lower pork prices.

Now Vietnam had 27.3 million pigs, an increase of 21 percent over a year ago and equivalent to 88.7 percent of the time before the disease occurred.

The Ministry of Industry and Trade said that early preparations were made to ensure enough supply of pork for Tet with many enterprises launching price stabilisation programmes./.

Australian expert highlights Southeast Asia’s trade prospects

Richard Maude, Senior Fellow at Australia’s Asia Society Policy Institute, has spoken highly of trade prospects of Southeast Asian nations against the backdrop of COVID-19.

In an article, he said that global trends in trade, foreign investment and production offer a mix of peril and opportunity for the Southeast Asian governments as they try to steer their damaged economies towards recovery.

“Beset by lockdowns, disrupted supply chains and travel restrictions, world trade volumes fell by historically steep levels in the first half of 2020. Southeast Asia was no exception – the region’s economies rely heavily on external demand and many play increasingly significant roles in East Asian supply chains,” he continued.

In the second quarter of 2020, for example, the value of goods exported from the ten members of the Association of Southeast Asian Nations (ASEAN) fell by 15 percent on a year-on-year basis and imports fell by 27 percent.

Foreign direct investment flows to Southeast Asia also declined sharply early in 2020.

The vertiginous plunge in world goods trade, at least, may now be bottoming out, but the International Monetary Fund (IMF) remains decidedly gloomy about prospects for a trade-led recovery in Asia.

Even so, amid all the uncertainty and downside risk, Southeast Asia may yet find itself better placed than other regions to trade itself out of trouble, the expert said, citing that East Asian economic regionalism will strengthen as one of the reasons.

Most major East Asian economies – China, Japan, the Republic of Korea and Taiwan – have managed to re-open their economies. China’s giant economy in particular is once again growing and helping keep Southeast Asian trade afloat.

Domestic consumption in Southeast Asia could double to 4 trillion USD over the next ten years.

Within the region, there are also signs the deep economic slump of the first half of 2020 is easing, at least in those parts of the region where the pandemic has been tamed. The decline in ASEAN global goods exports and imports, for example, slowed in the third quarter of 2020 on a quarter-on-quarter basis.

Vietnam, one of the best performing ASEAN economies, managed to eke out a small increase in economic growth in 2020, he cited.

Once it enters into force, the newly signed Regional Comprehensive Economic Partnership (RCEP) trade deal will give intra-Asian trading another boost. It is an incentive for large corporations to locate as much of their supply chains as possible within the bloc.

“ASEAN is also well placed to benefit from supply chain diversification within East Asia. Some manufacturing was already shifting to Southeast Asia before the pandemic.”

The pandemic has now reinforced interest from companies from around the world in regionalisation and supply chain diversification. Some governments, Japan, for example, is offering financial incentives to some of its companies to build production sites in Southeast Asia.

Like the rest of the world, the region faces headwinds and uncertainties, Maude noted, putting forth some suggestions for regional countries to use trade to help drive economic recovery./.

Tet sales increase sharply on low prices

With a week to go for Tet (the Lunar New Year) sales of goods bought to celebrate the Lunar New Year have increased by 30-40 per from normal times, according to market observers.

They attribute it to prices remaining steady and people’s increasing income at the end of the year.

Saigon Co.op’s supermarket chains have managed to meet market demand thanks to early preparation of goods, accurate forecast of demand and discounts, Nguyen Anh Duc, its permanent deputy general director, said.

In January sales increased by 37 per cent compared to the same period in the previous month, with growth of fresh and processed foods, cosmetics, kitchen appliances, and garments being high, he said.

There has been no shortages of goods, especially pork, and no price hikes, he said.

Dinh Quang Khoi, head of marketing and customer care at MM Mega Market Viet Nam, said customers have bought Tet goods earlier than usual, and retail sales increased by more than 10 per cent compare with same periods of last year, while the increase is 5 -6 per cent if the wholesale segment is included.

Shopping malls in HCM City like Vincom Central Dong Khoi, Takashimaya and Aeon Celadon Tan Phu are crowded, especially at weekends.

Sales of processed foods are expected to go up by more than 20 per cent.

People are switching more and more to poultry meat and eggs instead of pork because the pork price is rising to the delight of companies like San Ha, Ba Huan and Vinh Thanh Dat.

