Demand for top meat drives funding
Demand for top meat drives funding
In the midst of the rising demand for quality pork, Vietnam has witnessed growing investment in the clean meat market.
Last week, AVG Capital Partners, a private equity fund from Russia, signed an MoU with Thanh Hoa People’s Committee to develop a $1.4 billion pork processing complex in Nghi Son Economic Zone.
With an area of 1,000 hectares, the complex has a designed capacity to produce five million hogs a year. It will boast 43 commercial pig farms and three hybrid pig farms, a mixed feed factory with a capacity of two million tonnes a year, as well as a slaughterhouse and processing plant with a capacity of 600,000 tonnes a year.
Phong Quach, head of business development at Ipsos Strategy3 in Vietnam, said that as a general principle, any high-tech investment in agriculture is good for Vietnam. This is because the Vietnamese agricultural sector is still trying to attract more technology that can provide higher output for both the domestic and export markets.
The Ministry of Agriculture and Rural Development has identified in its objectives for 2030 that it wants to strive for high-value added agricultural outputs rather than volume.
Quach added, “When we take a closer look at different points in the value chain and investments, there are different dynamics in the competition depending on the node we review. The latest investment from AVG Capital Partners is a feed-farm-food (3F) investment encompassing the entire production chain. However, the output capacity of the processing facility is much higher than its supply, with 600,000 tonnes of processed meat against five million hogs a year.”
This would suggest that there is still significant opportunity for Vietnamese farms to supply this facility. If AVG Capital Partners is looking to source hogs from Vietnamese farms, this would be a vote of confidence for local farming while epidemics still wreak havoc in the global husbandry industry, Vietnam included, according to Quach.
Another player, CJ VinaAgri, a member of CJ Group in Vietnam, has officially launched its clean meat retail chain Meat Master in Ho Chi Minh City. The chain supplies quality meat produced under the 3F model. The move is part of CJ Group’s efforts to increase its presence in Vietnam and tap into the promising market.
C.P. Group from Thailand is meanwhile investing in its retail channel to deliver chilled and processed meat like Fresh Mart and C.P. Pork Shop. The revenue of C.P. Vietnam’s farm and food business has increased to $640 million in the recent two quarters, with earnings from the feed segment reaching around $200 million per quarter. C.P. has the largest farms in the country with an output of 16,000-17,000 pigs a day.
Dutch animal feed giant De Heus meanwhile has joined forces with local Hung Nhon Group to develop the DHN Dak Lak Agricultural High-Technology complex.
The project is expected to form a disease-free zone and provide high productivity pig and chicken breeds to the market. The $66-million venture will feed 2,500 grandparent and great-grandparent pigs, as well as 25,000 parent and gilt pigs to the market when it is launched.
Vu Manh Hung, general director of Hung Nhon Group said, “We will invest in a clean meat store chain with a closed process from breeding and processing to distributing products directly to consumers to reduce intermediate and transport costs.”
Key players share the approach to raising quality and standards to achieve success, reacting to a strengthening demand among Vietnamese consumers – especially the middle class – for clean and safe food. The Vietnamese meat market is huge and fresh, high-quality, and high-st,andard products make up only a fraction of the total market so the sector will continue to attract investment.
Quach pointed out that the major difference among players lies in their retail strategy. In Vietnam, based on Ipsos’ experiences, there are three dominant meat retail strategies, including one that leverages modern trade, one that focuses on wet markets, and one that works independent from the marketplace.
The first two strategies have a clear focus on customer base and emphasise convenience, which is critical for Vietnamese consumers. Locations are picked through researching consumer habits to create the shortest possible meat shopping journey within the total shopping journey.
“Meanwhie, the retail format of CJ Meat Master follows the third category. Its first shop in District 1 of Ho Chi Minh City is at a spot where there are no wet markets, convenience stores, or supermarkets nearby. This means that the retail format does not intend to leverage any available food and meal shopping traffic nearby and instead take advantage of other types of traffic and strategic purposes,” Quach added.
Ahead of the game, Masan MEATLife, a subsidiary of Masan Group, launched its certified branded chilled meat line MEATDeli in 2018 using European processing technology and standards. In particular, Masan has stepped up its game by acquiring Vingroup’s VinCommerce and VinEco arms, putting MEATDeli products on the shelves of VinMart.
Both the clean meat and processed meat markets are still very small in Vietnam but the growing middle class in Vietnam sets it up for tremendous opportunities.
“Therefore, it is critical for local and foreign players to understand the needs of Vietnamese consumers and provide a quality offering that takes into account local shopping culture and craft a long term journey for their shift to clean and safe meat production,” Quach concluded.
Dong Nai looks for investor for 300-hectare industrial park
Dong Nai province is looking for an investor to develop Cam My Industrial Park with the total investment capital of VND2.71 trillion ($117.83 million).
The industrial park (IP) is one of three IPs approved by the prime minister. The two others are the 300-hectare Gia Kiem and the 190ha Phuoc Binh IP. At present, the provincial Department of Planning and Investment is completing dossiers to call for investment in infrastructure development for the three projects. Cam My IP has yet to complete site clearance.
