BUSINESS NEWS HEADLINES JUNE 6
Hanoi to hold investment-development cooperation conference
A conference on investment and development cooperation is to take place at the National Convention Centre in Hanoi on June 27.
The date was approved at a June 1 meeting of standing members of the Hanoi Party Committee regarding its content and a list of projects to be tabled at the conference.
The participants said the organisation of the event immediately following the COVID-19 pandemic being brought under control will send a strong message about the city and Vietnam attracting domestic and foreign investment.
It also affirms that Hanoi is a safe and stable destination for investors, they added.
The Hanoi People’s Committee was assigned to organise the event in a safe and effective manner in line with regulations.
The municipal People’s Committee was requested to step up communications campaigns before, during, and after the conference, to provide information on the event, promote Hanoi’s socio-economic development over the last five years, and introduce planning for the local Hoa Lac urban area.
According to a report from the Hanoi People’s Committee, in the first five months of this year the capital attracted over 1.05 billion USD and 9.16 trillion VND (395.3 million USD) worth of foreign and domestic investment, respectively.
There were 12,260 enterprises established during the period - a year-on-year decline of 10 percent. These new enterprises, however, registered total capital of 181.4 trillion VND, an increase of 9 percent year on year./.
Major shareholder files for transport firm bankruptcy
A shareholder at Saigontourist Transport JSC has filed for bankruptcy due to struggling business operations and an increase in expenses.
If approved, the company will become the third listed firm ever to file for bankruptcy after cement maker Beton 6 and Saigon Plastic Packaging JSC.
Major shareholder Nguyen Van Hong, who has a 21.8 per cent stake in the company, said in the filing that Saigontourist Transport JSC had performed inefficiently in recent years.
Accumulative loss had exceeded the firm’s charter capital and it had been unable to repay debts, he said.
In response, the court requested the company to submit financial reports from the last three years and financial statements that clarify the situation.
In addition, the firm was asked to show the attempt it had made to resolve financial issues and the list of its assets and the locations of the assets.
A list of debtors and lenders must also be sent to the court, which contains all loans and guaranteed assets.
Saigontourist Transport was also required to provide its portfolio and asset valuations.
Under the Law on Bankruptcy, a shareholder or a group of shareholders owning more than 20 per cent stake for at least six months can file for the business bankruptcy.
Saigontourist Transport JSC was founded in 1976 and became a member of the HCM City Tourist Corporation ten years later.
In 1999, the company was put under the management of the Saigon Tourist Corporation (Saigontourist). The latter is no longer a shareholder.
In April 2004, the company turned into joint-stock company. In March 2009, Saigontourist Transport JSC doubled its charter capital to VND80 billion (US$3.44 million).
The firm is well-known for its brand Saigontourist Taxi while it also focuses on driver training and education.
Saigontourist Transport JSC has made losses since 2015. The company in 2019 posted a loss of nearly VND14 billion, raising its cumulative loss to VND93 billion.
Losses were made because the firm was unable to pay the land lease tax worth VND13 billion for its facility in Commune 2, Tan Binh District, HCM City. The tax is expected to increase by VND2 billion by June 2020.
To resolve the problem, the company had planned to sell 1.6 million shares to shareholders in a bid to gain VND16 billion. The entire sale revenue would be spent raising capital and paying the lease tax.
The proposal was rejected by shareholders at the annual meeting on May 23.
The company is targeting to post a loss of only VND3 billion in 2020. Saigontourist Transport shares (UPCoM: STT) have stayed at VND9,100 apiece since December 20, 2019.
PV GAS among top 50 listed companies in 2020 for eighth year
The PetroVietnam Gas Joint Stock Corporation (PV GAS) has been named in the list of the top 50 listed companies 2020 by Forbes Vietnam for the eighth consecutive year.
The list shows the emergence of sectors less hit by COVID-19 such as pharmaceuticals, assembling, consumer goods, construction materials and finance.
It groups best performing companies listed on the Hanoi Stock Exchange and Ho Chi Minh Stock Exchange.
Accordingly, total post-tax profit of companies on the list surpassed 138.7 trillion VND (6 billion USD), up 8.7 percent from 2019. The leading companies also posted impressive growth.
Due to the impacts of COVID-19, the market capitalisation of companies on the list decreased year-on-year for the first time in the past eight years, reaching 81.3 billion USD as of the mid-May, down 13.5 percent from 2019.