According to experts, the prices of many items have never been so stable as this year as the Covid-19 pandemic caused global demand to shrink.

Many products could not be exported, and so producers and distributors switched their focus to the domestic market, increasing supply.

To sustain demand in this scenario enterprises have had to improve quality and keep prices competitive.

One Commune One Product attracts Tet shoppers

Many products made under a programme called ‘One Commune One Product’ have become a big hit with consumers seeking to buy gift hampers for Tet (Lunar New Year).

Sticky rice grown by the Khau Nua Lech Thuong Quan Rice Cooperative in Bac Kan Province’s Ngan Son District is one such.

The co-operative has had to mobilise a lot of manpower to fulfil the mountain of orders it got.

Its rice is renowned for its plasticity and aroma, and is well known to consumers across the country.

According to a co-operative spokesperson, 100 additional workers were hired for packaging and delivery but demand still not be met.

In the last month or so it supplied more than 10 tonnes of rice to markets such as HCM City and Ha Noi.

Phan Thanh Hieu, director of the Phuong Nam Food Joint Stock Company, said this year, due to the impact of the COVID-19 epidemic, businesses had prepared for low demand, but two high-end products, organic ST 25 and ST 25 rice varieties, grown together with shrimp in Soc Trang Province, are out of stock.

“We have had to turn down many orders or deliver less than the ordered quantity though the rice prices are four to five times higher than that of other rice. ST 25 grown together with shrimp has a price of VND285,000(US$12.4) for 5kg, VND15,000 higher than ST 25.”

Le Kieu Phuong, director of Phuc Thinh Production and Commerce Co. Ltd, said her company recently got a One Commune One Product (OCOP) certificate for its three prawn cracker production lines in Ca Mau Province.

It is now working on selling the products to major supermarket chains before Lunar New Year with the aid of the certificate, she said.

In Dong Nai Province, where more and more people are becoming interested in regional specialties, seven OCOP producers have signed contracts with Central Retail Viet Nam to sell 21 items.

Nguyen Thi Bich Van, media director of Central, said the two supermarkets would design their display shelves to ensure OCOP products easily catch the eye of shoppers as part of a commitment to support them.

MM Mega Market is also selling 56 OCOP confectionery and jam products for Tet at discounts of up to 50 per cent to introduce them to customers.

Do Quoc Huy, marketing director of Saigon Co.op, said the company is helping develop OCOP goods, but their limited production means they could only be sold locally and not across its retail chains.

The two-year-old OCOP programme has helped a number of localities develop a wide variety of agricultural and non-agricultural products, providing steady incomes to many locals.

COVID-19 pandemic continues to ravage travel industry

A resurgence of Covid-19 just before the Tet (Lunar New Year) holiday has hugely impacted travelling, again demonstrating its impact on the tourism industry.

“There has been an immediate impact on the hospitality business with several cancellations across the country, not only in the affected destinations but anywhere with access via an airport,” Mauro Gasparotti, director of Savills Hotels Asia Pacific, said.

“Prior to these local transmissions, the industry was anticipating increased travel demand during and after the Tet holiday, which would have been a good start to the year,” Gasparotti said.

Travel interest is diminishing amid a mist of uncertainty with air travel demand dropping 15 per cent immediately after the news release.

Online flight search demand to Da Nang and HCM City during this peak period of the year dropped 35 per cent and 34 per cent week-on-week respectively, according to OTA Insight.

Some companies immediately enforced travel restrictions, with requests to limit attending events and large gatherings.

This has directly affected MICE (Meetings, Incentives, Conferences and Exhibitions) business in city hotels, where several conferences have been put on hold or delayed.

Drive-to destinations have also been affected by weekend cancellations.

Last year international arrivals to the country numbered just 3.8 million, a 78 per cent decline from 2019.

Domestic traveller numbers fell 34 per cent to 56 million.

Hotels and resorts suffered badly, with many being forced into temporary closure.

Last year occupancy and average daily rates (ADR) both dropped, while revenues fell 70 per cent.

In Ha Noi, the average occupancy was 32 per cent compared to 80 per cent in 2019 while it dropped to 23 percent in HCM City from 72 per cent.

The national average of 62 per cent in 2019 plummeted to just 24 per cent last year.

