Launching new clothing brand

Vietnam’s benchmark VN-Index rose 3 points on June 3 to reach a record-high of 1,340.78 points.

Liquidity on the Ho Chi Minh Stock Exchange (HOSE) also posted a new record of nearly 26.14 trillion VND (1.13 billion USD).

The southern bourse saw 222 codes rising, 187 codes declining, and 49 remaining unchanged.

The HNX-Index on the Hanoi Stock Exchange, meanwhile, rose 3.58 points to 322.05 points, also a new high.

Liquidity stood at more than 4.41 trillion VND. It had 112 codes increasing, 79 declining, and 80 staying flat.

The UPCOM-Index (Unlisted Public Companies Market) gained 0.52 points to 89.39 points, with more than 2.11 trillion VND injected into the market, equivalent to over 117.1 million shares traded.

In the market as a whole, liquidity stood at a record of more than 32.67 trillion VND.

In the first five months of this year, domestic investors opened 480,490 new securities accounts, 20 percent higher than the figure of the whole year of 2020./.

FDI inflows into IPs and Ezs surge over five-month period

Industrial zones (IPs) and economic zones (EZs) nationwide attracted a total of 291 foreign direct investment projects during the five-month period with newly-registered and additionally increased capital reaching approximately US$6.02 billion, a year-on-year increase of roughly 10.3%.

According to details given by the Ministry of Planning and Investment, industrial zones and economic zones across the country have had roughly 10,853 valid foreign direct investment (FDI) projects during the opening five months of the year with total registered capital reaching US$228.4 billion, of which FDI disbursement was at some 69.6%.

During the reviewed period, there were 38 investment projects on construction of IP infrastructure, thereby bringing the total number of established local IPs to 394.

In line with the master planning for the development of Vietnamese coastal economic zones until 2020, with a vision ahead to 2030, the nation is set to have 19 coastal economic zones with a total area of 871,500 hectares.

Digital transformation – key to bringing local agricultural products to global market

Digital transformation is widely considered to be a crucial solution in both production and trade activities, thereby helping to introduce Vietnamese agricultural products to the international market.

With lychees currently entering the harvest season, the Ministry of Industry and Trade has recently co-ordinated alongside major domestic and foreign e-commerce platforms, such as Alibaba, Lazada, and Sendo to help farmers sell their products.

According to details given by the Vietnam Trade Promotion Agency, roughly three tonnes of Thanh Ha lychees from Hai Duong have been sold on Lazada since May 14, while six tonnes of lychees were sold through the Sendo trading platform on May 24.

Hoang Minh Chien, deputy director of Vietnam Trade Promotion Agency, underscored the importance of applying modern technologies, especially digital platforms, in production activities as a means of boosting economic efficiency.

This comes following plums and Yen Chau mangoes from the northern province of Son La being listed on Shopee and subsequently being distributed in Hanoi and Ho Chi Minh City.

All products listed on e-commerce platforms have received support from the Vietnam Trade Promotion Agency in relation to boosting product traceability, labeling, and transparency of their products.

Dao Ha Trung, chairman of the Ho Chi Minh City High-Tech Association, said that promoting the application of technology is an inevitable trend and plays a crucial role in bringing local agricultural products to consumers in both domestic and international markets in a more convenient manner.

Vietnam, China to speed up customs clearance for fresh fruits

Competent forces of Vietnam and China on June 2 reached consensus on plant quarantine to simplify procedures and shorten customs clearance time for fresh fruit exports.

During their talks on same the day, the two sides discussed fruit quarantine activities at border gates over the past time, focusing on quarantine for Vietnam’s fresh fruits to be exported to the neighbouring country in the time ahead.

Accordingly, China’s customs and quarantine agencies will examine Vietnamese fruits randomly, and exempt check-up for fresh lychees from Vietnam.

Vietnam has exported nine types of fruits to China, namely dragon fruit, longan, mango, lychee, banana, jackfruit, rambutan, watermelon and mangosteen. However, eight of them have been subject to plant quarantine as the two sides have yet to sign agreements on this regard.

Given the complex developments of the COVID-19 pandemic, the two sides agreed to study the possibility to build a joint mechanism to speed up plant quarantine at border gates./.

Cement exports soar by 50 per cent

A cement production line at La Hien Cement VVMI JSC in the northern province of Thai Nguyen.

Cement consumption is estimated at 45.83 million tonnes from the beginning of the year, up about 16 per cent year-on-year.

Consumption in the domestic market reached about 26.57 million tonnes, a year-on-year growth of 9 per cent.

Data from the Building Materials Department, Ministry of Construction, estimated cement consumption would reach about 10.79 million tonnes last month, up about 12 per cent from last year.

Domestic consumption was about 6.49 million tonnes and exports estimated at 4.3 million tonnes.

In terms of prices, the domestic price of cement last month is comparable to that of April. Meanwhile, export prices saw a slight increase.

Explaining the strong growth in cement export volume, Luong Duc Long, vice president cum general secretary of the Viet Nam Cement Association (VNCA), said the country had expanded its cement exports in developing countries.

However, Long also said exports of cement to these markets were unsustainable because these countries were also focusing on developing the domestic cement industry to meet the demand for domestic cement consumption.

Therefore, Viet Nam’s cement manufacturing and exporting enterprises should focus on improving their competitiveness and product quality in the export markets to be more stable and sustainable.

US gives preliminary conclusions on anti-dumping of local PTY products

The Trade Remedies Authority under the Ministry of Industry and Trade has received information regarding the US Department of Commerce making preliminary conclusions on the anti-dumping investigation into Polyester Textured Yarn (PTY) products of Malaysia, Indonesia, Thailand, and Vietnam.

Most notably, the preliminary dumping margin of Indonesian enterprises ranges from 7.45% to 26.07%, while that of Thai enterprises hovers between 14.8% to 56.08%. Meanwhile, all Malaysian businesses are subject to a flat tax rate of 17.35%.

After issuing the preliminary conclusions of the case, according to the practice of previous cases, the US Department of Commerce (DOC) may choose to conduct on-site verification of firms in the near future as a means of verifying the information submitted in the questionnaire.

Despite these plans, due to the impact of the novel coronavirus (COVID-19) pandemic, the DOC have announced that it will not conduct on-site verification, but will instead require businesses to provide additional information in order to verify data before making a final conclusion.

Therefore, the Trade Remedies Authority recommends that in the future relevant PTY yarn manufacturers and exporters continue to co-operate closely with the investigation agency and the Trade Remedies Authority as a means of ensuring positive results.

The investigation was initiated by the DOC on November 17, 2020, with the DOC expected to issue a final conclusion before October 9.

IIP grows 10% in May

The index of industrial production (IIP) grew by 9.9 per cent in the first five months of this year over the same period last year.

By sector the processing and manufacturing industry increased by 12.6 per cent; the electricity production and distribution industry increased by 8.3 per cent; water supply, drainage and waste treatment 7.5 per cent; while the mining industry fell by 7 per cent.

Among the secondary industries, a number of key industries had a high production index in the five months compared to the same period last year.

Metal production grew by 38 per cent; motor vehicle production 35 per cent; production of beds, wardrobes, tables and chairs 18.3 per cent; and production of electronic products, computers and optical products 15.5 per cent.

In the opposite direction, a number of industries saw a decrease. Crude oil and natural gas exploitation dropped by 11.5 per cent; print, copy records of all kinds 5.1 per cent; hard coal and lignite mining 3.8 per cent; drainage and waste treatment 1.6 per cent; production of coke and refined petroleum products 0.4 per cent.

The number of employees working in industrial enterprises as of May 1 rose by 1.2 per cent compared to the same period last month and by 2.2 per cent over the same period last year.

Industrial production last month was estimated to grow by 1.6 per cent over the previous month and 11.6 per cent over the same period last year despite the complicated developments of the COVID-19 pandemic from the end of April, which directly affected a number of industrial zones in the two provinces of Bac Giang and Bac Ninh.

Of which, the mining industry dropped by 6.4 per cent month-on-month and by 9.8 per cent year-on-year; processing and manufacturing rose by 2.6 per cent and 14.6 per cent respectively.

Electricity production and distribution increased by 12 per cent year-on-year; and water supply, drainage and waste treatment increased by 6.8 per cent.

Consumer debts put for sale for first time in Viet Nam

Commercial banks have made public the sale of unsecured consumer debt for the first time in the country.

Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank) recently announced it would sell consumer loans to recover debts. Accordingly, the debts belong to many borrowers and are valued from VND1.68 million to VND17.58 million. The book value of the debts includes principal, interest and penalties.

Notably, these consumer debts are unsecured and the starting price is equal to the book value. The bank also requires deposits equal to the starting selling prices from customers who want to buy the debts.

The sale of unsecured consumer debts is uncommon in Viet Nam as previously banks often made public only bad debts for sale to handle and recover them, and they always had collateral such as real estate, machinery, equipment, factories and cars.

According to a representative of VietinBank, selling consumer debts is one of the bank’s legal business operations to handle and recover debts. Though the debts aren’t non-performing loans, banks can still sell them.

Financial expert Huynh Trung Minh said customers often repay consumer debts on time, such as instalment purchases or small consumer loans, so the bad debt ratio of such loans is very low.

Minh believed the sale of consumer debts are useful for buyers who would like to have the address and information of the borrowers so they can enlarge their database and access new potential customers. In foreign countries, the refinancing business segment, or relending to customers who are in debt but solvable in the future, is common and profitable.

However, according to another financial expert and lawyer Truong Thanh Duc it is not easy to sell consumer debts at full cost of principal, interest and penalties because the sale seems less attractive than that of bad debts. Currently with bad debts with collateral, banks can only sell them at a price equal to only 50-70 per cent of book value.

Recently, commercial banks and financial companies have promoted the consumer lending segment to meet the urgent capital needs of people. In particular, the Government also encouraged the development of consumer lending in a move to fight against usury.

Though consumer lending has been thriving with increasing risk of bad debts, financial expert Dinh The Hien said there had been no legal debt trading market in this segment. After the Government banned the debt collection service, financial companies and banks have to deal with bad debts from consumer loans by themselves.

According to experts, if VietinBank’s sale of consumer debts succeeds, it can stimulate other banks to follow suit, thereby creating a more bustling consumer loan trading market, contributing to handling bad debts from this segment.

VIB increases charter capital, issue bonus shares at 40%

The Vietnam International Bank (VIB) has announced its plan to issue 40 per cent bonus shares to increase charter capital to over VND15.5 trillion (US$665 million).

The plan was published by the bank on Monday after receiving approval from the State Bank of Viet Nam and the State Securities Commission.

As per the plan, each shareholder who owns 100 existing shares will receive 40 new ones. Shareholders should register to receive bonus shares no later than June 10, according to the bank.

Currently, VIB shares are traded at around VND64,300 apiece, up nearly 100 per cent compared to the beginning of this year. VIB now ranks 18th in the group of companies with the largest market capitalisation at over VND70 trillion.

VIB continues to affirm its impressive business performance thanks to the diversified credit portfolio that has helped reduce concentration risks, especially the negative impact of the COVID-19 pandemic.

As of May 2021, the bank’s bad debt ratio was as low as 1.25 per cent while its restructured debt balance for COVID-19 affected borrowers decreased to about VND200 billion, accounting for 0.1 per cent of the total outstanding loans.

Earlier on March 26, Moody’s Investors Service upgraded the credit rating outlook of VIB to “positive” from its previous “stable”. According to Moody’s, VIB had a stable asset quality and high profitability while ensuring sufficient capital sources for sustainable development.

VIB is known as a leading retail bank with an average annual growth rate of over 50 per cent over the past five years. The retail outstanding balance was 87 per cent of total outstanding balance, of which over 95 per cent of retail loans have collateral. VIB is one of few banks with such a high proportion.

The bank has kept leading in growth rate with four key products of auto loans, mortgages, bancassurance and credit cards. VIB has also held the No 1 position in terms of auto loans and bancassurance market share for many years.

Meanwhile, VIB has also pioneered in digital transformation thanks to its focus on developing digital banking and products with high technology and automation content. The bank’s MyVIB app has been recognised as the best digital banking application of the year and the best customer experience in Viet Nam by The Asset magazine for four consecutive years.

In April, VIB launched VIB Online Plus 2in1 – the first integrated credit card and payment card line in Southeast Asia. That marked the pioneering step of a Vietnamese bank in cashless payment in the region.

MOF extends fee cuts to support listed firms until end of 2021

The Ministry of Finance (MOF) just announced the extension of Circular 14/2020/TT-BTC issued on March 18, 2020 for another six months to cut fees for fifteen securities services, the State Security Commission of Viet Nam said.

The aim is to support the country’s stock market amid a surge in COVID-19 cases.

Accordingly, nine services’ fees will be reduced by 10 – 50 per cent and six others will be exempt.

Previously, Circular 14/2020/TT-BTC was extended once under Circular 70/2020/TT-BTC issued on July 17, 2020. Of which, charges for securities services will be reduced or exempt for 10 more months, from August 31, 2020 to June 30, 2021.

After December 31, all fees for securities services applied at stock exchanges and Viet Nam Securities Depository Centre will be in force under Circular 127/2018/TT-BTC.

POW faces risk of being kicked out of VN30-Index

PetroVietnam Power Corporation (POW)’s market capitalisation has fallen significantly for more than a year, meaning its shares might be eliminated from the VN30-Index during assessments.

On Tuesday, POW shares were traded at VND12,100 per share, making VND27.4 trillion (US$1.2 billion) in market capitalisation.

With the value, PetroVietnam Power is standing in 36th in the top listed companies on the Ho Chi Minh Stock Exchange (HoSE) with the greatest market capitalisation. The rank was down sharply since January 2020 when it was in the top 20 companies by market capitalisation and listed in the VN30-Index, which tracks the 30 biggest stocks on HoSE.

The downgrade in POW’s rank was not due to the decrease of its stock price as the price is similar to late 2019.

The reasons were that the market has recorded the appearance of the series of companies with high market capitalisation and many shares have surged tens to hundreds of per cent since early 2020.

Some companies that were listed after PetroVietnam Power, like Vietnam Rubber Group JSC (GVR), is worth VND113.4 trillion (US$4.9 billion), standing in the top 13 companies by market capitalisation.

Especially, a series of banks that were newly listed or transferred from other exchanges like Vietnam International Commercial Joint Stock Bank (VIB), Asia Commercial Bank (ACB) and SEABank (SSB) all surpassed PetroVietnam Power in market capitalisation.

With the current rank, PetroVietnam Power’s position will be threatened during the portfolio assessment of the VN30-Index this July.

According to regulation version 3.0 issued on November 9, 2020, the assessment is based on criteria including listing date, liquidity, and stocks rank from 21 to 40 by market capitalisation in the last 12 months. Also those in the VN30 basket in the previous assessment will get priority, then come newly listed stocks.

However, with the downgrade to the bottom rank in the priority group, if POW share prices don’t improve soon, there is a risk of being kicked out of the VN30-Index.

The VN30-Index is an important index that attracts many passive funds as the country’s stock market rises dramatically.

Bank stocks witness upswing in prices

Bank stock prices have witnessed a dramatic increase since the end of March after plenty of banks announced positive first-quarter business results, as well as news on rising mergers and acquisitions (M&A).

Among the listed banks, Vietnam Prosperity Commercial Joint Stock Bank (VPB) has been the strongest performer in the stock market since the beginning of this year. VPB closed the trading session on December 31 at VND32,500 (US$1.41) per share, it now is being traded at VND67,600 per share, equivalent to an increase of 108 per cent.

VPB’s gain was attributed to the news that VPBank has sold 49 per cent of its charter capital at FE Credit to Japan’s SMBC Group at a valuation of $2.8 billion. VPB shares are also attractive thanks to its leading position in the consumer finance segment and the private placement plan for foreign strategic partners.

Lien Viet Post Commercial Joint Stock Bank (LienVietPostBank) has also witnessed an increase of more than 104 per cent since the beginning of this year, currently trading at VND25,400 per share.

Nguyen Duc Thuy, a founding shareholder of Thaiholdings Joint Stock Company (THD), has officially been elected as Vice Chairman of the Board of Directors of LienVietPostBank since early May.

After less than a year after listing, the market price of THD has increased 13 times, from the reference price on the first trading day of VND15,000 per share to VND197,100 per share on May 26 this year.

At LienVietPostBank’s 2021 Annual General Meeting of Shareholders held at the end of April, shareholders shared that they hope the same gain will also happen to the bank’s shares.

Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank) also underwent an increase of more than 74 per cent since the beginning of this year. Vietnam International Commercial Bank (VIB) rose by 94 per cent compared to the end of 2020; Southeast Asia Commercial Joint Stock Bank (SSB) gained by 84 per cent so far this year and has maintained its upward momentum after two months of listing on HOSE.

National Commercial Joint Stock Bank (NVB) witnessed an impressive increase of more than 80 per cent and Vietnam Joint Stock Commercial Bank for Industry and Trade (CTG) rose 49 per cent so far this year.

In a recent report, SSI Securities Joint Stock Company said that banks’ plan to raise charter capital can be a supportive factor for the movement of bank stock prices from now until the end of 2021.

In 2021, there are about 16 banks with plans to increase their charter capital significantly, according to the report. Specifically, charter capital at these banks will be increased by VND82.7 trillion, up 31 per cent compared to 2020. Of the estimate, about 75 per cent will be increased through stock split; 22 per cent from private placement and the rest is through the employee stock ownership plan (ESOP).

From 2020, the State Bank will tighten the payment of cash dividends by banks. Instead, the State Bank encourages them to pay dividends in stock.

Laptop, computer prices on the rise

Due to the scarcity of goods and components, the price of laptops, computers and accessories has increased in local retail stores, and the trend looks set to continue.

A representative of The Gioi Di Dong (Mobile World) told VnEconomy online newspaper said that due to the scarcity of chips, it had slightly increased the price of some new models and might increase the price of other models in the near future.

A retailer said that normally, for many laptop and computer models, the price would gradually drop after three to six months after launching. But from the beginning of this year, the price of laptops and computers had increased.

In the short term, demand was very large in the low-price segment under VND16 million (US$696). Meanwhile, those in the segment above VND16 million were still enjoying promotions, he added.

Nguyen The Kha, Senior Director Mobility Groups of FPT Shop, said increased prices and the shortage of components did not affect the shop much as FPT Shop had taken careful preparations for changes amid the pandemic.

Key products have been forecasted and stocked, ensuring there were always enough supplies for 30-45 days while waiting for new shipments to arrive, said Kha.

Nguyen Ngoc Dat, CEO of the retail chain Di dong Viet (Viet Mobile), shared that in the context of insufficient supply and demand, product price increases were inevitable. However, he forecast that the scarcity could be quickly overcome.

If purchasing power increases, product prices from now to the last quarter of the year might increase slightly, ranging from 1-3 per cent, an insignificant increase.

Most retail systems in Viet Nam forecast that the laptop, computer and accessories segment would be able to meet market demand by the fourth quarter of this year.

Market research firm TrendForce reported that global laptop sales exceeded 200 million units for the first time last year.

This is a new record high for the global laptop market. It is forecasted that global laptop shipments will have a chance to reach 217 million this year. Thus, personal computer (PC) growth will be 8.1 per cent compared to last year.

Meanwhile, Gartner estimated the number of PCs (including desktops and laptops) sold rose by 32 per cent in the first quarter of this year compared to the same period last year.

With the potential for demand and the growth of the laptop and computer market, many retailers are racing to expand their business chains and take advantage of new opportunities despite the COVID-19 pandemic.

For example, Viet Mobile recently opened a new store in Bien Hoa City, Dong Nai Province. To date, this retail system has up to 18 stores in HCM City and 11 stores associated with the ‘shop in a shop model’ with network operator MobiFone.

In the first quarter of this year, FPT Shop also opened 70 laptop retail centres nationwide.

Contractors of Cam Lo-La Son highway relapse contract for numerous times

A series of contractors of Cam Lo-La Son highway, a component project of the North-South Expressway, have violated committments on construction progress.

The Ministry of Transport (MoT) submitted a document to Ho Chi Minh Road Project Management Board to ask the board to carefully monitor the progress and quality of work provided by the contractors of Cam Lo-La Son section.

The MoT has also asked the management board to look for contractors to replace Hoang Nguyen Construction Co., Ltd. – the developer of the XL03 construction package. Hoang Nguyen missed its committed timeline for the third time.

Regarding contractors committing violations for the second time, the MoT asked the management board to issue a third warning to The 36 Corporation JSC, Material Equipment and Civil Engineering Construction JSC No.624 and request the contractors to deal with their violations.

At contractors, who violates the construction progress for the first time, they will be warned for the second time.

Besides, the MoT ordered these contractors to complete the delayed work before June 5 or shoulder the penalties laid out in their project contracts.

The construction of Cam Lo-La Son was kicked off in September 2020.

This section has a total investment capital of over VND7.6 trillion ($330.43 million) sourced from government bonds. The section was designed with two lanes of 12m width to run for 98km, allowing maximum travel speed of 80kmph. In the next phase from 2030-2040, the section will be expanded to 4-6 lanes.

The Cam Lo-La Son section is the first of the 11 subprojects of the Eastern part of the North-South Expressway to be constructed in 2019.

The section was scheduled for completion in 2021 to connect to La Son-Tuy Loan Expressway to form Cam Lo-La Son-Tuy Loan Expressway, diverting pressure from National Highway 1A on which traffic slows down around the Hai Van and other mountain passes while contributing to national security and fueling the development of the whole central region. However, these delays put it at risk of missing this deadline.

Strong growth in exports in first five months

Exports to key markets such as the United States, the European Union, China, ASEAN, and South Korea grew strongly in the first five months of the year.

In the first five months, export turnover of goods reached $130.94 billion, up 30.7 per cent over the same period last year.

Accordingly, the domestic economic sector reached $33.06 billion, up 16 .6 per cent and accounting for 25.2 per cent of the total export turnover. Meanwhile, the foreign-invested sector reached $97.88 billion ((including crude oil), up 36.3 per cent, accounting for 74.8 per cent.

Notably, there were 22 items with an export turnover of over $1 billion, accounting for 87.3 per cent of total export turnover. There were six items with export turnover exceeding $5 billion, accounting for 63.8 per cent.

Heavy industrial and mineral products reached $70.7 billion, up 33 per cent compared to the corresponding period last year. Additionally, light industrial products and handicrafts were estimated at $47.32 billion, up 33 per cent, while the agricultural and forestry products reached $9.69 billion, up 13.5 per cent. Finally, seafood products reached $3.24 billion, up 12 per cent.

Most impressively, exports to key markets have reached record growth. Especially, exports to the US, Vietnam’s largest export market, accounted for the largest portion with a turnover of $37.6 billion, up 49.8 per cent over the same period last year. This was followed by China with $20.1 billion (up 26 per cent), the EU with $16.1 billion (up 20.8 per cent), ASEAN with $11.5 billion (up 23.7 per cent), South Korea with $8.9 billion (up 17.1 per cent), and Japan with $8.4 billion (up 7.7 per cent).

Agricultural products the next big move in e-commerce

Putting agricultural products on online trading is growing as a new trend of the local e-commerce sector this year.

Both Lazada and Sendo have carried out several programmes to support the northern province of Hai Duong’s farmers to sell litchi products on their e-commerce platforms. According to Dang Dang Truong, PR lead at Sendo, just between May 24 and 27, a total of 12 tonnes of litchi were sold through the platform.

Similarly, at a recent conference promoting the export of agricultural products from Hai Duong held by the Vietnam Trade Promotion Agency (Vietrade), newly-established online shopping sites such as Voso (Viettel Post) and Postmart (Vietnam Post) also announced to start focusing on agricultural items instead of fast-moving consumer goods, clothes, and cosmetics like other platforms.

The new segment also lured in the involvement of startups such as Vietnam-based FoodMap and Indonesia-based TaniFund. So far, TaniFund has successfully mobilised $65.5 million Series B funding, led by MDI Ventures, while harbouring plans to enter Vietnam at the soonest.

In a previous talk with VIR, Sendo founder and CEO Tran Hai Linh said that agricultural goods have solid trade potential on e-commerce sites in Vietnam because they have been one of the most consumed commodities in Vietnam. However, to date, due to obstacles related to logistics and transportation, agricultural items, especially fresh food, have yet to reach popularity on online shopping sites.

He explained the hardest part of entering the segment is ensuring the best quality of fresh food products during transportation. There need to be suitable packaging and transporting processes to keep produce fresh and undamaged on short and longer trips.