Once the three IPs come into operation, Dong Nai will have a total of 35 IPs in its master plan for the 2021-2030 period.
According to the plan, the province will have an addition of eight IPs in the period of 2021-2030, including four new projects with the total area of 4,300ha in Long Khanh, Trang Bom, Nhon Trach, among others and four expansion projects, including Dau Giay, Long Khanh, and Tan Phu.
According to a study by the province, enterprises shifting operations from China to Vietnam are boosting IP development and industrial real estate in Dong Nai.
The province also has numerous advantages for IP development while numerous large-scale infrastructure projects are under construction, including Long Thanh International Airport as well as the Dau Giay-Lien Khuong and Ben Luc-Long Thanh highways.
Dong Nai is one of the leading provinces attracting foreign direct investment (FDI) to Vietnam. Despite the COVID-19 outbreak, the province exceeded its investment attraction target of 2020 with more than $402.2 million.
Especially, FDI in the province’s IPs hit a five-year record in the first days of the year, according to the provincial Industrial Zones Management Authority. Notably, the province attracted FDI of more than $226 million in 11 projects in the first 10 days of the new year.
Three new projects accounted for $190 million with the other eight being existing projects that expanded investment by $36 million.
Animal feed exports increase in 2020
Vietnam acquired $800.7 million in export turnover from animal feed in 2020, up 16.98 per cent on-year, according to statistics published by the General Department of Vietnam Customs.
This sharp increase in December was fuelled by a high growth rate in three leading markets of China, Cambodia, and the US at 84, 66, and 69 per cent, respectively.
At present, the three largest export markets in terms of animal feed are China, Cambodia, and the US, which account for 10 per cent of the total export value of these goods.
Notably, Vietnam acquired $221.23 million from China (up 15.68 per cent), $122.32 million from Cambodia (up 23.15 per cent), and $114.5 million from the US (up 125 per cent).
According to the Ministry of Industry and Trade (MoIT), the country’s export turnover from these products to key markets increased in 2020. However, turnover in many small markets declined such as Japan with $26.2 million, down 27 per cent on-year; South Korea with $19 million, down 18.5 per cent; and Indonesia with $11 million, down 33 per cent.
The MoIT forecasted that with the existing productivity in collaboration with the large-scale expansion, animal feed will be one of the goods categories having export turnover over $1 billion.
However, the export value of animal feed only accounted for one-fifth of the import turnover of $3.9 billion in 2020.
Vietnam is now home to 265 animal feed production businesses, 180 of which are domestically run. Although domestic enterprises outperformed in terms of quantity, foreign firms still led the way in terms of capacity and market share.
Japan’s health names latch onto Vietnam
More Japanese pharma and healthcare companies are heading to Vietnam as drug demands in the local lucrative market are on the rise.
The second-largest pharmaceutical company in Japan, Daiichi Sankyo Co., Ltd., has entered a licence agreement with Mitsubishi Tanabe Pharma Corporation to register and launch edaravone brand Radicava in Vietnam. The medication treats patients with amyotrophic lateral sclerosis and helps with recovery from a stroke.
Yukinori Tominaga, general director of Daiichi Sankyo Vietnam Co., Ltd., told VIR, “We are going to provide more access to new medications in order to increase options for Vietnamese doctors to improve the quality of life in Vietnamese people.”
The agreement is one of several plans by Daiichi Sankyo for Vietnam in 2021. It aims to contribute to the enrichment of quality of life in the country through the innovative pharmaceuticals from Daiichi Sankyo and external resources, as the Mitsubishi Tanabe case, in order to address diverse medical needs.
Having established a representative office in Ho Chi Minh City in 2014 to provide support activities for the sale and promotion of its pharma products, last year Daiichi Sankyo strengthened its presence in Vietnam by announcing the establishment of its Vietnamese arm as a wholly-owned subsidiary to conduct sales activities. This is to better respond to the changing business environment of the pharmaceutical industry in Vietnam and to strengthen its business operations, focusing on new products.
The Tokyo-based company researches in the field of innovative drugs, with subsidiaries operating worldwide. In fiscal year 2019, Daiichi Sankyo generated a revenue of almost ¥982 billion ($9.46 billion), up from approximately ¥930 billion ($8.96 billion) in the previous fiscal year.
Tominaga admitted that during 2020 with the global health crisis, Daiichi Sankyo has suffered some negative impacts especially in primary care, but avoided significant impacts throughout the year.
Daiichi Sankyo is one of several Japanese companies in the health sector with more presence in Vietnam, which is deemed a safe place to do business and which has growing demands for innovative medicines and high-end services, in a move to diversify their supply chains.
According to a representative from the Japan External Trade Organization (JETRO), besides traditional investment sectors like manufacturing, Japanese investors are also grasping onto other sectors such as healthcare, clean energy, and customer services.
As demonstrated in the list of 30 Japanese companies planning to move from China to Vietnam, the Philippines, Malaysia, Thailand, and Laos announced last year by JETRO, half of those will shift to Vietnam, with the majority operating in the health sector. They include names like Inoue Iron Works, Able Yamauchi, Showa, Techno Global, Hashimoto Cross, and Matsuoka. They specialise in pharmaceutical manufacturing equipment, medical gloves, masks, and other medical clothing among others.