January started on a positive note, with hotels in key destinations seeing increased MICE and event bookings while at some resorts corporate bookings started to return, Gasparotti said.

“The market in 2021 is expected to be broadly similar to most of 2020, at least until borders reopen to leisure and business trade. Hotels have adapted by considerably reducing operating costs to establish lower breakeven points.

“The good news is that several destinations are still performing at acceptable levels.”

The performance in December and January was positive for destinations like Phu Quoc and Vung Tau, which appeal to both local leisure travellers and year-end company trips.

Some hotels have used promotions, such as ‘staycation’ packages and F&B deals to nurture local demand, which have propped up their numbers.

Fruit and vegetable exports decline by 7.6% in January

Vietnamese fruit and vegetable exports in January endured a drop of 7.6% to US$260 million compared to the same period from last year, largely due to unpredictable developments relating to the COVID-19 pandemic, according to the Ministry of Agriculture and Rural Development (MARD).

The MARD’s Agro-Processing and Market Development Authority stated that China was the leading importer of local fruit and vegetables last year, making up 56.3% of the total market share, although fruit and vegetable exports to this market fell by 25.7% to US$1.84 billion compared to 2019.

Elsewhere, the United States market ranked second with US$168.8 million, followed by Thailand with US$157.2 million, the Republic of Korea with US$143 million, and Japan with US$127.7 million.

Furthermore, January saw the country’s import value of fruit and vegetables enjoy an annual increase of 22.3% to US$140 million, with China, the US, and Australia representing the three largest suppliers to the Vietnamese market.

Moreover, the import value of fruit and vegetables from China in 2020 decreased by 21% compared to 2019’s figures, while imports from the US and Australia witnessed respective increases of 2.3% and 1%.

Due to complicated developments relating to COVID-19, the nation’s fruit and vegetable export activities have been significantly impacted as consumers have changed their shopping habits with several countries also moving to tighten import procedures as a way of securing their borders.

Experts have therefore advised local firms to strive to strengthen their supervision over product quality to avoid violating quarantine regulations, and ensure that food and safety rules are followed as a means of facilitating relevant customs clearance processes.

Acceleration opportunity for Vietnamese AI startups

The AI Accelerator Challenge 2021, organised by VSV Foundation under the auspices of the Ministry of Science and Technology and funded by the Australian Embassy, is officially open for registration.

The AI Accelerator Challenge 2021(AAC 2021) is an acceleration programme specifically designed for Vietnamese AI startups with innovative ideas and products that address the practical needs of the market.

AAC 2021, themed “AI in pandemic – Adapting to the new normal”, has been organised with the goal of identifying, incubating, promoting, and developing potential AI-powered applications in numerous fields such as finance, commerce, electronics, telecommunications, manufacturing, agriculture, healthcare, education, transportation, and smart city development. Participants will have the opportunity to undertake a 4-week online training course, after which the top five teams will be awarded prizes including a service support package worth VND500 million($21,740), a business promotion and mentoring course worth VND200 million ($8,700) and up to VND200 million in seed investment with no equity required.

The programme will assist Vietnam’s economic recovery from the COVID-19 pandemic, as well as help to foster the development of a vibrant AI startup environment. “Vietnam should be very proud of its successes in tackling COVID-19,” said Andrew Barnes, Australian Chargé d’Affaires to Vietnam. “Through sponsoring programmes to promote innovative applications using AI, Australia is demonstrating its strong commitment to assisting Vietnam in overcoming the COVID-19 pandemic, supporting economic recovery, and strengthening its innovation system.”

“The government is trying to implement many activities to cope with disruptions caused by COVID-19, in which innovation and the application of advanced science and technology have been defined as the key to increase the resilience of businesses and the recovery of the economy. AI is one of the core technologies that promise to revolutionise many of Vietnam’s key socioeconomic sectors such as health, education, business, commerce, finance, and agriculture,” Deputy Minister Bui The Duy from the Ministry of Science and Technology (MoST) added.

“We are proud to be a part of this programme,” said Thach Le Anh, founder of VSV Foundation. “AAC 2021 will not only allow Vietnamese AI startups to receive mentoring from top AI technology experts but also support them with business development and fund-raising, including by raising capital from angel investors and leading domestic and foreign venture capital funds. The startups will be able to raise up to VND2 billion ($86,960) after the programme ends.”

