VIETNAM BUSINESS NEWS APRIL 8
Aquatic product exports hit $1.64 bln in Q1
The export of key aquatic products posted strong rises in many markets in the first quarter of 2021, increasing Vietnam’s aquatic export turnover by 3 percent to 1.64 billion USD.
Of note, shrimp and tra fish exports rose 10 percent and 11 percent in March to 270 million USD and 137 million USD, respectively.
Vietnam earned 646 million USD from exporting shrimp in the first quarter, up nearly 3 percent year-on-year, while the export value of tra fish totalled 336 million USD, a rise of just 0.6 percent.
Exports of squid, octopus, and fish-related products also saw positive growth signs.
According to Le Hang, Deputy Director of the VASEP.PRO centre at the Vietnam Association of Seafood Exporters and Producers, the export of squid and octopus surged 8 percent in March, lifting the total export value in the first quarter to 112 million USD.
The European market is recovering thanks to tariff preferences under the EU-Vietnam Free Trade Agreement (EVFTA), Hang said.
The US, Japan, the Republic of Korea, and China remained the biggest importers of Vietnamese aquatic products in the first two months of the year, accounting for 53.8 percent of the total.
Aquatic export value rose in most markets, with the highest growth reported in Russia, of 44.6 percent.
Exports to China in the months to come are forecast to recover strongly as the country resolves congestion at seaports and loosens procedures to prevent the spread of COVID-19 from imported aquatic products, especially frozen products.
Vietnam’s aquatic exports are predicted to hit 2.32 billion USD for the first four months, an increase of nearly 4 percent year-on-year./.
Shares rise for eight consecutive sessions, VN-Index hits new high
Shares gained for the eighth consecutive trading session Wednesday thanks to increased buying force as market sentiment improved when the VN-Index hit a new high.
On the Ho Chi Minh Stock Exchange (HoSE), the VN-Index climbed 0.20 per cent to 1,242.38 points with the market breadth turning positive.
The southern market index gained a total 6.9 per cent during the last eight sessions.
During the session, 155 stocks decreased while 267 stocks increased.
The market's liquidity stayed high with over 727.8 million shares traded, worth over VND16.5 trillion.
The gain of the 30 large-cap trackers was the main driving force for the market's rally. The VN30-Index increased 0.19 per cent to 1,257.77 points. Of the VN30 basket, 17 stocks gained while seven slid.
Thanks to the continuous increase of the market and no deep corrections, investors boldly entered buying orders, pushing many stocks to rise sharply.
Vingroup (VIC) and Masan Group (MSN) were the two leading stocks in the top ten that have the most positive impact on the VN-Index's gain. They were followed by Novaland (NVL), insurer Bao Viet Holdings (BVH), PVPower (POW), Military Bank (MBB), Vincom Retail (VRE), Ha Noi Export-Import Company (GEX).
Meanwhile, real estate company Vinhomes (VHM) and dairy firm Vinamilk (VNM) led the group of stocks that had negative impacts on the VN-Index.
“Despite the pressure of short-term profit-taking in the morning, VN-Index still surpassed 1,240 points in the afternoon session. Investment cash continued flowing into the market,” said BIDV Securities Co.
“Liquidity decreased slightly but remained at a stable level with positive market breadth, showing that cash flow is spreading to the market.
“Foreign investors turned to be net sellers again with the cash flow differentiating to mid-cap stocks, reflecting that the upturn momentum of the VN-Index may slow down and accumulate in the 1,230-1,250 range,” it said.
On the Ha Noi Stock Exchange (HNX), the HNX-Index rose 0.40 per cent to close Wednesday at 292.84 points.
It had risen 0.15 per cent to close Tuesday at 291.68 points.
In Wednesday’s trade, some 164 million shares were traded on the northern bourse, worth nearly VND2.8 trillion.
Agriculture sector needs to develop raw materials to reduce dependence on imports
The agricultural sector needs to focus on developing raw materials to reduce the dependence on imports as well as improve processing capacity, experts said.
Many agricultural products of Viet Nam saw exports hit billions of US dollars per year but production was still heavily reliant on imported raw materials.
For example, Viet Nam was among the world’s largest cashew exports but still has to import around 80 per cent of raw cashew for processing, mainly from Ivory Coast, Ghana, Nigeria, Guinea Bissau, Benin, Togo, Burkina Faso and Mozambique.
Viet Nam also had to import raw tuna for processing as domestic raw material sources only met 30-35 per cent of demand.
According to Nguyen Van Nam, former Director of the Viet Nam Institute of Trade Research under the Ministry of Industry and Trade, globalisation was expanding global value chains, meaning that for just one product, different production stages could be located in different countries, which depended on the capacity of each country.
For the cashew industry, for example, Nam said that while the processing capacity of plants in Viet Nam increased significantly, the production of raw cashew did not expand correspondingly due to limited cultivation land and farmers choosing other plants with higher added value.
This meant that Viet Nam must import raw cashew for production, which was a very normal thing, he said.
However, there would be risks when Viet Nam relied on imported raw materials. The recent Suez Canal blockage heavily affected the import of raw cashew which were mainly from Africa and had to go through this canal. This was an unanticipated risk, he pointed out.
Viet Nam had introduced a number of policies to support agricultural production, including measures to support prices or subsidies directly related to production quantities.
Nam said that under the World Trade Organisation, subsidies were subject to limits with “de minimis” minimal support allowed at 10 per cent for developing countries, including Viet Nam.
However, Viet Nam had not been successful in implementing subsidies support for the agricultural sector due to limited budget and the lack of an appropriate market mechanism.
Nam said it was important to develop comprehensive programmes and strategies to support farmers and agricultural enterprises to enhance their competitiveness, from raw material production to processing capacity as well as distribution.
Experts said that improving the processing capacity was also essential to increase the added value for agricultural products.
Statistics showed that there were more than 7,500 agricultural processing companies of large scale in Viet Nam with a total capacity of around 120 million tonnes of raw materials per year.