The PetroVietnam Insurance Joint stock Corporation and the PetroVietnam Power Corporation are also in the list./.
Indonesia prepares 89 new national strategic projects
The Indonesian government is preparing 89 new National Strategic Projects (NSP) worth a total 1,422 trillion rupiah (94.8 billion USD) throughout 2020 – 2024, a senior minister said.
Among them are drone projects, bridges, airports, industrial zones, irrigation, dams, sea dikes, rice fields, biofuel and salt projects.
Indonesian Coordinating Minister for Economic Affairs Airlangga Hartarto told reporters after a recent virtual conference led by President Joko Widodo that the president also suggested creating transportation, economy and tourism hubs in East Kalimantan, Bali or Manado in North Sulawesi.
The World Bank has forecast that Indonesia’s economy is expected to grow zero percent in 2020 compared to 5.02 percent last year.
Earlier, Finance Minister Sri Mulyani Indrawati revised downward economic growth to 2.3 percent this year, adding that the figure would stand at minus 0.4 percent in the worst case scenario.
Meanwhile, Malaysia’s short-term economic recovery plan for the June to December period will be launched by Prime Minister Muhyiddin Yassin this month, said Finance Minister Zafrul Abdul Aziz.
He said the plan would still focus on three key objectives, namely to empower people, propel businesses, and stimulate the economy.
In addition, it represents an opportunity for the Southeast Asian nation to take advantage of new opportunities arising from the COVID-19 crisis, the official noted.
Industrial production index up 11.2 percent in May
Vietnam’s index of industrial production (IIP) in May rose by 11.2 percent over the previous month but decreased by 3.1 percent year on year, according to the General Statistics Office (GSO).
The growth of the May IIP was a positive signal during Vietnam’s fight against the COVID-19 pandemic and restoring development of the economy, the GSO said. At present, the pandemic is under control nationwide.
Of the figure, industrial production decreased by 13 percent in the mining industry; 2.4 percent in the processing and manufacturing sector; 2 percent in the electricity production and distribution industry; and 2.3 percent in the water supply and waste treatment sector.
The GSO also said the IIP in the first five months of this year increased by 1 percent over the same period last year. However, this figure was much lower than the growth of 9.5 percent in the first five months of 2019.
During the first five months, the index surged by 2.2 percent in the processing and manufacturing industry year on year, lower than the growth rate of 10.9 percent in the first five months of 2019 compared to the same period of 2018.
The index increased by 2.6 percent in the electricity production and distribution industry and 2.9 percent in the water supply and waste treatment sector. However, the index of the mining industry dropped by 8.1 percent year on year.
The GSO reported that due to the complicated development of COVID-19, the supply chain of raw materials for production has been interrupted, thereby seriously affecting the domestic industrial production.
Some industries saw a strong decrease in IIP during the first five months, including support services for mining (36.5 percent); repair, maintenance and installation of machinery and equipment (16.4 percent); motor vehicle production (16.3 percent); auto and motorcycle production (15.6 percent); and beverage production (14.6 percent).
Meanwhile, some other industries gained IIP growth in the first five months compared to the same period of last year. They included the manufacture of medicines, pharmaceutical chemicals and medicinal materials (25.9 percent); production of coke and refined petroleum products (12.9 percent); pulp and paper products (9.3 percent); and production of chemical products (9.1 percent)./.
US finance corporation sees Vietnam as priority partner
The US International Development Finance Corporation (DFC) always attaches a great importance to and considers Vietnam a preferred partner in US cooperative projects, CEO of the DFC Adam Boehler told Vietnamese Ambassador to the US Ha Kim Ngoc.
During a meeting on June 2 in Washington DC, Boehler announced that as a development finance agency of the US Government, the DFC is implementing a series of plans to support investment projects in developing countries, especially those in the spheres of energy, infrastructure and digital economy.
At the regional level, the DFC is interested in supporting development projects in the Greater Mekong Sub-region, as well as those specialising in producing strategic products in the US’s supply chain, he stated.
Boehler also hoped that reached agreements will be implemented effectively during working meetings between the DFC and Vietnamese agencies, including the Ministry of Planning and Investment.
The DFC official emphasised the effective coordination between Vietnam and the US in producing and supplying medical supplies and protective equipment to combat the COVID-19 pandemic.