This programme is funded by Australia’s flagship Aus4Innovation programme which will disburse AUD11 million ($8.44 million) over four years (2018-2022) to strengthen the Vietnamese innovation system and prepare for Vietnam’s economic and digital future. It is funded by the Australian Department of Foreign Affairs and Trade and managed by the Australian Commonwealth Scientific and Industrial Research Organisation in strategic collaboration with the MoST.

Investors give EVN Genco 2 cold shoulder at IPO

Despite Power Generation Corporation 2 (EVN Genco 2) owning substantial interests in several thermal and hydropower plants, 99.97 per cent of the stake it offered at its initial public offering (IPO) was unmarketable.

The Ho Chi Minh City Stock Exchange (HSX) has published the results of the auction registration for the stake of EVN Genco 2.

The company offered 580 million shares or 48.9 per cent of its charter capital to investors with the initial price of VND24,520 ($1.06) per share and expected to acquire VND14.225 trillion ($618.5 million) from the sale.

However, only 14 investors registered to join the auction, registering 262,500 shares, including 200,000 shares from a single foreign investor, 10,500 shares by five Vietnamese people, and 52,000 shares by eight domestic investors.

At present, EVN Genco 2 owns a 100 per cent stake in Trung Son Hydropower One Member LLC, which operates Trung Son hydropower plant with the designed capacity of 1 billion kWh per year.

It also owns a series of thermal power companies including Pha Lai, Haiphong, and Thac Mo, among others.

According to its financial statement, the company generated 17.8 million kWh, equaling 97 per cent of its plan for the whole year and 7 per cent of the power coursing through the whole national power grid.

The unmarketable IPOs of EVN Genco had precedent because they own too many member companies and subsidiaries. Buying stakes in the plants one by one will help investors limit risks.

Previously, EVN Genco 3 failed in its IPO in February 2018 when only 2.8 per cent of the offered shares was sold.

Vietnam targets 60 – 62 bln USD from agro-forestry-fisheries export by 2030

Vietnam has set a goal of earning around 60-62 billion USD from agro-forestry-fisheries export by 2030 under a project recently approved by the Prime Minister.

The project looks to fully and sustainably join the global supply chain of agro-forestry-fisheries, improve the quality and value of their export to meet regulations of importers, and develop their trademarks in international markets.

Of the figure, 25 billion USD will be from major farm produce, 16-17 billion USD from forestry products, 15 billion USD from aquatic products, 3-4 billion USD from animal husbandry products, and nearly 2 billion USD from others.

Agro-forestry-fisheries export is expected to grow by some 6-8 percent annually. About 40 percent of export will be national brands, 70 percent have their origins traced, and around 60 percent of exports are processed and deeply processed ones.

To such end, the project targets fine-tuning mechanisms and policies to ensure food safety and develop support industry, assisting firms in protecting intellectual property right in export markets, popularising trademarks on domestic and foreign media./.

Central localities seek new development routes amid COVID-19

Central provinces must adjust their socio-economic development goals and strategies to minimise the adverse effects brought by the COVID-19 pandemic and natural disasters in 2020, officials have said.

Nguyen Tan Tuan, Chairman of the People Committee of Khanh Hoa province, said while the province’s tourism industry was hit especially hard, growth in the industrial sector managed to stay positive.

“Since the beginning of the pandemic, we have made it our highest priority to keep the virus in check. Our effort has allowed us to attract a number of foreign investors as they moved from regions hard-hit by COVID-19,” Tuan said.

He said the province has been making use of the downtime to upgrade and invest in its tourism infrastructure, waiting for international tourists to return. In the meantime, Khanh Hoa has started several promotion campaigns to attract domestic travellers.

Meanwhile, Quang Nam made significant gains in developing modern agriculture in 2020 despite being one of the central provinces severely hit by natural disasters last year.

“Agriculture has always been a key priority in our province’s development scheme. During the pandemic, it has become Quang Nam’s economic driver,” said Le Van Dung, Deputy Secretary of the provincial Party Committee.

Dung said with tourism and commerce disrupted because of the pandemic and natural disasters Quang Nam chose to make large investments in industrial projects to mitigate the economic damage to the province in the long run.