During the past three years, 30 agricultural processing projects were constructed with total investment capital of US$1 billion.
However, the processing capacity of Viet Nam remained low, Bach Quoc Khang, secretary of the Science and Technology Programme for New Rural Development, said.
Only five to 10 per cent of the output of vegetables and meat were processed per year, Khang said.
The investment in processing was not equal to the development of raw material production, he pointed out.
Under the Prime Minister’s Directive No 25/CT-TTg dated June 4, 2020, Viet Nam targeted to become one among the world’s ten leading countries in terms of agricultural processing and agricultural product trading centres.
To achieve this goal, focus must be placed on improving processing and preservation technology capacity, experts said.
High logistics costs hindering exports
Despite being known for its low labour costs, higher logistics costs have continually reduced the competitiveness of Vietnam’s exports compared to elsewhere in the region.
Export orders at this enterprise were not overly affected by COVID-19, but high logistics costs are now creating difficulties.
Besides the rising cost, there is also a shortage of containers, disrupting exports even further.
Goods must undergo trans-shipment in a third country before being shipped to the US and the EU, so enterprises must pay unloading fees twice, at up to 300 USD per container, compared to direct shipments from deep-water ports in Vietnam.
To address any inadequacies, relevant authorities have established an inspection group to check foreign vessels.
According to the Ministry of Industry and Trade, to ease the current difficulties, businesses need to pay attention to using full logistics package services, and be proactive in the management of raw material supplies, production, transportation, and delivery times, to control the market while increasing their competitiveness./.
Thoughts return to stronger rail options
The recent Suez Canal blockage may prompt governments to consider further development of multimodal transportation of goods, with different trans-continental rail routes.
Although the Ever Given container ship was rescued one week after being stranded in the Suez Canal in Egypt, the trading world remains rocked as hundreds of billions of US dollars has evaporated in the wake of the global trade system significantly relying on this narrow canal.
The incident has also posed questions on developing other transportation channels, in which trans-continental rail routes may be top of the list.
“One of the most effective channels is to develop a rail route running through Asia and Europe. This would be very good for exporters in Vietnam,” said Tran Thanh Hai, deputy director of the Ministry of Industry and Trade’s Agency of Foreign Trade.
It is now recommended that exporters should consider and take advantage of the current rail route connecting Vietnam through China to Kazakhstan, Russia, Belarus, Poland, and Germany. From Germany, the goods can be transported to other European markets.
Currently if goods are transported via this rail route, it would take a month from Vietnam to Germany, with a cost of $8,000-9,000 per container, which is higher than the $6,000-8,000 for sea transportation which can take up to 50 days.
However, the existing difficulty is the difference in railway widths and also standards of the trains themselves. The width of Vietnam’s railways is one metre, while that of other nations is around 1.4m. Moreover, trains in Vietnam cannot accommodate a huge volume of goods at the same time – each train can carry a maximum of 90 tonnes of goods for 15 compartments. If exporters want their goods transported by trains from Vietnam to overseas markets, they will have to change trains many times, meaning higher costs.
These factors currently make it difficult for Vietnam to boost the transportation of goods by train to other international markets.
Kazakhstani Ambassador to Vietnam Yerlan Baizhanov previously told VIR that Kazakhstan, China, and Vietnam had established a council to discuss a project to develop a rail route for goods transportation from Vietnam through China to Kazakhstan and other member countries of the Vietnam-Eurasian Economic Union (EAEU), including Russia, Belarus, Armenia and Kyrgyzstan, and vice versa.
“The council has organised a number of meetings. One of the key issues now is to fix the cost for transporting goods,” Baizhanov said. “I believe that there will be a shared solution. If this rail route is not developed, it will be difficult to raise the bilateral trade between Kazakhstan and Vietnam, which currently sits at only $500 million per year.”
The railway will help reduce the time for transporting goods from Kazakhstan to Vietnam to only 14 days from about one or two months now, he added. “The Kazakhstani side will continue working with Vietnam’s authorised agencies about this project,” said Baizhanov.
Currently, goods are transported between both nations by sea, which often takes a few months for a ship.
Under the railway project, whose total length and investment capital remain unrevealed, container goods will be transported from Vietnam’s northern Dong Dang and Lao Cai railway stations to China’s Lianyungang port – whose 49 per cent of stake is now held by Kazakhstan Temir Zholy (KTZ), the national railway company of Kazakhstan. After that, the goods will be transported by railway to Kazakhstan, which borders China, and to other EAEU countries.
Leaders of the railway industry of Vietnam, Kazakhstan, and China have decided on the project’s logistics manager, namely KTZExpress of Kazakhstan and Vietnam’s Transportation and Trade JSC, a member unit of state-owned Vietnam Railways Corporation. They have also considered the demand for organising container-based trains for the new routes. KTZ and Vietnam Railways Corporation also inked an MoU on cooperation in railway development several years ago.
Currently, under its strategy, Kazakhstan is boosting transport infrastructure modernisation and attaching great importance to developing transport-logistics routes connecting Kazakhstan with Southeast Asian nations including Vietnam. The railway will also enable Kazakhstan to boost imports of electronics, and garments and textiles products from Vietnam, which it needs the most.
In the same vein, in 2018, members of the Organization for Cooperation of Railways (OSJD) discussed a plan to develop a railway transport system running from Vietnam to Russia through other Asian and European countries. The plan is part of an agreement signed that year at the OSJD’s conference of general directors in the central city of Danang. Directors pledged to promote logistics development through rail, expand research cooperation, and supply locomotives and machinery. However, no further information of the plan has been published so far.
Hanoi’s property market predicted to rebound strongly
Strong construction activities in many different types of property and areas in Hanoi signal the strong recovery of the capital’s real estate market from this year onwards, according to CBRE Hanoi Branch Director Nguyen Hoai An.