For his part, Ambassador Ngoc shared Vietnam’s experience in controlling the disease, as well as its priorities in economic recovery and promoting regional and global cooperation as the ASEAN Chair 2020.
He highly valued the DFC’s role and expressed his hope that the two sides would soon deploy specific cooperation projects in the region.
Emphasising that 2020 marks 25 years of normalisation of Vietnam-US relations, the diplomat called on the DFC to continue to participate in and contribute to relevant activities in the coming time, including joining ASEAN-US and Vietnam-US conferences on investment cooperation in the region.
On the occasion, Ngoc handed over made-in-Vietnam face masks as gifts to DFC staff.
Indonesia’s aviation industry forecast to fully recover in 2022
Air transport operators of Indonesia recently estimated that the COVID-19 pandemic’s influence on the aviation industry may linger on, even until 2022.
A senior expert at the Indonesia National Air Carriers Association (INACA) said Indonesian airlines are facing great pressure that may cause negative impact through 2021 and the country’s aviation sector won’t rebound to pre-COVID-19 levels until the first quarter of 2022.
In a recent report submitted to all airline members in the world, the International Air Transport Association (IATA) shared the view that Indonesia’s aviation industry may have to wait until 2022 to gain as much revenue as in 2019.
Irfan Sebuahutra, President Director of flag carrier PT Garuda Indonesia, said like other airlines, the company’s revenue dropped dramatically since the disease broke out, by almost 90 percent.
As many as 70 percent of the firm’s aircraft must lie idle in parking lots while the occupancy rate on the permitted flights must be kept at under 50 percent to prevent the spread of COVID-19.
Garuda Indonesia decided to lay off 181 pilots from June 1, which has encountered objections from the Garuda Pilot Association (APG) which said the decision and news of layoffs were delivered suddenly, not in accordance with statutory provisions and employment contracts.
Meanwhile, Irfan Sebuahutra said the move was necessary to reduce the pressure caused by the pandemic and harmonise the supply and demand of aviation operations.
He noted the carrier will continues to fulfil its obligations relevant to the rights of pilots according to the signed contracts’ validity period./.
Singaporean banks record spike of deposits
Singapore is witnessing a jump in deposits in local banks, which reflects investors' risk aversion and inflows from other markets, including Hong Kong (China), said Bloomberg Intelligence.
According to statistics by Monetary Authority of Singapore (MAS), foreign-currency deposits at Singaporean banks almost quadrupled from a year earlier to a record 27 billion SGD (19.2 billion USD) in April.
Deposits from non-residents surged 44 percent to 62 billion SGD (44.1 billion USD) – the highest level since 1991 when records began.
Kiksha Gera, a banking analyst at Bloomberg Intelligence, said in a report on June 2 that rising tensions in Hong Kong could potentially cause flows to Singapore if Hong Kong's status as a financial centre is threatened.
In its May report, the Hong Kong Monetary Authority said Hong Kong's local-currency deposits in April fell by 79.20 billion HKD (over 10.2 billion USD) or 1.1 percent to 6.90 trillion HKD compared to the same period of 2019./.
Foreign arrivals in Indonesia plunge, visa exemption to be reviewed
The number of foreign travellers visiting Indonesia plunged by 87.44 percent year-on-year to 160,000 in April, reported the National Agency of Statistics of Indonesia.
Head of the agency Kecuk Suhariyanto said the figure in April slumped by 66.02 percent month-on-month.
The agency conceded that the tourism sector has been hit by the pandemic since February.
During a webinar held on June 2, Chairman of the People's Consultative Assembly (MPR) Bambang Soesatyo suggested the government review its visa exemption policy for tourists to prevent a massive spread of COVID-19 infections once the tourism sector reopens.
Indonesia must strictly scrutinise foreign tourists and make sure they are free from the novel coronavirus, he added.
The country welcomed 16.11 million foreign tourists last year, earning 20 billion USD in revenue, surpassing that of oil and gas industry.
Singapore, Malaysia agree to defer high-speed rail project
Singapore and Malaysia have agreed to defer the Kuala Lumpur-Singapore High-Speed Rail (HSR) project again until the end of the year.
Singapore Transport Minister Khaw Boon Wan said Malaysia had requested to extend the suspension period of the project to discuss the country’s proposed changes to the project.
