Unfair trading practices in the food supply chain

The Hanoitimes – It is important to avoid stagnation during the transportation process of input materials for production and of agricultural products in Covid-19-hit-areas, Deputy Prime Minister Trinh Dinh Dung has said.

Deputy Prime Minister Trinh Dinh Dung instructed local authorities to soon clear the hurdles for the smooth distribution and sale of farm produce affected by the Covid-19 pandemic.

People in Danang are buying farm produce from Hai Duong province. Photo: Quang Hai.

Over the past few days, the fact that Hai Duong province became a pandemic hotspot has caused difficulties for traders to ship agricultural products out of the province, due to strict anti-Covid-19 measures imposed by neighboring localities.

Under this context, Deputy PM Dung requested related government agencies and provinces/cities, including the Ministry of Health, Ministry of Transportation, and Ministry of Agricultural and Rural Development, to create favorable conditions for the movement of goods for timely exports and distribution.

“This is particularly important for input materials for production and agricultural products in Covid-19-hit-areas,” said Dung, adding it is important to avoid stagnation during the transportation process and  disruption to economic activities.

Meanwhile, the Ministry of Industry and Trade is tasked with promoting and expanding consumption markets for Vietnamese goods and products  both at home and abroad.

A report from Hai Duong Department of Industry and Trade revealed over 90,000 tons of agricultural products are facing sales stagnation.

“If not properly resolved, the issue could impact the supply chains and cause disruption to economic activities of multiple provinces/cities,” said Pham Thanh Hai, director of Hai Duong Department of Industry and Trade.

According to the MoIT, the main reason is that drivers from high risk areas are required to have Covid-19 negative testing result certificate, but health facilities currently only carry out such tests for people under quarantine, and not open for on-demand.

“Certain provinces do not accept testing results from private health facilities,” stated the MoIT, referring to the fact that the Hai Duong Center for Disease Control (CDC) was designated by Hai Phong’s authorities as the only qualified center for Covid-19 testing.

The MoIT also raised concern from the lack of a uniform safety procedure during the production and distribution of agricultural products from Covid-19 zones to other localities, leading to  conflicting measures from cities and provinces.

The Hanoitimes – Vietnam has been on way to pursue an energy transition that reduce carbon emission and develop renewable sources in an effort to combat climate change .

Liquefied natural gas (LNG) has been considered a source of energy that is able to meet Vietnam’s rising power demand and clean enough in comparison with coal power which the country is advised to minimize from now on.

Vietnam has been on way to pursue an energy transition that reduces carbon emission and develops renewable sources in an effort to combat climate change and there will be room in the country’s mix for fossil fuels as long as they are clean, a local expert has said.

Dang Huy Dong, president of Vietnam’s Planning and Development Institute. Photo: MPI

“Gas is by far the cleanest fossil fuel,” Dang Huy Dong, president of Vietnam’s Planning and Development Institute, said at the Future Energy Asia 2020 forum in Bangkok last month.

Gas, particularly LNG, is the only meaningful solution for Vietnam to reduce emissions in the context that the potential of hydropower is almost exhausted while solar and wind power are not reliable enough, the Bangkok Post quoted Dong as saying.

“Only gas could provide Vietnam with a practical energy supply, in particular LNG,” according to Dong, who is a former deputy minister of Planning and Investment.

He attributed the choice of gas to falling fuel prices, improved efficiency and technologies. At the same time, the price of coal-fired power is rising due to supply and financial limitations.

For the aforementioned reasons, Dong believes Vietnam needs to move away from coal to other sources, as China and many other countries are doing.

“In the interests of environmental protection and sustainable development, more and more provinces in Vietnam are demanding a change from coal projects to LNG power projects,” he said.

Vietnam’s power demand and the government’s choice

Vietnam’s energy sources. Data: MOIT/Bangkokpost. Chart: Linh Pham

Currently, coal-fired power plants generate about 39% of the electricity consumed in Vietnam. Hydropower accounts for 35%, gas-fired power 18.5%, and renewables 7.2%.

Over the past decade, hydropower generating capacity has recorded the highest growth rate in Vietnam. The country now has 5,500 megawatts (MW) solar capacity, representing 40% of all such capacity in Southeast Asia. This suggests a boom in renewable energy projects in Vietnam, where more attractive feed-in tariff (FIT) policies have been introduced for solar and wind power.

However, as the second largest power market in ASEAN, the country of 95 million is facing a critical supply challenge, with a need to triple capacity by 2030, the expert said.

“Rapid urbanization and industrialization have driven up electricity consumption in Vietnam dramatically,” he said, adding that southern Vietnam was at risk of being undersupplied.

In addition to expanding capacity, Vietnam has encouraged energy efficiency and renewable energy, reduction of CO2 emissions and creation of an energy market through the country’s eighth National Power Development Master Plan for the 2021-2030 period.

Furthermore, the government sees an efficient and reliable power supply as critical for socio-economic development. In 2016, it abandoned plans for nuclear development, citing safety concerns following the 2011 Fukushima disaster in Japan. It has resulted in a shift in long-term planning to include other sources to replace the planned nuclear capacity.