At a recent press conference looking back on the Hanoi market in the first quarter, An noted that not only residential real estate but also commercial real estate will welcome many new projects with the participation of foreign investors and domestic developers from the southern region.
A CBRE Vietnam survey showed that approximately 4,400 apartments were launched in Hanoi in Q1, down 39 percent quarter-on-quarter due to the hiatus caused by the Lunar New Year (Tet) holiday and the resurgence of COVID-19, but still up 270 percent year-on-year.
This indicates a strong recovery in the local property market compared to Q1 of 2020, when COVID-19 first broke out in Vietnam.
Do Van Anh, manager of the research and consulting division at CBRE Vietnam, said most of the new apartment supply in Q1 came from 14 projects already opened for sale, while only three projects were newly launched.
She said apartments in the mid-end segment were still the most popular in the market, accounting for up to 80 percent of total new supply in Q1. The eastern and western areas of the city were home to most new projects, with 77 percent of new supply.
The positive market sentiment in recent times has also helped bridge the gap between the number of newly-launched apartments and those already sold.
A total of 4,200 apartments were sold in Q1. In the mid-end segment, the number of sold apartments was higher than newly-launched apartments.
Anh forecast that new supply and sales in Hanoi this year will be around 24,000-26,000 apartments. Many residential real estate projects will be launched for sale in different parts of the city, both inner and outlying districts, in coming quarters, helping the market become more vibrant./.
VinGroup restarts $1.5 billion tourism entertainment project
Local tourism property developer, Vinpearl joint-stock company, a member of VinGroup, has restarted the Van Village project – a luxury entertainment and resort complex – at the foot of the Hai Van Pass after a 10-year hiatus.
The Lang Van (Van Village) project, which covers 1,000ha in the former Van Village, will be built with total investment of VND35 trillion (US$1.5 billion) – 10 times as much as its initial approved plan of investment.
The site, which is only accessible by boat and by foot, will be one of the largest entertainment and resort projects in Da Nang, and it would host five million tourists per year in the near future.
The project would spark future investment in five-star entertainment and tourism as it is situated in the key economic centre in the northwest zone, near Lien Chieu Port; Nam O eco-tour site and resort invested by Trung Thuy Group; the National Historical Relic and Architecture of Hai Van Gate on the top of Hai Van Pass linked with National Highway No 1, Kim Lien railway station, a logistics centre, the East-West Economic Corridors and the Chan May-Lang Co Economic Zone in Thua Thien Hue.
The project, which was first planned by the authorities of Da Nang in 2011, had been delayed due to adjustments of the Master Plan.
Da Nang People’s Committee had to fine-tune the plan for the project in 2016.
Da Nang will build a new Lien Chieu Port as an international hub for handling cargo ships with 100,000 deadweight tonnage (DWT) and container ships with loading capacities from 6,000 to 8,000 twenty-foot equivalent unit (TEUs) near the Lang Van complex project.
According to the city’s Investment Promotion Agency, VinGroup has poured hundreds of millions of US dollars in projects, including a 222-bed international hospital; two Vinpearl luxury resorts; the Vincom trading centre, and Vinpearl condotel in the city.
Vietnam expected to further open markets to global economy: Bloomberg
The new Vietnamese leaders are expected to uphold the country’s long-held policies, including further opening its markets to the global economy and balancing relations with China and the US, said Bloomberg.
The election of a new President and Prime Minister in Vietnam on April 5 has attracted attention of international media.
Nikkei Asia English-language newsmagazine quoted Prof Carl Thayer at Australia’s New South Wales University as saying that PM Chinh has the support of a large number of members of the Party Central Committee.
Thayer added that the new PM’s immediate priorities have already been determined, which are defeating the COVID-19 pandemic and kick-starting Vietnam's economic recovery.
In an article by AP, Thayer was quoted as speaking highly of Phuc’s contributions to the economic growth and the fight against COVID-19 in Vietnam during his tenure as Prime Minister.
During his time as prime minister, the country sustained the economic growth of 7 percent up until last year when COVID-19 hit the world, the article noted.
Xinhua News Agency reported that Chinese President Xi Jinping sent a message of congratulations to President Nguyen Xuan Phuc, while Chinese Premier Li Keqiang cabled his congratulatory message to Prime Minister Pham Minh Chinh.
In his message to President Phuc, Russian President Vladimir Putin expressed a hope that the Russia-Vietnam strategic partnership will continue to flourish, TASS news agency reported./.
Binh Duong: Index of Industrial Production up 6.9 pct. in Q1
Binh Duong’s Index of Industrial Production (IIP) picked up 6.9 percent year-on-year in the first quarter, with FDI firms remaining the largest contributor, according to the provincial People’s Committee.
Significant growth was seen in some key industries, such as wood and wooden products (15.6 percent); prefabricated metal products, excluding machinery and equipment (11.14 percent); and electronics, computers, and optical products (14.7 percent).
Several others experienced lower growth than in the same period last year, such as food processing (up 1.08 percent), beverages (0.29 percent), chemicals and chemical products (2.41 percent), and rubber products and plastics (1.14 percent).
The southern province is now home to more than 8,500 industrial manufacturers, of which 26.4 percent are FDI enterprises who together contributed 63.3 percent of the province’s industrial production in Q1. They also accounted for over 82 percent of local export revenues during the period.
According to Director of the provincial Department of Industry and Trade Nguyen Thanh Toan, Binh Duong has heavily invested in developing infrastructure in local industrial parks and clusters so as to attract more investors. It has also provided all possible support for enterprises to maintain stable production, he said.
He added that the province is calling for investment in hi-tech, environmentally-friendly projects that promote the use of clean technology and produce competitive products.
VPS surges past long-time leader SSI to become top securities brokerage
There is a new leader in the securities brokerage industry with VPS Securities Joint Stock Company dislodging long-time incumbent SSI Securities Corporation from the top spot.
It marks a big jump for VPS, which ranked third last year with a market share of 8.22 per cent, rising to 10.84 per cent in the fourth quarter.