In the spirit of bilateral cooperation, Singapore agreed to a final extension of the suspension period to 31 December 2020, Khaw said.
Singapore’s Ministry of Transport said that the HSR is a mutually beneficial project that will strengthen the connectivity and people-to-people ties between the two countries.
Singapore looks forward to receiving Malaysia’s formal proposal on the changes to the HSR project soon, so that both sides can begin discussion immediately, the ministry said in its statement.
Once completed, the 350km-long HSR project will reduce travel time between Singapore and Kuala Lumpur to around 90 minutes by train, from the current 11 hours on existing train services.
The HSR service is expected to start by January 1, 2031, instead of the original commencement date of December 2026, as a result of suspension./.
Building credibility key to e-commerce: Seminar
Building credibility is key to the development of e-commerce, experts told a seminar held by the Vietnam Institute of Economics (VIE) in Hanoi on June 2.
VIE Deputy Director Le Xuan Sang said e-commerce has become indispensable for many businesses and contributes to improving their competitiveness, especially small and medium-sized enterprises (SMEs).
He added that e-commerce development depends on the legal framework and policies, human resources, and trust.
Of a similar mind, Le Duc Anh, Director of the Centre for Information and Digital Technology at the Ministry of Industry and Trade’s Vietnam E-Commerce and Digital Economy Agency, said businesses should be rated for their credibility by both buyers and sellers, including on information verification, the settlement of complaints, delivery quality, and guaranteed payments.
Participants suggested the State promptly refine the legal framework and policies for e-commerce and cashless payments, enhance security system and information safety, and encourage links between bank card owners and goods and services providers.
Figures show that e-commerce in Vietnam grew from 4 billion USD to 8 billion USD during the 2015-2018 period, rising 30 to 40 percent each year. Nearly 40 million mobile users and internet subscribers access e-commerce and online shopping./.
Indonesia aims to be oil dependent from 2026
The Indonesian Government aims to be free from oil imports starting from 2026, an official has said.
To support the Government’s plans, the State-owned energy producer PT Pertamina will build two oil refineries in Bontang in East Kalimantan and Tuban in East Java as well as develop refinery capacity at existing plants in Dumai, Balikpapan, Balongan, and Cilacap.
Mohammad Hidayat from the Ministry of Energy and Mineral Resources said that based on a fuel supply and demand prognosis for 2020-2026, production has been estimated at 87.4 million kiloliters (KL) while demand is growing 3.16 percent annually and will reach 85.1 million KL.
The prognosis is based on the availability of existing data and refinery projects being built and completed in what year, and how much production can meet domestic fuel needs, he said last week.
He went on to say that fuel production from domestic refineries will remain stagnant in 2020-2021 while demand continues to grow. There will be additional fuel production from Balongan in 2022 and fuel imports are estimated at 25.9 million KL and domestic fuel production at 47.8 million KL, while fuel demand is estimated at 74.7 million KL.
The completion of the Balikpapan project in 2023 is expected to contribute to additional fuel production of 57.5 million KL and help imports fall slightly, to 25 million KL, he added. Fuel demand is projected at 77.3 million.
Fuel demand in 2024 stands at 80 million KL, fuel production at 57.5 million KL, and imports at 25.9 million KL.
Fuel imports are forecast to decline sharply in 2025 when demand expands to 82.5 million KL and fuel production reaches 68.1 million KL and imports 13.4 million KL. The decline in imports is due to additional production from the Bontang refinery.
Additional production is expected from Cilacap and Tuban in 2026./.
More THACO-made semi-trailers shipped to America
Vietnamese multi-business group THACO on June 1, 2020 exported to the US market another 36 semi-trailers manufactured at its Special Vehicles Manufacturing Limited Company, or THACO SV, in THACO Chu Lai Industrial Park, Quang Nam province.
The US market is one of the most challenging ones in the world with strict standards on product quality but THACO has managed to enter, thus joining deeper into global value chains.
THACO had researched the market then signed a memorandum of understanding (MOU) on cooperation in manufacturing and distributing semi-trailers with PITTS Enterprises - one of the 15 largest manufacturers of semi-trailers in North America possessing history of more than 100 years. The 36 semi-trailers are the first batch of the 69 ones made by THACO to be shipped to the US through PITTS Enterprises. The American company will continue to cooperate with THACO in R&D, design and manufacturing new products to meet consumer demands and expand the market.