Pham Ngoc Anh Tung, founder of FoodMap has also highlighted the high investment costs that come with entering this retail segment.

According to Development Reimagined, a China-headquartered organisation specialised in diplomacy, environment, and public relations, selling agricultural products online cost a long time and large investments before reaching success. For example, in China, e-commerce giant Alibaba in 2015 carried out the “Taobao villages” programme to help farmers sell their products on its Taobao platform. However, until 2020, purchasing agricultural goods online reached common in the country.

Funds key for delta bottleneck

Mekong Delta provinces are actively accelerating the development of transport infrastructure to remove logistics bottlenecks for better regional connectivity. However, some of the proposed projects are depending on finding sufficient financial backing from the government and other sources.

The section crossing the region is 700km long, of which 52.5km are in Ben Tre. The road is slated to be developed within the next five years. However, as this would be a brand new and large coastal route in the Mekong Delta, the development needs to mobilise various resources. The province intends to call for public investment and mobilise resources from the society to jointly develop the project.

Nhan said that this new coastal road will significantly reduce the commuting distance between Ben Tre and Ho Chi Minh City to 50km instead of 90km via the National Highway No.1A. Once completed, the road will open opportunities for coastal economic development by reorganising new industries such as urban construction, tourism, aquaculture, manufacturing, and processing. There is also a synchronous plan to create space for a land fund, employment, and climate change response.

Likewise, Long An province is focusing on completing the procedures to carry out the construction of a number of important traffic projects in the area. In the next five years, the province will focus on investing in the construction and expansion of many important transport projects connecting the province and other localities in the region. Long An will mobilise about VND30 trillion ($1.3 billion), including more than VND18 trillion ($782 million) from the central government as well as local budgets, with the rest of nearly VND12 billion ($521 million) coming from other sources on infrastructure development.

According to Nguyen Hoai Trung, deputy director of Long An Department of Transport, once these projects are in operation they will smoothly connect industrial zones and clusters of the province to Long An International Port, Ho Chi Minh City, and neighbouring provinces.

“Additionally, these projects will contribute to creating favourable conditions for people and businesses to travel and transport goods, promoting the socioeconomic development of the locality,” he added.

Meanwhile, Can Tho city gives priority to eight key projects in the 2021-2025 period including the ring road to the west of the city connecting the National Highway No.91 and the National Highway No.61C; four provincial roads; and two bridges. The total investment capital is estimated at VND7.5 trillion ($325.2 million).

Can Tho has proposed the government to prioritise investment of key projects connecting the region such as My Thuan-Can Tho Expressway and Can Tho-Kien Giang Highway. Also, the city will implement transport routes and public passenger transport terminals to increase the carrying rate to 10 per cent by 2025 and 20-30 per cent by 2030, boosting the interprovincial connection between Can Tho and its neighbouring provinces.

The Mekong Delta region contributes 50 per cent of the rice crop, 65 per cent of aquaculture, 70 per cent of fruit, 95 per cent of exported rice, and 60 per cent of exported fish of the whole country. With its suitable location, it offers convenient trade opportunities with other ASEAN countries and the Greater Mekong Subregion. However, the connection with Ho Chi Minh City and overseas remains one of the tightest bottlenecks of the region’s development.

The Annual Mekong Delta Economic Report 2020 by the Vietnam Chamber of Commerce and Industry and Fulbright University showed that the investment demand in the region for all types of basic transport infrastructure such as roads, waterways, aviation, and even railway is huge. However, development in the last 10 years has been modest.

Many businesses have voiced their concerns about traffic congestion from the Mekong Delta to Ho Chi Minh City. Lack of well-aligned planning and poor logistics also led to cost increase in all stages of the production value chain, reducing the competitiveness of businesses and the regional economy.

Minister of Transport Nguyen Van The said that the ministry will focus on some breakthrough projects in the coming time, such as the expressway connecting Can Tho and Ca Mau in the form of a public-private partnership.

The ministry will also make investments in expressways from Chau Doc district to Long Xuyen city of An Giang province with the total investment of the first phase project estimated at VND23.62 trillion ($1 billion).

To support the sustainable development in the Mekong Delta, the ministry has proposed the planning of Tran De Deepwater Seaport in Soc Trang province, capable of receiving vessels of up to 100,000 tonnes. The port is expected to achieve a throughput capacity of 50-55 million tonnes by 2030. When being put into operation, products in the region will not need to be shipped to Ho Chi Minh City for export. The total capital for the plan’s implementation is estimated at VND50.51 trillion (2.2 billion), with investment expected to come from private investors, not the state budget.

“At present, the Mekong Delta is at a great risk amid climate change. Therefore, the government directs the road transport sector to prioritise infrastructure investments in the region. The efforts will also create a premise for the region to change its economic structure, gearing towards sustainable development,” Minister The said.

Currently, his ministry has prepared nearly new investment projects across all kinds of transportation with the total capital of $5.14 billion for the delta.

Generally, Vietnam is seeking international loans worth around $2 billion from the World Bank, France, and Germany to support the development of the Mekong Delta’s infrastructure, including coastal roads like the one Ben Tre is proposing.

Carolyn Turk, World Bank country director for Vietnam said, “In partnership with government authorities at all levels, innovative pilots and large infrastructure investments have been implemented to bolster climate resilience, natural resources management, and sustainability while fostering growth for people, rural areas, cities, provinces and the region. Importantly, new perspectives, new evidence, new knowledge, and relevant international experiences and expertise have been brought to the Mekong Delta for addressing its very complex challenges.”

Hanoi attracts over US$519 million in FDI in Jan-May

During the first five months of the year, the total pledged capital of new foreign invested projects and additional capital for existing ones in the capital city of Hanoi reached US$519.2 million, according to the municipal Statistics Department.

In the given period, 139 new foreign direct investment (FDI) projects were granted investment registration certificates, with total registered capital of US$76.8 million, while an additional US$442.4 million was injected into 63 existing FDI projects.

In May alone, Hanoi licensed 16 FDI projects with total registered capital of US$5.3 million, comprising 14 wholly foreign-owned projects and two foreign joint ventures. Also, foreign investors pumped an additional US$184 million into 13 existing projects.

As for the operations of domestic enterprises, the capital city saw 2,238 newly-established firms last month, improving 8% versus the same period last year, with registered capital reaching VND42.3 trillion, up 69% against the year-ago figure.

Besides this, 245 enterprises were dissolved, rising 20% compared to last year’s figure; 788 signed up to temporarily suspend operations, up 28%; and 644 resumed operations, up 51%.

Vietnamese carmaker acquires South Korean retail chain E-Mart

Vietnamese carmaker Truong Hai Auto Corporation (THACO) confirmed at its shareholders’ meeting on May 31 that it had signed a contract to acquire the entire E-Mart Vietnam Co. from South Korean retail giant E-mart.

Nguyen Hung Minh, vice chairman of THACO, said the firm expects to complete the purchase within six months but did not reveal the value of the deal.

South Korea’s largest retailer established E-mart Vietnam Co. in 2014 and opened the first E-Mart supermarket in HCMC’s Go Vap District at the end of 2015. The supermarket, which is the only E-Mart supermarket that has been opened in Vietnam until now, was built on an area of 3 hectares at a cost of US$60 million.

In 2018, E-Mart bought another land lot in HCMC to prepare for the development of its second supermarket in Vietnam. However, the project has been delayed due to legal setbacks.

South Korean newspaper The Korea Times cited the retail giant as saying that it decided to withdraw from the Vietnamese market due to difficulties in expanding the business.

Under the deal, THACO will operate the chain as a franchisee and pay royalty to E-Mart. The automaker will also distribute E-Mart’s No Brand products in Vietnam.

Minh said THACO has plans to open three E-Mart supermarkets next year and expand the chain to 11 supermarkets nationwide by 2025.

Tran Ba Duong, chairman of THACO, said the firm has chosen some locations in Thu Duc City, Go Vap District and Tay Ninh’s Go Dau District for the construction of the new E-Mart supermarkets.

Before E-Mart, some other foreign retailers had fled from Vietnam due to severe competition. French retailer Casino Group sold its Big C supermarket chain in Vietnam to Thai conglomerate Central Group in 2016, while METRO Cash & Carry sold its retail chain to TCC Group in the same year.

Auchan, another French retailer, sold its local assets to Saigon Co.op in 2019.

Hanoi to host first livestream on OCOP products

The first-ever livestream promoting products of Hanoi’s “One Commune, One Product” (OCOP) programme will be held in the coming time, announced the organisers on June 2.

Organised by the Hanoi Coordination Office for New-style Rural Area Building together with the ASEAN Digital Conversion Research Institute (ASEAN Academy), the event aims to support stakeholders in the production, sale and marketing of OCOP products through digital technologies and e-commerce platforms, especially against the backdrop of COVID-19.

The three-hour livestream is slated for June 6, starting from 9am, and can be watched on the OCOP Live Facebook page and VTC Now.

It is hoped to motivate stakeholders in the programme in Hanoi and across the country at large to improve marketing skills and offer their products online via livestreaming, so as to reach more customers in the digital era.

Hanoi will open 40 more showrooms for goods from the local OCOP programme this year, making them more popular among domestic consumers and foreign visitors.

According to the municipal Department of Industry and Trade, products to be displayed include silk, confectionery, food, safe fruit and vegetable, and handicrafts.

They must be rated at least three-star and have been certificated as typical rural industrial products at the municipal and regional levels.

The Hanoi Department of Industry and Trade will organise five Vietnamese Goods Weeks in Hanoi this year to stimulate domestic demand and increase total retail sales, thereby helping businesses and farmers consume products.

Specifically, the five weeks will have a scale of about 100 standard booths each week.

Notably, Hanoi will support 50 percent of booth costs for participating units with a maximum of two booths per unit; similar support will be provided to each locality. In which, the city will pay attention to support localities and businesses of Hanoi and other localities in consuming agricultural products, aquatic products, and fruit, which face difficulties in consumption due to the impact of the COVID-19 pandemic.

At the same time, it will also strengthen communication and promotion, create the best conditions for businesses to reach consumers and expand the market.

In 2020, 14 OCOP showrooms were put into operation in the capital city. The city sped up necessary steps to verify and rate 370 more OCOP products in December to raise the total to 1,000 in the year.

Of the city’s recognised OCOP products, 421 have been rated four stars and 195 rated three stars while 14 are expected to earn five-star rankings.

The majority of the OCOP products (74.1 percent) are foods while souvenirs, furniture and décor products account for 18.3 percent of the total. The remainders are beverages, herbal medicine, fabrics and apparel.

The OCOP was initiated by the Ministry of Agriculture and Rural Development in 2008, based on Japan’s “One Village, One Product” and Thailand’s “One Town, One Product” programmes. It is an economic development programme for rural areas and focuses on increasing internal power and values, and is also to help with the national target programme on new-style rural area building.

Vietnam verified, rated, and recognised a total of 3,200 products as OCOP goods last year, 800 higher than planned, according to the Ministry of Agriculture and Rural Development.

The national OCOP council is reviewing 43 products for five-star ratings, the ministry said.

OCOP products are made from a combination of local resources, traditional culture, and advanced technology, which facilitates the development of diverse products with better quality and packaging, and the ability to trace product origin.

The programme has provided farmers with the chance to come together to form cooperatives, which now account for 38 percent of 1,400 OCOP producers nationwide. The establishment of these cooperatives has allowed farmers to create products with better quality, design, and packaging as well as higher standards, and made products more relevant to market demand./.

Vietnamese goods introduced to Thailand at trade exchange

An online trade exchange programme between Vietnam and Thailand on food and building and interior products was held on June 2 to introduce local products to Thailand and help domestic producers gain broader access to the market.

The exchange was held jointly by the Trade Promotion Agency at the Ministry of Industry and Trade (MoIT) and Thailand’s Central Group.

It was part of a series of events held to mark the 45th anniversary of diplomatic relations between the two countries.

Addressing the exchange, Vietnamese Trade Counsellor in Thailand Tran Thi Thanh My said this is the fifth time the programme has been held, aiming to facilitate Vietnamese products and businesses sending goods to the Thai market through the Central Group’s distribution network.

To ensure its effectiveness, she went on, market research was conducted and businesses with products suitable for the Thai market were selected.

Bui Quang Hung from the Trade Promotion Agency said that in recent years it has regularly coordinated with international organisations to conduct trade promotions between Vietnamese businesses and foreign importers, including those in Thailand.

He expressed his appreciation of the efforts made by the Central Group in cooperation with the MoIT in helping Vietnamese businesses penetrate into the Thai market through the group’s distribution network.

Such efforts are even more meaningful given that COVID-19 has had a profound effect on global trade, he added.

Emmanuel Francois Patrick Couronne, Director of Retail Purchasing at the Central Group, said the trade exchange helps the group meet reputable businesses and will see it bring more high-quality Vietnamese products to Thai consumers.

Held for the first time in 2016, the trade exchange has been an effective bridge in sending Vietnamese goods to the Central Group and has opened up many business opportunities for local exporters.

Vietnamese agricultural products such as lychees, dragon fruit, coffee, cashew nuts, and dried fruit have been exported to Thailand and found favour among local consumers.

A programme to promote Vietnamese goods and cuisine, called “Taste of Vietnam”, is to be held in Udon Thani province in northeastern Thailand on June 24-26, aimed at promoting Vietnamese products and creating opportunities for local suppliers to export goods to the market./.

Firms in pandemic-hit Bac Ninh, Bac Giang assisted to resume operations

The northern provinces of Bac Ninh and Bac Giang, which have been hardest stricken by the COVID-19 pandemic, are working to help local enterprises resume operations, while ensuring the health of their workers, local leaders said on June 2.

Vice Chairman of the Bac Ninh Provincial People’s Committee Vuong Quoc Tuan reported at a meeting with the National Steering Committee for COVID-19 Prevention and Control that as of 6 am on June 2, the province had recorded 934 cases in all of its eight district-level localities, including 219 at industrial parks and clusters.

Nearly 80,000 workers in Bac Ninh have been vaccinated against the coronavirus, and the number is expected to continue to rise in the coming days.

The neighbouring province of Bac Giang said it will speed up vaccinations, aiming to administer 102,000 doses to workers, as allocated by the Government.

A total of 13 businesses in the province, with 5,133 workers, have resumed their operations under a new model, the meeting heard.

Dang Quang Tan, Director of the General Department of Preventive Medicine under the Ministry of Health, said the pandemic has basically been contained in Bac Ninh and Bac Giang provinces.

He urged Bac Giang to continue evacuating workers from pandemic hotspots such as Nui Hieu village in Quang Chau commune, Viet Yen district.

The steering committee asked Bac Ninh to track the cause of pandemic clusters in certain communes in Thuan Thanh district, which have lasted for nearly a month.

“We have to take serious actions to soon end pandemic clusters in Thuan Thanh district,” said Deputy Prime Minister Vu Duc Dam, head of the steering committee.

The steering committee also stressed the need to ensure safety for medical workers engaging in collecting samples for COVID-19 testing./.

Vietnamese farm produce introduced to Japan

Vietnamese farm produce, mostly fruits and vegetables, dried food, aquatic products and beverages, were introduced during the Vietnam – Japan trade teleconference on June 2.

Speaking at the event, Director of the Ministry of Industry and Trade’s Vietnam Trade Promotion Agency Do Ba Phu said despite the COVID-19 pandemic, trade between the two nations still hit 16 billion USD in the first four months of this year, up nearly 6 percent annually. Japan has huge demand for agro-forestry-fisheries products and consumer goods while Vietnam holds potential of producing them.

Makoto Nakamura, an expert of international trade from the Japan External Trade Organisation, said Japan is one of the top countries in terms of food import, mostly fish and products processed from fish, shrimp, eel, fruits and vegetables from the US, Brazil, China and Vietnam.

Moreover, the Japanese people pay the most attention to health safety, followed by cost, convenience and luxury food. Therefore, all imported farm produce must undergo quarantine before customs clearance, he said.

He advised Vietnamese exporters to meet regulations set in Japan’s law on food hygiene and safety, including those regarding artificial additives, preservation and storage, and pesticide residue levels./.

Minister: Vietnam targets shift to circular economy

Vietnam is working to shift from a linear economy to a circular economy based on the three pillars of designing and prolonging material lifespan, reducing waste and emissions, and restoring the ecological system, Minister of Natural Resources and Environment Tran Hong Ha has said.

The minister made the statement during an webinar which was held in Hanoi on June 2 on the sidelines of the World Circular Economy Forum.

Co-organised by the Ministry of Natural Resources and Environment (MoNRE)’s Institute of Strategy and Policy on Natural Resources and Environment, the Asian Development Bank Institute (ADBI) and the Finnish Innovation Fund (SITRA), the event aimed to introduce policies and case studies on the circular economy, relevant principles and recommendations, and discuss green economic recovery after the COVID-19 pandemic.

Speaking at the event, Ha said the shift to a circular, green economy with low carbon emissions is an indispensable trend of the era and a revolution of the green industry in the 21st century, presenting a chance for the global community to deliver on international commitments in environmental protection and climate change response for the sake of sustainable development.

In response to the World Environment Day (June 5), Vietnam launched a number of programmes during the Action Month for the Environment to encourage the development of the circular economy via sustainable production and consumption, he said.

In accordance with the Law on Environmental Protection 2020, the MoNRE is working with agencies concerned to build regulations on criteria, roadmaps and mechanisms to encourage the development of the circular economy in the country.

The MoNRE, in collaboration with the Finance Ministry, is restructuring the system of economic and financial tools in the field of natural resources and environment, thus ensuring national financial safety and meeting environmental protection requirements in each period.

According to the minister, the MoNRE is also partnering with the Ministry of Information and Communications, ministries and agencies to build a database in the field to serve the national digital transformation programme.

Participants at the event looked into the legal framework, national and regional policies and regulations, opportunities for the private sector and innovations in cities, and the best solutions to the shift to the circular economy./.

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

A supermarket in HCM City. With the costs of materials needed for foodstuffs rising, businesses are finding ways to cut costs so that they can keep prices steady. — Photo nhandan.com.vn

Do Van Khuol, supply director of Saigon Food Company, said the cost of both domestically sourced and imported inputs have risen, including those of rice and seafood, whose output has fallen.

COVID-19 is driving up the costs of imported ingredients, and prices could rise by 10-25 per cent in the third and fourth quarters of this year, he warned.

Suppliers of products like chicken drumstick, dried cheese and macaroni in the US or Europe are planning to increase prices by up to 50 per cent this year, according to many large supermarkets that are having to negotiate with their suppliers.

This is putting pressure on grocery shoppers struggling with falling incomes and businesses and restaurants who are forced to increase their prices to cover the rising costs of items such as cooking oil, sugar and flour.

Nguyen Anh Duc, general director of Saigon Co.op, said that in April suppliers notified that they were planning to increase prices in May, especially of cooking oil, milk and instant noodles due to a rise in production costs.

The retail chain is considering each price increase proposal to come up with a reasonable pricing roadmap for each product and spread out the price increases gradually instead.

It is asking suppliers and manufacturers to temporarily take a cut in profits to reduce the pressure on consumers, and encouraging them to work with it to launch promotions, he said.

According to foodstuff manufacturer Acecook, instant noodle production costs have been rising since the final quarter of 2020, and so it has been making efforts to cut costs and wastage before considering price hikes.

Other food businesses are also cutting costs and restructuring to avoid increases in prices.

Deputy Prime Minister Le Minh Khai has called on local authorities to keep a lid on consumer prices in the remaining months of 2021.

Nguyen Anh Tuan, head of the Ministry of Finance’s price management department, said his department would monitor prices, especially of essential goods, and propose solutions to stabilise demand and supply if needed.

‘Vin’ stocks drag down Vietnam market

Shares dropped on Tuesday as investors dumped stocks in the ‘Vin’ family, weighing down the overall stock market.

The market benchmark VN-Index on the Ho Chi Minh Stock Exchange (HoSE) declined 0.48 per cent, or 6.02 points, to finish Tuesday at 1,252.68 points.

The southern market index had declined 0.60 per cent on Monday, to finish the trading day at 1,258.70 points.

The market breadth Tuesday was negative as 274 stocks declined while 143 rose and 46 ended flat.

The market’s liquidity was high with over 692.5 million shares traded on the southern market, worth VND21 trillion (US$915 million).

The shares of the ‘Vin’ family performed poorly as IT-real-estate-manufacturing-retail conglomerate Vingroup (VIC) and real estate giant Vinhomes (VHM) dropped.

Vingroup (VIC) dropped 2.4 per cent, Vincom Retail (VRE) declined 2.3 per cent and Vinhomes (VHM) was down 1.9 per cent.

Bank stocks also performed poorly on selling pressure, including Asia Commercial Bank (ACB), Bank for Investment and Development of Vietnam (BID), Vietinbank (CTG), Saigon-Hanoi Bank (SHB), Vietcombank (VCB), VPBank (VPB) and HDBank (HDB).

“In this period, there is a lack of information supporting the market, thus, VN-Index is likely to continue fluctuate with alternating ups and downs in the 1,200-1,220 zone to 1,275-1,285 zone to accumulate and create a new base in the short term,” said Bao Viet Securities Co.

“Investors should maintain the proportion of shares in the portfolio at 30-35 per cent, prioritising holding medium-long term positions and consider taking a short position in the short term when the index is testing the support zone of 1,200-1,220 points,” it said.

On a sector basis, 28 out of 25 sectors witnessed downtrend, including insurance, seafood processing, real estate, agriculture, home appliance production, logistics, construction, banking, rubber production, securities, agriculture and healthcare.

The 30 biggest stocks tracker, VN30-Index, rose 0.53 per cent to finish Tuesday at 1,378.59 points.

Of the VN30 basket, 11 stocks increased while 18 decreased.

Meanwhile, on the Ha Noi Stock Exchange (HNX), the HNX-Index declined 0.72 per cent to close Tuesday at 294.64 points.

The northern market index had risen 0.70 per cent to close Monday at 296.79 points.

During the session, nearly 123 million shares were traded on HNX, worth VND2.5 trillion.

Vietnam trade deficit with China hits record high

In the first four months of 2021 Vietnam’s trade deficit with China jumped to US$17.6 billion, a record high figure over the past three years, according to the data from the General Department of Vietnam Customs.

Throughout the reviewed period, Vietnam imported US$33.9 billion worth of commodities from China, or US$11 billion more than last year’s four-month figure, while it shipped its products valued at US$16 billion to China.

Its major imports include machinery, equipment and spare parts (US$7.45 billion), computers and components (over US$6.3 billion), chemicals (US$800 million), and steel (US$920 million).

Notably, garment, textile and footwear materials enjoyed an impressive growth rate among the raw material imports used in production activities.

The import turnover of fabrics from China reached US$2.68 billion, an annual rise of US$680 million, while textile, garment and leather raw materials had a turnover of over US$1 billion, up by more than US$300 million against same period from 2020 and 2019.

The increase in input material imports means the textile, leather and footwear sectors are getting back of the recovery track following the negative impact of the COVID-19 pandemic on export orders.

The high import value also indicates the heavy reliance of local firms on the supply source of raw materials from China.

At present, Vietnam is mainly importing phone and computer components, machinery and equipment from China, thereby accounting for 80% of total import turnover.

Steel consumption surges by 40% in 4-month period

Vietnam’s steel industry is highly dependent on imported input materials, therefore, price hikes in the international market would lead to higher domestic finished products.

Domestic steel production and sales in the first four months surged by 38-40% year-on-year, while exports of such products also rose by 68% year-on-year, according to the Vietnam Steel Association (VSA).

Nearly 2.82 million tons of steel were produced in April, a decline of 4.8% against last month, but more than double the amount recorded in the same period of 2020, noted the VSA.

In line with the large quantity produced, the amount of steel consumption increased by nearly 57% in the month to 2.7 million tons.

Overall, steel production in the January-April period was estimated at 10.48 million tons, up 38% year-on-year, of which 9.84 million tons, or an increase of 40% year-on-year, were sold domestically.

“This shows that domestic supply remains sufficient to meet products’ demand,” stated the VSA.

In reality, however, domestic steel prices went up by 40-50% in the past months and put steel buyers under pressure. In its own report, the Ministry of Construction (MoC) said there have been abnormalities in steel prices.

For this issue, the Ministry of Industry and Trade (MoIT) attributed rising input materials costs for steel production in the global market in the past nine months.

“Vietnam’s steel industry is highly dependent on imported input materials, therefore, price hikes in the international market would lead to higher domestic finished products,” noted the MoIT, adding such price hike is not showing sign of slowing down.