In the first quarter of this year its market share rose to 13.24 per cent, with SSI following with 11.89 per cent, and HCM City Securities Corporation (8.23 per cent), VNDirect Securities Corporation (7.46 per cent), and Viet Capital Securities JSC (5.62 per cent).
Mirae Asset Securities (Vietnam) Limited Liability Company, MS Securities Joint Stock Company, Techcom Securities JSC, FPT Securities Joint Stock Company, and BIDV Securities Joint Stock Company each accounted for 3.25-4.5 per cent.
Nguyen Hong Nam, CEO of SSI Securities Corporation, said: “Competition is very necessary to promote the development of the market. Brokerage market share is an important criterion for each securities firm but is certainly not the sole operational goal. Each company has its own goals to pursue and act upon.”
Market capitalisation on HOSE as of March 31 skyrocketed by 93.56 per cent from a year earlier to more than VND4.46 quadrillion (US$193.72 billion).
It was equivalent to 70.95 per cent of the country’s GDP.
In the first quarter the VN-Index, the benchmark stock index, touched 1,200 points three times but could not cross what has become a key psychological barrier.
It has crossed 1,200 points in April.
Vietnamese firms participate in M-Tech Nagoya exhibition
Vietnamese businesses have joined the Mechanical Components & Materials Technology Expo (M-Tech), which opened in Nagoya, the capital city of Aichi Prefecture, Japan on April 7.
The annual M-Tech Nagoya exhibition is the biggest of its kind in Japan, gathering a large number of businesses from the UK, France, Germany, the US, Japan, the Republic of Korea and China.
This is a good chance for Vietnamese firms to seek partnership opportunities, join the global value chains and access latest manufacturing technologies.
However, according to Vietnamese Trade Councilor in Japan Ta Minh Duc, this year, due to COVID-19 pandemic’s impact, many Vietnamese businesses have not able to attend the event. The Vietnamese Trade Office in Japan have supported them in introducing their products to partners.
Masaki Hatabe from Reed Exhibitions – the organiser of the event – said that the firm will organise three exhibitions this year and four next year. He said he hopes Vietnamese enterprises can join the events.
According to Japanese customs statistics, in 2020, Vietnam’s exports of support industry products to Japan reached 1.1 billion USD, accounting for 5 percent of the total export revenue of Vietnam to the market.
The Vietnamese Trade Office in Japan attributed the results to the Vietnamese and Japanese Government’s efforts in promoting partnerships among businesses of both sides.
In six priorities of the industrialisation strategy within the Vietnam-Japan cooperation framework, three are related to the support industry, including electronics, agricultural machinery, and automobile and automobile spare part production.
Alongside, the two sides have agreed to implement many measures to further boost the growth of Vietnam’s support industry, while strengthening personnel training in business management, and attracting more investment and exploring more markets to increase revenue and reduce cost./.
Vietnam, Saudi Arabia work to boost bilateral cooperation
Deputy Minister of Industry and Trade Cao Quoc Hung and Deputy Minister of Economy and Planning of Saudi Arabia Bandar AlKhamies co-chaired the fourth session of the Vietnam-Saudi Arabia Joint Committee on Economic, Scientific and Technological Cooperation via videoconference on April 7.
At the event, the co-chairs viewed the implementation of cooperation contents agreed since the third session, and put forth orientations and measures to boost the two countries’ future cooperation in the coming time.
Both sides agreed on the importance of the joint committee mechanism in developing friendship and cooperation, and continuing to pave the way for expanding multifaceted collaboration between the two countries.
According to Deputy Minister Cao Quoc Hung, Vietnam and Saudi Arabia have supported each other at international and regional forums, as well as multilateralism, international law, the United Nations Charter and the role of the UN in ensuring global peace and development
Hung said Saudi Arabia is a major market and one of Vietnam’s important partners in the Middle-East – Africa region, while highlighting the development of the two countries’ economic and trade ties in recent times.
The two countries’ import-export value has been rising and hit 1.87 billion USD in 2014. In 2020, the figure reached 1.6 billion USD despite the impacts of the COVID-19 pandemic.
However, investment from Saudi Arabian enterprises to Vietnam is still modest, although their financial potential and strength are huge, and Vietnam boasts potential and advantages on investment and business environment.
Therefore, Vietnam encourages and is willing to create favourable conditions for Saudi Arabian businesses to invest in Vietnam, so as to increase and promote the two countries’ cooperation.
Saudi Arabia is running six projects with total registered capital of 2.37 million USD in Vietnam, ranking 89th among 139 countries and territories investing in the Southeast Asian nation.
The fourth session focused on certain priority areas to promote cooperation such as enhancing bilateral trade through diversifying imports on the basis of demand and strength of each country, increasing investment attraction from Saudi Arabia to Vietnam, and removing difficulties in bilateral trade ties.
The two sides looked towards the early conclusion of the necessary legal framework to facilitate and support payment, trade and investment activities of businesses and people of the two countries.
They discussed how to increase cooperation in energy, electricity, oil and gas, renewable energy, chemicals, food processing, construction of infrastructure like airport, seaports, roads, industrial parks, high-end resorts, hotels, urban areas, and industrial and agricultural production.
Besides, they also discussed measures to boost cooperation in fields as defence – security, labour, healthcare, education, culture, tourism, agriculture, industry, information technology.
Deputy Minister Cao Quoc Hung from Hanoi and Deputy Minister Bandar AlKhamies from Riyalh signed the minutes of meeting. They agreed that the fifth session will take place in 2023 in Saudi Arabia./.
Large farm produce processing factory inaugurated in Lao Cai
A 42 billion VND (1.82 million USD) vegetable and fruit processing factory was put into operation in Vung Lai commune, Muong Khuong district of the northern mountainous province of Lao Cai on April 7.
Invested by the Asia Food Company, the facility has an annual capacity of processing 4,600 tonnes of pine apple, 800 tonnes of banana, 1,000 tonnes of maize, 1,600 tonnes of concentrated pine apple juice, and 250 tonnes of vegetables and fruit.