THACO’s semi-trailers for the US market include 20 feet slider semi-trailers, 40-feet gooseneck semi-trailers, 40/45-feet extendable semi-trailers. THACO SV ha thoroughly researched the market in order work out suitable products meeting the US quality standards and needs. They are equipped with advanced features such as the Anti-lock Braking System (ABS) to help the vehicles operate safely; Tire Inflation System (PSI) to keep the pressure stable during operation, increase tire life; and warning LEDs to help detect air leaks or tire tank problem. Also, the semi-trailers are equipped with Stemco Hubodometer to help keep track of the journey, making them convenient for warranty and maintenance. In particular, they also meet US transportation standards such as DOT, AAR, ANSI, TOFC, FMVSS, SAE, TTMA.
In April 2020, THACO exported to the US two 54-feet modular house drawbar trailers, able for expansion to 74 feet. They have a drawbar towing bar which has payload up to 27 tonnes of cargo; 2-line pneumatic braking system; the air suspension system that helps them operate smoothly, combined with the Wabco axle lift valve to adjust the height of the trailer center for easy transporting and unloading cargo. This type of semi-trailer can transport different kinds of wooden modular houses with a maximum load of up to 25 tonnes. The shipment is scheduled to at Charleston Port on June 2.
Thanks to high quality and superior performance, THACO's semi-trailers have been exported to various markets including such as Colombia, the Republic of Korea and the US. THACO plans this year to hand over to PITTS Enterprises in June another 33 semi-trailers signed, and to further perform deals agreed upon. The Vietnamese multi-business group will also increase export volumes to Japan, Australia, and ASEAN markets./.
Bac Giang enjoys early harvest of “thieu” lychee
The northern province of Bac Giang had harvested 16,735 tonnes of “thieu” lychee as of June 1, with prices ranging from 25,000 VND to 45,000 VND (1.08 USD to 1.95 USD) per kilogram, according to the provincial Department of Industry and Trade.
The fruit is in bloom in Tan Yen and Luc Nam districts, with farmers in the former harvesting nearly 1,000 tonnes each day.
Main markets during this early part of the season are domestic, including Hanoi, Ho Chi Minh City, Da Nang, and northern Lao Cai province.
According to Vice Chairman of the provincial People’s Committee Lai Thanh Son, “thieu” lychee is a key crop within the local agriculture sector’s economic development.
Production value is estimated at 4 trillion - 4.5 trillion VND (172.8 million - 194.4 million USD) annually, representing 25-28 percent of the local cultivation sector.
The positive outcome this year is attributed to the expansion of production areas operating under VietGap, GlobalGAP, and organic standards, as well as the application of new technical solutions and creative methods adopted by growers.
The province has built sales plans and scenarios, thus enabling businesses and traders to study and buy the local lychee.
A video conference promoting “thieu” lychee is scheduled to take place on June 6, connecting 62 locations nationwide and two from China’s Guangxi and Yunnan provinces.
Bac Giang will continue its policy of diversifying markets, and has so far exported “thieu” lychee to more than 30 countries and territories.
China remains the traditional market, while the province will also target Japan, the Republic of Korea, Australia, Malaysia, Thailand, and Singapore.
It is also moving to expand exports to fastidious markets such as the Middle East, the EU, the US, and Canada./.
Philippines seeks World Bank’s loan to boost fisheries sector
The Philippine Department of Agriculture is seeking a 200-million-USD loan from the World Bank to help boost the local fisheries industry.
The FishCore project is integral to the national goals of recovery and resiliency as the sector is striving to survive, reboot and grow amid the COVID-19 pandemic.
It also aims to address structural weaknesses in the value chain to improve sustainability and resiliency of fishery resources, increase incomes of fisherfolk, and uplift the socio-economic conditions of coastal communities.
The loan is expected to support the expansion and modernisation of local capture fisheries and aquaculture through the provision of technical support, capital, and an enabling environment./.
Fish catches recovering after COVID-19 in central provinces
Fish catches are gradually recovering after the COVID-19 outbreak in central provinces, according to local fishermen.
Le Thi Bich Lien, a seafood trader in Binh Thuan province, said in recent days the Phan Thiet fishing port has been a hub of activity with many kinds of seafood including yellow stripe trevally, mackerel, squid, and other local species being brought constantly from the sea by fishermen.