Among measures to cool down steel prices in the domestic market, the MoIT is encouraging steel plants to boost production capacity and expected to tighten steel exports.

According to the VSA, iron ore was traded at US$189.4-190 per ton on May 4 at Tianjin port (China), an increase of US$20 per ton against early April. Six days later, prices of such products rose to a record high of US$231 per ton.

Meanwhile, prices of hot-rolled coils also rose by US$130 month-on-month to US$925 per ton on May 4.

“High prices of hot-rolled coils are causing difficulties for domestic steel producers, especially those who are relying on these materials for steel production,” stated the VSA.

The VSA expected steel prices to continue rising in May to offset rising prices from imported input materials.

Honey exports face US anti-dumping probe

The US Department of Commerce (DOC) has officially begun an anti-dumping investigation into honey imported from Argentina, Brazil, Ukraine, and Vietnam, the Trade Remedies Authority of Vietnam has announced.

Petitioners include the American Honey Producers Association and the Sioux Honey Association.

Merchandise subject to the investigation is currently classifiable under statistical sub-headings 0409.0000.05, 0409.0000.35, 0409.0000.45, 0409.0000.56, and 0409.0000.65 of the Harmonized Tariff Schedule of the United States (HTSUS).

The agency said the period DOC will investigate is between October 1, 2020 and March 31, 2021, with Vietnam’s dumping margin estimated to range from 47.56 to 138.23 percent.

The investigation is scheduled to last for 12 months and can be extended by another six months under US law./.

RoK conglomerate looking to develop hydrogen projects in Can Tho

Republic of Korea (RoK) conglomerate the SK Group said on May 18 that it wishes to set up long-term cooperation with Vietnam, including the Mekong Delta city of Can Tho, which has substantial potential in hydrogen development and high-tech production.

At a working session with municipal leaders, group representatives stressed the role of hydrogen in building a clean energy economy in the future.

SK aims to build a clean hydrogen model by optimising liquified natural gas (LNG) infrastructure and carbon capture and storage (CCS) technology in Vietnam, it said.

Deputy Director of the municipal Department of Planning and Investment Truong Quoc Trang suggested the investor pay attention to projects on building oil, gas, and petroleum depots and bonded warehouses at the Tra Noc 2 Industrial Park in Phuoc Thoi ward, O Mon district.

Regarding the group’s proposal to invest in projects producing blue hydrogen, green hydrogen, and hydrogen panels, the official suggested it locate these projects at the Hung Phu and Thot Not Industrial Parks.

He also called on SK Group to pour investment into auto manufacturing and pharmaceutical projects, as well as those building infrastructure at industrial parks and logistics centres.

Chairman of the municipal People’s Committee Nguyen Viet Truong expressed his hope that the group will develop a hydrogen ecosystem and LNG warehouses in the city.

He used the occasion to brief the investor on Can Tho’s advantages, especially its significant demand for LNG./.

Ample room for Vietnam, Russia to forge trade ties: Seminar

Despite global trade uncertainties and COVID-19, trade between Vietnam and Russia has grown significantly, heard an online seminar in Moscow on May 18.

The bilateral trade in the first 10 months of last year hit 10.34 billion USD, a year-on-year rise of 17.98 percent, according to Dr. Vu Thuy Trang, Director of the Centre for Russian and CIS Studies at the Institute for European Studies under the Vietnam Academy of Social Sciences.

The seminar, which brought together more than 20 Vietnamese and Russian scholars, looked into trade and investment cooperation outcomes between the two countries since the free trade agreement between Vietnam and the Eurasian Economic Union (EAEU) came into force in October 2016.

The participants also pointed out limitations and proposed solutions and recommendations for boosting the ties.

Many said Vietnam’s export revenue to the EAEU has still remained modest as compared with their potential.

Vietnam has signed an array of FTAs with countries worldwide and posted marked economic growth, they said, noting that there are ample room for Vietnam and Russia to step up their economic and trade links.

Lychee harvest season gets underway in Hai Duong

A ceremony took place in Thanh Hai district in the northern province of Hai Duong on May 18 to mark the beginning of the local lychee harvest season and the first shipments this year of about 100 tonnes to Japan and Singapore.

It was the first of a series of events being held to promote its signature Thanh Ha lychee.

The ceremony saw the presence of Minister of Industry and Trade Nguyen Hong Dien, Minister of Agriculture and Rural Development Le Minh Hoan, and provincial leaders.

Hai Duong is better placed to export lychee to Japan this year, as the Japanese side has authorised the Plant Protection Department to monitor the sterilisation of the fruit in Vietnam, according to Luong Thi Kiem from the provincial Department of Agriculture and Rural Development.

Major exporters such as the Ameii Vietnam JSC and the Red Dragon Co., Ltd. have linked with local growers to purchase lychees for export to Japan, she added.

During this crop, Hai Duong will export 30,000-35,000 tonnes of the fruit to China, which has been its biggest buyer for many years. About 70 packaging facilities in the province have been granted codes for export to Vietnam’s northern neighbour.

The province also plans to ship around 1,000 tonnes of lychee to Japan, 1,000 tonnes in total to the US, Australia and Singapore, and 800-1,000 tonnes to Thailand, the Middle East, and Malaysia.

Hai Duong now has three facilities with qualified sterilisation equipment for the preliminary treatment and packaging of shipments to Japan. It is also home to a dozen lychee packaging facilities for exports to Australia, Thailand, the Republic of Korea, the EU, and elsewhere.

Dubbed the “lychee capital” of Hai Duong, Thanh Ha district is harvesting the early-ripening lychee and the main-crop lychee will be ready for harvest from June 5. Total production is estimated at about 55,000 tonnes this year.

The fruit is being grown on 9,186 ha in the province this year, of which 1,000 ha has been granted VietGap certification and 450 ha GlobalGap, and 8,000 ha provided with growing area codes for export./.

100 tonnes of lychees to be exported to Australia in coming days

Approximately 100 tonnes of Vietnamese lychees are due to be exported to both South Australia and Western Australia in the near future, according to the Ministry of Industry and Trade.

The move is part of the Vietnamese Trade Office in Australia’s work with lychee importers to agree on a plan aimed at exporting roughly 100 tonnes of local lychees to South Australia and Western Australia.

The Trade Office will continue to deploy a scheme to develop a brand and promote the consumption of Vietnamese lychees in Australia over the course of this year. This will be done by strengthening trade connectivity and sending inspection teams to remove difficulties relating to import procedures in the Australian market.

The programme aims to stimulate demand for lychees and other Vietnamese farm products on social networks, at stores and supermarkets, as well as through other information channels.

The Trade Office has proposed that Australian agencies facilitate customs clearance procedures in order to help Vietnamese lychees make greater inroads into the market.

Last year, despite numerous difficulties occurring in air freight and marine transportation due to the COVID-19 impact, local lychee export turnover to Australia increased by 188% compared to the same period from 2019.

Regulation on apartment tax outdated: experts

The regulation that people with annual incomes exceeding VND100 million have to pay value added tax (VAT) and personal income tax (PIT), which was issued six years ago, is no longer appropriate, especially for those leasing their apartments in large cities, while the HCMC and Hanoi Tax Departments have plans to tax apartments for lease.

The HCMC Tax Department will pilot the plan in five apartment buildings in District 11–Res 11 at 205 Lac Long Quan Street, Thuan Viet at 319 Ly Thuong Kiet Street, Bao Gia at 184 Le Dai Hanh Street, Khai Hoan at 624 Lac Long Quan Street and another at 70 Lu Gia Street, the local media reported.

The rentals of apartments in these buildings are all over VND10 million per month, meaning that all apartment lessors will have to pay taxes, including a VAT and PIT rate of 5% each.

The Hanoi Tax Department has also asked its subordinates to employ measures to avoid tax losses from apartments, offices and retail spaces for lease.

With the regulation, the owners of apartments must pay higher taxes than providers of other services, such as massages, karaoke, computer repair and construction consulting and supervision, which are subject to a PIT rate of 2% and a VAT rate of 5%, and insurance and lottery agents which pay only a VAT rate of 5%.

According to lawyer Tran Xoa, director of Minh Dang Quang Law Firm, the regulation on taxing apartments for lease is outdated, causing disagreements and unfairness among taxpayers.

Therefore, Xoa proposed the Ministry of Finance amend the regulation, raising the revenue cap subject to taxes from VND100 million to VND150 million and allowing apartment lessors to deduct costs before calculating their incomes.

Sharing the view, lawyer Nguyen Duc Nghia, director of the Legal Advisory Center under the HCMC Union of Business Associations, said the revenue cap subject to taxes of VND100 million had not been changed for six years, while the consumer price index had increased remarkably. The cap should be raised by 30%-40%.

Since the Covid-19 outbreak, the Government has issued multiple support policies for enterprises but no considerable support for salaried workers and household businesses.

Taxing apartments for lease is aimed at creating fairness among business entities but experts were concerned that many investors would withdraw from this sector.

Dr Vu Dinh Anh, an economic expert, said paying taxes for the State is compulsory. However, unused land and real estate products should also be taxed to prevent wastefulness.

Auto imports from China surge in Jan-Apr

Vietnam spent US$247 million importing more than 6,600 completely-built-up (CBU) cars from China in the first four months of the year, soaring 480% over the same period last year, according to the General Department of Vietnam Customs.

In the four-month period, the country bought nearly 50,200 autos worth a total of US$1.12 billion, jumping 56.5% in volume and 58.2% in value.

Of the total, there were some 33,400 cars with fewer than nine seats and nearly 12,000 trucks.

Thailand continued to be Vietnam’s largest supplier of autos with 25,700 units, valued at US$474.8 million, followed by Indonesia with 13,900 units worth US$172.8 million.

The number of auto imports from Thailand, Indonesia and China accounted for up to 92.2% of Vietnam’s total car imports in the four-month period.

In April alone, nearly 14,900 CBU autos, valued at US$310 million, were shipped to Vietnam, mainly from Thailand, Indonesia and China. The number of autos imported from these three markets accounted for 94% of the country’s total car imports last month.

Of the total, over 10,300 under-nine-seat cars worth US$156 million underwent customs clearance procedures, making up 69.4% of the total number of CBU car imports to Vietnam in April and down 4.7% in volume month-on-month.

Moreover, 29 vehicles with more than nine seats, 2,500 trucks and 1,980 special-use vehicles were delivered to Vietnam.

Among the special-use vehicles, nearly 1,700 units, or 84%, were imported from China through a border gate in Lang Son Province.

Promoting proactiveness and flexibility in consumption of agricultural products

Due to the new and complicated developments of the COVID-19 pandemic in the country and the world, the production, business and consumption of agricultural products in many localities continues to face difficulties, especially those entering the harvest season of fresh vegetables, tubers and fruits.

In order to promptly remove difficulties, reduce inventories, and avoid the situation of “having to rescue” a large amount of goods like during previous outbreaks, the Ministry of Agriculture and Rural Development (MoARD) has sent an official dispatch to the Ministry of Planning and Investment, proposing additional support policies and measures, focusing on synchronous solutions and the joint participation of ministries and agencies to reduce the damage to affected localities. Accordingly, the Ministry of Agriculture and Rural Development will conduct trade promotion activities to help localities enhance the consumption of agricultural products using online forms.

In addition, the ministry has coordinated with the trade and diplomacy agencies and management boards at border gates to promptly handle difficulties and obstacles in exporting agricultural products. The MoARD has also proposed the Ministry of Industry and Trade (MoIT) direct provinces and cities to create favourable conditions for the smooth consumption of safe agricultural products from provinces affected by COVID-19 epidemic. The MoIT has asked businesses providing logistics services, warehousing and cold storage and shipping lines to support the preservation of goods and reduce reservation costs, especially for agricultural products that need special preservation techniques.

It can be seen that during this epidemic outbreak, ministries and agencies have promptly sent out official dispatches with proposals and recommendations, avoiding the passive handling and congestion of agricultural products due to the epidemic. However, in order to make the consumption of agricultural products smooth and effective in the context of the epidemic being forecasted to last for a long time, localities should take the initiative in coming up with appropriate solutions for each item.

For example, the Hai Duong provincial People’s Committee is expected to cooperate with the MoIT and relevant agencies to hold a virtual conference to promote the consumption of Thanh Ha lychee and other typical local agricultural products on May 18. The main point is Hai Duong, which will be connected with hundreds of places around the country and dozens abroad including the UK, Australia, Belgium, Germany, the Netherlands, the Republic of Korea, the US, Japan, France, Singapore and China. These will be the first steps in terms of the online sales trend that has been increasingly popular in the world, especially during the COVID-19 outbreak.

In addition, Luc Ngan district in the northern province of Bac Giang has developed different measures to support farmers in the harvesting, processing and consumption of lychees. Accordingly, the province will focus on consuming fresh fruit or putting it into processing depending on the epidemic situation in the country and its ability to export.

Obviously, the COVID-19 pandemic has created many challenges for the production, business and consumption of agricultural products in the country and for export. However, the epidemic is also an opportunity for both producers and enterprises to find new approachs to accessing partners and customers, ensuring epidemic prevention and avoiding logistical congestion.

This will bring valueto the country’s agriculture sector, including online trade promotion, online sales and the improvement of deep processing of many agricultural products with high economic value.

Steel exports surge 50% despite steel price upsurge

Vietnam’s exports of steel and iron increased over 50% in the first four months of 2021 despite a surge in domestic steel prices, according to the General Department of Vietnam Customs.

Data of the department showed that the country exported 3.9 million tons of steel and iron worth US$2.79 billion from January to April, surging 50.4% in volume and 96.3% in value compared with the same period last year.

In the second half of April, the country exported nearly 593,700 tons of steel and iron worth US$471 million, increasing 58% in value compared with the month’s first half.

Domestic steel prices have soared 45% since the beginning of this year, making life difficult for enterprises and contractors. Many contractors have had to walk away from projects.

The Vietnam Industry Agency attributed the steel price upsurge to the high prices of imported materials for steel production. The longer shipping time triggered by Covid-19 has contributed to the hike.

Besides businesses, many households said the steel price upsurge has raised the construction cost of their houses by some 15%.

The Ministry of Industry and Trade has suggested the Government and related departments take measures to restrict the exports of steel to stabilize domestic steel prices.

In addition, the Vietnam Steel Association has asked its members to raise the steel production capacity. In the first four months of the year, the raw steel volume picked up 17.4%, while the rolled steel volume surged nearly 62%.

The association had earlier forecast that domestic steel prices would decline at the end of the second quarter of 2021. However, based on the current situation, it said steel prices would continue to rise until the end of the third quarter.

Ca Mau builds geographical indication certification for black tiger shrimp

In order to promote the branding of Ca Mau black tiger shrimp, the provincial Department of Science and Technology has coordinated with the Centre for Sustainable Rural Development to develop a geographical indication and common logo.

Ca Mau black tiger shrimp have been certified by many international organisations such as ASC, B.A.P, GlobalGAP, EU, and Nuturland, present in over 90 countries and territories.

According to the provincial Department of Science and Technology, the project “Build and manage the Ca Mau geographical indication for the provincial black tiger shrimp development” under the intellectual property (IP) development programme for the 2016-2020 period has been completed and put into operation.

In the coming time, the unit will transfer knowledge about IP and the system of tools to manage the geographical indications of Ca Mau black tiger shrimp to the localities.

Accordingly, in order to preserve the Ca Mau black tiger shrimp brand, producers, businesses, and state management agencies must make greater efforts to ensure the ecological environment, seed, food sources and nutrition.

The provincial Department of Science and Technology has organised training courses and disseminated knowledge on IP; while at the same time organising seminars to collect opinions on improving the system of management tools for the geographical indication of Ca Mau black tiger shrimp.

The goal of successfully protecting geographical indications for local natural black tiger shrimp products is essential, creating a basis for sustainable production, protecting the reputation and value of products in the market.

In addition, successfully protecting geographical indications for local natural black tiger shrimp contributes to promoting the application of technical advances in farming, preservation and processing to improve productivity and product quality.

Vietnamese labour exports to Taiwan suspended until mid-June

The Department of Overseas Labour (DoLAB) announced on May 18 that labour export activities to Taiwan (China) will be suspended as of May 19 until June 18 as part of efforts to deal with a recent surge in the number of COVID-19 cases in Taiwan.

Exceptions may be made for individuals who obtain entry permission for emergency or humanitarian reasons.

The Taiwan CDC also added that the move will be adjusted on a rolling basis, with future decisions based on the status of the pandemic and the effectiveness of new measures.

The DoLAB requested that firms inform Vietnamese labourers who are waiting for their exit procedures, and contact Taiwanese counterparts to adjust their recruitment plans for local migrant workers.

The department also asked that businesses co-operate with the labour management board in Taiwan to handle the situation.

During the first four months of the year, Taiwan received a total of 15,055 Vietnamese labourers, including 5,255 female workers.

HCM City to develop riverine infrastructure, economy

HCM City is focusing on developing riverside infrastructure and space for businesses there by 2045.

According to a plan submitted to the city’s Department of Planning and Architecture, it plans to build multi-purpose infrastructure along the Saigon River, improve the scenery and public utilities there, and reinforce the city’s capabilities in combating flooding, climate change and erosion.

Architect Ngo Anh Vu, deputy director of the HCM City Urban Planning Institute, said the Saigon River’s two banks have 3,100-5,000 hectares of land that could be used to plant trees, build traffic infrastructure and public spaces and provide space for businesses.

The river passes through the city centre, and offers great potential for developing the riverine economy, Nguyen Thanh Nha, the director of the department, said.

Therefore, the areas around it should be prioritised in terms of infrastructure investment, such as embankments, bridges and open green spaces, he added.

Architect Ngo Viet Nam Son, chairman of consulting and design company NgoViet Architects & Planners, said riverside areas could be used to develop public spaces, something the city lacks, and transportation, parking and amusement.

The plan focuses on renovating its banks in the city centre and investing in several key green infrastructure projects.

The investment will focus on areas along the sides which are culturally and historically important and suitable for developing commercially, and those that are connected to infrastructures such as metro lines, roads and bridges.

The city will encourage and help companies invest in green infrastructure.

HCM City has a total of nearly 8,000 kilometres of rivers, canals and channels, accounting for around 16 per cent of its area.

Viet Nam wants to quadruple mango exports by 2030

Viet Nam plans to expand the area under mango and production by 2030 to achieve exports of US$650 million to take advantage of the growing global demand for the fruit.

According to the Ministry of Agriculture and Rural Development’s Agro Processing and Market Development Authority, last year mango exports were worth $180 million, or 1.15 per cent of the global export share, with China according for nearly $152 million.

Viet Nam also exported to Russia, the US, Korea, the EU, Australia, and Japan.

Nguyen Dinh Tung, chairman of Vina T&T Group, which has been the fruit since 2019, said his company’s preservation technologies keep the fruit for around a month and the free trade agreements Viet Nam has signed markets is helping it enter many new markets.

Mango could be grown throughout the year without much change in quality, which helps his company easily clinch export deals, he said.

Viet Nam has around 87,000 hectares under mango, with the Mekong Delta accounting for nearly half of it.

Dong Thap Province has identified mango as a key crop in its agricultural reform plan.

The province, the largest mango producer in the delta, uses advanced farming techniques and processes fresh mangoes for both domestic consumption and export.

Pham Thien Nghia, chairman of its People’s Committee, said the province has more than 12,000ha under mango, mostly in Cao Lanh District and Cao Lanh City. The Hoa Loc variety accounts for 70 per cent of its output and Cat Chu for 20 per cent, two speciality varieties that are in high demand.

Dong Thap plans to increase its area under various fruits to more than 35,000ha from 33,000ha now by 2025 with a focus on environment-friendly farming methods and developing value chains for them.

It also plans to enhance origin tracing for fruits and tourism services involving orchards.

It hopes to have 928ha of fruits grown to Vietnamese good agricultural practices (VietGAP) standards and 53ha to GlobalGAP standards.

Besides mango, longan and citrus fruits are the key produce here and they are grown in large, concentrated farming areas.

Under the province’s agriculture restructuring plan, many farmers with low-yield rice fields have switched to fruits and adopted VietGAP and GlobalGAP standards and advanced techniques to produce quality fruits that are exported.

The Government wants the delta provinces to register mango farming zones and assign codes, push for safe farming practices and carry out frequent inspections of processing and packing facilities.

Thanh Hoa attracting more agriculture investment

Thanh Hoa Province has seen increasing investment in agriculture in the last five years, especially from big investors.

In late 2019, a joint venture between Gia Phu Agricultural Joint Stock Company and Master Good Group from Hungary inaugurated a modern poultry export and slaughter plant in the province, worth VND300 billion (US$12.9 million) with a capacity to slaughter 8 million chickens per year.

Other big firms have invested in agriculture projects in the northern province, showing their confidence in the local mechanisms, policies and investment environment.

According to the provincial Department of Agriculture and Rural Development, Thanh Hoa has attracted 176 investment projects, covering 3,700ha with a total investment of more than VND20 trillion in agriculture including seven foreign direct investment (FDI) projects with a total investment of nearly VND3.9 trillion

A representative of the department said: “The major projects are expected to completely change the lives of rural residents.”

According to the department, Thanh Hoa aimed to prioritise projects applying scientific and technological advances, associated with product processing and consumption, contributing to job creation for local workers.

It mentioned some projects that complete all production process in the province, including Vinamilk, which runs a farm with 16,000 cows with a total investment of VND1.6 trillion, as well as the dairy cow project with a scale of 20,000 cows with total investment capital of VND3.8 trillion of TH True Milk Company.

In addition, Singaporean Hope Co invested in a breeding farm project with a scale of more than 10,000 sows and production of 500,000 pigs with a total investment of more than VND1.1 trillion, while An Phuoc Import Export and Production Development Investment Joint Stock Company invested in a textile fibre factory project with a total value of VND628 billion.

Most recently, the department said Xuan Thien Group was completing investment procedures for 18 projects with a total registered capital of about VND32.4 trillion while the AVG Group plans to invest in a pork processing complex in Nghi Son Economic Zone with a total value of $1.4 billion.

A representative from the department told local media: “Agriculture is an investment channel with risks but full of potentials and advantages in the province.

“Thanh Hoa has determined that agriculture has many strengths and great development and created many policies to attract investment in this field,” he added.

He said the province ran annual investment promotion conferences to attract agriculture projects, which the province offers preferential mechanisms and policies.

Le Duc Giang, deputy chairman of Thanh Hoa Provincial People’s Committee, said the province has a very large agricultural land area with more than 900,000 ha with three ecological regions of mountains, plains and coastal areas, all with great potential.

Giang said though nearly 900 enterprises invest in agriculture, with more than 700 farms and about 2,000 co-operatives, there is still plenty of room to grow.

CIMB and Finhay join hands for debit card

CIMB and Finhay have announced a partnership to issue a co-branded debit card on the Finhay app to enable customers to enjoy benefits from the CIMB and Finhay ecosystems.

Under the deal, Finhay users will be able to open a virtual account and co-branded debit card on the Finhay app with eKYC solution by CIMB to take control with all-in-one spending, saving, investment and more. With only a bank account and debit card, users can instantly invest, save, transfer and withdraw money free of charge at more than 17,000 ATMs nationwide.

Finhay and CIMB customers will also enjoy smart and modern financial – banking solutions, enabling them to plan and optimise the implementation of financial solutions with small amounts from VND50,000 (US$2.1) or VND100,000.

“Consumers and businesses will no longer see banking as a separate sphere or sector, and will instead come to expect that day-to-day financial tasks will be carried out within their favourite brand ecosystems.

“And if you’re a traditional bank, it’s time to start gearing up for a battle of your own – one that isn’t necessarily going to be on home turf,” said Thomson Fam Siew Kat, CEO of CIMB Vietnam.

Nghiem Xuan Huy, CEO of Finhay, said: “Thanks to the strategic partnership with CIMB Vietnam, we now can provide solutions to open bank accounts, money transfer and withdrawal. We would introduce some new financial services to our customers in the future.

“I think there are relatively attractive changes in the embedded finance in the market. I don’t know how long that trend is going to go on, but it’s something that we’re starting to see demand for.”

Export of iron and steel soaring sharply

As the scarcity of iron ore supply pushed prices up and Beijing is passing heavy restrictions to reduce emissions, the recovery in global steel demand have sparked a “steel fever” recently and increased Vietnam’s iron and steel export value in the first four months.

The latest report by the General Department of Vietnam Customs highlighted that in the second half of April 2021, steel exports rose by $173 million, equivalent to 58.1 per cent compared to the first half of the month.