The products will be exported to the Asian, European and American markets, and serve domestic consumption.
It will create jobs for 500 seasonal and 200 regular labourers.
Currently, the factory has committed to buying all farm produce of Muong Khuong farmers, while supporting them in fertilizers and farming techniques.
Muong Khuong district is an agricultural hub of Lao Cai with nearly 8,000 hectares of crops./.
Adding LNG import terminal for Ca Na LNG Power Complex
The prime minister approved the suggestion of the Ministry of Transport of adding a liquefied natural gas (LNG) import terminal in Ca Na LNG Power Complex.
The Ca Na LNG power complex will turn Ninh Thuan province into the energy hub of the country
Accordingly, the terminal can endure loads of up to 97,000 tonnes and will directly support the first phase (1,500MW) of the LNG power complex.
The national LNG import and transit port plan is part of the national energy and seaport system master plan for 2021-2030 with a vision to 2050.
By the end of 2020, Ninh Thuan People's Committee issued Decision No.2162/QD-UBND approving the project of the first phase of the Ca Na LNG power complex, with a capacity of 1,500MW implemented in Phuoc Diem commune (Thuan Nam district), with a total project investment value of more than VND49 trillion ($2.13 billion).
The project includes the LNG power plant using combined-cycle gas turbines with a capacity of 1,500MW, as well as the material supply and handling system (including LNG import terminal, LNG storage, gas recycling warehouse, and gas pipeline system), the power transmission system to ensure the transmission of the entire 6,000MW generated by the LNG power complex, and the related infrastructure and technical works.
The Ca Na LNG complex will commence implementation in the third quarter of 2021, and put into operation in the third quarter of 2024.
Danang promotes investment in string of big projects
In light of the adjusted general planning of the city to 2030 with a vision to 2045, Danang set sights on becoming a modern, liveable ecological city.
With the goal of becoming one of the major socio-economic centres of the country and Southeast Asia, Danang will focus on finishing key projects, including shopping malls, leisure complexes such as Vinacapital Danang Golf Resort, Ba Na-Suoi Mo ecotourism complex, the Lang Van resort complex, and InterContinental Danang Sun Peninsula Resort.
In addition, the city will concentrate on high-tech development across a total area of about 1,710 hectares, featuring Danang High-Tech Park and Expanded High-Tech Park and Danang Software Park No.1, 2 and 3; alongside the establishment of an innovation cluster south of the city in association with the Danang University urban area, the Innovation Centre, and Danang Software Park.
Many large corporations have registered to study investment opportunities in areas under Danang’s newly-adjusted planning right after the Danang Department of Tourism came up with many solutions to help achieve the target, including completing Danang city's tourism development master plan to 2030 with a vision to 2045 as well as developing new products and services.
Many large corporations have registered to study investment opportunities in areas under Danang’s newly-adjusted planning.
For instance, Ecoland Group provided insights into forming a high-tech complex in Hoa Lien and Hoa Minh communes.
Chairman of Imex Pan Pacific Group (IPPG) Johnathan Hanh Nguyen said that his corporation had plans to pour more than $8 billion into numerous projects in the city, with the highlight of forming a regional financial centre in Son Tra district.
Notably, Phat Dat Real Estate Development Corporation also planned to carry out a 650-hectare project in Hoa Chau-Hoa Tien communes in the Development Reserve subzone (5,858 hectares).
Several investors like BRG Group, Sakae Group, and Sun Group expressed their interest in building duty-free areas, urban areas, and golf courses in the centre of Hoa Vang, Hoa Tien, and Hoa Chau districts and the 2,729ha Suon Doi (Hillside) subzone
Tran Du Lich, a member of the prime minister’s Economic Advisory Group, said that these revised contents in the general planning have set forth proper orientations for the development of Danang in the forthcoming time.
“Urban zones have taken shape fairly clearly in the planning. Notably, the revised planning envisages setting up the Danang Startup and Innovation Centre, focusing on promoting digital transformation, which is the right move that matches contemporary development trends,” Lich noted.
In 2021, the city granted investment licences to six investment projects in Danang Hi-Tech Park and industrial parks, including three foreign-invested projects.
The three foreign-invested projects are funded by Japanese and US investors. They include a $110 million semiconductor factory, the $35 million Fujikin Danang research-development-production centre, and a $300,000 packaging factory.
Besides, the city also gave in-principle approval to a $135 million project on 3D printing services of Arevo Inc. from the US at Danang Hi-Tech Park.
Danang expects to serve five million tourists this year, up 85 per cent compared to 2020.
E-commerce platform a boost for Vietnam’s exports to EU
The recent debut of the Vietnam-EU e-commerce platform (VEFTA) is expected to boost Vietnam’s exports to the EU market, experts have said.
Nguyen Kim Hung, head of the Vietnam Institute of Business Administration and Digital Economy, said the platform will serve as a B2B marketplace, helping connect Vietnamese firms and international trade partners, especially those from Europe.
Once completed, it will be directly linked with the existing e-commerce platforms of cities, provinces, and sectors, he said, noting that the platform will also provide necessary information about trade agreements and policies regarding international trade.
Efforts are being made to build a digital eco-system to facilitate connectivity and trading by enterprises on a single platform, according to Hung.
Deputy Minister of Industry and Trade Cao Quoc Hung stressed the significance of the platform for small and medium-sized enterprises and household businesses.
Nguyen Viet Cuong, Director of the Kim Nam Tech Company Limited, said that with a trading scale larger than present platforms, the VEFTA enables the export of “Made in Vietnam” products, mainly agro-forestry products and footwear, to the EU.
Meanwhile, Chairman of the Vietnam Association of Small and Medium Enterprises Nguyen Van Than said the association wishes to accompany its members and the Ministry of Industry and Trade (MoIT) in studying solutions, focusing on digital transformation and e-commerce, in an effort to help domestic firms optimise advantages generated by the EU-Vietnam Free Trade Agreement (EVFTA).