“Due to the return of tourists to Phan Thiet, the consumption of seafood has increased, leading to an increase in prices from last month.”
Phan Van Nam, a fisherman in the province’s La Gi commune, said: “I am very happy because during this trip the cost of petrol and oil were very low, the catch was big and seafood prices were up.”
Traders are now paying 50,000 VND (2.2 USD) for a kilogramme of skipjack tuna, 10,000 VND higher than 10 days ago, he said.
After unloading their catch he and his crew plan to set sail again immediately to take advantage of the rich pickings at sea and low fuel prices, he said.
According to the province Department of Agriculture and Rural Development, herrings, shrimps, shellfish, scallops, and specks are appearing in many areas, fishermen are entering the South Fish Season, the prices of petrol and oil are cheap, and so they expect a big profit.
Fishermen in neighbouring Phu Yen province are getting ready to fish tuna since the COVID-19 situation in the Republic of Korea and China is under control and import demand there will gradually recover.
According to a report by the Vietnam Research Institute for Marine Fisheries, fish migration to Vietnamese waters is huge this season, and fishermen should use technological tools like magnetic compass, GPS and sonar to improve their catch. If the migratory fishes are optimally exploited, the country's target of 3.95 million tonnes of seafood this year would be achieved, it said.
The two provinces plan to continue upgrading their fishing ports and storm shelters, developing logistics services for fishing and diversifying processed fish products to add value.
The two provinces would use soft loans from central and local governments to help fishermen build high-capacity boats for offshore fishing, the institute said./.
Viet Nam’s manufacturing sector recovers in May
The Vietnamese manufacturing sector has seen some recovery with the Manufacturing Purchasing Managers' Index (PMI) increasing ten index points in May to 42.7 as the virus was brought under control in Việt Nam.
A survey of Nikkei and IHS Markit released on Monday showed the index was up from the record low of 32.7 in April.
“The success Việt Nam has had in bringing the COVID-19 outbreak in the country under control means that the economy can begin along the road to recovery. That said, the PMI data for May suggest that the road will be a long one, with the manufacturing sector remaining in contraction mode midway through the second quarter of the year, albeit the decline was much softer than the record seen in April," said Andrew Harker, Economics Director at IHS Markit.
"The return to growth will likely be gradual, with little support coming from export markets in the near-term at least as the pandemic continues to affect large parts of the world."
Although signalling a much softer decline in business conditions than in the previous month, the latest data indicated that the health of the sector continued to deteriorate at a rapid rate.
Output, new orders and employment all decreased at rates unseen prior to the current crisis together with difficulties in securing new export orders.
Meanwhile, firms lowered their output prices again to try to attract new business, with input costs also falling, albeit marginally, according to the survey.
Disruption from the COVID-19 pandemic led to a sixth successive monthly decline in manufacturing production. However, the fall was much softer than seen in April as some firms resumed operations.
A further sharp reduction in new orders meant that spare capacity remained evident in the sector. As a result, manufacturers maintained a cautious approach to hiring, often opting not to replace workers who had resigned. Staffing levels decreased for the fourth month running.
Manufacturers also continued to scale back their purchasing activity and inventories of both purchases and finished goods, albeit in each case to lesser extents than in April.
With COVID-19 brought under control in Viet Nam, there was tentative optimism among manufacturers that production would increase over the coming year. This followed a negative outlook in the previous month.
National IIP up 11.2 per cent in May
Viet Nam’s index of industrial production (IIP) in May rose by 11.2 per cent over the previous month but decreased by 3.1 per cent year on year, according to the General Statistics Office (GSO).
The growth of May's IIP was a positive signal during Viet Nam’s fight against the COVID-19 pandemic and restoring development of the economy, GSO said. At present, the pandemic is under control nationwide.
Of the figure, industrial production decreased by 13 per cent in the mining industry; 2.4 per cent in the processing and manufacturing sector; 2 per cent in the electricity production and distribution industry; and 2.3 per cent in the water supply and waste treatment sector.
The GSO also said the IIP in the first five months of this year increased by 1 per cent over the same period last year. However, this figure was much lower than the growth of 9.5 per cent in the first five months of 2019 compared to the same period of 2018.
During the first five months, the index surged by 2.2 per cent in the processing and manufacturing industry year on year, lower than the growth rate of 10.9 per cent in the first five months of 2019 compared to the same period of 2018.