Quang Ngai, a traditionally strong economic performer in the region thanks to being home to the country’s largest oil complex the Dung Quat Refinery, has been looking for ways to become less reliant on the oil industry.

Dang Van Minh, Chairman of the provincial People’s Committee, said the province has been working with its partners to set up numerous large-scale industrial parks.

“We want to become one of the country’s best destinations for investments and industrial development. The province aims to build a transparent and healthy business environment to win over potential investors,” said Minh.

Meanwhile, Da Nang, the central region’s main economic hub and the city most affected by the pandemic with nearly 200,000 jobs lost during 2020, said it has set a new course to push for greater digitalisation of commerce, smart city technologies and star ups culture.

“The city aims to diversify its economy. While we still identify tourism and services as major industries we want to see strong development on the fronts of information technology and digitalisation in the near future,” said Nguyen Dinh Vinh, head of the municiapal Party Committee’s Board for Information and Education./.

Cambodia to resume farmed fish import from Vietnam

The Cambodian Ministry of Agriculture, Forestry and Fisheries on February 8 issued a press release on the resumption of the import of aquatic products, including farmed fish, from neighbouring countries, including Vietnam.

The import suspension was announced by the Cambodian side one month ago.

On January 19, Vietnamese Minister of Industry and Trade Tran Tuan Anh sent a letter to Cambodian Minister of Commerce Pan Sorasak, saying Vietnam’s shipments of farmed fish failed to pass through customs and were returned.

The import ban showed signs of running counter to the trade liberalisation spirit of the World Trade Organisation (WTO) and the ASEAN Economic Community, of which both countries are members, he said.

In the press release, the Cambodian Ministry of Agriculture, Forestry and Fisheries said it will continue to collect feedback from the Cambodian Aquaculture Association, importers and exporters, and concerned agencies that are Cambodia’s trade partners to build and recognise technical standards.

Le Bien Cuong, head of the Vietnamese trade affairs office in Cambodia, told the Vietnam News Agency on February 8 that the Cambodian side has shown its goodwill and active response.

Cambodia would consider imposing additional non-tariff technical measures in farmed fish import, including certificates of product origin and quality, he said.

According to the Vietnamese ministry, in recent years, Vietnam has exported about 60 million USD worth of aquatic products to Cambodia annually. Although Cambodia is not a major market of Vietnamese aquatic products, its stable import demand has contributed significantly to cross-border trade development, as well as job creation and income generation for local residents./.

VinFast acquires licence to test self-driving electric vehicles in California

VinFast has just become the 57th automaker to receive a licence to test self-driving electric vehicles in California, the US.

The company said its three SUV models VF31, VF32 and VF33 met the highest global safety standards including five-star ratings from the US National Highway Traffic Safety Administration and the European New Car Assessment Programme.

VinFast has just become the 57th automaker to receive a licence to test self-driving electric vehicles in California, the US.

Automakers, including big names such as Apple, Tesla, BMW, and Volkswagen according to California’s Department of Motor Vehicles website, have also secured their licences to test run their vehicles in the Golden State, the world’s largest technology and innovation hub.

All three of the company’s models are to be equipped with level 2-3 autonomous features, which include 30 smart features divided into seven groups: intelligent steering assist system, lane control system, active journey control system, multi-point collision warning system, comprehensive collision mitigation system, intelligent automated parking system and driver monitoring system.

Models VF32 and VF33 will be sold in the US, Canada and Europe markets from 2022. The launch of high-tech electric vehicles, including electric scooters, electric buses and personal electric cars, is part of VinFast’s pre-defined roadmap since entering the automotive market three years ago.

Customers can start ordering the cars in May this year in Vietnam and in November in the US, Canada and the EU.

In Vietnam, Vietnamese automakers also started to install electric vehicle charging stations at commercial centres at Vinhomes Ocean Park, Vincom Long Bien in Hanoi to serve the first electric cars produced, expected to be available this year.

VinFast sold 31,500 cars in Vietnam last year, with its VinFast sedan and SUV models among the bestsellers in their respective segments./.

Agricultural, forestry, fisheries exports up sharply in January

Vietnam’s exports of agricultural, forestry, and fisheries products grew 27.1 percent year-on-year to 3.49 billion USD in January.