Matsuoka Corporation, which produces protective clothing for the health sector, plans to invest ¥3 billion ($28 million) in An Nam Matsuoka Garment Company, its Vietnamese manufacturing unit, to start production of protective wear and other items in the next few months.
Elsewhere, seeing growth potential in Vietnam, Taisho Group, one of the five largest pharmaceutical firms in Japan, increased its ownership in Hau Giang Pharmaceutical JSC, the biggest publicly-traded drugmaker in Vietnam, to 50.78 per cent in 2019 as a way to deepen its footprint there.
Similarly, Nipro Pharma Corporation – Japan’s biggest prescription drug contract manufacturer – is expanding its operations in Vietnam with a new project worth $300 million in Saigon Hi-Tech Park (SHTP) after investing $150 million in the first plant in the northern port city of Haiphong.
A source from SHTP told VIR that Nipro is completing procedures to enlarge its facility by increasing the investment capital by about $270 million.
Experts forecast that private domestic and foreign investment in the Vietnamese health sector will be on the rise as the state has plans to divest its stake in a number of powerful pharma firms, including leading pharma firms Vinapharm and Traphaco. The sector’s existing challenges, including hospital overloads and downgrades, also bring about chances for financiers to venture further into.
According to data researchers Fitch Solutions, the country’s total health expenditure was about $17 billion in 2019, or 6.6 per cent of the country’s GDP. The company also projects that the figure will reach $23 billion in 2022 with compound annual growth rate of 10.7 per cent.
Development drivers and expectations for Vietnam in 2021
Vietnam successfully managed to ride out the unprecedented challenges in 2020 and is gradually recovering with new development drivers and expectations in 2021.
The drivers of and expectations for the Vietnamese economy in 2021 are primarily built on the achievements in containing Covid-19, with Vietnam recognised as one of the most successful countries in the world, as well as economic resilience and a positive growth rate of 2.91% in 2020.
Entering 2021, Vietnam is quite confident with a US$340 billion economy, among the 40 largest economies in the world and the fourth largest economy in ASEAN; GDP per capita of US$3,521; a trade surplus of US$19.1 billion; and foreign reserves of more than US$90 billion.
The growth drivers in 2021 will be strengthened and supplemented by institutional breakthroughs and an improved business environment, making Vietnam one of the best investment destinations in the world. The business community continues to record growth in both quantity and quality, with many companies working towards breakthroughs in industrial production and technology and deeper participation in regional and global value chains. Growth in 2021 is also expected to be driven by successes in economic restructuring, especially in agriculture and tourism.
The drivers for 2021 will also come from the country’s sustainable development achievements. With a human development index (HDI) of 0.704, Vietnam has been included in the group of countries with high HDI for the first time, ranking at number 117 among 189 countries and territories. Vietnam’s human capital index is also higher than the average of countries with the same income level. Vietnam is one of the first countries to fulfil the UN’s goal on sustainable multidimensional poverty reduction.
Other drivers for 2021 include a strong digital push in the business community, major improvements in telecommunications infrastructure and the building of electronic government and smart cities.
The expectations of comprehensive and profound breakthroughs on the path of reform and modernisation in Vietnam are also being elevated by the high consensus in personnel work and the quality of documents at the 13th National Party Congress, the people’s confidence in the Party, and the dynamism, innovation and responsibilities of a new crop of officials elected at the 13th Party Congress.
Vietnam is now in possession of an economy, strength and international prestige like never before, as recognised by both people at home and the international community. Such accomplishments are an affirmation of the quality of institutions and the effectiveness of policy response and market response of the Party, State and entire business community and people of Vietnam.
With new confidence and good spirit following the success of the 13th Party Congress, we are fully confident that Vietnam will continue to emerge as bright spot in terms of socio-economic development in a more sustainable and effective manner in 2021.
IPC has new general director
Lam Hoai Anh, deputy general director of HCMC Finance and Investment Company (HFIC), has been appointed as new general director of HCMC-based Tan Thuan Industrial Promotion Co., Ltd (IPC).
On February 5, HCMC Vice Chairman Le Hoa Binh handed over the municipal government’s decision on the appointment to Anh, the local media reported.
Anh, born in 1972 in the Mekong Delta province of Long An, will hold the post for five years.
HCMC Vice Chairman Binh said Anh is an active and enthusiastic official. He had worked in the finance sector, which will help him do the new job well.
Despite difficulties in the initial stage, Binh expected Anh would coordinate with the board of directors and the member council of IPC to develop the company.
Anh’s predecessor is Pham Phu Quoc, a National Assembly deputy of HCMC, who had resigned after he was found holding Cypriot citizenship.
Covid-19 dashes aviation, tourism sectors’ hopes to earn profits during Tet
Many enterprises in the aviation and tourism sectors as well as hotels had expected to earn profits during the upcoming Lunar New Year or Tet holiday to make up for their losses last year, but their hopes have been destroyed due to the new Covid-19 wave.