Thereby, manufacturing industrial products in the first four months of 2021 rose significantly on-year, while rolled steel products increased 61.8 per cent, and crude iron and steel rose 17.4 per cent.

The Vietnam Steel Association (VSA) reported that steel production reached more than 10.4 million tonnes in the first four months, up 38.3 per cent on-year. Sales reached 9.4 million tonnes, up 40.3 per cent on-year, and exports were 2.1 million, a rise of 67.8 per cent on-year.

Over the past months, local steel prices have increased sharply by 40-45 per cent over the last quarter of 2020. The steel sector heated up due to the consecutive rises in input material prices, while Vietnam’s steel production mainly depends on import materials like iron ore, scrap steel, graphite electrode. Delays in delivery and the interruption of global logistics have also contributed to the increase in steel prices.

Specifically, the VSA reported that the price of iron ore (Fe 62 per cent) on May 4, 2021 was at $189.4-189.9 per tonne, a $19 over early April, and increased to $210-212 per tonne on May 7, 2021.

Premium hard coking coal exported from Australian ports on May 4, 2021 was at $103.75 per tonne, down $5 over early April, while in China it rose high.

Heavy melting steel (HMS) I/II 80:20 imported through East Asian ports cost $466, a rise of $24 over early April. The price of HSM in the US has increased slightly, while in Europe and Southeast Asia it remained stable.

Hot-rolled coiled steel (HRC) on May 4 was at $925 per tonne at East Asian ports, up $130 over early April.

“Generally, the world market of HRC has been fluctuating, so the local market faces a lot of challenges because enterprises that produce flat steel (galvanised sheet, steel pipe) use HRC as manufacturing material,” VSA reported.

In order to adjust the supply of steel and stabilise prices, reduce speculation and price pressure, in early February 2021, the Ministry of Industry and Trade (MoIT) in collaboration with relevant ministries and agencies submitted Document No.724/BCT-CN to the government.

The MoIT also asked the ministry’s units to check and build some technical barriers and quality standards to improve competitive climate and ensure customers’ rights, and apply some trade remedies for steel products in accordance with trade regulations and international laws.

SBV clamping down on credit risks

Despite stringent requirements applicable for risky sectors such as securities, real estate, and build-operate-transfer projects, credit is envisaged to grow in the coming quarters given the favourable interest rates and a much-improved risk management mechanism.

Last week, the State Bank of Vietnam’s (SBV) Supervision Agency cautioned that potential risks might arise from credit institutions that provide loans in specific areas, such as real estate, securities, and transportation.

To ensure the safety of banking operations and limit risks, the SBV asked credit institutions to strictly follow Directive No.01/CT-NHNN from January 3 on organising the implementation of the key tasks of the banking sector.

“The central bank has paid special attention to banks’ appraisal and supervision of loan purposes and valuation of real estate collaterals at some areas that experienced land fever,” said Yen Tran, analyst at KIS Securities.

The SBV highlighted potentially risky sectors, including real estate, securities, and build-operate-transfer (BOT) and build-transfer (BT) projects as usual but with more specific notices.

Furthermore, the SBV would also keep a firm hand in promoting capital contributions into manufacturing and for supporting customers vulnerable due to the pandemic, natural disasters, and climate change.

Tran explained, “For real estate, banks must concentrate on alleviating risks arising from large clients, the land fever phenomenon, and the trade of real estate. For BOT and BT projects, credit institutions must balance their capital flow and use loans for medium- and long-term projects to limit liquidity risks and continue to strictly comply with the instructions of the SBV.”

For consumer loans, she added, banks must improve appraisal and supervision processes to control credit quality for consumption purposes.

In terms of securities, the SBV also reminded both local and foreign credit institutions to tighten their regulations about investment, trading equity, and corporate bonds.

The SBV cautioned banks about provisions and bad debt recollection on debt classification and accrued interest recognition – for example, pandemic-induced restructured loans and debt recovery – to ensure the government and shareholders’ interests are kept.

“These are official messages for banking operation in 2021 to maintain system stability amid the unpredictable pandemic. We believe the entire banking system will revise its credit policies, risk management, and supervision to be compatible with the SBV’s guidance and sustain healthy assets,” Tran noted. “However, we do not expect these to stamp down credit growth in the coming quarters given the favourable interest rate environment and dynamic local economy.”

Particularly, the margin loan balance of securities companies is in an upward trajectory. In Q1 of 2021, it increased by 53 per cent compared to the same period last year. At some securities companies, the total outstanding loans for margin loans have almost exceeded the ceiling, twice as much as their equity. Last month, a number of securities companies have approved plans to increase capital, such as MBS, VNDIRECT, and HSC. Thus, margin loans are anticipated to rise considerably.

Experts at VNDIRECT Securities also believed that the current risk management of the banking and brokerage system has been much improved.

According to Circular No.36/2014/TT-NHNN on limits and prudential ratios in operations of credit institutions and foreign bank branches, the total outstanding credit that commercial banks and branches of foreign banks extend to clients for stock investments and business is not allowed to exceed 5 per cent of their charter and allocated capital.

As investors are more aware of financial leverage-related risks, bad debt ratio arising from securities loans is relatively low.

Economist Vo Tri Thanh said, “The SBV has urged credit institutions to strictly control credit in some risky sectors, but actually, no specific measure has been taken so far.”

Likewise, economist Le Xuan Nghia emphasised, “The SBV does not need to take any further actions to tighten real estate credit. In fact, real estate credit has long been managed in a prudent fashion.”n

The State Bank of Vietnam has sent document to credit institutions warning about the 10 signs of potential risks appearing in the sector last year and asked them to follow Directive No.01/CT-NHNN on key tasks in 2021 as follows:

– On balance sheets, the non-performing loans (NPL) ratio in 2020 increased versus 2019.

– Some consumer finance companies witnessed strong increase in NPLs and ratios.

– Accrued interest from credit activities increased versus 2019.

– Real estate credit increased robustly and still has strong weight in the country’s credit.

– Investment into corporate bonds of development and real estate trade has a high weight in the total corporate bond investment portfolio. Some banks accelerated corporate bond investment, particularly focusing on development and trading real estate.

– Credit for investment and trading securities skyrocketed versus 2019.

– Credit quality of loans to real estate, consumer, and card decreased heavily compared to 2019.

– NPLs of the large corporate segment with a total balance of over VND500 billion ($21.7 million) per client has shown signs of increase.

– The rise in accrued interests may lead to the fact that reported income in 2020 has yet to reflect the true outcome.

– Some credit institutions have not yet tried their best in recollecting bad debts and off-balance-sheet debts.

Vietnam’s industrial production index rises 24.1% y-o-y in Apr

Vietnam’s industrial production index increased by 1.1% month-on-month and 24.1% year-on-year in April thanks to robust external and recovering domestic demand, according to the World Bank’s “Vietnam Macro Monitoring May 2021” report.

The high year-on-year growth rate was to a large extent due to the low base effect as production was hit hard by the Covid-19 pandemic-related lockdown in April 2020.

The continued expansion also reflected recovering domestic consumption in addition to solid external demand for hi-tech manufacturing products.

The most dynamic sub-sectors included beverage, clothing, home appliances, basic metals, electronics, computers, optical products and machinery.

Industrial production continued its solid expansion, while retail sales rebounded after two consecutive months of decline.

Retail sales grew by 2.3% month-on-month in April, reflecting the partial recovery of consumer demand from the third outbreak of Covid-19 in late January 2021. This rebound was driven by a 1.9% increase in the sales of goods, while services grew by 3.8%. However, the overall sales were still lower than in January.

The report also showed that merchandise trade continued to perform exceptionally well, driven by robust demand from the United States and other major trading partners.

The expansion of goods exports eased slightly by 3.4% month-on-month while imports continued to grow by 2.6% in April.

Over the first four months of 2020, exports and imports grew by 26% and 31% year-on-year, respectively. Trade expansion was fueled by the recovery in the U.S. and China and to a lesser extent by the EU, ASEAN and South Korea.

Credit to the economy grew by 2% month-on-month, reflecting increased demand for credit as businesses responded to the stronger consumer demand during the national holidays in late April and early May.

The average overnight interbank interest rate also increased from 0.29% in March to 0.48% in April.

The consumer price index increased by 0.5% month-on-month, mainly driven by higher prices of consumer goods, including food, beverage, clothing, household supplies and appliances. This reflected the recovery of household consumption from the third local outbreak of Covid-19.

Prior to the fourth Covid-19 wave, which started in late April, mobility was improving fast, but it is deteriorating again with the new restrictions.

During most of April, most mobility indicators improved significantly as the third Covid-19 outbreak was brought under control. They also spiked at the end of the month as Vietnamese celebrated the second-longest national holidays in observance of National Reunification Day and International Labor Day. However, such indicators are deteriorating in May due to stronger mobility restrictions.

The World Bank warned that domestic economic activities will be affected by the fourth Covid-19 wave, especially those in sectors such as tourism, transport and retail, depending on the magnitude of the outbreak and how quickly the Government will be able to bring it under control.

The Government should consider boosting domestic demand by adopting a more accommodative fiscal policy, including increasing its support to the affected businesses and people.

Alibaba, Baring Private Equity Asia invest $400m in Masan retail arm, The CrownX

Masan Group Corporation (HOSE: MSN) and a consortium led by Alibaba Group and Baring Private Equity Asia on May 18 announced the signing of definitive agreements for the acquisition of a 5.5 per cent stake in The CrownX for a cash consideration of US$400 million.

The CrownX is Masan’s integrated consumer retail arm that consolidates its interests in Masan Consumer Holdings (MCH) and VinCommerce (VCM). The transaction implies a pre-money valuation of $6.9 billion for the company, or $93.5 per share.

Masan will own 80.2 per cent of the company after the consortium’s investment.

The formation of The CrownX last year brought together two industry leaders to form a consumer and retail powerhouse. As part of Alibaba’s investment, The CrownX will now partner with Lazada to build the company’s digital presence and capabilities and accelerate the offline to online (O2O) market in Viet Nam.

The transaction marks a shared vision across the company’s shareholders that The CrownX has the potential to establish Viet Nam’s first tech-enabled consumer ecosystem and expand its reach to serve consumers nationwide.

Danny Le, chief executive officer of Masan Group, said: “This strategic partnership will accelerate our ability to achieve our goal of transforming The CrownX into a one-stop shop to serve consumers’ everyday needs, whether offline or online, ‘Point of Life.’

“Our immediate priority is to modernise Viet Nam’s grocery market and develop an unparalleled consumer proposition from assortment to shopping experience.

“I strongly believe that this partnership will reduce our learning curve and enable us to reach our endgame more efficiently and effectively.”

Janice Leow, managing director at BPEA, said: “We are delighted to be partnering with Masan and Alibaba, and believe this strategic investment has the potential to supercharge The CrownX’s growth in a nascent retail market and create the largest consumer ecosystem in Viet Nam.

“As a long-term investor in the country, we think Viet Nam has a long runway for growth supported by strong macroeconomic tailwinds and attractive demographics.

“The CrownX also has tremendous digital potential, particularly in e-commerce and data analytics. BPEA prioritises digital transformation in all of our portfolio companies, and we look forward to working with the company in its next stage of growth.”

As a part of the transaction, VCM will enter a strategic cooperation agreement with Lazada, Alibaba’s Southeast Asian e-commerce platform.

It will be the grocery retailer of choice on Lazada in Viet Nam.

The parties will share know-how, co-develop analytics to develop grocery as a key online category, transform VCM’s offline stores into pick-up points for online orders, and explore synergies between the respective parties’ logistics platforms for service and cost optimisation for consumers.

Grocery accounts for 50 per cent of Viet Nam’s retail market and 25 per cent of consumer wallet share and is of essential daily use, but online penetration is still nascent.

Masan targets The CrownX’s online gross merchandise accounting for at least 5 per cent of its total sales in the near future.

Credit Suisse (Singapore) Limited and Deutsche Bank acted as the exclusive financial advisors respectively to Masan Group and BPEA. The transaction is subject to customary corporate regulatory approvals.

Masan is also in advanced discussions for a further strategic investment of $300 – 400 million in The CrownX from other investors, and these are expected to be wrapped up in 2021.

Conference aims to boost consumption of Hai Duong farm produce amid COVID-19

Authorities in the northern province of Hai Duong held an in-person and online conference on May 18 to bolster the consumption of local lychees and other outstanding agricultural products.

The conference was linked with 31 cities and provinces around Vietnam and more than 10 countries and territories, along with 200 international export companies and over 50 major distributors.

Hai Duong held the event amidst the current situation of COVID-19 with the aim of seeking markets for local agricultural products.

Minister of Agriculture and Rural Development Le Minh Hoan said the province needs to develop its processing industry in line with the taste and consumption trends of different markets.

The Ministry of Industry and Trade will pay more heed to trade promotions to help Hai Duong boost the export of its farm produce in general and lychee in particular. It will provide assistance with origin tracing and sales on e-commerce platforms.

For his part, Secretary of the provincial Party Committee Pham Xuan Thang said Hai Duong has been working to improve value and quality in agricultural production.

The consumption and export of local farm produce, however, face major challenges against the backdrop of the pandemic, he noted.

Total fruit output in Hai Duong is estimated to reach 260,000 tonnes this year, including about 55,000 tonnes of lychees. Last year, the province exported 25,000 tonnes of lychees despite COVID-19, accounting for nearly one quarter of Vietnam’s total shipment of the fruit abroad (98,000 tonnes).

It is now working to promote export to existing markets such as China, the United Arab Emirates, France, Malaysia, and the US, while also seeking new markets./.

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

Vietnam’s GDP growth is expected to rebound to 7 percent in 2021, driven by a recovery in goods and service export, resilient domestic economy, and healthy investment inflows, according to the ASEAN 3 Macroeconomic Research Office (AMRO).

In its Annual Consultation Report on Vietnam published on May 19, which was produced based on AMRO’s virtual 2020 Annual Consultation Visit to Vietnam and data and information available up to February 11, 2021, the office said Vietnam’s manufacturing output continued to expand thanks to robust exports and positive spillover from global supply chain restructuring.

The economic recovery is expected to continue on the back of an increase in domestic consumption following the relaxation of mobility restrictions, and an acceleration in public investment disbursement, it noted.

The report said continued policy support of the Government remains essential to bolster national economic recovery.

Effective food supply chain management and stable fuel prices will help the Vietnamese government keep inflation below 4 percent in 2021, the report stressed.

Vietnam needs to step up its efforts to develop domestic supporting industries in order to strengthen its participation and increase its value-add in the global value chains.

The ASEAN 3 Macroeconomic Research Office (AMRO) is an international organisation established to contribute towards securing macroeconomic and financial stability of the ASEAN 3 region, comprising 10 ASEAN member nations, China, Hong Kong (China), Japan and the Republic of Korea.

The Annual Consultation Report was prepared in fulfillment of AMRO’s mandate. The organisation is committed to monitoring, analysing and reporting to its members on their macroeconomic status and financial soundness./.

Mazda recalls over 61,000 faulty vehicles

Mazda has recalled a total of 61,517 imported and domestically-assembled vehicles in Vietnam for repair and replacement of faulty fuel pumps.

They include 3,369 Mazda2 vehicles imported between June 4, 2018 and August 21, 2019; 36,285 Mazda2, Mazda3, CX-5, and Mazda6 vehicles assembled domestically during 2017-2018; and 21,863 Mazda6, CX-5, and CX-8 vehicles assembled in Vietnam between January 4 and December 30, 2019.

The recall will run until December 31, 2025 at all agents and service stations of the Truong Hai Auto Corporation (THACO) nationwide. Repairs will be completed free of charge.

The fault can cause engines to stall while driving, vibrate, or fail to start, Vietnam Register said.

No related accidents have been recorded to date but THACO has recommended that customers have their vehicles examined nonetheless.

Customers can contact hotlines for Mazda Vietnam’s technical services support, in the northern region on 0938 807 112 and the southern region on 0938 908 905, or the customer service centre on 1900 545591./.

Vietnam’s April economic indicators good, says WB

The World Bank in Vietnam has recently announced its updated report on Vietnam Macro Monitoring, which states that most of the country’s economic indicators in April were good.

Accordingly, Vietnam’s industrial production continued its growth momentum, increasing by over 1 percent against March, or more than 24 percent compared with the same period last year.

Meanwhile, revenue from retail sales in April began to expand after two consecutive months of decline. The consumer price index also recorded a slight increase, reflecting a recovery in household consumption.

In terms of exports, a double-digit growth was recorded in all major export items, with the fastest increase in the export revenue of machinery.

However, the bank warned that measures applied by the government to fight the latest developments of Covid-19 pandemic would affect domestic economic activities, especially tourism, transportation and retail./.

Tourism-related firms face bankruptcy due to pandemic

Many tourism-related firms that have borrowed from banks are facing foreclosure due to the latest outbreak of COVID-19 infections.

According to the firms, they are on the verge of closing their businesses because there are no customers due to the pandemic. With no revenue, they are afraid of losing their restaurants and hotels because they have taken out loans from banks and are now struggling to pay the debts.

Mauro Gasparotti, Director of Savills Hotels Asia Pacific, told Tien phong (Vanguard) newspaper that the accommodation service industry continued to be severely affected by the pandemic. Hotels and resorts all had received many requests to cancel or change the date of stay.

In addition, Mauro said, MICE (meetings, incentives, conventions and exhibitions) and event business segments of hotels in HCM City and Ha Noi have been also affected as conferences were forced to be postponed or cancelled by the local authority due to the pandemic.

This is really a blow to hotels as from April onwards, the market will be in the peak season for events and conferences. Most hotels have high expectations for this business segment to partially compensate for losses from room revenue, according to Mauro.

Savills’ survey also noted that the business activities of resorts had suffered the same difficulties as more than 50 per cent of the number of bookings cancelled, mainly from groups of tourists and corporate customers.

A hotel firm in the central coastal city of Nha Trang has recently petitioned to the Prime Minister because the firm has to burden loans and is now no longer able to pay the debts so the firm’s owner fears foreclosure.

The company director said in 2017 they borrowed VND250 billion from a bank to build a hotel. The hotel was completed and put into operation from January 31, 2019. In January 2020, COVID-19 caused the tourism industry to fall into crisis. Currently, the pandemic is still complicated and the hotel business has remained pessimistic as foreign guests have not been allowed to be entered while domestic guests are very modest.

In April 2021, the firm had to pay both principal and interest of VND5.5 billion to banks and it now has no capital left. In early May, the firm was fined due to overdue debts. Now they have petitioned the Prime Minister to ask for support from the bank to extend the debt and restructure the repayment period of the loan principal and interest, the firm’s owner said.

According to accommodation firms, in 2020, banks restructured loans for some of them, but the extension of the debts was only between three and six months. Now the deadline is approaching and they still have no capital to repay the debts.

Hoang Van Vinh, chairman of the Khanh Hoa Tourism Association, said throughout this year, the tourism industry was heavily affected by the pandemic. The association forecast the difficulties will last at least until the end of this year.

According to the Vietnam Tourism Association, urgent solutions are needed to help companies maintain operations and recover soon.

The General Statistics Office reported that due to the impact of COVID-19, tourism revenue in the first quarter of this year was estimated at VND3.1 trillion, down 60.1 per cent over the same period last year, while the industry’s revenue in Q1 2020 also declined 24.8 per cent against Q1 2019.

South Korean businesses prioritize Hanoi for office lease

The Asian investors in Vietnam want to choose locations near their business community.

South Korean businesses prioritize Hanoi for setting up an office when deciding to invest in Vietnam.

Hanoi, with the vision to be Asia’s innovation hub by 2045, is an attractive destination for the South Korean business community.

South Korea’s Samsung, the leader in terms of foreign investment capital in the north of Vietnam, set up its two largest manufacturing and technology development centers in the northern provinces of Bac Ninh and Thai Nguyen, the neighboring localities of Hanoi.

According to real estate consultancy Savills Vietnam, office space by South Korean companies in Hanoi is 60% higher than in Ho Chi Minh City (HCMC).

Meanwhile, the office space leased by Japanese companies targeting the manufacturing sector is roughly equal in both cities, showing that they see the potential and business scale in both Hanoi and HCMC.

Most companies from the two Asian countries leasing premium office are operating in fields of tech, property, manufacturing, finance and insurance.

The office supply in the city hasn’t met the huge demand of businesses, according to Hoang Nguyet Minh, Director of Commercial Leasing of Savills Hanoi. “However, they may look for Grade A offices in the West or the mid-town for a wide range of flexible options,” she told Hanoitimes.

Hanoi market witnessed prime office segment expanding, from focusing on the central business district (CBD) Hoan Kiem area, to two non-CBD areas including the mid-town (accounting for 38% of total Grade A office supply) and the West (35%) over the past 10 years.

Though the rent in two new areas is lower than the CBD, tenants enjoy certain benefits and the high-quality of the buildings. “This made lease price in two areas increase compared to the previous years,” she said.

By the end of quarter one (Q1), Vietnam’s office market recorded positive signals of recovery.

Hanoi saw the launch of new prime office projects including Capital Place, jointly developed by CapitaLand Vietnam and Mitsubishi Estate Asia, Thaiholdings Tower invested by the Vietnamese Thaiholdings, and Leadvisors Tower developed by LeadvisorSanei Hospitality Holdings (a joint venture between the Vietnamese Leadvisors Capital Management and the Japanese Sanei Architecture Planning Co., Ltd).

By 2023, the city will have more Grade A projects concentrating in Ba Dinh district (situated in mid-town area) and Cau Giay district in the West. The average rent is expected to increase up to US$35 – US$37 per square meter per month.

Foreign enterprises place trust, raise investment in Dong Nai

The trust of investors in the local business climate and support from authorities for enterprises count among the factors that have helped southern Dong Nai province almost reach its foreign direct investment (FDI) target for the year.

The Swiss-funded Nestle Vietnam, based at the Bien Hoa 2 Industrial Park, has continually increased its charter capital since opening its first factory on-site in 1995.

Most recently, in April, it added 132 million USD to its investment in a coffee production project at the Amata Industrial Park in Dong Nai, bringing the total to over 400 million USD.

Carl Khoury, a manager at the company, said it has set up four factories in Vietnam, including three in Dong Nai, and it considers the province a key destination since it boasts industrial parks with complete infrastructure, borders Ho Chi Minh City, the country’s southern economic hub, and is served by highways and expressways favourable for goods transportation.

He noted that the company has developed continually over the last 25 years thanks in part to a sound investment climate and clear legal procedures that match international practice, both nationally and in Dong Nai.

Authorities have also swiftly dealt with any problems facing businesses, Khoury added.

In late March, the Soheung Vietnam Co. Ltd, with investment from the Republic of Korea, raised its capital by 30 million USD to 80 million USD to expand its factory at the Long Thanh Industrial Park in Dong Nai.

The company said the greatest challenge foreign businesses encounter when investing in a country is a lack of understanding about local practices and legal regulations.

However, it added, local agencies have helped it handle environmental and construction-related procedures, while taxation, business registration, and insurance services have been provided online, facilitating operations.

Dong Nai has attracted 66 FDI projects worth over 680 million USD since the beginning of this year, while its target for the year as a whole was around 700 million USD, according to the province’s Industrial Zones Authority.

It is currently home to nearly 1,400 FDI projects from 41 countries and territories with combined capital of 27 billion USD.

Chairman of the provincial People’s Committee Cao Tien Dung said FDI projects have contributed greatly to local socio-economic development, and Dong Nai views foreign investment as a main development resource.

The province pledges to provide the best possible conditions to investors, he noted, adding that it prioritises large-scale projects using advanced technology and skilled workers in supporting industries.

In the time ahead, it will also boost infrastructure development, build modern residential areas, and invest strongly in education and healthcare, as investors come to the province not only to seek profit but also to enjoy a good life, Dung said./.

Transport enterprises suffer heavy losses

Four COVID-19 outbreaks in a single year have pushed transport businesses deeper into losses.

With Vietnam seeing the fourth outbreak of COVID-19 this time, the country’s entire railway network has been almost completely frozen. There are only two passenger trains and about 10 freight trains running each day, while there were 40 trains running between Hanoi and Ho Chi Minh City only before the pandemic outbreak.