Remarkably, Vietnam is also interested in greater integration of power development throughout Southeast Asia, deploying cheaper sources as well as optimizing system operations.

“I think this is somewhat in line with the (goals of) interconnectivity and interconnection within ASEAN,” Dong emphasized.

The Hanoitimes – On the occasion of the 25th anniversary of the US-Vietnam diplomatic relations, US companies shared with Hanoitimes their expectations about opportunities for their investment expansions in Vietnam.

Dr. Mason Cobb, chairman of Victoria Healthcare International Clinics

After Vietnam achieved the middle income status and ODA decreased, the Vietnamese government became more accommodating for investment and that continues to this day.

Dr. Mason Cobb, chairman of Victoria Healthcare International Clinics

However, it is still not a truly level playing field with local companies. The attitude and perception, and spirit of cooperation has become much warmer and more understanding than during that difficult middle period.

More importantly, the company’s mission in healthcare as primarily helping Vietnam build a world-class healthcare system. To that end, the company brings Vietnamese to the US and bring educational and other assets to Vietnam to help increase understanding and skills.

AmCham Healthcare Committee Mission has stated: “We are a key strategic partner for promoting health and wellness and shaping the healthcare industry in Vietnam.”

Regarding the healthcare sector, I think there are still regulatory hurdles that could dampen investment atmosphere. For example, the Ministry of Health has proposed that all foreign doctors must speak fluent Vietnamese. In effect, there would be an exodus of international healthcare and its standards. This will inhibit achieving a truly international standard for healthcare here by essentially expelling international influences.

Vietnam is quite unique in its “healthcare consumer”: several attempts from highly developed countries have floundered for not understanding the Vietnamese patient’s unique perceptions. In the best of conditions this must be carefully considered by foreign healthcare investors.

Vietnam has shown itself to be best in the world at handling the Covid-19 pandemic. This has spawned a motivation to make the Vietnamese healthcare system world-class. Individual patient healthcare is quite different, however, and Vietnam will at once be both motivated but headstrong with a tendency to both court foreign investment and discount their contribution.

In fact, continuing a cooperative and supportive relationship with the international medical community is the shortest and surest path to the goal of world-class healthcare.

Decreasing the regulatory burden and reinforcing fair application of rules. Easy access to decision makers in the Vietnamese government is also key.

We will continue to grow and develop our reach and technical skills. We will also invest in human capital with input from the US. We can really contribute to healthcare in Vietnam through a more integrated system, incorporating retail pharmacy, insurance, education, and patient care as a seamless system that is both very efficient and patient-friendly.

Nguyen Ba Luan, country president of Cargill Vietnam

The Vietnamese government should be commended for transforming the country over many years from a centrally planned into a market economy. This transformation has dramatically increased US foreign investment in Vietnam.

Nguyen Ba Luan, country president of Cargill Vietnam

The approach by the Vietnamese government to attract foreign investment and encourage open and free global trade has benefitted the Vietnamese economy and its agricultural and food sector. It has enabled more foreign investment and Cargill has invested heavily in Vietnam since 1995, after the significant event of the normalization of the diplomatic relationship between Vietnam and the US.

The transformation of Vietnam economy by the government has enabled Cargill to grow its business significantly in the country over the past 25 years and now has over 1,500 employees working across 23 locations. Cargill remains committed to conducting its business in the country with the highest level of integrity, accountability and responsibility.

US companies in Vietnam, who can demonstrate social tangible benefits by not only growing the Vietnamese economy but have a strong local Corporate Social Responsibility program improve the relationship between the two countries.

Cargill also enhanced diplomacy between the two countries by acting as a conduction between the US and Vietnam agricultural and food sector by bringing best practices to the Vietnamese sector and working through two-way trade issues as they arise.

While the Vietnamese government is to be congratulated for its on-going efforts in attracting foreign investment, further supporting incentives in the form of tax schemes will encourage more foreign investment.

Further reform of its legal framework relating to business and foreign investment is encouraged and the continuation of aligning the country with international food, export and import standards and practices will give US companies more confidence to grow and invest in Vietnam.

The continuation of building an advanced and integrated transport infrastructure will not only greatly improve the Vietnamese economy but will attract further investment from US companies especially in the Food & Agricultural sector.

Further alignment of policies with international standards, expansion of tax investment schemes and improvements to legal business framework and regulations and policies will go a long way in making Vietnam a for attractive destination for US companies looking to invest.

Also, continuation of dialogue between the Vietnamese government and US companies in Vietnam on policy reform, global best practices and any regulation, legal or policy obstacles will continue to attract further foreign investment by US companies.

Vietnam is important to Cargill globally. We continue to see tremendous opportunity in Vietnam and we intend to keep investing in and growing our business here, both in terms of capacity and capabilities, talents and communities as we fulfill our purpose of nourishing the world.

The Hanoitimes – LNG is believed to be a major source in Vietnam’s power mix capacity of roughly 130 GW by 2030.