Flights have been suspended as many air passengers returned their tickets, while tours during the holiday have been canceled. In addition, many stores and restaurants in many localities have been temporarily closed.
Vietravel has suspended all of its tours to the northern region and is working out response plans in case the pandemic takes a turn for the worse. Vietravel Airlines, which has been put into operation for over a month, has also faced multiple difficulties.
Vietravel Holdings Chairman Nguyen Quoc Ky said travel companies had invested heavily in their products and services for Tet but the pandemic has upset their plans. If the situation gets more complicated, even those that survived the previous two pandemic waves will find it hard to overcome this one.
As a result, laborers will be put at a disadvantage. Only half of Vietravel’s employees have returned to work.
Not only travel firms, lodging facilities have also faced the same fate. According to Savills Hotels, the new Covid-19 wave has hindered the recovery of hotels.
Savills Hotels director Mauro Gasparotti said the pandemic has hit not only localities with Covid-19 outbreaks but also others.
Some conferences have been suspended, directly affecting the Meeting, Incentive, Convention and Exhibition tourism segment.
He forecast the situation this year might be similar to that of last year if the international tourism segment is not resumed.
As for the aviation sector, the number of air passengers has declined 15% over the period that new Covid-19 cases had not been confirmed.
In addition, the demand for flights to Danang and HCMC plunged 35% and 34%, respectively, according to OTA Insight.
As a result, Vietnam Airlines’ losses of more than VND11 trillion may need more time to be recouped. Moreover, it will be difficult to introduce a credit package worth VND14 trillion for the national flag carrier.
Meanwhile, Vietjet Air has significantly cut expenditures.
According to SSI Securities Corporation’s recent report on the outlook of the aviation sector this year, the market will remain gloomy as the United Kingdom’s coronavirus variant has been found in many countries. The aviation sector will not recover until the end of 2021, when Covid-19 vaccines are approved.
Development of Tan Phu-Bao Loc expy project approved
Prime Minister Nguyen Xuan Phuc has agreed in principle that the Lam Dong Province government will be in charge of developing the Tan Phu-Bao Loc expressway project, which connects Lam Dong with the neighboring province of Dong Nai, during the 2021-2025 period under the public-private partnership format.
The Central Highlands province of Lam Dong was asked to mobilize capital to ensure that an appropriate amount of the province’s budget is invested in the project, reported Thanh Nien Online.
The ministries of Transport, Planning and Investment, Finance and the relevant agencies have to create optimal conditions and facilitate investment procedures for the project, PM Phuc said.
The Transport Ministry was told to work with Lam Dong’s government to comprehensively assess the impact of the construction of the project along with other build-operate-transfer projects to avoid possible disputes and ensure investment effectiveness. The ministry has to coordinate with other agencies to study the construction of the Dau Giay-Tan Phu and Bao Loc-Lien Khuong expressways.
PM Phuc asked the three ministries to give their feedback on the allocation of the State budget during the 2021-2025 period for the road project as proposed earlier by Lam Dong.
The provincial government of Lam Dong has to quickly conduct the project’s pre-feasibility study and report to the higher authorities by March for consideration and approval, select qualified investors and funding organizations for the project and execute the project in a lawful, transparent and efficient manner.
Earlier, in January last year, Lam Dong sought an approval from the Government leader to develop the 67-kilometer Tan Phu-Bao Loc expressway project with four lanes, as a component of the 200-kilometer-long Dau Giay-Lien Khuong expressway project, which is set to link the Central Highlands provinces and the southeastern provinces.
The Tan Phu-Bao Loc expressway will require some VND18.2 trillion in investment, with some VND9.7 trillion backed by the investor and an equal amount funded by the State budget.
Ministry plans to develop Can Tho-Ca Mau expy in 2021-2025
The Ministry of Transport plans to add the Can Tho-Ca Mau expressway project to the list of public investment projects in the 2021-2025 period instead of after 2030 as approved earlier by the prime minister.
The ministry announced the decision in a document sent to the Party Committee of Soc Trang Province and the provincial delegation of National Assembly deputies on their proposal to complete an expressway from HCMC to Can Tho and develop the Can Tho-Ca Mau expressway project parallel to the Quan Lo-Phung Hiep route to ensure that economic centers are connected in the localities that the expressway will pass through, the local media reported.
According to the Ministry of Transport, the Trung Luong-My Thuan section of the HCMC-Can Tho Expressway has been opened to traffic, while work on the My Thuan-Can Tho section started early this year and was expected to be completed in 2022 and that on the My Thuan 2 bridge project in 2023.
The Ministry of Transport is drawing up a plan to develop the road system in the 2021-2030 period with a vision to 2050, proposing adjusting the roadmap to invest in the Can Tho-Ca Mau expressway and some other projects.
The ministry has assigned the Cuu Long Corporation for Investment Development and Project Management of Infrastructure to prepare the prefeasibility reports for these projects.
After the National Assembly and the Government handed over the mid-term public investment capital in the 2021-2025 period, the ministry will coordinate with the relevant ministries, agencies and localities to review and choose important and urgent projects for the Government and the National Assembly to develop first.