Vietnam Railways Corporation (VNR) said that passenger volume has dropped 90 per cent. Specifically, on May 13, 2021, VNR obtained VND600 million ($26,090) from passenger trains and VND5 billion ($217,400) from freight trains, only half of their earnings before the pandemic (more than VND10 billion ~ $434,780). This forced the corporation to have about half of its workforce take alternative breaks. “The corporation has estimated to lose VND700 billion-1 trillion ($30.43-43.5 million) this year,” Vu Anh Minh from VNR said.

In the aviation sector, Vietnam Airlines operated about 500 flights every day. Due to the pandemic, it has cut down its flights to 65, which were only half full at all times.

Noi Bai International Airport (Hanoi) said that passenger count has decreased sharply recently. On its most crowded day during the April 30 and May 1 holidays, the airport received 540 flights with 79,000 passengers. However, these figures have dropped to 90-200 flights and 9,000-15,000 passengers a day since the fourth outbreak. “The number of flights and passengers is forecast to further reduce in the time to come,” a representative of Noi Bai International Airport said.

Luu Huy Ha, chairman of passenger transportation service company Hoang Ha JSC said that the car rental business has almost closed, while only 10-20 per cent of seats of inter-city buses are occupied. Before the pandemic, 200 buses were operated each day on the Thai Binh-Hanoi route, which has dropped to 20-30 now. The number of buses and taxis running has also reduced by 50 per cent.

In the first quarter of 2021, Hoang Ha JSC lost VND15 billion ($652,170), while it gained VND4 billion ($173,910) in profit in the same period of 2019, and lost VND66 billion ($2.87 million) altogether last year. “I am not sure how much longer we can take losses,” said Ha.

Employees of these transport businesses have been working alternatively and their incomes were reduced to the minimum wage. Thereby, the representative of businesses and the Hanoi Taxi-Truck Association recommended the government to extend tax payment deadlines and temporarily exempt added value, exempt insurance premiums paid for employees whose contracts are terminated, and who work in rotation.

“We hope that the government could delay tax payments of 2020-2021 to 2022,” Nguyen Cong Hung, chairman of the association said.

Franchising model the way ahead for burgeoning domestic coffee outlets

Franchising is being seen as the fastest way to help brands, including cafe chains, to increase coverage in Vietnam, with numerous chains reporting soaring numbers of outlets thanks to this model.

Within the franchise model, profits mostly come from franchised investors. The larger the chain, the more investors will be attracted to participate.

“Franchising helps businesses quickly reach a large number of sale points and optimise investment costs via streamlining the operating team and cost for decoration, furniture, lighting, uniforms, and other factors,” said James Duong Nguyen, general director of Dcorp R-Keeper Vietnam.

There are two popular franchise models in Vietnam – zero-dong and traditional.

Representatives of the two largest zero-dong franchise coffee chains in Vietnam are Milano and Napoli, with more than 1,000 points of sale per brand. The founders of these coffee chains do not collect brand copyright fees and no monthly maintenance fees from franchisers. Instead, their main revenues come from providing full-service coffee shop design solutions, including decoration, to partners.

For example, Napoli offers three franchise packages from $3,000-15,000 with an area of 50-100 square metres. These packages include a 5-year warranty, decorations, furniture, lighting, and uniforms, which are enough for a coffee shop to start operating.

The devices serving for decoration and construction of a coffee shop are manufactured by Napoli, thus, the cost is at least twice as cheap compared to franchisers doing it themselves, and construction time takes only 7-10 days.

Nguyen Duc Hung, founder of Napoli, reaffirmed that this model has been a source of life for Napoli for more than 20 years. “Opening a cafe usually costs a lot initially but the zero-dong franchise model helps to simplify these cost for investors,” he said.

Within the traditional franchise model, partners will have to pay much more to the founders of a chain.

According to statistics published by news publisher FnB Vietnam, as of late 2019, Highlands Coffee – one of the most successful names in the local coffee and franchising scene –charges a franchise fee much higher than the average competition, with stricter rules to comply with.

Notably, the initial franchise fee amounts to up to VND5 billion ($217,000). The monthly franchise fee makes up 7 per cent of the franchiser’s monthly profit, and the management fee is 5 per cent of the monthly profit.

At Viva Star Coffee, the franchise fee is VND160 million ($7,000) for a 5-year contract, while the monthly fee amounts to 5 per cent of the profit, with total expenditures to set up a shop estimated at around VND1.1 billion ($48,000).

A representative of Ong Bau coffee said it is upbeat about its adaptability to the pandemic. He told VIR that most of Ong Bau’s partners are those who own the premises or rent them to run another business. They incorporate Ong Bau’s franchise to make the most of their premises and increase their income. Therefore, these partners are not much affected by the current complications.

Preventing counterfeit during explosive e-commerce growth during pandemic

E-commerce is on a trend of strong growth thanks to changing purchasing behaviours during the COVID-19 health crisis, elevating risks for customers due to the boom of fake and counterfeit goods on e-commerce platforms.

“Instead of shopping, I order clothes, home appliances, and electronics for all my family on e-commerce platforms, as well as order all fresh food through the app or hotline of supermarkets and grocery stores, and receive food and coffee through delivery apps,” she said, adding that she has not gone out much, except commuting between her home and work to avoid the pandemic. “My purchase frequency on e-commerce platforms has increased 5-10-fold since the health crisis.”

Thu Lan is one among millions of people in Vietnam and over the world who are adopting new habits due to the pandemic. According to Mastercard’s latest Recovery Insights report, this amounted to an additional $900 billion being spent on retail online around the world in 2020. Put another way: in 2020, e-commerce made up roughly $1 out of every $5 spent on retail, up from about $1 out of every $7 spent in 2019.

“Even in times of worldwide shutdowns, globalisation has shown its resilience, fuelled by digitalisation and the power of global trade,” says John Pearson, CEO of DHL Express. “These trends have led to an ever-growing number of consumers shifting their shopping activities online. The pandemic has accelerated this development like never before, with a sharp rise in businesses selling their goods in the global marketplace. E-commerce and global logistics thus provided the key to unlock local shutdowns, keep economies running, and mitigate the impact of COVID-19 for many of our customers.”

According to Mastercard’s latest Recovery Insights report, international e-commerce got a boost both in sales volume and the number of different countries where shoppers placed orders. With infinitely more choices at their fingertips, consumer spending on international e-commerce grew around 25-30 per cent on-year from March 2020 through February 2021. Consumers are increasing their e-commerce footprints, buying from up to 30 per cent more online retailers.

E-commerce is also predicted to see strong growth in the B2B (business to business) segment in the coming years. In the opinion of an expert from DHL Express, one of the leading global firms in the logistics industry, by 2025, 80 per cent of all B2B sales interactions between suppliers and professional buyers will take place in digital channels.

In 2019, before the pandemic, global sales on B2B e-commerce sites and marketplaces had already increased by 18.2 per cent to reach $12.2 trillion, outpacing the market size of the B2C sector. Through COVID-19 and the resulting acceleration of digitalisation, this global B2B e-commerce volume is estimated to reach $20.9 trillion by 2027.

In addition to the convenience it offers, e-commerce also carries risks for customers. Last week, Tuyet Mai, an accountant at BRG Retail ordered a lipstick from a world-famous brand for VND590,000 ($25.65) on Shopee. A few days later, she received the item, but it was not authentic. “It looks rough, not shiny, and came without a full box, labels, or a barcode. For this price, I was expecting an authentic lipstick,” said Mai.

In fact, fake goods have been a serious issue for e-commerce for a long time. In February, the 2020 Review of Notorious Markets for Counterfeiting and Piracy report of the United States Trade Representative Office (USTR) highlighted that Shopee is “tolerating counterfeiting”,with right holders reporting very high levels of counterfeits being sold on all of Shopee’s platforms.

Shopee reportedly has no procedures for vetting third-party sellers and preventing infringers from re-registering on the platforms, and sellers of counterfeit goods seem to have their accounts frozen only after multiple escalating actions.

The General Department of Market Surveillance (GDMS) predicts the annual growth rate of Vietnam’s e-commerce in 2015-2025 at 43 per cent. Particularly in 2020, the revenue of the e-commerce segment was estimated to surpass $13 billion with an escalating number of violations.

Last year, the department checked more than 5,000 cases, settled about 4,500 violations, distributing fines of VND30 billion ($1.3 million) in total. The value of counterfeit goods and goods without a certificate of origin, violating intellectual property rights discovered in the first seven months of 2020 by the GDMS was VND40 billion ($1.74 million).

Tran Huu Linh, director general of the GDMS confirmed that the authority has been building a legal framework to address these issues, proposing more adequate penalties to replace Decree No.52/2013/ND-CP on e-commerce.

“The legal document will set up a new management method for e-commerce purchases. The growth of e-commerce is fast enough, especially during the pandemic, to receive the same treatment as traditional retail. The new decree will put e-commerce and traditional retail on the same footing,” said Linh. “Additionally, the responsibilities of e-commerce developers and businesses will also be tightened to mitigate issues as much as possible to ensure customers’ rights.”

Hanoi strives to lead country in e-commerce

Vietnam’s capital city of Hanoi will strive to take the lead in e-commerce nationwide, considering it an important task in economic growth this year, Acting Director of the municipal Department of Industry and Trade Tran Thi Phuong Lan has said.

Hanoi is now home to 330,000 enterprises, 95 percent of which are small and medium-sized enterprises (SMEs) and account for 25-30 percent of its exports.

In recent years, the capital has ranked second nationwide in the e-commerce index. Despite the impact of the COVID-19 pandemic, its e-commerce sector still grew 30 percent last year, with over 12,350 websites and apps contributing 8 percent to total retail sales.

To facilitate online trade, Hanoi has supported companies in technological application, cashless payments, and building websites for farm produce sale.

The department also worked with the Ministry of Industry and Trade to step up technology transfer and connect firms with e-commerce sites to boost exports.

In cooperation with other departments and agencies, it has accelerated the construction of logistics centres and warehouse networks.

Lan said the department will work to sell handicrafts from Hanoi on Amazon by providing training to local SMEs, holding seminars to help them understand procedures and regulations, and offering advice on refreshing product lines./.

Conference to seek ways for boosting farm produce export to Japan

The Vietnam Trade Promotion Agency (Vietrade) under the Ministry of Industry and Trade (MoIT) and the Vietnam Trade Office in Japan will jointly organise an online conference on June 2 to promote connections in a bid to increase the export of Vietnamese farm produce to Japan.

This is one of activities within the framework of a national trade promotion programme in 2021, which aims to support Vietnamese businesses to boost the export of agricultural products and food to foreign markets.

The event is expected to attract 60 local businesses operating in producing and exporting farm produce and food, along with Japanese firms.

Vietnam is ranked 17th in agro-forestry-aquaculture exports in the world, with turnover hitting 41.2 billion USD in 2020, accounting for 1.95 percent of the global total.

Recently, Minister of Agriculture and Rural Development Le Minh Hoan asked agencies within the ministry, local authorities and departments of agriculture and rural development of localities to focus on measures to seek new export markets for Vietnamese farm produce, saying that this is a decisive factor in the country’s agricultural economic development.

Relevant ministries, sectors, localities and business associations were urged to enhance negotiations to remove technical and trade barriers in key markets.

In the coming time, the country will continue to strengthen trade promotion activities, bolster the application of technology in agricultural development, and raise the quality of farm produce for export./.

Over 10 trillion VND of FDI poured in six wind power projects in Dak Lak

The authorities in the Central Highlands province of Dak Lak has granted in-principle investment approval to six foreign-funded wind power projects worth more than 10.08 trillion VND (436.5 million USD).

Of the projects, there are two wind power plants from the Singaporean-invested VNM company. The two boast a total capacity of 70 MW and cost over 2.21 trillion VND.

Accordingly, the 20 MW-Alpha VNM plant, valued at 650 billion VND, will be developed in three communes of Ea Sol, Dlie Yang and Ea Hiao on an area of nearly 6.5ha.

Meanwhile, the 50MW-Beta plant will cover 10.9ha in eight communes of Dat Hieu, An Binh, Doan Ket, Thong Nhat, Binh Tan, Cu Bao, Ea Ngai and Ea Tul with a cost of 1.56 trillion VND.

With attractive investment attraction policies and favourable natural conditions, Dak Lak has become a destination for many solar and wind power projects./.

Firms advised to be cautious when doing business with Indian partners

The Ministry of Industry and Trade has urged firms to be cautious when doing business with companies in India that were severely hit by the COVID-19 pandemic.

India is struggling with severe cases of COVID-19 and deaths are increasing every day. Many states have imposed lockdowns and social distancing to prevent the spread of the virus, which was negatively affecting the transportation of goods at ports, operations of banks as well as production and business of firms in India.

A number of major ports such as Mundra, Nhava Seva, Chennai and Kolkata halved their operations due to a severe shortage of workers. This situation made shipping lines hesitant to transport goods to India with a fear that they would return with empty containers or store containers at the ports incurring storage fees.

According to the ministry, many banks in India only operate two or three days a week with around 30-50 percent of employees, working hours were limited from 11am to 2pm. Banks with positive cases were forced to close for one to two weeks. Therefore, transactions at banks were very limited.

The ministry urged firms to be cautious when doing business with partners in India.

Firms should regularly keep contact to maintain the partnership and keep informed about the pandemic development as well as the India Government’s prevention measures.

Before signing commercial contracts, it was necessary to study regulations, measures and policies that each locality was applying, the ministry said, urging firms to choose to do business with reputable enterprises.

It was also important to anticipate difficulties that might arise and affect customs clearance and banking transactions in India, the ministry said, adding that firms should negotiate carefully all terms, including delivery, payment and dispute resolutions. Companies should also insure for all shipments.

Firms should contact with the ministry’s Asia-Africa Market Department for supports via telephone number 024.2220.5479 and email: [email protected]; or the Vietnam Trade Office in India via email [email protected]

The bilateral trade between Vietnam and India reached 3.3 billion USD in the first quarter of this year, representing a rise of more than 34 percent over the same period last year. The two-way trade was set to reach 12 billion USD this year./.

Plan for implementation of UKVFTA adopted

The plan aims to assign tasks and responsibilities to relevant agencies and organisations, and decide on direction measures and others to implement the deal fully and effectively.

To that end, the Government leader requested ministries, sectors and localities to step up the dissemination of information about the UKVFTA as well as the British market, build laws and institutions, enhance the competitiveness and develop human resources, and improve social welfare, environmental protection and sustainable development policies, along with carrying out regular and assigned tasks.

It is necessary to popularise information about the agreement and the British market to relevant persons, especially farmers, fishermen and workers via different means of communications to raise their awareness of the deal’s commitments as well as work that needs to be done towards effective enforcement.

The PM also asked ministries, sectors and localities to speed up the organisation of trade and investment promotion programmes in the UK, and continue perfecting necessary institutions to enforce the agreement, improving the competitiveness of industries and businesses, especially micro-, small- and medium-sized enterprises.

Attention should be paid to assisting Vietnamese enterprises in joining production networks, and value and supply chains which see the participation of British businesses to take advantage of the agreement, while encouraging British-invested companies to connect with domestic partners to form and develop supply chains.

The plan also aims to promote mutual recognition of assessment results of conformity with the UK, especially for Vietnam’s key products exported to the country.

Firms advised to be cautious when doing business with Indian partners

The Ministry of Industry and Trade has urged firms to be cautious when doing business with companies in India that were severely hit by the COVID-19 pandemic.

India is struggling with severe cases of COVID-19 and deaths are increasing every day. Many states have imposed lockdowns and social distancing to prevent the spread of the virus, which was negatively affecting the transportation of goods at ports, operations of banks as well as production and business of firms in India.

A number of major ports such as Mundra, Nhava Seva, Chennai and Kolkata halved their operations due to a severe shortage of workers. This situation made shipping lines hesitant to transport goods to India with a fear that they would return with empty containers or store containers at the ports incurring storage fees.

According to the ministry, many banks in India only operate two or three days a week with around 30-50 percent of employees, working hours were limited from 11am to 2pm. Banks with positive cases were forced to close for one to two weeks. Therefore, transactions at banks were very limited.

The ministry urged firms to be cautious when doing business with partners in India.

Firms should regularly keep contact to maintain the partnership and keep informed about the pandemic development as well as the India Government’s prevention measures.

Before signing commercial contracts, it was necessary to study regulations, measures and policies that each locality was applying, the ministry said, urging firms to choose to do business with reputable enterprises.

It was also important to anticipate difficulties that might arise and affect customs clearance and banking transactions in India, the ministry said, adding that firms should negotiate carefully all terms, including delivery, payment and dispute resolutions. Companies should also insure for all shipments.

Firms should contact with the ministry’s Asia-Africa Market Department for supports via telephone number 024.2220.5479 and email: [email protected]; or the Vietnam Trade Office in India via email [email protected]

The bilateral trade between Vietnam and India reached 3.3 billion USD in the first quarter of this year, representing a rise of more than 34 percent over the same period last year. The two-way trade was set to reach 12 billion USD this year./.

Over 10 trillion VND of FDI poured in six wind power projects in Dak Lak

The authorities in the Central Highlands province of Dak Lak has granted in-principle investment approval to six foreign-funded wind power projects worth more than 10.08 trillion VND (436.5 million USD).

Of the projects, there are two wind power plants from the Singaporean-invested VNM company. The two boast a total capacity of 70 MW and cost over 2.21 trillion VND.

Accordingly, the 20 MW-Alpha VNM plant, valued at 650 billion VND, will be developed in three communes of Ea Sol, Dlie Yang and Ea Hiao on an area of nearly 6.5ha.

Meanwhile, the 50MW-Beta plant will cover 10.9ha in eight communes of Dat Hieu, An Binh, Doan Ket, Thong Nhat, Binh Tan, Cu Bao, Ea Ngai and Ea Tul with a cost of 1.56 trillion VND.

With attractive investment attraction policies and favourable natural conditions, Dak Lak has become a destination for many solar and wind power projects./.

Conference to seek ways for boosting farm produce export to Japan

The Vietnam Trade Promotion Agency (Vietrade) under the Ministry of Industry and Trade (MoIT) and the Vietnam Trade Office in Japan will jointly organise an online conference on June 2 to promote connections in a bid to increase the export of Vietnamese farm produce to Japan.

This is one of activities within the framework of a national trade promotion programme in 2021, which aims to support Vietnamese businesses to boost the export of agricultural products and food to foreign markets.

The event is expected to attract 60 local businesses operating in producing and exporting farm produce and food, along with Japanese firms.

Vietnam is ranked 17th in agro-forestry-aquaculture exports in the world, with turnover hitting 41.2 billion USD in 2020, accounting for 1.95 percent of the global total.

Recently, Minister of Agriculture and Rural Development Le Minh Hoan asked agencies within the ministry, local authorities and departments of agriculture and rural development of localities to focus on measures to seek new export markets for Vietnamese farm produce, saying that this is a decisive factor in the country’s agricultural economic development.

Relevant ministries, sectors, localities and business associations were urged to enhance negotiations to remove technical and trade barriers in key markets.

In the coming time, the country will continue to strengthen trade promotion activities, bolster the application of technology in agricultural development, and raise the quality of farm produce for export./.

Flexible state budget management for national sustainable finance: Minister

The finance ministry would allocate VND3 trillion (US$130 million) from the state budget for the Covid-19 fight.

The Ministry of Finance (MoF) would manage the state budget in a flexible manner during the Covid-19 pandemic to ensure national sustainable finance.

Minister of Finance Ho Duc Phoc made the statement at a recent meeting discussing state budget management.

In the first four months of 2021, Vietnam’s budget revenue stood at VND543.4 trillion (US$23.6 billion), equivalent to 40.5% of the yearly estimate. Of the total, domestic revenue made up a lion’s share of VND456.3 trillion (US$19.8 billion), followed by customs revenue of VND74.5 trillion (US$3.23 billion), and crude oil revenue of VND12 trillion (US$521 million).

Meanwhile, budget expenditure during the period was estimated at VND463.7 trillion (US$20.1 billion), including capital expenditure of VND86 trillion (US$3.73 billion), regular spending of VND338.1 trillion (US$14.67 billion), and debt payment of VND38.8 trillion (US$1.68 billion).

Minister Phoc called for greater efforts in realizing priorities in the coming time, including the completion of a development strategy for the financial sector in the 2021-2030 period; development strategy for State Treasury and customs; and finalizing legal framework to lay the foundation for further economic development.

Regarding the General Department of Taxation, Phoc requested the agency to focus on budget collection and preventing transfer pricing, while drafting regulations on tax collection on digital platform and issuing e-invoices.

The General Department of Vietnam Customs is tasked with tightening management of customs clearance procedures to fight off smuggling and trade frauds.

A report from the MoF revealed an allocation of VND3 trillion (US$130 million) for the Covid-19 fight, including the provision of an addition of VND1.74 trillion (US$75.6 million) for purchasing vaccines and medical equipment to contain the pandemic.

“Amid serious Covid-19 condition, the MoF would ensure sufficient fund for the fight against the pandemic,” stated Phoc.

VinaCapital fund plans to divest from KDH

Vietnam Ventures Limited, a fund managed by VinaCapital has just registered to sell 7.7 million shares of Khang Dien House Trading and Investment JSC (KDH) between May 20 and June 18.

Once the deal is completed, Vietnam Ventures Limited will hold 20.5 million shares of KDH, equivalent to an ownership rate of 3.67 per cent and will no longer be a major shareholder of KDH.

The fund said the deal is being conducted to restructure the investment portfolio. This move comes amid KDH shares continuously hitting higher levels and are currently at the highest price territory in history.

Since the beginning of the year, funds managed by Dragon Capital have also continuously lowered the proportion of KDH shares in their portfolios.

Earlier this year, these funds held about 84.1 million KDH shares, equivalent to an ownership rate of 15.05 per cent, but now they only hold 55.21 million KDH shares, equivalent to the ownership rate of 9.88 per cent.

Under net selling pressure from foreign investors, KDH stocks were excluded from VN Diamond basket because they don’t meet the criteria for foreign ownership limit ratio (FOL) as the indicator was lower than required (90 per cent).

However, KDH stocks are still trading at historic highs on the stock market. Since April, the shares have been on a bullish trend with a gain of up to 20 per cent. The average trading liquidity of KDH shares in April was over 5.3 million units per day.

KDH shares, listed on the Ho Chi Minh Stock Exchange (HoSE), closed Tuesday at VND36,000 per share.

Becamex plans to raise $65 million via bonds

The board of directors of the Investment and Industrial Development Joint Stock Corporation (Becamex IDC) has approved the second corporate bond issuance plan this year.

The maximum total par value is VND1.5 trillion (US$65.2 million) and divided into three to five installments.

The bond term is expected to be from one to five years, with a par value of VND1 billion per bond, and is expected to be issued in the second or third quarter of this year.

The purpose of this bond fundraising includes increasing the operating capital scale of Becamex and restructuring the capital.

Previously, Becamex announced the issuance of two million private bonds for the first time on March 30 this year with a total issuance value of VND2 trillion. The bond has a maturity date of March 25, 2026.

Becamex recorded a total bond value of VND6.05 trillion by the end of the first quarter of this year.

Becamex achieved a revenue of approximately VND1.4 trillion in the first quarter of this year, up 14 per cent over the same period last year.

Its profit after tax grew by 40.9 per cent compared to the same period last year to VND468 billion.

Compared to the plan, Becamex has completed 15.7 per cent of the revenue target and 20.3 per cent of the target of profit after tax.

Bac Giang calls for farm produce sale support amid Covid-19 outbreak

Authorities in the northern province of Bac Giang are seeking government support to help boost the sale of local farm produce amid the Covid-19 spread.

The province has sent a document signed by provincial people’s committee Chairman Le Anh Duong to Prime Minister Pham Minh Chinh about the issue.

According to Duong, up to nearly 80% of the population in Bac Giang live in rural areas. At present, local farmers are raising nearly one million pigs with a total pork productivity of 44,000 tonnes; around 10,000 tonnes of chickens; 1,100 hectares of vegetables, 28,000 hectares of lychee and other kinds of fruits, including oranges and longans. Among those, 180,000 tonnes of lychee have ripened. Meanwhile, some 20,000 tonnes of longans need to be harvested between July and the end of August.

However, the province has become the epicentre of the most recent Covid-19 wave, affecting the farm produce sales. Farm produce transportation from Bac Giang is facing difficulties.

The province has informed the prime minister of the situation and hopes the government leader can instruct localities nationwide to create favourable conditions for the transportation of Bac Giang’s farm produce.

The Bac Giang official asked the government to adopt measures to encourage companies and supermarket chains to buy Bac Giang farm produce.