The index increased by 2.6 per cent in the electricity production and distribution industry and 2.9 per cent in the water supply and waste treatment sector. However, the index of the mining industry dropped by 8.1 per cent year on year.
The GSO reported that due to the complicated development of COVID-19, the supply chain of raw materials for production has been interrupted, thereby seriously affecting the domestic industrial production.
Some industries saw a strong decrease in IIP during the first five months, including support services for mining (36.5 per cent); repair, maintenance and installation of machinery and equipment (16.4 per cent); motor vehicle production (16.3 per cent); auto and motorcycle production (15.6 per cent); and beverage production (14.6 per cent).
Meanwhile, some other industries gained IIP growth in the first five months compared to the same period of last year. They included the manufacture of medicines, pharmaceutical chemicals and medicinal materials (25.9 per cent); production of coke and refined petroleum products (12.9 per cent); pulp and paper products (9.3 per cent); and production of chemical products (9.1 per cent).
CIEM finds bottlenecks in easing after COVID-19 pandemic
The Central Institute for Economic Management (CIEM) identified the slow reform of investment procedures as a bottleneck of the local economy amid the easing of measures after the COVID-19 pandemic.
CIEM’s director Tran Thi Hong Minh told a conference in Ha Noi yesterday that the bottlenecks in procedures were reflected in the implementation of e-government, the efficiency of coordination and use of public resources as well as inclusive development and sustainability.
“Viet Nam's economy was badly affected by COVID-19 in the first months of the year. Though the country has controlled the pandemic well and entered the economic recovery process, the pandemic is still complicated around the world,” said Minh.
She said: “These bottlenecks have existed before the pandemic," adding: “It is time to remove the bottlenecks to develop the economy.”
Nguyen Anh Duong, head of Macroeconomics Department, CIEM, said they should take into account changes and uncertainties that may affect the socio-economy in the next ten years too.
Duong said the bottlenecks in attracting investors, especially foreign ones, were unnecessary procedures, adding that the country should not only cut such procedures but also pay attention to the issue of those procedures to best help the investors.
Also at the conference, Dau Tuan Anh, head of the legal department from the Viet Nam Chamber of Commerce and Industry, said that Viet Nam's management ability would be seen differently in this pandemic, adding that: "The quality of governance in Viet Nam has been confirmed and the local businesses have a good adaptation.”
However, Tuan said the country needed to continue reforming its administrative procedures, adding that: “The procedures need to create favorable conditions for businesses, not just to solve the difficulties.”
Son La longans meet export standards to US and French markets
Situated in the northern province of Son La, Mai Son district is expected to export approximately 2,600 tonnes of longan over the course of the year to several foreign markets such as the United States, China, France, Poland, and Malaysia.
At present, Mai Son district is one of the localities that has the largest longan cultivation area throughout Son La province at over 2,500 hectares and enjoys an estimated output of 14,650 tonnes.
Thanks to the transfer of technology and the application of safe production processes, the district now has 95 hectares of longan growing areas which have successfully obtained certificates of safe food standards in line with the Vietnam Good Agricultural Practices (VietGAP) standards.
Most notably, the Post-Import Plant Quarantine Centre II under the Plant Protection Department has moved to grant a regional code to a total of 56 hectares of cultivation area.
Moreover, this year’s harvest season is expected to see the district’s longan output that meets export standards reach roughly 5,200 tonnes.
Mai Son district is therefore predicted to export some 2,600 tonnes of longan to markets such as the US, China, Cambodia, and Japan, in addition to emerging markets, including the United Arab Emirates, the Republic of Korea, France, Poland, and Malaysia.
Currently, relevant agencies have instructed local farmers to apply the use of advanced technologies in production whilst strictly implementing the production process in line with VietGAP and GlobalGAP standards.
This should be done whilst strengthening the supervision over the code-granted areas, as well as intensifying trade promotion activities to ensure export targets are met in a timely manner.
Logistics market must prepare itself for transformation process
The impact of the novel coronavirus (COVID-19) epidemic can be considered a catalyst that launches the transformation of logistics businesses due to the buying trend starting to shift from direct to online.
A survey conducted by the Vietnam Logistics Enterprise Association (VLA) indicates that logistics firms are suffering from several bad effects from the COVID-19 epidemic, ultimately resulting in a 10% to 30% reduction in terms of sales in comparison to the same period from last year.