As for the Can Tho-Ca Mau expressway project, besides three plans proposed by the consulting firm, the ministry has asked Cuu Long Corporation to direct the consulting firm to study a new direction of the expressway that is parallel to National Highway 1 and five to seven kilometers from Soc Trang City of the province of the same name and Bac Lieu Province.
The direction will ensure the connection of cities in the region and ease traffic on National Highway 1, especially at the gateways of large cities.
Smuggling activity recorded most on aviation route
According to the General Department of Vietnam Customs, the situation of smuggling and cross-border trafficking of goods in January tends to decrease compared to the same period in 2020, but the nature of smuggling cases is still complicated, more sophisticated and the number of seized goods increased.
As from December 16, 2020 to January 15, 2021, the customs forces discovered 803 cases and seized violated goods with total amount of more than VND518 billion (over US$22 million), performed state budget collection of VND12.5 billion (US$540,000), prosecuted two cases and transferred five cases to other agencies to prosecute.
The smuggling activity took place the most on aviation route.
The number of arrests has increased sharply; the violated goods are high value, tiny, easy to hide such as drugs, weapons, gold, rhino horn, ivory, pangolin scales, cell-phones, alcohol, tobacco, etc.
Investors need to protect themselves against market volatility
Vietnam’s stock market this week has recovered again with gaining trading sessions and impressive trading volume. The shock caused by the historic slump on January 28 when the VN Index volatilized 6.67 percent, along with the state of no buyers, seems to have been left behind. However, the lesson from that historic stock market crash will never be old when being placed in the context that hundreds of thousands of new investors have entered the stock market lately.
After the losing trading session on January 28, the most exciting topic on securities forums at that time was ‘What makes the stock market so volatile?’. Investors cited all the reasons, even conspiracy theories, such as market manipulation by the “strong hands” and cornering the market combined with shutting down the trading system. Not so many investors dare to accept the truth that they were the reason for those fluctuations.
When stocks climb up wildly, no one mentions their extraordinary excitement but immerses in the increasing profits day by day, feeling the joy of gaining a few more percentage points of profit every day. When the market flips over, the crowd unexpectedly becomes concerned about the management responsibilities of the regulator for such a sudden plummet in the market. They seem to think that the regulator must make the market go up.
From a psychological perspective, trying to find external reasons to explain an adverse outcome or a mistake of oneself is actually an avoidance of responsibility or a state of trying to soothe the pain. This kind of sentiment is quite common in the stock market. Therefore, books on securities investment and trading all emphasize the principle of eliminating emotions from decisions.
This principle has only a few short lines, but it is summarized in hundreds of years of securities trading of investors. Many new investors in the stock market only want to see drawings describing investment strategies and tips on making stock investments profitable, easy to understand and practice immediately. However, they are reluctant to absorb the experiences written in multi-page books.
They know the support, resistance, and technical buy point of stocks. However, they do not understand the risk-return tradeoff principle in each transaction, the win/loss ratio, and the principles of capital management, trading, portfolio building, and risk management.
F0 investors – newcomers to the market – before every decision to buy or sell, usually pay attention to profit first. Meanwhile, experienced investors often concern about the maximum risk they will encounter and whether it is worth the expected return or not. For instance, when an investor decides to buy stock A at VND25,000 per share, if he thinks that the price will go up to VND30,000 in the next week, giving him a profit of 20 percent, then he is an F0 investor.
On the contrary, if he thinks that the price of stock A does not increase as expected but decreases, so he will cut loss at VND24,000, then he is an Fn investor. When putting risks before profits, investors are responsible for their capital and have determined that securities investment is a long-term career instead of an opportunity to make money quickly.
The fierce turbulences, like the market volatility last week, have occurred many times in the past 10 years and contributed to eliminating several generations of amateur investors. What goes up must come down: that is the rule. Market trends also have many different levels.
A long-term uptrend based on macroeconomic growth or micro-growth of enterprises still mixes with short-term downtrends when supply and demand dominate in a period. The current market is a short-term downtrend in a long-term uptrend. Therefore, long-term investors do not need to panic, even though the downward volatility can reach dozens of percentage in just a few days. It is an opportunity to restructure the portfolio, take partial profits on the portfolio, and buy back stocks at lower prices, or even buy more stocks.
In contrast, short-term speculators have to focus on protecting cash assets. For not knowing whether we are making long-term investments or speculating, it will lead us to emotional transactions going along with the majority and being dominated by unusual movements in the market. Worse, we will trade stocks erratically, making consecutive mistakes and being kicked out of the game.
Supply of affordable housing still fails to meet demand
The supply of affordable housing in general and social housing, in particular, in big cities like Hanoi and Ho Chi Minh in the past years, has always failed to meet the needs of the people. Especially, in HCMC, although the city government has had many programs and plans to develop social housing, the number of projects that have been completed and put into use remains small.