Media agencies were also asked to help promote Bac Giang’s products, particularly those with Vietnamese Good Agricultural Practices (VietGAP) and Global GAP standards.

Over the past two weeks, Bac Giang has recorded hundreds of locally-transmitted Covid-19 cases with the majority from industrial parks. The province has closed four industrial parks since Tuesday.

Keeping inflation in the sweet spot

The government will attempt to successfully control inflation this year with demand potentially failing to fully recover, despite a rise in local consumption.

In the first four months of this year, the consumer price index (CPI) increased 0.89 per cent on-year, also the lowest rise in the first four months since 2016. Specifically, the first-four-month rate was 1.41 per cent in 2016, 4.8 per cent in 2017, 2.8 per cent in 2018, 2.71 per cent in 2019, and 4.9 per cent in 2020.

In the first four months of this year, though there has been a rise in prices of some items used to calculated CPI in Vietnam, such as foodstuffs (0.2 per cent on-year), catering services (2.07 per cent), gas (14.69 per cent), and petrol (2.49 per cent), such a price hike was small as compared to the same period last year, when COVID-19 began to attack the economy.

The period saw total retail and consumption service revenues hit nearly VND1.7 quadrillion ($73.9 billion), up 10 per cent over the same period last year when the rate declined 2.8 per cent on-year.

“Despite a rise in local consumption, it remains weak and has yet to fully recover, and this has failed to significantly increase the first-four-month CPI,” said a GSO expert. “There have also been some major causes behind such an on-year reduction.”

Since last year the government has been deploying support solutions for individuals and enterprises hit by COVID-19. For example, state-owned Electricity of Vietnam (EVN) has reduced power prices for its customers. The average electricity price in the first four months of 2021 fell 5.88 per cent on-year, leading to a 0.19 per cent reduction in CPI.

However, despite the move, EVN has reported that all of its activities increased on-year in the first quarter of 2021.The group’s total gross industrial output is estimated to be VND52.83 trillion ($2.3 billion), up 3.18 per cent on-year.

Commercial electricity totalled 50.79 million kilowatt hours, up 3.18 per cent. In which, electricity for agro-forestry-fishery accounts for 3.97 per cent of total electricity consumed, while the rate is 56.01 per cent for construction and industrial activities and 31.46 per cent for households – all up against the same period last year. Notably, EVN’s total revenue from power sales is estimated to be over VND94 trillion (over $4 billion), up 4.11 per cent on-year.

Another cause behind a reduction in first-four-month CPI in Vietnam is that state-owned Vietnam Railways Corporation, airlines, and travel firms have launched price discounts to stimulate travelling and tourism activities. For example, the ticket price for trains since early this year has decreased on average 7.4 per cent on-year, while the air ticket price has also dropped 17.4 per cent on-year, and full-package tours’ average price has also followed suit, at 3.32 per cent on-year.

The Asian Development Bank (ADB) has praised Vietnam’s efforts to control inflation, saying that in the first quarter of 2021 it slid to its lowest level since 2016 due to lower transport costs and subdued demand. “But rising international oil prices on the back of global economic recovery and increased domestic consumption are expected to edge inflation up to 3.8 per cent this year and 4 per cent in 2022,” read an ADB report on Vietnam’s economic outlook.

The International Monetary Fund (IMF) also forecast that the inflation for 2021 in Vietnam may be only 2.4 per cent.

“Inflation continued to be well contained at 3.23 per cent, below the authorities’ target of 4 per cent in 2020,” said an IMF report also on Vietnam’s economic prospects. “Authorities have set the targets for GDP growth of 6.5 per cent and inflation at around 4 per cent in 2021 in line with the goals set in the national Socioeconomic Development Strategy for 2021-2030.”

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

Authorities check a coach in Ninh Binh city, the capital of northern Ninh Binh province.

The current COVID-19 resurgence has put the brakes on trade, transport and tourism, with all the sectors experiencing declines in May, according to the General Statistics Office (GSO).

The turns of passengers transported across the country was estimated at 287.8 million this month, a 14.9-percent decrease from April, the GSO reported. The figure exceeded 1.59 billion in the first five months of 2021, up 4.2 percent year-on-year.

In May, transport of goods, meanwhile, increased by 2.8 percent to 139 million tonnes. This brought the total volume of freight transport from January to May to 739 million tonnes, up 10.5 percent year-on-year.

Total retail sales of goods and services valued 393.6 trillion VND (17.1 billion USD), down 3.1 percent from the previous month and 1 percent from a year earlier. The five-month sum hit over 2.08 trillion VND, up 7.6 percent year-on-year.

International visitor arrivals in Vietnam totalled 13,400 this month, down 30.8 percent month-on-month and 40.6 percent year-on-year. The five-month figure plunged 97.8 percent compared to the same period last year as international travel restriction continued to be in place./.

Experts urge wariness over firms offering lucrative investment opportunities

Experts have sounded the alarm about a new form of financial investment co-operation offering high interest rates, warning that investors could lose their capital in a rate trap.

As banks are currently offering low interest rates, many companies are advertising in a bid to mobilise idle capital from investors by offering very high interest rates, vneconomy.vn reported.

According to an advertisement on the website of Nhat Nam Real Estate and Trading Investment Joint Stock Company, despite being newly established in July 2019, the company has more than 8,000 investors participating in business co-operation. The company is offering an interest rate of up to 168 per cent for a 24-month term to investors, which is 12 times higher than the interest rate listed by commercial banks.

According to the company’s staff, customers can receive high interest rates and discounted real estate and other services from the company if they invest from VND20 million to VND5 billion over two years.

After two working days of sending their capital to the company, every day customers will receive a part of the principal and interest rate sent to their personal account from Monday to Friday, except weekends and the country’s holidays.

The staff claimed the company can pay such attractive profits due to its involvement in many business segments with a focus on real estate in many cities and provinces from Ha Noi, Ha Nam and Thanh Hoa to Kien Giang, Tay Ninh and Dac Lak.

Also offering high interest rates and sustainable profit, the Blue Diamond Real Estate Services Trading and Investment Joint Stock Company headquartered in HCM City is seeking investment with a dream interest rate of 105 per cent in 20 months.

The company announced it recently launched a gratitude programme to loyal investors, offering customers VND6.16 million per month with an investment capital of only VND60 million. This means as well as three SJC gold taels as a gift, the customers are promised a total of VND123 million after 20 months.

According to lawyer Truong Thanh Duc, Director of ANVI Law Firm, all forms of capital mobilisation, from bond and stock issuance to business co-operation contracts, are legal. However, the above form of investment co-operation, which commits to pay fixed high interest rates is fraudulent and ambiguous.

Duc explained under Article 468 of the 2015 Civil Code, the interest rate of a loan may be agreed upon by the involved parties but must not exceed 20 per cent of the loan amount per year, unless otherwise prescribed by a relevant law.

To dodge the law, the companies mobilise capital by calling for business investment co-operation, whose interest rate can reach hundreds of per cent legally. However, they don’t warn their customers that business investment co-operation has risks and the customers must accept those risks.

If the companies claim their investment is profitable and safe without any risks, they are cheating customers, Duc noted.

VietinBank to receive over 300 million USD in State capital

The Government has approved a plan to invest an additional 6.977 trillion VND (303.2 million USD) in State capital in the Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank) so as to maintain the State’s ownership percentage at this bank.

The approval will be the basis for VietinBank to carry out procedures for raising its charter capital, helping it continue expanding operations.

The bank is expected to complete the issuance of shares to pay dividends, at a rate of 29.0695 percent, in the third or fourth quarter of 2021.

Following the issuance, the bank’s charter capital will increase by 10.824 trillion VND, from 37.234 trillion VND to 48.058 trillion VND.

Last year, the bank posted 17.085 trillion VND in consolidated pre-tax profit while the non-performing loan ratio stood at 0.94 percent.

The respective figures were at 8.06 trillion VND and 0.88 percent by the end of the first quarter this year./.

Ample room for Vietnamese farm produce, food in Poland

The Polish market has ample room for Vietnamese farm produce and food, experts said at a recent online conference.

The conference was jointly held by the Vietnam Trade Promotion Agency under the Ministry of Industry and Trade (Vietrade), the Commercial Affairs Office under the Vietnamese Embassy in Poland, and the Polish Chamber of Commerce. It aims to help Vietnamese firms study and access the Central European market.

Participants shared the view that Vietnam’s farm produce and food have grown strongly over the past years and affirmed their position in the international market, explaining that these products have hit the shelves of 185 countries and territories, including the US, Japan, the EU and the Republic of Korea (RoK).

Nguyen Thanh Hai, Counsellor at the Commercial Affairs Office, said Poland has huge demand for products that Vietnam has strength like rice, tra and basa fish (pangasius), shrimp, mango products, pineapple, coffee and cashew nuts.

Vietnam’s ST24 and ST25 rice varieties are competitive as compared with their rivals from Thailand in terms of price and quality, according to the official.

Wojciech Gerwel, Polish Ambassador to Vietnam, said the fruitful traditional relationship between Vietnam and Poland would create optimal conditions for their businesses to cooperate.

Vu Ba Phu, head of Vietrade, pointed out the positive impact of the EU-Vietnam Free Trade Agreement (EVFTA) on Vietnam’s economy, particularly its imports from and exports to the EU and Poland.

Vietnam is the EU’s 10th largest goods supplier, he said, suggesting Vietnamese ministries and agencies step up the information work to help domestic enterprises stay updated on commitments in the agreement and market demand.

Following the conference, nearly 30 Vietnamese businesses conducted online transactions with more than 40 Polish firms, and introduced Vietnam’s farm produce and food products that would be exported to the EU./.

Digitalization – viable option for banks’ sustainable growth

By 2025, at least 50% of banking procedures and 70% of customers’ transactions are expected to take place in the cyber environment.

While keeping a safe distance and remote working have become new practices since the Covid-19 outbreak, Vietnamese banks have been quick to push for digitalization to meet customers’ demand for more digital banking options and pursue sustainable growth.

A study from Vietnam’s E-commerce and Digital Economy Agency (iDEA) revealed Vietnam’s e-commerce revenue rose by an impressive rate of 18% year-on-year to US$11.8 billion last year, or 5.5% of the total revenue of retail sales and services.

WeAreSocial & Hootsuite in its Digital report on the Vietnamese market suggested the rate of internet users from the age of 16-64 using mobile phones for online shopping rose from 55% in 2019 to 68.5% in 2020.

The use of online banking and financial services, thus, went up from 36% to 40.1% in the 2019-2020 period as people considered digital banking a normal routine in new circumstances.

Since last year, state-run Vietcombank launched its digital banking app VCB Digibank, while BIDV also kicked off its own digital transformation initiative via the BIDV iBank app.

VCB Digibank was developed based on the combination of internet banking and mobile banking platforms. For BIDV customers, the BIDV iBank allows enterprises to conduct banking transactions, including account and transaction inquiries, in a safe, accurate, and quick manner without visiting a physical bank branch.

Private banks, including Viet Capital Bank, OCB, or TPBank also launched their respective digital bank app to better meet customers’ demand for quick and safe services.

To further accelerate the digitalization trend in the banking sector, the State Bank of Vietnam (SBV), the country’s central bank, has recently issued a plan for digital transformation   Vietnamese banking sector until 2025, with a vision to 2030.

By that time, the SBV expects at least 50% of banking procedures and 70% of customers’ transactions to be conducted in the cyber environment; 50% of consumer loans to clients have processed automatically online.

For its part, the central bank would reform its operation comprehensively by taking advantage of Industry 4.0 technologies and meeting the government’s requirements for digital transformation.

SBV’s Vice Governor Nguyen Kim Anh noted digitalization in the banking sector is a key task to promote financial inclusion and the establishment of e-government, eventually towards the digital government.

“In this regard, banks should give priority to new technologies application and innovation, in which customers are at the center of all services,” Anh added.

According to Anh, banks and credit institutions are expected to develop digital bank models and expand services for greater customer satisfaction.

“The capability of banks to meet the customers’ demand would be the measurement for their efforts in digitalization,” he said.

While saying these targets are ambitious, Anh referred to a recent survey that 95% of banks are planning for digital transformation.

“Certain banks have been able to provide fully-digitalized banking procedures, including depositing money, opening and using of account, transfer wiring, personnel management, or to apply artificial intelligence, machine learning and big data in more advanced tasks including grouping customers and assisting the lending process,” Anh suggested.

In the coming time, Anh said the SBV would accelerate the process of drafting the Law on e-transactions, which serves as a basis for ministries and government agencies to promote the digitalization process.

In parallel with the efforts, the SBV is scheduled to issue a decree on e-identification and verification, along with regulations to protect privacy and data in the cyber environment, Anh added.

In 2020, the number of mobile transactions surged by 114% in number and 118% in value against 2019, while payment via QR code scanning also rose by 73%.

This resulted in a sharp increase of 78% in the number of total transactions and 128% in value compared to those recorded in 2019.

Foreign enterprises place trust, raise investment in Dong Nai

The trust of investors in the local business climate and support from authorities for enterprises count among the factors that have helped southern Dong Nai province almost reach its foreign direct investment (FDI) target for the year.

The Swiss-funded Nestle Vietnam, based at the Bien Hoa 2 Industrial Park, has continually increased its charter capital since opening its first factory on-site in 1995.

Most recently, in April, it added 132 million USD to its investment in a coffee production project at the Amata Industrial Park in Dong Nai, bringing the total to over 400 million USD.

Carl Khoury, a manager at the company, said it has set up four factories in Vietnam, including three in Dong Nai, and it considers the province a key destination since it boasts industrial parks with complete infrastructure, borders Ho Chi Minh City, the country’s southern economic hub, and is served by highways and expressways favourable for goods transportation.

He noted that the company has developed continually over the last 25 years thanks in part to a sound investment climate and clear legal procedures that match international practice, both nationally and in Dong Nai.

Authorities have also swiftly dealt with any problems facing businesses, Khoury added.

In late March, the Soheung Vietnam Co. Ltd, with investment from the Republic of Korea, raised its capital by 30 million USD to 80 million USD to expand its factory at the Long Thanh Industrial Park in Dong Nai.

The company said the greatest challenge foreign businesses encounter when investing in a country is a lack of understanding about local practices and legal regulations.

However, it added, local agencies have helped it handle environmental and construction-related procedures, while taxation, business registration, and insurance services have been provided online, facilitating operations.

Dong Nai has attracted 66 FDI projects worth over 680 million USD since the beginning of this year, while its target for the year as a whole was around 700 million USD, according to the province’s Industrial Zones Authority.

It is currently home to nearly 1,400 FDI projects from 41 countries and territories with combined capital of 27 billion USD.

Chairman of the provincial People’s Committee Cao Tien Dung said FDI projects have contributed greatly to local socio-economic development, and Dong Nai views foreign investment as a main development resource.

The province pledges to provide the best possible conditions to investors, he noted, adding that it prioritises large-scale projects using advanced technology and skilled workers in supporting industries.

In the time ahead, it will also boost infrastructure development, build modern residential areas, and invest strongly in education and healthcare, as investors come to the province not only to seek profit but also to enjoy a good life, Dung said./.

JICA provides 25 million USD for wind power project in Quang Tri

The Japan International Cooperation Agency (JICA) has recently signed a facility agreement to provide up to 25 million USD for an onshore wind power generation project with a total capacity of 144 MW in the central province of Quang Tri.

The Power Construction Joint Stock Company No. 1, a major local company in Vietnam in the field of renewable energy development and electromechanical works, and RENOVA, Inc., a leading renewable energy IPP developer in Japan, are sponsors to the project.

Three project companies namely Lien Lap Wind Power Joint Stock Company, Phong Nguyen Wind Power Joint Stock Company, and Phong Huy Wind Power Joint Stock Compan are the borrowers. The loan is co-financed by Asian Development Bank (ADB) and Export Finance Australia under the Australian government.

This project is JICA’s first finance for a wind power generation project in Vietnam and is expected to serve as a model case for private sector wind power generation projects in the renewable energy sector in Vietnam, including those by Japanese and local companies.

In addition, the project will contribute to the Initiative on Overseas loan and Investment for ASEAN announced at the Japan-ASEAN Summit Meeting on November 4, 2019, and is the first investment by a Japanese company in a new-large scale wind power project in Vietnam.

According to the Ministry of Industry and Trade of Vietnam, electricity demand in Vietnam is expected to increase by 8-8.5 percent per year from 2021 to 2025, and demand for electricity is expected to be strong.

The Vietnamese government has also set a target of reducing greenhouse gas emissions by 9 percent in 2030 compared to the base-case scenario without climate change measures and has adopted the introduction of renewable energy as a specific measure.

In order to increase the supply of electricity and combat climate change at the same time, the government has set a target of using renewable energy sources for about 15-20 percent of the 125-130 GW of power generation capacity in its power development plan for 2030 of which 6000 MW will be supplied by wind power projects./.

PM orders removing difficulties in farm produce consumption for Bac Giang

The Prime Minister has tasked the Ministry of Industry and Trade with removing difficulties in the consumption of agricultural products, especially lychee, for Bac Giang province that is now the country’s COVID-19 hotspot.

Accordingly, the ministry will hold working sessions with the northern province, dubbed as Vietnam’s “lychee kingdom,” to set forth plans on lychee purchase and consumption.

At the same time, it needs to step up activities to boost domestic consumption and export, while closely coordinating with relevant ministries, agencies and localities to facilitate the circulation of the fruit.

COVID-19 prevention and control regulations must be always observed, the PM stressed.

According to the provincial People’s Committee, Bac Giang has 28,100 ha of lychee this year, with a total output of some 180,000 tonnes, up 15,000 tonnes from the previous year. The main lychee harvest season will begin in mid-June.

Amidst the pandemic, China – one of Bac Giang’s major lychee buyers – finds it hard to enter the locality.

Bac Giang has decided to establish two groups in charge of supporting lychee export at border gates in the northern provinces of Lao Cai and Lang Son./.

Vietnamese customers remain loyal to local retail brands: Nielsen

Vietnamese consumers are more and more interested in locally-made products and place greater trust in local retail brands, market researcher Nielsen has said.

In a report exploring Vietnam’s latest consumer trends, Nielsen wrote that 2020 left many challenges for the domestic retail industry due to COVID-19 and natural disasters, which cut into purchasing power.

In the face of the pandemic, customers tended to be more loyal to Vietnamese retail brands and sought attractive promotional programmes and products with reasonable prices, it added.

Retailers with abundant resources, strong market understanding, and updated business strategies will gain a competitive edge.

Female customers aged 25-49 prefer convenience stores such as the Co.opmart supermarket chain of the Saigon Union of Trading Cooperatives (Saigon Co.op), for their good customer services, convenient location, and offers for customers.

Saigon Co.op has moved to diversify its retail format in order to lead the market in product quality and food safety, promote the development of its own brands, and complete a modern supply chain.

It targets adding 136 stores in 44 cities and provinces to its network this year, serving 2 million shoppers every day. It is also focusing on completing logistics facilities, upgrading services, and expanding new cashless payment methods./.

Northern region enjoys record rice output in 2020-2021 Winter-Spring crop

The northern region enjoyed record rice output and productivity in the 2020-2021 Winter-Spring crop, it was reported at an online review conference on May 28.

According to the Department of Crop Production under the Ministry of Agriculture and Rural Development, the region harvested an average 6.36 tonnes of paddy rice per hectare during the crop, with total output reaching an estimated 6.9 million tonnes, an increase of 34,000 tonnes from the same period last year.

Nguyen Nhu Cuong, head of Department of Crop Production said the outstanding results are attributable to favourable weather conditions.  With greater area of high quality rice varieties and reduction in production costs, the profit has also improved for farmers.

He stressed that the achievement plays an important role in ensuring food security and  socio-economic stability in the context of complicated developments of the COVID-19 pandemic.

According to schedule, northern provinces will sow rice on 1.2 million hectares, down 7,000 ha from the same crop last year. Average productivity is expected to reach 5.18 tonnes per hectare and the estimated output at 6.3 million tonnes./.

Canadian firms seek trade, investment opportunities in Vietnam

Canada’s westernmost province of British Columbia and the Asia-Pacific Foundation of Canada (APFC) held a webinar on May 27 to discuss opportunities for local firms in investing in Vietnam under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

The event drew representatives from various Vietnamese and Canadian authorised agencies and more than 200 British Columbia firms.

Addressing the event, George Chow, British Columbia’s Minister of State for Trade, spoke highly of the Vietnamese economy’s dynamism, underlining that Vietnam is among the most open economies in terms of trade in the world.

He highlighted the important position of Vietnam in the Canadian province’s economic partnership.

In 2019 when the CPTPP took effect officially for Vietnam, the Southeast Asian country became the 10th largest export market of British Columbia with total export value of 359 million CAD, Chow said.

The CPTPP has created favourable conditions for Canadian businesses to access the Vietnamese market, facilitating exports of goods and services as well as investment in various fields, he added.

For his part, Vietnamese Consul General in Vancouver Nguyen Quang Trung underscored the growing comprehensive partnership between Vietnam and Canada and British Columbia in particular, even amid the COVID-19 pandemic.

However, the diplomat said that the bilateral economic cooperation has remained modest compared to the two sides’ potential.

Trung lauded the participation of experienced Canadian organisations operating in Vietnam in the workshop to provide objective information for businesses in British Columbia. He hoped Canadian firms of Vietnamese origin will work as bridges to connect businesses from the two sides.

At the event, participants gave specific information about the Vietnamese market and the advantages that the CPTPP has created for Canadian firms to do business and invest in Vietnam. They also discussed a wide range of issues, including the role of Canadian representative agencies in Vietnam./.

RoK credit card issuer wholly acquires Wirecard Vietnam

BC Card, a Republic of Korea-based credit card issuer, has acquired 100 percent stake of Vietnamese point of sale (POS) terminal provider Wirecard Vietnam in a bid to expand its foothold in Southeast Asia.

Wirecard Vietnam, the largest POS system supplier in Vietnam, offers one-stop-shop payment solutions, from back-end software to front-end hardware, to around 40 local banks and payment services firms.

The Hanoi-based company, a subsidiary of Germany’s Wirecard Sales International Holding, has been present in Vietnam since 1999. Its revenue reached a record high 137.3 billion VND (close to 5.95 million USD) in 2019, up 15.5 percent from the previous year. Its after-tax profit hit 12.4 billion VND, a year-on-year increase of 2018.

The parent corporation last year filed for insolvency after it admitted 1.9 billion EUR in cash had gone missing from its balance sheet, forcing Wirecard Singapore to divest its entire holding from the Vietnam company to BC Card.

“Despite the challenging circumstances of the international sales processes amidst a pandemic, we succeeded in preserving another Wirecard subsidiary in Asia,” said insolvency administrator Michael Jaffé.

BC Card, meanwhile, is the RoK’s biggest payment processing company and local brand network. It has been collaborating with a number of major banking and payment services firms in Vietnam, such as National Payment Corporation of Vietnam (NAPAS), LienVietPostBank, and Sacombank.

“BC Card has decided to take over the stake of Wirecard Vietnam to directly run a business in the local market, and to increase its presence there,” said BC Card CEO Choi Won-seok.

The transfer of the stake will be completed by the third quarter this year after the RoK firm pays for the acquisition./.

Vietnam – interesting potential market in Asia-Pacific: German economist

Vietnam continues to be one of the most interesting potential markets in the Asian-Pacific region, together with India, economist Daniel Müller from the German Asia-Pacific Business Association (OAV) has said.

Talking to the Vietnam News Agency correspondents in Germany, Müller stated that the Vietnamese economy has recovered significantly and dynamically, reflected through a year-on-year increase of 29.5 percent in the trade turnover in the first four months of 2021, with 206.5 billion USD – the highest in the past 10 years.

However, in the second quarter, it is difficult for the country to achieve the growth rate as high as that of the first quarter, given the new COVID-19 outbreak, which will hinder the re-opening of its borders.

He predicted Vietnam’s economic growth rate would be equivalent to the average level of previous years.

In the medium term, the German expert affirmed that the industrial sector will continue to be the main driving force of Vietnam’s economy.

If Vietnam continues to expand its policies to attract foreign direct investment and accelerate digital transformation, Vietnam will have good opportunities to participate more in global supply chains, for example, in electronics, computing and automotive industries, he stressed.

In these industries, Vietnam should develop a strategic development plan, in which it should connect well with potential foreign investors.

To cope with long-term challenges, the Government should adjust the relationship between the State and businesses to conform to international standards so as to make the public-private partnership more effectively, he added.