According to the MoIT, Vietnam’s exports to the EU were up 3.5 percent in the opening months of the trade deal, from August to December last year.
During the first quarter of this year, trade turnover hit 9.9 billion USD, an 18 percent increase year-on-year.
Vietnam posted a trade surplus of 4 billion USD with the EU in January and February, representing a year-on-year rise of 36.3 percent.
Plastic materials, rubber products, computers, electronics and components, steel, and chemicals saw the highest increases in export revenue./.
FPT Software sets up third office in Philippines
FPT Software, a member of FPT Corporation, has recently announced that it will open its third office in the Philippines on April 13, positioning itself as a major IT player in the nation.
Based in Manila, it is the 57th office FPT Software has established in 25 countries and territories across the world.
Despite formidable challenges brought by the COVID-19 pandemic, the firm’s revenue in the Philippines surged 65 percent in 2020.
With the establishment of the new office, FPT Software expects to increase the number of employees here by 25 percent to 221 by the end of this year.
In 2015, FPT Software established its first Philippine office in the country’s oldest city of Cebu. The company expanded their presence with a second office at IT Park Cebu City four years later. In this market, FPT Software focuses on providing Business Process Outsourcing (BPO) services, management services for Application Management Service (AMS) and Infrastructure Management Services (IMS), and software services targeting English-speaking markets.
FPT Software is a global technology and IT services provider headquartered in Vietnam, with more than 500 million USD in revenue and 16,000 employees in 25 countries and territories. As a pioneer in digital transformation, the company delivers world-class services in Smart factory, Digital platforms, RPA, AI, IoT, Cloud, AR/VR, BPO, and more.
It has served 700 customers worldwide, a hundred of which are Fortune Global 500 companies in the industries of Automotive, Banking and Finance, Logistics & Transportation, Utilities, and more./.
Forbes hails rising office rents, growth in VN housing market
US business magazine Forbes has recently published an article detailing real estate in Vietnam in which it starts out by stating: “Office rents rising in 2020? Positive GDP growth during a global health crisis? Seems unimaginable, unless you live in Vietnam.”
The price of apartments in Ho Chi Minh City has increased by 90% between 2017 and 2020. (Photo: Getty)
The piece details numerousse achievements Vietnam has recorded over the past year, given the current health and economic hardships faced by nations across the world.
Forbes stresses that throughout the same period, Vietnam has eclipsed all of its Asian rivals economically by recording positive GDP growth of 2.9%. Indeed, this represents a noteworthy feat considering that last year witnessed the GDPs of neighbouring Thailand and Malaysia suffer declines of 6.1% and 5.6%, respectively.
“Consequently, Vietnam’s real estate market has flourished in recent years, with continued economic growth leading to a surge in property prices. The country’s real estate market proved resilient during the pandemic, with both the industrial and residential sectors leading the pack,” says Forbes.
According to the financial publication, the star of the local real estate market remains the national industrial sector, which has been the beneficiary of a manufacturing boom occurring in recent times. In addition, recent years has seen firms such as Nike, Adidas, and Samsung move their operations out of China and into Vietnam due to increasing production costs in the northern neighbour, coupled with the ongoing trade war with the United States.
Furthermore, the Vietnamese housing market has also enjoyed an unprecedented period of growth in recent years due to rampant demand for apartments exceeding the supply of units, with many new developments selling out shortly after going on sale to the public.
The website quotes Cushman & Wakefield as saying that the price of apartments in Ho Chi Minh City has risen in response to this added demand and has grown by a staggering 90% between 2017 and 2020, including a rise of 12.8% in 2020 alone.
Despite office markets globally suffering as employees work from home, local economic growth spurred Ho Chi Minh City’s office rents to climb by 1.7% in 2020, while nearby cities such as Bangkok, Singapore, and Hong Kong (China) all saw office rents decline throughout last year.
Similar to the rest of the world, last year wreaked havoc on the Vietnamese hotel sector, with occupancy rates hovering between 20% and 30% for most of the year. While it is expected that the recovery will be gradual, the outlook remains strong given the fact that the country’s travel industry was in the process of taking off before the pandemic.
“With the Government targeting 6.5% GDP growth in 2021, Vietnam’s real estate market is poised to ride the economy’s tailwinds into the future,” Forbes concludes.
Work begins on military-civilian Phan Thiet airport
Delegates start construction of Phan Thiet Airport in the south-central province of Binh Thuan on Monday.
Construction of Phan Thiet Airport in the south-central province of Binh Thuan began on Monday, with defence and provincial authorities taking part in the ground-breaking.
Under the Government’s amended aviation transportation development plan for up to 2030, Phan Thiet Airport will be used or both military and civilian purposes.
When completed next year it will have one runway of over 3,000m.
It will handle both domestic and international flights and have a capacity of two million passengers a year.
Provincial chairman Le Tuan Phong speaks at the event.
The province prepared for the construction by assigning various departments and other agencies to acquire and clear lands and pay compensation to their owners.
Most of the required land has been acquired and is ready for the construction.
Provincial chairman Le Tuan Phong stressed at the ground-breaking ceremony that the construction of Phan Thiet International Airport is a milestone for Binh Thuan in carrying out build-operate-transfer (BOT) projects.
He assured that the province would complete the land acquisition and compensation and handover to the developers well in time.
All difficulties related to the construction would also be solved, he promised.
Under the Government’s amended aviation transportation development plan for up to 2030, Phan Thiet Airport will be used or both military and civilian purposes.
The province People’s Committee has instructed all relevant agencies and the developer to work with ministries to submit plans for the civilian component of the airport, he added.
Speaking at the airport’s ceremony, Deputy Minister of National Defence Senior Lieutenant-General Tran Don said the province should closely co-operate with his ministry and the developers to quickly clear unexploded ordnance in the area to speed up land clearance.