Some large-scale social housing projects that have been put into use in recent years include the HQC Plaza project in Nguyen Van Linh Street in Binh Chanh District, invested by Hoang Quan Real Estate Joint Stock Company, with a scale of 1,750 units, inaugurated at the end of 2019 and the HOF-HQC Ho Hoc Lam project, invested by the HCMC Housing Development Fund (HOF) in association with Hoang Quan Real Estate JSC. The project has a total investment of more than VND608 billion, with a scale of 718 apartments. It is the first public-private partnership project implemented to solve the needs of social housing in HCMC.
Earlier, the apartment project of the Ministry of Public Security in No.3 Street in Binh An Ward in Thu Duc City, invested by Phu Cuong Investment Joint Stock Company, was also put into use in 2016. The 20-story apartment building with functional areas, including residential apartments, parking areas, a kindergarten, and a technical infrastructure system, covers more than 20,020 square meters. It has 956 apartments and a floor area of 128,425.51 square meters. However, according to authorities, the number of social housing projects is much less than the demand.
According to real estate experts, although accounting for 70-80 percent of the demand for housing in big cities like HCMC, the supply of affordable housing is extremely scarce or even unavailable in the market. From 2019, the chances for young people to buy houses were lower and lower because the kind of apartments priced at VND1.1 billion-VND1.5 billion per unit was almost no longer available in the market. Specifically, from the past 3 to 5 years, the price of Grade C and Grade B apartments from VND16 million to VND21 million per square meter has now reached VND25 million-VND36 million per square meter. Thus, people with a need for affordable housing can only rely on social housing projects.
“We really need an apartment to settle down, but with limited financial resources, we can only look forward to social housing projects to enjoy the policy of this program. However, for many years, our dream has not come true yet because the number of these projects is too low. I have searched for them, but they are unavailable,” shared Mr. Binh, a person looking to buy an affordable house.
According to the HCMC Housing Development Program for the 2016-2025 period approved by the municipal People’s Committee in Decision No.5086/QD-UBND on November 14, 2018, in the 2016-2020 period, the city would strive to complete about 1.78 million square meters of housing floor area. In fact, only 1.28 million square meters of floor area were completed, equivalent to 15,177 apartments.
In the 2021-2025 period, HCMC plans to develop about 2.27 million square meters of social housing floor area, equivalent to about 25,000 apartments, to meet a part of the demand. According to Mr. Huynh Thanh Khiet, Deputy Director of the HCMC Department of Construction, the department will continue to monitor and urge the implementation of 19 social housing projects, with a scale of 26,983 apartments, to meet the set target. The department will also update and review commercial housing projects with a scale of 10 hectares that have identified a 20-percent land fund to implement social housing and urge the implementation to ensure the achievement of the target of building social housing in these projects.
The Department of Construction has updated 65 commercial housing development projects, which have a land-use scale of 10 hectares upwards and have to spend 20 percent of residential land on building social housing, with a total area of about 197.3 hectares, equivalent to about 146,550 apartments. According to Mr. Khiet, the department plans to develop and manage social housing in the city in the 2021-2025 period to submit to the municipal People’s Committee for promulgation.
However, how to mobilize social resources and various economic sectors to participate in this housing segment is not an easy problem. Although there are many incentives for enterprises to develop affordable housing and social housing, they remain apathetic. Mr. Nguyen Van Duc, Deputy Director of Dat Lanh Real Estate Company, one of the pioneering enterprises in building affordable houses in HCMC, analyzed that enterprises were not interested in affordable housing because the return was low, at only VND1 million-VND2 million per square meter. If there are financial problems, they will go bankrupt or suffer losses. In terms of legal procedures for low-income housing or high-end apartment projects, they are the same complicated as each other.
Mr. Ngo Quang Phuc, CEO of Phu Dong Group, said that the core solution to increase the supply of affordable housing is to create equal competition in the market and transparency in investment procedures for affordable housing. Especially, it should put an end to the “ask-give” situation to attract large enterprises with great potentials. According to Mr. Le Hoang Chau, Chairman of the HCMC Real Estate Association (HoREA), one of the reasons why the supply of affordable housing is scarce in the market is that the approval process for building construction is usually time-consuming.
On the other hand, the State Bank of Vietnam is currently implementing a schedule to gradually restrict credit to the real estate market, causing enterprises to face difficulties in seeking alternative capital sources.
“To increase the supply of housing, the State needs to continue to launch financial support packages to develop social and affordable housing, creating favorable conditions for investors, as well as buyers. At the same time, localities, including HCMC, should put forward solutions to consolidate and speed up the approval process of projects to stabilize the real estate market and prevent projects from being delayed, affecting the approval of new projects,” Mr. Chau suggested.
Hanoi starts conducting national 2021 economic census
The data collection period is set to take place from March 1 to July 30, 2021 on various economic component groups.
Result from the national 2021 economic census would serve as the foundation for the calculation of the country’s GDP and GRDP data.
“The main objective of the economic census is to collect data from different economic components and assess their development in terms of quantity, scale and number of employees,” stated the Head of Hanoi’s Statistics Office Dau Ngoc Hung at the meeting marking the launch of the national 2021 economic census in Hanoi on February 5.