Regarding the economic relationship between Vietnam and Germany in the first half of 2021, Müller said that forums and communication channels have helped deepen the economic ties.

The European Union-Vietnam Free Trade Agreement (EVFTA) plays an important role and is a good opportunity to promote economic cooperation between the two countries’ businesses. In January 2021, the OAV coordinated with the German Ministry of Economy and the Vietnamese Ministry of Industry and Trade to establish the Joint Committee on Germany-Vietnam Economic Cooperation (JEC). JEC will regularly hold discussions, with focus on the progress of implementing the EVFTA.

Regarding the prospect of the EU-Vietnam Investment Protection Agreement (EVIPA), the German expert said that Germany is interested in this pact, thanks to an increase in Germany’s direct investments in Vietnam. However, it is not known exactly when the EVIPA will be ratified by the German Parliament and other EU member parliaments, he added./.

HCM City’s CPI rises 0.33 percent in May

The consumer price index of Ho Chi Minh City recorded a month-on-month rise of 0.33 percent in May, according to the city’s Statistics Office.

Among the groups of products and services in the CPI basket, increases were seen in transport (1.08 percent), and restaurant and catering services (0.51 percent).

Meanwhile, housing, electricity, water, and construction materials increased 0.36 percent against the previous month and beverages and tobacco 0.13 percent.

The group of post and telecommunication services saw the largest contraction of 0.68 percent in the month, followed by culture, entertainment and tourism (0.08 percent); and garment-textile, footwear and headwear (0.04 percent), while that of equipment and household appliances fell 0.01 percent.

The prices of medicine and medical services remained stable compared to the previous month.

The Statistics Office also reported that the gold price grew 1.34 percent month on month, bringing the figure up 21.56 percent in Jan-May.

The US dollar exchange rate declined 0.25 percent compared to the previous month, making the five-month figure down 1.14 percent./.

Moody affirms its long-term domestic and foreign currency deposit and issuer ratings of four Vietnamese banks

Credit rating agency Moody’s on Wednesday affirmed its long-term domestic and foreign currency deposit and issuer ratings of four Vietnamese banks.

The Orient Commercial Joint Stock Bank (OCB), Tien Phong Commercial Joint Stock Bank (TPBank), and Vietnam International Bank (VIB) have been assigned B1, while the Vietnam JSC Bank for Industry and Trade (VietinBank) at Ba3, because of stable credit profiles that underpinned the affirmation of their respective Baseline Credit Assessments (BCA) and Adjusted BCAs at b1.

The ratings of TPBank and VIB reflect the banks’ stable and good asset quality; good profitability; and adequate capitalisation. OCB’s ratings reflect the bank’s strong capital position; above-average profitability; and elevated asset risks.

The report says TPBank, VIB and OCB are reliant on market funding, a result of their small domestic franchises, but the high levels of liquid assets in their balance sheets mitigate this risk.

Moody’s expects the asset quality of TPBank and VIB will remain stable in the next 12 to 18 months, as reflected by the declines in their respective non-performing loan (NPL) ratios to 1.2 per cent and 1.7 per cent as of the end of 2020, from 1.3 per cent and 2.0 per cent as of the end of 2019.

OCB’s asset risks will likely remain elevated over the same period.

A common risk factor for the three banks is their rapid loan growth, which increases their risk of credit losses due to a higher level of unseasoned loans. Moody’s expects profitability for the three banks to remain stable, supported by good yields from their retail and SME loans, and growing bancassurance fee income.

VietinBank’s ratings reflect improvements in the bank’s asset quality; its average profitability; weak capitalisation; and good deposit franchise, with Moody’s expecting its asset quality to remain stable in the next year and a half.

The report said that it could upgrade the long-term ratings of the four banks if the Vietnamese Government’s sovereign rating or the banks’ BCAs are upgraded.

The banks’ BCAs could be upgraded if there are material and sustainable improvements in their solvency metrics. Moody’s could downgrade the long-term ratings of these banks if their credit fundamentals severely deteriorate, including a spike in NPLs leading to higher loan loss provisions that will weigh on the banks’ profitability and capital. A significant deterioration in the banks’ funding and liquidity could also be negative for the ratings.

Southern localities ensure adequate supply of essential goods

Localities in the Mekong Delta have coordinated with relevant agencies and businesses to ensure the COVID-19 outbreak does not disrupt the supply of essential goods or causes price hikes, and plan to carry out food safety inspections to ensure people can shop safely.

According to authorities, amid the epidemic, ensuring the supply of goods is the top priority.

The industry and trade departments in the region have called on all production units, distribution systems and retailers to make plans to stockpile essential goods, especially price-stabilised items, to ensure supply does not dry up.

Nguyen Van Tham, deputy director of Hau Giang province’s Department of Industry and Trade, said his department has coordinated with districts, towns and cities, businesses, supermarkets, and department stores across the province to stockpile rice, pork, chicken, eggs, seafood, vegetables, instant noodles, salt, cooking oil, bottled water, antibacterial cloth masks, antiseptic liquid, and toilet paper.

In case of an emergency, authorities would use specialised vehicles to distribute essential goods to people in quarantine, he added.

In Can Tho city, 11 businesses have registered to stockpile food and foodstuffs worth a total of over 553 billion VND (23.97 million USD), especially rice, meat, seafood, vegetables, fruits, instant noodles, bottled water, processed foods, and eggs.

Some others have registered to stock other products such as masks, antiseptic liquids, toilet paper, and petrol.

The Can Tho municipal Department of Industry and Trade has coordinated with relevant agencies and departments to set up three teams to inspect traditional markets, supermarkets and businesses to ensure they comply with anti-COVID measures.

It also plans to stock essential goods to meet demand under all circumstances.

Similarly, the Dong Thap Department of Industry and Trade has instructed commercial centres, supermarkets, traditional markets, and businesses in the province to carry out an assessment of the risk posed by COVID and report plans to ensure supply of essential goods.

Businesses in the region have proactively made goods production and supply plans, and distributors are actively working with suppliers to stock a variety of goods.

Nguyen Kim Cuong, deputy director of Co.opmart Can Tho, said the volume of stocks is worth around 18 billion VND (781,476 USD).

It has stepped up sales via telephone and app to make it easier for customers.

Like other Co.opmart supermarkets across the country, it has ensured sufficient stocks of goods at the best prices, she said, adding that it could provide 1,000-1,500 hot meals a day.

Van Quoc Hoang, director of Co.opmart in Vinh Long pProvince, said currently his supermarket focuses on increasing stocks of essential items that people could store for long-term use such as canned foods, rice, spices, frozen goods, spring rolls, meat paste, milk, vegetables, fresh meat, and fish.

According to industry and trade departments in south-western provinces, along with stockpiling of goods, authorities also continue to exhort people to stay calm assuring them that the supply of essential goods is always abundant.

They also warn people not to hoard essential items, especially inflammable and explosive items such as gasoline and oil.

Ho Chi Minh City has also vowed to ensure market stable.

According to their managements, the volume of goods arriving remains normal at around 3,300 tonnes per night at the Thu Duc Wholesale Market and 4,160 tonnes at the Hoc Mon Wholesale Market in the city.

Retailers such as Saigon Co.op, Central Retail, Lotte Mart, and AEON Mall have stocked enough goods to ensure adequate supply and continue to take measures to safeguard the health of customers and staff amid the rising community incidence of COVID-19.

For instance, Saigon Co.op’s retail systems, including Co.opmart, Co.opXtra, Co.op Food, and Co.op Smile, have increased stocks of basic necessities such as sugar, rice, cooking oil, salt, fish sauce, meat, poultry eggs, and dry foods besides hand sanitisers, soaps and anti-bacterial cloth masks to ensure steady supply and prices for at least the next six months.

At all stores, customers are required to wear face masks, get their temperature checked and maintain social distance while shopping and waiting to pay.

Nguyen Anh Duc, general director of Saigon Co-op, said this time anti-epidemic measures have been stepped up because the outbreak is more threatening this time.

The supermarkets’ two key tasks now are to ensure food security and a safe shopping environment for people, he said.

Saigon Co.op and other retailers are working with suppliers of essential goods to offer discounts by turn on products to share the burden with consumers and minimise the increase in prices./.

Customers need more understanding about financial services

The need to increase awareness and understanding of customers’ financial services is increasing globally, and Vietnam – an emerging economy, is no exception, according to a report.

The information was released from a study of 2,000 global consumers released on May 27 by Mambu, a banking and financial services platform.

According to the State Bank of Vietnam (SBV)’s statistics in 2020, 70 percent of adults in the country had a bank account, but nearly half of them lacked access to credit. According to Agribank, more than 70 percent of the population is concentrated in rural areas, but access to modern banking services in these areas is very limited.

On the other hand, in recent years, thanks to the development of digital technology and the digital transformation process among banks, mobile banking applications have played an important role in financial inclusion. Banks have been able to reach customers in places without a physical bank headquarters or branches.

Cashless transactions in Vietnam increased by 75.2 percent in the first nine months of 2020, compared to the same period the year before. Online shopping grew exponentially, ranking third in Southeast Asia in terms of visits to online shopping apps in the second quarter of 2020.

The Government’s efforts to enhance financial services include aiming for 80 percent of adults to have a bank account by 2025 and piloting a mobile money programme for two years from 2021.

The above factors encourage people to learn and use financial services while promoting digital transformation among banks and credit institutions. Statistics from the SBV show that 94 percent of banks in Vietnam have gone digital or are planning to do so.

As well as banks, fintechs and telecoms firms are involved in digital banking in Vietnam. Instead of competing with each other, there’s increasing collaboration between technology companies and credit institutions.

New technology solutions are changing the financial service landscape in Vietnam, include new forms of online payment such as e-wallets, QR codes, digital banking products incorporating AI, data analytics and cloud computing.

Pham Quang Minh, General Manager of Mambu Vietnam said: “Technology solutions that leverage true software as services (SaaS), cloud-native and API-first platform allow banks to compose any desired product and service by assembling best-of-breed components and independently connecting them together. The ‘composable banking’ approach will help banks digitise quickly, flexibly, economically, provides a ‘customer-centric’ experience, and meet the constantly changing needs of customers in the 4.0 era.”

On a global scale, the report revealed both banked and unbanked individuals feel underserved, with 56 percent of banked customers claiming there are other services they should be able to access.

“With more than 1.7 billion unbanked adults globally, the data that’s usually reported points us to emerging markets and geographical barriers to access; however, the gap in accessibility on a global level should not be ignored,” said Elliott Limb, Mambu’s Chief Customer Officer.

“Personalisation is going to be key for banks if they want to avoid being sidelined by new entrants that give more inclusivity and access. Banks need to be using the technology available to understand their consumers’ habits and in turn, anticipate their needs, with hyper-personalised recommendations and services”./.

Agro-forestry-aquatic product exports enjoy trade surplus of 3.27 billion USD

Vietnam raked in 22.83 billion USD from exporting agro-forestry-aquatic products in the first five months of 2021, representing a year-on-year increase of 30.3 percent, reported the Ministry of Agriculture and Rural Development.

The country spent 19.57 billion USD on importing agro-forestry-aquatic products during January – May, up 51 percent year-on-year, resulting in a trade surplus of 3.27 billion USD.

Of which, the group of major farm produce earned 7.78 billion USD, up 13 percent. Meanwhile, major forestry and aquatic products brought home 7.06 billion USD and 3.24 billion USD, up 61.8 percent and 12 percent, respectively. The livestock industry recorded a 43.9 percent-growth, earning 166 million USD.

In the reviewed period, many products and groups of products witnessed increases in export values, including rubber, tea, rice, vegetables, pepper, cashew nuts, cassava and products from cassava, livestock products, tra fish, shrimp;,wood, rattan, bamboo and cinnamon.

Notably, although the pepper export volume decreased by 15.6 percent, but thanks to an increase in its average export price, the pepper export value still surged by 25.2 percent to 387 million USD.

The US remained the biggest importer of Vietnamese agro-forestry-aquatic products in the last five months, accounting for a market share of 24.6 percent. It was followed by China, Japan, and the Republic of Korea, with 22.6 percent, 6.6 percent and 4.9 percent, respectively./.

Cement stocks struggle despite surge in product price

While many stocks in the building materials sector like steel or plastic have surged recently, cement stocks are still hovering around a low price zone.

According to data compiled by the Department of Building Materials, Ministry of Construction, in the first four months of 2021, consumption of cement products is estimated to reach 34.58 million tonnes, up 16.5 percent year-on-year.

Of which, domestic consumption accounted for around 19.44 million tonnes, a slight increase over the same period last year, while exports of cement products jumped 65 percent over 2020 to 15.14 million tonnes.

Besides gains in consumption, many cement companies also raised product prices. Accordingly, Vicem Hoang Mai Cement JSC (HOM) has increased selling prices of all cement products by 30,000 VND per tonne, which apply for provinces including Thanh Hoa, Nghe An and Ha Tinh.

Bim Son Cement JSC (BCC) also raised its product prices by 30,000 VND per tonne from April 21. Hoang Long Cement JSC, Long Son Co., LTD and Duyen Ha Co., LTD increased their prices by 40,000 VND per tonne at the same time.

However, in the stock market, these companies’ performance was not as good as their product prices.

After positive responses to higher cement prices for a short time, cement stocks fell sharply since early April.

Ha Tien 1 Cement JSC (HT1) shares dropped more than 17 percent since April to trade at 15,300 VND per share on May 27.

Similarly, BCC shares tumbled over 18.5 percent during the same period to 10,100 VND per share on May 28.

After climbing for ten straight sessions in early April, Vicem Hai Van Cement JSC (HVX) shares plunged 37.5 percent to trade at 4,450 VND per share on May 27.

The market prices of most cement stocks are currently hovering around their par value.

Gains in cement selling prices will be reflected in the second quarter business results of cement companies, while the first quarter business results of some companies were poor, resulting in the appeal of cement stocks declining.

In the first quarter, Bim Son Cement posted an increase of 0.88 percent year-on-year in net revenue to 1.06 trillion VND, while its profit after tax declined by 61 percent to over 7.2 billion VND.

The company explained that its profit fell in the first quarter due to higher cost of goods sold, outweighing gains in revenues and falls in expenses for financial activities, sales expenses and general and administrative expenses.

Meanwhile, Ha Tien 1’s net revenue also rose slightly by 0.5 percent year-on-year to 1.74 trillion VND in the first quarter of 2021. But its profit after tax edged 9.5 percent down to 94.7 billion VND.

HT1 shares was eliminated from the portfolio of MSCIFrontier Markets Small Cap Index and the company’s leaders registered to sell a huge amount of stocks, which forced HT1 shares to enter a bear market./.

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

A view of Khai Quang Industrial Park in Vinh Yen city of Vinh Phuc province

Tim Leelahaphan, the bank’s economist for Vietnam and Thailand, held that Vietnam’s economy remains strong and the country is proving to be one of the world’s best performing economies amid the COVID-19 pandemic.

However, he added, like many other countries, Vietnam is feeling the impact of the domestic COVID-19 situation, which is inevitable.

Vietnam began its COVID-19 vaccination campaign on March 8, with about 1 million people, mostly frontline health workers, receiving jabs so far. Expanding the campaign is a key condition for reopening tourism and promoting sustainable economic recovery, he said.

Other Standard Chartered specialists pointed out that the country’s trade figures have remained positive since last year.

In particular, mobile phones and accessories have accounted for some 16 percent of total overseas shipments and electronic devices, computers, and spare parts about 15 percent.

Vietnam also posted a trade surplus of 1.3 billion USD in the first four months of 2021.

Rapid economic growth may boost inflation, the specialists noted, adding that rising world food prices are also affecting domestic inflation.

They forecast inflation in Vietnam at 3.8 percent this year./.

Vietnam manufacturing output remains solid amid Covid-19 outbreak

Business sentiment eased to a three-month low on worries about the Covid-19 outbreak, but firms remained optimistic overall that output will increase over the coming year.

The Vietnam Manufacturing Purchasing Managers’ Index (PMI) posted 53.1 in May, down from 54.7 in April. The latest reading, however, signaled a sixth successive improvement in business conditions, and one that was solid despite weakening from the previous month, according to Nikkei and HIS Markit.

A reading below the 50 neutral marks indicates no change from the previous month, while a reading below 50 indicates contractions and above 50 points to an expansion.

“Latest data and anecdotal evidence from respondents suggested that the recent outbreak of the COVID-19 pandemic limited growth of both output and new orders midway through the second quarter of the year,” noted the IHS Markit’s report.

While the rate of expansion in production eased to a three-month low, it stayed in the positive trend as new orders continued to rise, it added.

The same was true for new business, which increased at the softest pace since February but for the ninth month running. Solid growth was also recorded for new business from abroad as some export markets showed signs of recovery from the Covid-19 pandemic.

Rising case numbers also impacted hiring in the Vietnamese manufacturing sector. Employment increased for the fourth consecutive month, but only modestly.

Staff shortages contributed to a near-record rise in backlogs of work as firms struggled to cope with inflows of new orders. Outstanding business accumulated to the greatest extent in more than a decade.

Operations were also hampered by a marked lengthening of suppliers’ delivery times, the greatest in just over a year. Again, the pandemic was a factor behind longer lead times, with shipping delays and material shortages also highlighted.

Despite delivery delays, firms expanded both their quantity and stocks of purchases amid efforts to build reserves. That said, in both cases, rates of increase were slower than in April.

Stocks of finished goods, meanwhile, were broadly unchanged amid the use of inventories to help meet new orders while production volumes were restricted. The stabilization ended a three-month sequence of rising stocks of finished goods.

The rate of input cost inflation quickened to a 40-month high in May. Supply shortages contributed to rising raw material prices, with iron, oil, and steel all mentioned in particular as costing more. Higher freight prices were also signaled.

In turn, manufacturers raised their own selling prices at a substantial pace. Moreover, the rate of inflation was the fastest in just over a decade, and the third-steepest since the survey began.

Businesses remain optimistic

Business sentiment eased to a three-month low on worries about the Covid-19 outbreak, but firms remained optimistic overall that output will increase over the coming year. Hopes that the virus will be brought back under control and the prospect of further new order growth supported confidence.

“The challenges of the Covid-19 pandemic returned to the Vietnamese manufacturing sector during May as an outbreak in the country hampered operations,” said Andrew Harker, associate director at IHS Markit, which compiles the survey.

“Output, new orders and employment all grew at slower rates, while difficulties completing orders meant that backlogs of work increased at one of the sharpest rates in more than ten years of data collection. Efforts to fulfil orders weren’t helped by further supply-chain disruption, which also contributed to price pressures. In fact, firms raised their selling prices at the fastest pace in more than a decade,” said Harker.

“Firms will be hoping that the Covid-19 outbreak can be brought under control quickly, as has been the case in the past in Vietnam. Confidence took a hit in May, but firms remained optimistic regarding the 12-month outlook for production,” he noted.

In May, Hanoi’s index of industrial production rose by 1.8% against last month and 5.1% year-on-year, leading to an overall growth of nearly 10% year-on-year in the five-month period and contributing a major part to the city’s push for economic recovery.

The manufacturing and processing sector, accounting for 96% of total production value in the local industry sector, remained key driving force with an expansion rate of 9.7% year-on-year.

Trade deficit returns in May

Vietnam incurred a trade deficit of US$2 billion in May, after earning trade surplus of US$1.63 billion in Jan-April, according to the General Statistics Office.

The complicated developments of Covid-19 in some localities affected trade, transport and tourism activities in May, the local media reported.

The country earned US$26 billion from exports and spent US$28 billion on imports in May, up 35.6% and 56.4% over the year-ago period.

Despite an increase by 33% in the country’s import-export turnover in the first five months of the year to over US$262 billion, the country suffered a trade deficit of US$369 million in the period.

In the first five months, the country exported more than US$130.94 billion worth of products, surging nearly 31%.

The United States remained Vietnam’s largest buyer with a revenue of US$37.6 billion, soaring nearly 50% over the same period last year. Exports to China also rose 26% to US$20 billion.

Meanwhile, the country spent US$131.31 billion on imports in January-May, up 36.4% year-on-year.

China was the largest supplier to Vietnam with US$43.3 billion, surging 53%, followed by South Korea, ASEAN, Japan, the European Union and the United States.

Agricultural products the next big move in e-commerce

Putting agricultural products on online trading is growing as a new trend of the local e-commerce sector this year.

Both Lazada and Sendo have carried out several programmes to support the northern province of Hai Duong’s farmers to sell litchi products on their e-commerce platforms. According to Dang Dang Truong, PR lead at Sendo, just between May 24 and 27, a total of 12 tonnes of litchi were sold through the platform.

Similarly, at a recent conference promoting the export of agricultural products from Hai Duong held by the Vietnam Trade Promotion Agency (Vietrade), newly-established online shopping sites such as Voso (Viettel Post) and Postmart (Vietnam Post) also announced to start focusing on agricultural items instead of fast-moving consumer goods, clothes, and cosmetics like other platforms.

The new segment also lured in the involvement of startups such as Vietnam-based FoodMap and Indonesia-based TaniFund. So far, TaniFund has successfully mobilised $65.5 million Series B funding, led by MDI Ventures, while harbouring plans to enter Vietnam at the soonest.

In a previous talk with VIR, Sendo founder and CEO Tran Hai Linh said that agricultural goods have solid trade potential on e-commerce sites in Vietnam because they have been one of the most consumed commodities in Vietnam. However, to date, due to obstacles related to logistics and transportation, agricultural items, especially fresh food, have yet to reach popularity on online shopping sites.

He explained the hardest part of entering the segment is ensuring the best quality of fresh food products during transportation. There need to be suitable packaging and transporting processes to keep produce fresh and undamaged on short and longer trips.

Pham Ngoc Anh Tung, founder of FoodMap has also highlighted the high investment costs that come with entering this retail segment.

According to Development Reimagined, a China-headquartered organisation specialised in diplomacy, environment, and public relations, selling agricultural products online cost a long time and large investments before reaching success. For example, in China, e-commerce giant Alibaba in 2015 carried out the “Taobao villages” programme to help farmers sell their products on its Taobao platform. However, until 2020, purchasing agricultural goods online reached common in the country.

Bank stocks witness upswing in prices

Bank stock prices have witnessed a dramatic increase since the end of March after plenty of banks announced positive first-quarter business results, as well as news on rising mergers and acquisitions (M&A).

Among the listed banks, Vietnam Prosperity Commercial Joint Stock Bank (VPB) has been the strongest performer in the stock market since the beginning of this year. VPB closed the trading session on December 31 at VND32,500 (US$1.41) per share, it now is being traded at VND67,600 per share, equivalent to an increase of 108 per cent.

VPB’s gain was attributed to the news that VPBank has sold 49 per cent of its charter capital at FE Credit to Japan’s SMBC Group at a valuation of $2.8 billion. VPB shares are also attractive thanks to its leading position in the consumer finance segment and the private placement plan for foreign strategic partners.

Lien Viet Post Commercial Joint Stock Bank (LienVietPostBank) has also witnessed an increase of more than 104 per cent since the beginning of this year, currently trading at VND25,400 per share.

Nguyen Duc Thuy, a founding shareholder of Thaiholdings Joint Stock Company (THD), has officially been elected as Vice Chairman of the Board of Directors of LienVietPostBank since early May.

After less than a year after listing, the market price of THD has increased 13 times, from the reference price on the first trading day of VND15,000 per share to VND197,100 per share on May 26 this year.

At LienVietPostBank’s 2021 Annual General Meeting of Shareholders held at the end of April, shareholders shared that they hope the same gain will also happen to the bank’s shares.

Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank) also underwent an increase of more than 74 per cent since the beginning of this year. Vietnam International Commercial Bank (VIB) rose by 94 per cent compared to the end of 2020; Southeast Asia Commercial Joint Stock Bank (SSB) gained by 84 per cent so far this year and has maintained its upward momentum after two months of listing on HOSE.

National Commercial Joint Stock Bank (NVB) witnessed an impressive increase of more than 80 per cent and Vietnam Joint Stock Commercial Bank for Industry and Trade (CTG) rose 49 per cent so far this year.

In a recent report, SSI Securities Joint Stock Company said that banks’ plan to raise charter capital can be a supportive factor for the movement of bank stock prices from now until the end of 2021.

In 2021, there are about 16 banks with plans to increase their charter capital significantly, according to the report. Specifically, charter capital at these banks will be increased by VND82.7 trillion, up 31 per cent compared to 2020. Of the estimate, about 75 per cent will be increased through stock split; 22 per cent from private placement and the rest is through the employee stock ownership plan (ESOP).