Vietnam has drafted a new master power development plan in which liquefied natural gas (LNG) will be a major source of energy for the country with two-digit annual energy demand growth by 2030.

LNG is a major source in Vietnam’s power mix energy by 2030. Photo: PV GAS

Vietnam’s Institute of Energy has compiled a list of 22 LNG power plants with the first to be operational by 2023.

To make the goal achievable, Vietnam has planned to develop infrastructure capable of importing 8 billion cubic meters (cu.m) of LNG a year by 2030, including LNG from the US that has a widening trade imbalance with Vietnam.

The following proposed LNG projects in Vietnam will provide an overview on the country’s LNG landscape in the future, Reuters has reported.

1/ Thi Vai LNG Terminal & Nhon Trach 3, 4 Power Plants is located in the southern province of Ba Ria-Vung Tau and invested by Petrovietnam Gas Joint Stock Corporation (PV GAS).

Its capacity for the first phase is 1 million tons per year (tpy) of LNG scheduled to be completed by 2022 and to be raised to 3 million tpy by 2023.

PetroVietnam Power Corporation (PV Power) has approved a US$1.4 billion plan to build the Nhon Trach 3 and 4 gas-fired power plants in neighboring Dong Nai province with a combined capacity of between 1,300 megawatts (MW) and 1,760 MW.

The plants, which will use 1.4 million tpy of LNG, are scheduled to become operational from 2023 and 2024, making them the first LNG-to-power facilities in Vietnam.

LNG: PV Gas has signed master sales agreements with Shell Singapore, a unit of Royal Dutch Shell, and Gazprom Marketing and Trading Singapore (GMTS), a unit of Gazprom, for supply of LNG.

Status: The project is under construction.

2/ Khanh Hoa Petrolimex Terminal Project is located in the central province of Khanh Hoa and invested by Vietnam National Petroleum Group (Petrolimex)

The combined capacity of four power plants is 6,000 MW to be built by state utility Electricity of Vietnam (EVN).

LNG: The complex has 180,000-cubic-meter LNG storage facility

Status: Petrolimex signed an agreement with Japan’s then JXTG (now Eneos Holdings) in July 2019 to compile an LNG & Gas Development plan, including the development of the complex.

3/ Ca Na LNG Power Complex is an EVN project located in the central province of Binh Thuan.

The first phase of the project is 1,500 MW expected to become operational in 2025-2026.

LNG: The complex will use LNG imported via a terminal to be developed at the nearby Ca Na Port.

Status: The project is available for investors.

4/ Bac Lieu LNG-to-power Complex is located in the southern province of Bac Lieu by Singapore-based Delta Offshore Energy Pte Ltd.

The power plant capacity is 3,200 MW.

LNG: The complex includes either a floating storage unit or a floating storage regasification unit with capacity of 150,000-174,000 cu.m and 35 kilometers of pipelines.

Status: Construction work on the US$4 billion project is scheduled to start in 2021 and the completion is slated for 2024. It will be the first large-scale LNG project to be developed by a foreign investor.

5/ Son My 2 LNG Power Plant is developed by US-based AES Corp in the central province of Binh Thuan.

The power plant capacity is 2,200 MW.

LNG: will be imported via the nearby Son My LNG terminal which will be built by PV GAS. The terminal has an initial throughput capacity of 3.6 million tpy.

Status: Memorandum of understanding for the US$1.7-billion project was signed in 2019. It is due to become operational in 2026 or 2027.

6/ Son My 1 LNG Power Plant is a project developed by EDF, Sojitz Corp, Kyushu Electric Power Co and Pacific Corp to be located in the central province of Binh Thuan.

Capacity of the power plant is 2,000 MW.

LNG: The facility is estimated to use 0.57 million tpy of imported LNG which will be transported via nearby Son My LNG Terminal.

Status: The power plant is expected to put into operation in 2027.

7/ Long Son LNG Power Complex is a US$3.78 billion project in the southern province of Ba Ria-Vung Tau to be invested by EVN and possibly units of Mitsubishi Corp and General Electric.

The power plant’s capacity for the first phase is between 1,200 MW and 1,500 MW once the facility is put into operation in 2025-2026.

LNG: will be imported via the nearby Long Son LNG terminal, which has a capacity of between 3.5 million and 4.4 million tpy.

Status: Authorized agencies are selecting investors.

8/ Ca Mau 3 LNG Power Plant is a project by PV Power located in the southernmost province of Ca Mau.

With an investment of US$1.51 billion, the power plant with capacity of 1,500 MW and scheduled for operation by 2026-2027 is put in a halt.

9/ US-Vietnam Joint Venture Chan May LNG in the central province of Thua Thien-Hue will be developed by Chan May LNG JSC, a US-Vietnam joint venture.

The power plant’s capacity is 4,000 MW.

LNG: Construction of the US$6-billion complex, which includes an LNG terminal and storage facilities, is scheduled to begin in 2021, with the first phase of 2,400 MW expected to come on line by 2024.

Status: Memorandum of understanding for the project has been signed.