According to Mr. Hung, the economic census will also evaluate the efficiency in Vietnam’s process of economic restructuring and revising growth model.
“Throughout the process, the government will have a better understanding on the application of IT and modern technologies under the Industry 4.0 in the business community,” noted Mr. Hung, saying this is an opportunity for enterprises to inform the authorities of their difficulties in accessing financial resources or integrating into the global economy.
The target in this national 2021 economic census include manufacturing facilities, businesses, public-non business units, associations, non-governmental agencies in Vietnam, and religious groups.
The National Statistics Office will collect information via 22 questionnaires in online platforms or direct interview.
The data collection period is set to take place from March 1 to July 30, 2021 on various economic component groups.
Vice Chairman of the Hanoi People’s Committee Ha Minh Hai, who also heads the Steering Committee on 2021 economic census in Hanoi, said statistics data holds great significance to support the city’s leaders in the process of management.
Mr. Hai requested the municipal Statistics Office to enhance the quality of analysis and economic forecast to better meet the demand for information in the current environment.
The municipal Statistics Office is set to announce the result of the economic census in December 2021, and the official result in the first quarter of 2022.
Vietnamese shoppers seek premium goods for Tet
In-home consumption will drive Vietnam’s fast-moving consumer goods sales in this Lunar New Year.
The Covid-19 pandemic’s impact on employment will lead to Vietnamese consumers optimizing spends and looking for better bargains, according to Mr. Richard Thomas, Director of Intelligent Analytics at NielsenIQ Vietnam.
Lunar New Year, the biggest festive event in Vietnam, is a banner event in Vietnam’s fast-moving consumer goods (FMCG) calendar. Normally, its sales are 12%-15% higher than non-festive periods and close to 20% of total FMCG sales of the whole year.
Given that the country’s economy is dependent on exports and tourism, the adverse impact on the key sectors have resulted in job losses and a rise in constrained consumers in the country.
Despite toned-down celebrations, Tet will still boost FMCG sales, Ms. Didem Sekerel Erdogan, Senior Vice President, Intelligent Analytics, APAC & EEMEA at NielsenIQ, predicted. “Local manufacturers and retailers have a unique opportunity to help consumers continue their beloved festive traditions during the pandemic by anticipating and adapting to changing consumer needs,” she said.
Vietnam’s retailers and manufacturers, when planning their promotional strategies for the Lunar New Year, should focus on offering free gifts and direct discounts as the most sought-after promotions in Vietnam, according to NielsenIQ.
According to NielsenIQ, local retailers and manufacturers invest heavily on promotions and price reductions during banner festive events such as Lunar New Year. These promotions, which are among the most effective ways to drive sales, can sometimes result in “promotional wastage” – where brands lose money because of ineffective promotions.
“There is no one-size-fits-all approach when it comes to promotions, as consumers respond differently to deals across different categories,” Ms. Erdogan said and suggested that, in order to capitalize on festive sales, brands and retailers must rethink their promotional strategies and ensure they are promoting the right products using the right mechanics and at the right price to better meet the needs of Lunar New Year shoppers.
In addition, local manufacturers and retailers should also offer special promotions on premium gifting categories such as abalone, chicken essence, bird’s nest and liquor as insulated spenders may have additional budgets to spend due to scaled down parties, open houses and celebrations.
Ms. Erodgan believes that these time-tested Lunar New Year traditions will continue during the pandemic, but they will take different forms and be smaller in scale. “We expect a rise in home-cooking, for example, as families avoid crowded restaurants for the reunion dinner,” she explained. “Smaller-sized social gatherings may also impact the sale of alcoholic beverages – with consumers choosing quality over quantity, thereby favoring premium brands.”
Spending habits will differ between constrained consumers (consumers who have been financially impacted by the pandemic) and insulated consumers (those who have been shielded from financial impact), according to NielsenIQ.
Constrained consumers will gravitate towards economic pack sizes, attractive promotions and deals, while insulated consumers may choose to indulge even more in anticipation of a more positive Year of the Buffalo, thus seeking more premium items.
Covid-19 boosts online shopping for Tet
E-commerce floors have pre-stocked goods and integrated new technology for online shopping activities.
Covid-19 has beefed up online shopping for the Tet holiday as it is the time when Vietnamese consumers spend the most throughout year.
Ms. Thu Hang, an accountant from Techcombank in Hanoi, is busier than usual with financial settlements at the end of the year, and online shopping on e-commerce sites is a salvage solution for her to prepare for Tet, especially in the context of the outbreak of Covid-19.
This year, Tet items such as kitchen guard meat, dried bamboo shoots, mushrooms, sausages, and clean food are more available on e-market than the previous year at the convenience of local consumers like Ms. Thu Hang. Many retailers have offered more promotions and diverse products with reasonable prices.
In order to meet the demand of online shopping during the Lunar New Year, e-commerce floors have pre-stocked goods and integrated new technology for online shopping activities.
Compared to the previous Tet holiday, Tiki, a Vietnamese online marketplace, increased at least its goods supply by 30%, focusing on packaged food, beverages, nutritional products, milk, spices.