From 2020, the State Bank will tighten the payment of cash dividends by banks. Instead, the State Bank encourages them to pay dividends in stock.

Japan licenses two more fresh lychee processing facilities in Hai Duong

Japan has licensed two more lychee processing facilities in Hai Duong Province, the hometown of “thieu” lychee specialty, to facilitate the fruit export to Japanese market.

According to the Plant Protection Department under the Ministry of Agriculture and Rural Development, the facilities commenced the processing of lychees for export to Japan on May 29.

The two treatment facilities are owned by Ameii Vietnam Joint Stock Company and Rong Do Limited Liability Company, featuring three processing chambers, each with a capacity of 2.5-3 tonnes/batch.

To date, Japan has recognised a total of four lychee processing facilities for export to this market, with five chambers operated by four local units, helping to increase the total processing capacity to 35-40 batches/day, many times higher than the processing capacity last year.

In 2020, only from 7.5-8 tonnes of lychee were treated each day before leaving for Japan.

Safety procedures have also been strengthened so that plant quarantine officers can rest assured to work in the current complicated COVID-19 situation, not to affect lychee exports.

Regarding the quality of this year’s lychee crop, Japan customers have rated it as having a higher quality than that of 2020. Lychee exported to Japan in the past few days has been sold out in only 2-3 hours.

Currently, Thanh Ha early-ripen lychee in Hai Duong’s Thanh Ha District has consumed about 65% of production and is expected to produce about 30,000 tonnes, while main season lychee are expected to reach about 25,000 tonnes this year, an increase of 15,000 tonnes compared to 2020.

The main lychee season will begin from June 1 and reach its peak of harvesting from June 5 in Hai Duong.

This year, thanks to the promotion of sales channels, Hai Duong lychee prices are higher. For lychees produced under the export process to Japan and Singapore, businesses are purchasing at VND7,000-10,000 per kg higher compared to lychees grown outside the export areas.

Ho Chi Minh City’s State budget revenue enjoys year-on-year rise of 22.8%

Ho Chi Minh City’s State budget collection is estimated to hit VND174.6 trillion (US$7.57 billion) during January-May, equivalent to 49 percent of the yearly estimates and up 22.8% year-on-year.

The figure also represented a rise of 5.7% compared to that of the same period of 2019 when the COVID-19 pandemic had yet to break out around the world.

Of the total, domestic revenue in the city was estimated at VND123.69 billion, equal to 49.8% of the estimates and accounting for 70.8% of the total and up 21.1% over the same period. Revenue from import-export activities is estimated at VND50.9 trillion, equal to 47.1% of the estimates and up 27.3% year-on-year. Revenue from crude oil is estimated at VND5.86 trillion, equal to 68.6% of the estimates and up 3.2% year-on-year.

Meanwhile, local budget revenue in the period is estimated at VND34.18 trillion, accounting for 19.6% of the total collection, equivalent to 41.6% of the estimates and up 7.5% year-on-year.

This year, the largest city of Vietnam is assigned to collect VND364.89 trillion for the State budget, down 10.1% from the 2020 estimates and 1.7% compared to last year’s real revenue.

Buyers hedge their bets on premier apartment purchases

It remains to be seen if a plan to open for sale the first products of a 6.4-hectare residential apartment project developed by FLC Group this year will go ahead on schedule as wary buyers wait on further pandemic developments.

Located in a 6.4-hectare area in Hanoi, the Premier Parc apartment complex started construction in January this year. Currently, the project is developing its infrastructure system with water drainage, inner roads, and lighting.

In June 2019, FLC Group formed a joint venture with South Korean Lotte Land to develop this project. However, in this February, the cooperation was terminated and FLC Group has continued development on its own.

Premier Parc will provide 145 shophouses, villas, semi-detached houses, and two high-end apartment buildings which are set to be handed over to buyers by the third quarter of 2022.

However, there are signs that staying on schedule will be difficult, especially as COVID-19 continues to make its presence felt in the country.

Nguyen Van Minh, a sales agent in Hanoi, said that his customers have been waiting for this project for a long time. However, with current pandemic restrictions in place over the past month, Minh doubts that the products will actually go on sale anytime soon.

FLC Group won the auction for the land in 2017 at a price of VND860 billion ($37.4 million), nearly three times higher than its initial quotation. The project was initially expected to be completed in mid-2019.

FLC is known as a major real estate developer with 400 projects nationwide – however, the developer has something of a track record for slow progress, leading to disputes with buyers. For instance, FLC Coastal Hill – Quy Nhon committed to hand over units to buyers by the fourth quarter of 2018 but FLC Group delayed it to this year.

Other reported violations include slow progress of construction, lack of committed facilities, and failing to hand over pink books to buyers at other projects such as FLC Quang Binh Beach and Golf Resort, FLC Sea Tower Quy Nhon, and FLC Garden City.

The prolonged pandemic has slowed many projects nationwide. According to a recent report released by the Ministry of Construction, more than 9,000 residential units were unsold across Vietnam as of the end of 2020.

Reasons for unsold units piling up were many but it was mostly due to the legal bottlenecks as well as the incapability of developers, leading to buyers hesitating during the pandemic.

Dat Xanh Group, as of the end of 2020, reported 55 per cent of total asset value, equivalent to $433 million, in stockpile, mostly in the An Vien, Luxgarden, Pho Duc Chinh, and Ngo Quyen projects.

Phat Dat Real Estate Development JSC, meanwhile, is also shouldering a stockpile of more than VND9.3 trillion ($404.35 million), accounting for 60 per cent of its total asset value, mainly in The EverRich 2, Nhon Hoi Eco-tourism Area, and Binh Duong Astral City.

Meanwhile, An Gia Real Estate Investment and Development Corporation is holding a large number of units in The Song, The Westage, River Panorama 1 and 2, Sky 89, and Signial.

Vietnamese bank rushes for digitalised products and services for import – export companies

Several banks are exploring digital ways to simplify the hefty paperwork that comes with international trade to enhance operational efficiency and support export-import companies. Military Bank (MB) – one of Vietnam’s largest commercial banks – is also accelerating its strength to bridge the gap between local enterprises and international markets and drive long-term resilience.

Founded in 2014, Ant Group’s origins begin with digital payment service Alipay. As of now, based on a strong technological foundation, Ant Group has expanded into many other financial services and even erodes the profits of Chinese traditional financial institutions.

A contender to one of the major banks now, Ant Group’s roots reach back to digital payment service provider Alipay. Since then, utilising its strong technological foundation, Ant Group has expanded into many other financial services and even erodes the profits of Chinese traditional financial institutions.

Ant CEO Eric Jing said in 2017 that Ant Group named itself after a small insect because it serves “the little guys”. However, the next few years showed that with digital transformation as the catalyst, “ants” can beat “elephants”, according to Business Insider.

In Vietnam, as fintech companies receive initial success, traditional banks are accelerating the digital transformation by developing new products and services. Several years ago, e-banking systems were mostly for account inquiries and domestic fund transfers. However, now, more robust products and services have been launched online to support tax payment, bill payments, as well as payroll and terms deposit management. Notably, even corporations can now open a bank account without visiting any physical branch.

That being said, the number of digital products and services for export-import activities remains limited. Realising this gap, some commercial banks have pioneered new features such as international payment and trade finance on online channels to enhance customer experience. Military Bank (MB) is one of the outstanding players in this competition.

The online international payment feature on BIZ MBBank, which was officially launched in July 2020, received a warm welcome from customers. The feature meets a variety of customers’ demands related to international payment, including making transfers, buying foreign currency, creating amendment/tracing/cancellation, submitting required documents, and making transfer inquiries.

Customers can conduct these activities online without spending time at brick-and-mortar counters. In addition, MB is one of the four banks in Vietnam to apply the SWIFT gpi initiative, which helps speed up transactions. Courtesy of SWIFT gpi, customers are allowed to benefit from real-time transaction tracing without additional costs.

Compared to conducting international transfers at counters, the process is significantly less time-consuming via BIZ MBBank, courtesy of automation. Customers can also save time and costs on paperwork and transportation. Those choosing to make transactions with MB can access favourable exchange rates without any conditions.

Being one of the very first companies to use online international payments on BIZ MBBank since the first days, Epi Viet Nam Technologies Co., Ltd. highly appreciates the experience BIZ MBBank has offered their customers.

“Both the bank and corporates are able to benefit from online international payment. It helps eliminate duplicated steps, enhancing efficiency and speeding up the overall processing time,” said Nguyen Thi Thuong, finance director at Epi Viet Nam.

“It used to take us hours to process paperwork and get the SWIFT messages. Since the launch of international payment on BIZ MBBank, the entire processing time has been reduced to less than an hour,” she added. “This particularly comes in handy in the context of the COVID-19 pandemic.”

Furthermore, to enhance customer experience, BIZ MBBank allows customers to sell foreign currency automatically. The process is 100 per cent automatic, enabling customers to exchange foreign currencies into Vietnam Dong as soon as they approve the transactions. MB is also planning to launch a new feature called “chat box” to provide customers with tailored and unique experiences.

MB has been known for its transformative initiatives in offering international payment – trade finance products in the market. In December 2020, MB successfully executed the complete life cycle of two blockchain-enabled import letters of credit (LCs) over the CONTOUR network. With these pioneering actions, MB is constantly affirming its position in the digital transformation race, especially in developing products for corporates and those conducting export-import activities.

Hanoi welcomes nearly three million visitors over five-month period

Hanoi welcomed approximately 2.89 million visitors during the course of the opening five months of the year, representing a year-on-year decline of 6.7%, according to figures compiled by the Hanoi Department of Tourism.

Total tourism revenue from domestic tourists stood at an estimated VND8.1 trillion, down by 50.7% compared to the same period from last year.

May alone saw the number of domestic tourists to the capital fall by 53.3% to 115,000 against the same period from last year, with revenue from domestic tourists being estimated at VND322 billion, an annual drop of 60.3%.

Since the beginning of the year, hotel room occupancy in Hanoi has reached just 23.6%, largely due to the adverse impacts of the novel coronavirus (COVID-19) pandemic, marking a decrease of 8.6% on-year.

The average occupancy rate of one to five star hotels in Hanoi was at 26.4% in May, down 1.7% from the previous month, but marking a rise of 7.12% compared to the same period last year.

The decline in the number of travelers visiting the capital can primarily be attributed to the complicated developments relating to the COVID-19 pandemic. This comes as tourist attractions in Hanoi temporarily stopped receiving tourists from May 3.

Custom watchdog tightens control over origin fraud of Vietnamese rice

The Ho Chi Minh City Customs Department has detained three shipments of rice passing through Cat Lai port after detecting signs of fraud relating to their Vietnamese origin.

According to the Saigon port area 1 Customs Branch, the unit moved to seize dozens of containers of rice imported from India due to suspicions that their Vietnamese origin was fraudulent.

The shipments belonged to two import declarations registered by an enterprise based in Hanoi, with import procedures being carried out through Cat Lai port at the end of February and March.

According to information released by the customs declaration, these batches of rice actually originate from India. However, after a thorough examination and inspection was carried out, customs officials successfully discovered that all of the packages and labels on the imported rice stated that they had Vietnamese origin.

Most notably, the package of each bag of rice had the brands and addresses of factories and businesses located in the nation.

After being suspicious of the origin of these goods, the unit moved to seize all shipments for the purpose of investigation and clarification.

Furthermore, there has also been signs of origin fraud in Vietnamese white rice. According to Vietnam’s Special Preferential Import Tariff relating to the implementation of the ASEAN-India Trade in Goods Agreement, 5% broken and 100% broken white rice imported from India enjoy a tax rate of 0%.

Moreover, the price of these two types of rice from India is only approximately US$400 per tonne and US$280 per tonne respectively, roughly US$100 per tonne lower than the price of Vietnamese rice.

The price of imported rice from India to Vietnam is therefore much more competitive compared to Vietnamese rice.

The Ho Chi Minh City Customs Department has recently devised a plan aimed at strengthen inspection over origin fraud and counterfeiting of labeling of goods, the infringement of intellectual property rights, and the illegal transshipment of Vietnamese white rice.

HCMC pledges to ensure sufficient food supply for local residents

The HCMC Department of Industry and Trade has worked out plans to provide more than 10,000 tons of food per day to local residents and implemented programs to connect with 22 other provinces to ensure the sufficient supply of food for residents during the social distancing period.

Bui Ta Hoang Vu, director of the municipal Department of Industry and Trade, said the department would ensure market stability while fighting the pandemic, and residents in the city do not need to flock to supermarkets and convenience stores to buy food for stockpiling.

Some 8,000 tons of vegetables and fruits will be available daily at the Binh Dien, Hoc Mon and Thu Duc wholesale markets. The volume will meet 70% of the demand from local residents. The remaining 30% will be met by supermarkets and large distributors.

As for meat and fish, the city has some 700 tons of pork, while the supply of poultry and seafood is abundant.

As many local residents have been rushing to stock up on food, Vu said they should not be worried about the shortage of food. He has asked enterprises to enhance online sales channels to reduce contact and gatherings.

Many large supermarkets in the city have increased their supplies and worked out long-term plans to ensure sufficient essential commodities.

According to Saigon Co.op, besides increasing supplies, it will make contact with Covid-19 checkpoints and quarantine facilities to provide products.

The Domestic Market Department under the Ministry of Industry and Trade has coordinated with the HCMC Department of Industry and Trade to ensure the provision of products and deal with obstacles hindering the transportation of products.

Massive airplanes face difficulties in overnight parking shortage

Director of the Civil Aviation Authority of Vietnam (CAAV) Dinh Viet Thang has just required the Airports Corporation of Vietnam, the international airports of Noi Bai and Tan Son Nhat to handle the parking shortage of airplanes overnight due to limited operation amid the current complicated Covid-19 pandemic situation.

According to the Civil Aviation Authority of Vietnam, the Covid-19 pandemic had hugely affected civil aviation activities nationwide. The flight exploitation has reduced, leading to the surge of airplane volumes parking overnight, especially in Noi Bai and Tan Son Nhat International Airports, where placing the maintenance facilities of the airlines.

To overcome the overload, CAAV required the relevant units to promptly clarify the demand of the overnight parking of the airlines, plan the allocation, arrange the parking lots at several airports during the long-lasting pandemic.

Particularly, the head of CAAV stressed that the relevant units need to maximize the parking lots overnight at the approved home-base of airlines, avoiding the concentration at Noi Bai and Tan Son Nhat International Airports.

If the airlines do not have the main maintenance and management facilities at Noi Bai and Tan Son Nhat airports, the relevant units have to review and restore the temporary parking lots overnight or allocate the parking at closed taxiways and the limitedly operated ones to minimize the influence of the airports’ exploitation.

Winners of Vietnam Specialty Coffee Competition announced

Khe Sanh Arabica coffee of Pun Coffee Co. Ltd. has won the first prize at the Vietnam Specialty Coffee Competition 2021 held by Buon Ma Thuot Coffee Association in the Central Highlands province of Dak Lak.

The second and third prizes were presented to products of Quang Tri specialty coffee group and Ngoc Linh Gingseng Joint Stock Company in Kon Tum province, respectively.

Regarding to Robusta coffee, Ea Tu Cooperative in Buon Ma Thuot city took the first prize. Mori Coffee Co. Ltd. in Gia Lai province and Phuc Minh Co. Ltd. in Buon Ma Thuot city received the second and the third prizes, respectively.

According to the organisers, the competition aims to discover and honour coffee products meeting specialty coffee standards, and to create a motivation for the coffee production industry in increasing the added value of coffee products.

It also offers an opportunity to introduce their specialty coffee products of Vietnam to consumers and producers at home and abroad.

This year’s competition saw the participation of 41 companies and units from Ho Chi Minh City, Hanoi, Son La, Quang Tri, Dak Nong, Gia Lai, Lam Dong and Dak Lak with 45 Robusta and 29 Arabica products.

With a cultivation area of about 5,000 hectares, Huong Hoa district in central Quang Tri province is one of the key areas for Arabica coffee growing in Vietnam. The district is famous both in and outside the country for its Khe Sanh Arabica coffee brand.

It is chosen by the Ministry of Agriculture and Rural Development (MARD) to build a Vietnamese specialty coffee brand with an area of about 60 hectares in Huong Phung commune.

Le Quang Thuan, Vice Chairman of the Huong Hoa District People’s Committee, said the district has been carrying out a number of measures to build specialty coffee brand on the cultivation area selected by the MARD and gradually expanded the model to communes and towns of Huong Hoa district.

Local authorities asked communes and towns to review their existing coffee areas to improve the quality of coffee and propose conversion for inefficient cultivation area.

Recently, the MARD has approved a project on the development of Vietnamese specialty coffee in the 2021 – 2030 period.

The project is in line with the international economic integration process, meeting the growing demand for specialty coffee in both domestic and export markets. It will contribute to enhancing the competitiveness of Vietnamese coffee products in the world market. The project is implemented in eight provinces including Dien Bien, Son La, Kon Tum, Gia Lai, Dak Lak, Dak Nong, Lam Dong and Quang Tri./.

Vietnam remains attractive among foreign investors despite COVID-19

Vietnam is still a popular investment destination for foreign investors, who poured 14 billion USD into the country during the first five months of the year.

With COVID-19 raging, the Regent Garment Factory Ltd., a subsidiary of Hong Kong (China)’s Crystal International Group Limited, still submitted a request to the northern province of Hai Duong to open a new 35 million USD garment factory in the locality. The request was approved last week.

The investment in the third factory confirms the company’s long-term interest in Vietnam.

Five other investors also received investment licences in the southern industrial hub of Binh Duong province. The largest investment came from Taiwan (China)’s Far Eastern Group, with an additional 610 million USD for its Polytex Far Eastern factory, which already has investment of nearly 600 million USD.

Meanwhile, the Cheng Loong Group from Taiwan (China) decided to inject an additional 100 million USD into its 1 billion USD paper factory. The project was licenced in late 2015.

Another big name – Procter & Gamble – has poured 44.8 million USD into a project, raising its investment in Vietnam to 247.8 million USD. At the same time, Singapore’s New Motion Private Company Limited launched a new project worth 184 million USD this year, while the Logistics ECPVN Binh Duong project will have investment of over 34.4 million USD.

A number of other large-scale projects have also received licences since the beginning of this year.

These projects prove that Vietnam remains a favourite destination for foreign investors despite COVID-19. Figures from the Foreign Investment Agency at the Ministry of Planning and Investment show that foreign investment in Vietnam rose 0.8 percent in the first five months of 2021 to 14 billion USD.

Of the total, newly-registered capital stood at nearly 8.83 billion USD, up 18.6 percent year-on-year, while additional investment totalled 3.86 billion USD, an increase of 11.7 percent compared to the same period last year. Investment through capital contributions and share purchases was 1.31 billion USD, down 56.3 percent year-on-year.

According to the agency, the disbursement of foreign investment was up 6.7 percent to 7.15 billion USD.

Experts said Vietnam boasts various competitive advantages in foreign investment attraction.

Its engagement in new generation free trade agreements (FTA), including the Regional Comprehensive Economic Partnership (RCEP), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), and the EU-Vietnam FTA has helped it access free markets in 55 countries and territories, including 15 G20 economies, making it more attractive to foreign investors, according to Deputy Minister of Planning and Investment Nguyen Thi Bich Ngoc.

Among Vietnam’s advantages, she said, are its stable macro-economy and positive growth amid COVID-19, strong support for foreign investors, and the issuance of a series of key laws regarding investment activities as well as special incentives for large-scale projects.

However, in reality, the foreign investment attraction “race” is becoming fiercer in Southeast Asia, she noted, adding that regional countries also introduce attractive policies to promote foreign investment.

Nguyen Duc Trung, Chairman of the People’s Committee of central Nghe An province, said foreign investors are waiting for a specific foreign investment attraction strategy as well as special preferential policies./.

HCM City’s industrial production up 7.4 percent in first five months

Ho Chi Minh City’s Index of Industrial Production (IIP) rose 7.4 percent year-on-year in the first five months of 2021, according to the municipal Department of Industry and Trade.

Data from the department shows that the five-month IIP of four key industries – electronics, mechanics, foodstuffs and pharmaceuticals – grew 8.5 percent against a year earlier and was over 1.1 percentage points higher than the overall IIP.

Meanwhile, 22 out of 30 Grade-II industries in the city saw their IIP rise, with the highest growth posted in wood processing and the production of wood and bamboo products (up 54.4 percent); metal production (37.8 percent); other processing and manufacturing technologies (32.2 percent); and electrical equipment production (27.1 percent).

According to the municipal Statistics Department, the local index of industrial consumption increased 10.1 percent against 2020.

Industries with a high consumption index included metal production, wood processing and the production of wood and bamboo products, motor vehicles, coke, and refined petroleum products./.

Hanoi attracts 519.2 million USD in FDI in five months

Total registered capital of new foreign-invested projects and additional capital in existing ones in Hanoi amounted to 519.2 million USD in the first five months of this year, according to the Statistics Department of Hanoi.

Specifically, 139 new FDI projects worth 76.8 million USD were licensed in the period, while existing projects absorbed 442.4 million USD.

In May alone, Hanoi gave the green light to 14 wholly foreign-owned projects and two foreign joint ventures, with combined registered capital of 5.3 million USD. Meanwhile, foreign investors poured 184 million USD in operational projects.

Regarding domestic enterprises, 2,238 new enterprises were established in Hanoi in May, up 8 percent year on year, which registered a total 42.3 trillion VND (1.84 billion USD) in capital, up 69 percent.

At the same time, 245 firms dissolved, up 20 percent, and 788 suspended operation, an increase of 28 percent, but 644 resumed operation, a surge of 51 percent./.

Mekong Delta needs momentum to grow further: conference

Tran Tuan Anh, head of the Party Central Committee’s Economic Commission, said on June 1 that solutions are needed to create momentum for socio-economic development in the Mekong Delta.

It is necessary to identify the advantages and challenges in the region’s sustainable development, especially in the new context, he told a conference in Hanoi.

The conference looked at the building of a project reviewing the implementation of Resolution No 21-NQ/TW dated January 20, 2013, on orientations, tasks, and solutions to spur socio-economic development and ensure national defence and security in the Mekong Delta in 2001-2010.

The Politburo has assigned the Economic Commission to coordinate with relevant agencies in assessing implementation.

The Mekong Delta has recorded achievements in many regards, with economic restructuring being on the right track. It has also affirmed its place as Vietnam’s leading centre for rice, aquatic product, and fruit production and export, the conference heard.

However, Anh said, limitations remain, such as slow regional growth, lower living standards than the national average, and economic development yet to match the region’s potential and advantages.

Given this, he stressed, new resources and measures are needed to boost regional socio-economic development./.

Vietnamese rice accounts for 84 percent of Philippines’ rice imports

The Philippines imported close to 800,000 tonnes of rice in the first four months of this year, of which Vietnamese rice accounted for 84 percent.

According to the Philippine Bureau of Plant Industry (BPI), in the January-April period, the country imported about 780,069 tonnes of rice, including 656,133 tonnes from Vietnam.

The Philippines imported 778,986 tonnes of rice in the same period last year.

In a recent report, the US Department of Agriculture (USDA) projected Philippines’ rice imports could reach 2 million tonnes this year, down 18.36 percent compared to the volume in 2020 as the Philippines eyes bigger rice production in 2021.

Earlier, in an executive order, Philippines President Rodrigo Duterte cut the Most Favoured Nation (MFN) tariff rates on rice to 35 percent from 40 percent for in-quota purchases and 50 percent for out-quota volume for one year.

According to the Vietnamese Ministry of Industry and Trade, the Philippines’s lowering tariffs on imported rice would open up opportunities for Vietnam to maintain stable supply of the product for the country and helping it stabilise the domestic market./.

Vietnam among leading smartphone users globally

The nation has been listed among the leading 10 countries in terms of smartphone users by Statista, a search tool used for the purpose of market research.

Statista note that China has more smartphone users than any other country in the world at almost 912 million, whilst India had the second most users with 439 million, less than half that of China.

Among neighbouring Southeast Asian countries, Indonesia came fourth with 160 million smartphone users, followed by the Philippines and Thailand with 41.3 million and 37.8 million, respectively.

This comes after the country came in ninth in 2020 with a smartphone penetration rate of 63.1%, higher than Indonesia at 58.6%, and the Philippines at 37.7%.

Furthermore, Vietnam is also considered to be a potential and fast-growing digital economy in Southeast Asia, with the local digital economy likely to reach US$52 billion in value by 2025.

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