Binh Thuan lacks comprehensive road and rail links with the outside, making Phan Thiet Airport important to it.
It will enable the province to fulfil its great maritime economy, energy and tourism potential.
Good infrastructure will also bring investors like Novaland and Rang Dong Company flocking to the province.
High hopes for PDP8 reform of energy mix
The Ministry of Industry and Trade has submitted the National Power Development Plan 8 for approval within this government tenure. Although the plan is designed flexibly, some experts pointed out possible inefficiencies and the risk of wasting financial resources.
Do Thang Hai, Deputy Minister of Industry and Trade, said that the latest draft of the plan (PDP8), which has received unanimity from the appraisal council, is “expected to be approved and issued by the prime minister right in this term by the new government.”
The PDP8 offers three groups of mechanisms and 11 solutions based on lessons learned from the previous plans to ensure feasibility in the implementation. The openness and flexibility of the PDP8, Hai said, represent the novel approach in this schedule.
The electricity development plan meets the criteria set out in Resolution No.55-NQ/TW from last year that outlines the National Energy Development Strategy of Vietnam towards 2030, with a vision to 2045.
Hai explained that the power mix will be diversified, giving high priority to the development of renewable energy with a more reasonable structure and distribution between each region. At the same time, the environmental impact of power development has been a big concern following Vietnam’s international commitments against climate change hazards.
The PDP8 sets out the total capacity planned for additional development and spatial distribution by region and locality but does not name specific projects in the new and renewable energy segments. After the plan is approved, the selection of investors will have to comply with the provisions of the Law on Investment and the Law on Bidding, ensuring openness and transparency.
One fact that was not mentioned by the Ministry of Industry and Trade in the final draft before submission was that the total capacity for renewable energy by 2045 is set at 121GW. However, by January the total installed capacity – including proposed additions – has already reached 180GW, far exceeding the 2045 target.
Vietnam is a country with huge renewable energy potential. La Hong Ky of the National Steering Committee for Electricity Development noticed that there was an “overstatement for the development of wind and solar power in Vietnam”. This, inadvertently hindered the normal development of other power sources, leading to potential energy shortages.
Although the general roadmap follows a one-step-ahead principle, meaning that there should always be enough electricity to meet the demand for socioeconomic development requirements and people’s daily life, looking at the reality of the current power system, it may be necessary to consider the most reasonable cost for the economy.
By the end of 2019, the total installed capacity of the national power system reached about 56,000MW. By the end of 2020, this amounted to approximately 70,000MW.
Compared to that, the system load in the 2019-2020 period was less than 40,000MW, so there was a huge amount of excess power.
The investment costs of power sources are fully included in the cost of electricity production, while power plants do not fully operate under truly competitive market mechanisms, trading electricity at fixed prices or rates under long-term contracts. Thus, an excess of power at such a large level could be a great waste of investment.
Statistics of the National Load Dispatch Centre show that in the last two months of 2020 and from the beginning of 2021 when electricity consumption on weekdays peaked, it only amounted to around 30,000MW.
Given the total installed capacity of 66,000MW, many power plants, including solar power and other sources, will have to limit generation.
The slower grid investment could also create difficulties for new sources of electricity. Statistics show that, in general, transmission network projects are 1-2 years behind schedule, sometimes even 4-5 years, making it difficult to operate the system.
The more efficient a power system is, the more costs for electricity generation are optimised, and the burden does not fall on the end consumers.
Many countries have agreed on the structural transformation of energy usage to mitigate climate change and develop sustainably. This transition is done depending on the energy sources and financial capacity of each country. Vietnam is a developing country whose the energy demand is increasing rapidly, and Ky said, “There should be research and integrated plans for the structural transformation of an energy mix that is suitable and effective for the country.”
The imbalance between investments in power sources and the national grid caused Vietnam’s grid to stay at a low level compared to other countries.
Dr. Bui Huy Phung from the Vietnam Institute of Energy Science found that, in the 1980s and 1990s, Vietnam’s electricity grid investment rate was about 20 per cent of total related investment. Between 2005 and 2009, this rate was about 36 per cent. However, in the previous draft PDP8, the rate was lower at around 34 per cent, while the global average stands at about 45-50 per cent.
HCM City seeks to stabilise supply, prices of essential goods by tying up with provinces
Director of the HCM City Department of Industry and Trade, Bui Ta Hoang Vu, has said the city would work closely with south-western cities and provinces to set up production chains to keep the supply and prices of essential products steady.
Co-operation between HCM City and the southern provinces has over the last 10 years fostered consumption of the latter’s products, enabling businesses to expand production and trading and contributing to socio-economic development.
In 2011 the department signed an agreement with the industry and trade departments of seven eastern provinces and 13 provinces and cities in the Southwest.
They have since been regularly exchanging information on demand and supply of goods, market prices and the availability of essential food and foodstuffs.
According to the Ben Tre People’s Committee, the programme has helped the province’s businesses find regular outlets for their products, making them feel secure about investing in expansion and quality.
Vu said enhancing demand-supply links is an indispensable and important aspect of trade, and the Trade Cooperation Programme between the city and other provinces and cities in the south-eastern and south-western regions has had a positive effect by creating close co-operation between them.
Over the last five years 3,743 contracts and MoUs have been signed between businesses in the city and in the southern region worth an estimated VND5 trillion (US$215.6 million) a year, he added.
The city’s three wholesale markets receive an average of 8,000 tonnes of agricultural products and foodstuffs every day from other localities for local consumption and onward transport to many other provinces and cities, helping balance supply and demand in the southern region.
Following the resounding success of the programme, the city Department of Industry and Trade plans to continue it for another five years.
In the next phase, the programme is expected to not only expand domestic consumption, but also promote export of industrial consumer products and household appliances, and build brands for agricultural products and specialities of each locality.
Government agencies will work to improve the efficiency of the programme to enable more businesses to meet, exchange information and explore co-operation opportunities.