“We expect sales in this year’s Lunar New Year at Tiki will grow up to 70% over the same period last year”, a representative from Tiki said.
Shopee, owned by Singapore-based tech group Sea, has worked with its vendors, brands and shipping partners to launch a new program for Tet delivery during the Lunar New Year.
Brick-and-mortar retailers such as Saigon Co.op, Big C and Megamarket have turned to their websites and apps to stimulate consumption . Co.opmart supermarkets saw an increase of 30-40% in online orders in recent days. Sales of Tet gift baskets through e-retailing have increased by 200% compared to the same period last year.
Hanoi Trade Corporation (Hapro) in cooperation with BRG Retail has promoted online shopping channel through its BRG Shopping app and Facebook fanpage, according to Deputy General Director of Hapro Do Tue Tam.
According to a representative of BigC/GO!, the supermarket chain also receives orders via Zalo and offer free delivery during this Tet season, in addition to receiving orders by phone and website as usual.
“Covid-19 has created an opportunity for businesses to boost the process of digital transformation, including online sales. We believe that this year’s Lunar New Year will see a boom in online shopping,” Mr. Nguyen Anh Duc, General Director of Saigon Co.op, said.
Nearly 50% of Japanese firms gain profit in Vietnam in 2020
Almost half of Japanese firms in Vietnam said they would expand investment in the country in the next one or two years.
In a difficult year of Covid-19, 49.6% of Japanese companies operating in Vietnam remained profitable and 20.3% at the break-even point.
Chief Representative of the Japan External Trade Organization (JETRO) in Hanoi Takeo Nakajima revealed the information at a meeting with Vice Minister of Planning and Investment Tran Duy Dong on February 4.
“Nearly half or 46.8% of Japanese firms in Vietnam said they would expand investment in the country in the next one or two years,” added Mr. Nakajima as he referred to the data from the JETRO survey on the performance of Japanese enterprises in 20 countries and territories, which was conducted from August 24 to September 25, 2020.
“The rate was lower compared to previous years, but remained fourth among countries/territories in the Asia-Pacific,” he said.
According to Mr. Nakajima, in 2020, companies in the survey expressed more concern over risks in the investment environment of the host country, including the legal framework, tax policies and administrative procedures.
“There are firms that want to utilize the local supply chains to support their operations, but Vietnam’s supporting industries have not been able to meet their demands,” said Mr. Nakajima, adding more firms are looking to partner with Vietnamese startups.
Vice Minister of Planning and Investment Tran Duy Dong expressed his impression of JETRO’s survey that has provided a comprehensive picture over Japanese business and investment activities in Vietnam.
“While the Covid-19 pandemic has caused negative impacts on Japanese firms in Vietnam, the survey showed most are optimistic for 2021,” said Mr. Dong.
“This requires stronger efforts from local authorities in keeping the pandemic under control and addressing concern of the business community,” Mr. Dong added.
In 2020, Vietnam became the top choice for Japanese firms that participating in a government program to move production facilities out of China, with 37 out of the total 81 having chosen Vietnam as their destination. Thailand came in second place with 19 companies.
The majority of Japanese firms looking to move to Vietnam are in the fields of medical equipment, in addition to those producing semiconductors, phones and parts, and air conditioners, among others.
Vietnam, Japan banks provide joint financial services
The Saigon Commercial Joint Stock Bank (SCB) has recently entered into a strategic cooperation deal with Kiraboshi Business Consulting Vietnam, the representative of Kiraboshi Bank of Japan.
Under the deal, SCB will work closely with the Japanese partner to take care of individual clients of the partner living, working and traveling in Vietnam. The two sides will provide financial solutions for corporate Japanese businesses operating in Vietnam, the Voice of Vietnam (VOV) reported.
According to the two banks, such comprehensive cooperation will enable the two banks to develop into a major financial cooperation alliance in the future that is to support businesses and investors of the two countries.
They will also expand cooperation to serve clients of other countries alongside Vietnamese and Japanese ones.
SCB Acting General Director Jeremy Chen explained said that more and more Japanese organisations and businesses are interested in investing in the Vietnamese market, and this is why SCB has teamed up with the Japanese partner to provide financial support and advice for clients./.
Hai Phong grants investment approval to LG Display’s project
Chairman of the People’s Committee of northern Hai Phong city Nguyen Van Tung on February 7 granted a certificate to LG Display Vietnam Hai Phong’s project adding 750 million USD in investments.
The additional amount brought the investment capital of the entire project to 3.25 billion USD in total, making it the foreign-invested project with the highest value in the port city.
It is set to begin in next month and become operational two months later, creating an additional 5,000 jobs and contributing about 5 million USD annually to the State budget.
LG Display Vietnam Hai Phong’s project was first approved in April 2016 with an investment of 2.5 billion USD, specialising in the production of LG Corporation’s OLED and LCD screens, among others.
In 2020, it posted 5.98 billion USD in sales revenues, a year-on-year surge of 624 percent.
As of early February, Hai Phong had attracted 823 million USD in foreign investment, rising six-fold against the amount recorded in the first two months last year. The figure is projected to hit 910 million USD by the end of this month./.