Rubber was the best performer in the opening month of the year, following on from its uptrend last year and totalling 200,000 tonnes worth 321 million USD, increases of 2.2-fold and 2.4-fold, respectively, year-on-year.

Shipments of key forestry products totalled 1.33 billion USD, up 47.8 percent year-on-year. Exports of wood and timber products alone reached 1.25 billion USD, up 48.4 percent.

Fisheries exports rose 19.6 percent to about 600 million USD, following repeated declines last year, especially after the outset of COVID-19.

Prawn exports experienced the highest growth last year among all fisheries items, up 11 percent to 3.7 billion USD.

Several major export earners, meanwhile, declined in January, including rice, fruit and vegetables, coffee, and pepper.

The country exported around 280,000 tonnes of rice for 154 million USD in the month, down 29.5 percent and 20.2 percent, respectively, from a year earlier.

A similar trend was seen in fruit and vegetables, with shipments reaching just 260 million USD, a year-on-year decline of 7.6 percent./.

Da Nang developing supporting industries

The central city of Da Nang has set a goal of developing supporting industries in tandem with high-tech industry to create products with high added value for export.

Under action programme No 01-Ctr/TU issued by the municipal Party Committee on December 10, 2020, the industry-construction sector is to grow by 11-11.5 percent annually between 2020 and 2025.

The municipal Department of Industry and Trade has reported that several large-scale projects in supporting industries have gradually joined the global supply chain.

Since 2016, Da Nang has attracted 24 new supporting industry projects worth over 9 trillion VND, two of which are foreign-invested, with 240 million USD, specialising in manufacturing aviation and automobile spare parts.

Da Nang is now home to around 110 supporting industry firms, accounting for 6.3 percent of all industrial enterprises in the city.

However, the number of domestic companies in the field remains limited, and most are of small scale with average technological capabilities. Meanwhile, foreign firms mostly process and assemble imported materials because the rate of domestically-made items remains low. Links between foreign and domestic businesses, meanwhile, are still less than needed.

General Director of the Long Hau Company, Tran Hong Son, said a number of local companies have yet to meet requirements for being recognised as supporting industry enterprises or manufacturers under Vietnam’s regulations.

He suggested quickly completing planning for an area devoted to supporting industry enterprises inside the Da Nang Hi-tech Park (DHTP) and putting it into operation to attract capable investors.

Head of the management board of the DHTP and industrial parks in Da Nang, Pham Truong Son, said the municipal People’s Committee has completed the planning for a supporting industrial park in the DHTP, which has been submitted to the Prime Minister for approval.

Once approved, Da Nang will outline a list of sectors in need of investment and then set up the park, the first of its kind in supporting industries in the city. Investors in the park would work with those at DHTP to create an industrial ecosystem.

If Da Nang develops supporting industries, investment will also pour into nearby localities, he said.

Under Politburo Resolution No 43/NQ-TW, Da Nang is to be a nucleus of the central key economic region and will develop hi-tech industries and information technology. To this end, Son suggested making the best use of its geographical location, infrastructure, human resources, and supporting industry.

Under the pending plan, the supporting industrial park is to cover an area of over 102 ha in Hoa Vang district, adjacent to the DHTP and the city’s information technology park.

In line with Resolution No 01-NQ/TU from the standing board of the municipal Party Committee, supporting industry enterprises will increase in number by 2030 and be capable of producing highly-competitive products, focusing on spare parts, software, and key services in support of priority industries. The city will also attract multi-national groups to guide and facilitate technology transfer.

By 2025, the city expects to have over 150 supporting enterprises, with at least 10 percent of domestic supporting enterprises being able to supply products to manufacturers. The value of the supporting industry will make up around 30 percent of added valued in the manufacturing and processing sector. At least one multi-national group or company is to invest in manufacturing end products.

Of the more than 300 supporting enterprises to be in business by 2030, at least 15 percent are to be able to directly supply products to manufacturers and assemblers. The value of the supporting industry will account for nearly 40 percent of added value in the manufacturing and processing sector and at least one multi-national group or company will invest in manufacturing end products./.

Source: VNA/VNN/VNS/SGGP/VOV/NDO/Dtinews/SGT/VIR