Provinces and cities have created favourable conditions for HCM City businesses to set up shop there and collaborate with their farmers for animal breeding and cultivation, according to Vu.
Twenty eight firms participating in the city’s price stabilisation programme have invested more than VND18 trillion ($778.1 million) in 47 production facilities and 63 farms in various localities.
Under the programme this year the city seeks to help participating businesses expand their sales networks and encourage them to tie up with modern distribution channels like supermarkets and convenience stores, develop sales points at traditional markets, industrial parks, export processing zones, and outlying districts, and organise mobile sales trips to enable more consumers to access their goods.
It also encourages firms to invest more in improving packaging and design and to diversify their products.
Airlines catch glimpse of light at the end of tunnel
While some low-cost airlines are insisting they made some remarkable gains in 2020, accelerating plans to open international routes are to further help other struggling Vietnamese airlines that continue to seek financial support to get through the heavy losses forced on them by pandemic restrictions.
In total, the Vietnamese aviation sector reported losses of VND18 trillion ($782.6 million) from their transportation operations last year, while the sector’s revenue declined VND100 trillion ($4.35 billion) in comparison to the previous year.
National flag carrier Vietnam Airlines suffers losses of over $480 million in 2020, lower than its estimated figure of $626.3 million last December. The airline’s accumulated revenue in 2020, thus, fell sharply by 59 per cent on-year to $1.76 billion. However, according to a recent Vietnam Airlines financial statement, the lower-than-expected loss only came after the airline completed procedures for depreciation adjustment and funds allocation for aircraft maintenance under the government’s support programme.
Meanwhile, budget carrier Vietjet has reportedly passed through the pandemic somewhat unscathed. While official results are yet to be released, CEO Nguyen Thi Phuong Thao shared that the figures were positive, with not one employee losing their job. Although the airline was grounded in the early part of last year, from June it had restarted its domestic network and added eight new routes to serve the domestic demand. For some markets, Thao said that traffic was actually around 30 per cent higher than it was in 2019, helping to put Vietjet in a strong position for 2021.
Bamboo Airways also seem to have made impressive results with pre-tax profit of $17.4 million. The profit is said to be coming from its signature 5-star flight-resort-golf packages, combined with the FLC Group ecosystem. According to Dang Tat Thang, standing vice president and CEO of Bamboo Airways, by the end of 2020 it boasted more than 30 aircraft and added a new Embraer 195 line, filling unexploited routes to destinations that lack small aircraft.
In addition, Bamboo Airways last week obtained slots to operate six flights a week from Heathrow, including three flights to Ho Chi Minh City and three to Hanoi. Last year, Bamboo Airways planned to fly directly to London and Frankfurt in the first quarter of 2021, but the move was inevitably delayed.
With the international market still mostly frozen, airline operations are based on domestic routes, along with a few repatriation flights and air freight. Last year the government applied various supporting policies for aviation businesses as a result, including a policy of 50 per cent discount on service fees for takeoff and flights to/from airlines. Thanks to this alone, Vietnam Airlines saved around $6.7 million.
The policy of reducing environmental protection tax on aviation fuel has also helped airlines reduce costs by as much as $7 million last year, expected to be about $18.7 million in 2021.
Last November, Vietnam Airlines obtained a credit package worth $174 million. Due to that, Vietjet also requested a credit package of between $175-215 million for the 2021-2023 period, with interest rates reduced by 4 per cent. Meanwhile, Bamboo Airways called for a refinanced zero interest long-term loan of $217 million and long-term loans worth the same amount from commercial banks with subsidised interest rates.
However, the support does not yet seem to be enough for the development of Vietnamese airlines.
According to the Vietnam Aviation Business Association (VABA), it is estimated that Vietnamese airlines are projected to suffer a total loss of up to VND15 trillion ($652.17 million) in 2021 because revenues continue to fall sharply compared to that of last year. The association said airlines are simply suffering from cash flow risk exhaustion.
A proposal from the VABA for credit assistance to aviation companies recently submitted to the Ministry of Planning and Investment suggests reducing the environmental tax on fuels to around VND1,000 (4 US cents) per litre and extending deadlines for paying various taxes.
Beyond proposals for financial support, the VABA also suggested to the government to create encouraging policies to promote quarantine tourism products at hotels and resorts as well as diversify staycation products to help both domestic and international tourists understand many more of the cultural traditions and identities of Vietnam during their temporary quarantine period.
At the same time, the association wants a step-by-step reopening of international routes, and accepting international travellers with vaccine passports into Vietnam.
Yeah1’s stock to be put under surveillance
The Hochiminh Stock Exchange (HoSE) has decided to put the Yeah1 Group’s (YEG) stock under surveillance starting from April 12, having previously put it on alert, as the Group incurred huge net losses over the past two years.
With this move, YEG’s shares will be entitled to a restricted transaction duration, which means they can only be traded in the afternoon phase from April 12.
The Group’s net losses in 2019 and 2020 were over VND385 billion and nearly VND182 billion, respectively. Also, its undistributed net profit as of December 31 last year was minus VND219 billion.
Earlier, according to the Group’s 2020 financial report, an audit agency had adjusted YEG’s net losses upward by VND29 billion.
As of last year, the Group’s total assets reached nearly VND1.3 trillion, down some 8.6% year-on-year. Its cash and cash equivalents plunged nearly 78% to reach over VND36 billion. Its surplus equity by the end of 2020 was some VND773 billion, dropping approximately 32% year-on-year.
By April 5, YEG’s stock contracted to stay at VND38,000, down 18% compared to its share price recorded at the beginning of this year. Recently, Nguyen Anh Nhuong Tong, board chairman of the Group, registered to sell 250,000 YEG shares from April 6 to May 4, aimed at reducing his ownership in the firm from eight million shares to 7.7 million shares, or a 24.7% stake.
Source: VNA/VNS/VOV/VIR/SGT/Nhan Dan/Hanoitimes