Most notably, approximately 15% of enterprises have seen their revenue drop by 50%, whilst over 50% of businesses have seen a drop of up to 30% in terms of the number of domestic and international logistics services.
As a result of the recent trade tensions between the United States and China, several importers have indicated their intentions to shift their location from China to the country, with the COVID-19 acting as a catalyst to accelerate the overall transformation process.
This serves as motivation for Vietnamese businesses as they strive to access e-commerce platforms. Despite this positive landscape for local companies within the sector, e-commerce giants such as Lazada, Tiki, Sendo, and Shopee are racing to pump money into technology and warehousing as a means of allowing their own delivery teams to serve outside customers and compete directly with traditional logistics firms from both at home and abroad, such as Viettel Post, VNPost, FedEx, UPS, and DHL, in addition to super applications like Grab, Go-Viet, and Be.
At present, the logistics market consists of more than 4,000 businesses, with the majority based in Hanoi and Ho Chi Minh City, including approximately 30 enterprises that provide transnational logistics services operating domestically, with major names such as DHL, FedEx, Maersk Logistics, APL Logistics, CJ Logistics, and KMTC Logistics.
The country’s logistics industry is therefore being seen as an area of strong growth, especially following the outbreak of the COVID-19, an event which required traditional logistics firms to embark on a transformation process faster than had been anticipated.
According to Julien Brun, Consulting Partner Manager of CEL, the pandemic has prompted both the Government and local businesses to transform digitally at a faster rate than ever.
In addition to accessing potential markets through new agreements and actively striving to attract relocating factories from China, Vietnamese businesses must be quick to adapt to the impending digital transformation.
Indeed, the global supply chain shift has begun with the trend of seeking alternative supply sources within the domestic market and throughout the region in order to reduce dependence, with the logistics market showing a drastic change as a result. In particular, the US is considering setting up an Economic Prosperity Network, including Japan, the Republic of Korea, New Zealand, India, and Vietnam.
The requirements of this new market include having reliable supply chains and products that display a clear origin of goods.
According to the VLA, the biggest challenges faced by small and medium-sized businesses when conducting their respective digital transformation comes in the form of financial capacity. This indicates that, in addition to their determination, initiations, and efforts, local firms need the support of the State to fully implement the process.
First of all, the State must work towards improving the legal framework for digital transformation with regard to security, anti-sabotage co-operation, and digital governance issues.
Furthermore, there should also be policies in place to encourage digital transformation by offering concessional loans and interests for digital transformation businesses along with supporting digital technology solutions for start-ups. On that basis, if firms are not financially capable, then they can simply purchase relevant solutions or hire solutions from expert software suppliers.
Additionally, the Government must launch a review taxes and fees in order to devise solutions aimed at reducing transportation costs, shorten the time needed to grant specialized permits, and for customs clearance and goods inspection at ports to be handled in a swift manner whilst simultaneously avoiding warehousing charges.
Cashew exports make US$1.24 billion over five-month period
Vietnam exported a haul of 184,000 tonnes of cashew nuts with a value of US$1.24 billion during the opening five months of the year, representing a year-on-year increase of 17.8% in volume and 2.2% rise in value, according to the Import and Export Department under the Ministry of Industry and Trade.
May alone saw the country ship 45,000 tonnes of cashew nuts worth US$280 million abroad, marking a rise of 1.2% in volume, and a decrease of 3.9% in value in comparison with the April statistics.
However, the average export price of cashew nuts during May suffered a sharp decrease of 5% to US$6,222 per tonne, its lowest level when compared to previous years.
Indeed, the average export price of cashew nuts throughout the five-month period reached US$6,725 per tonne, a decline of 13.3% on-year.
Moreover, April saw cashew exports to some foreign markets such as the United States, the Netherlands, Australia, and Japan record a double-digit growth compared to the same period last year. Meanwhile, cashew exports to both the UK and Israeli markets experienced a downward trajectory.
In contrast, the first four months of the year saw cashew exports to the US and the Netherlands enjoy an upward trend, while exports to the Chinese market witnessed a downward trend.
According to the International Trade Commission, China's cashew imports throughout the first quarter of the year suffered a drop of 28.7% to US$22.06 million from the same period last year.
Most notably, the country’s cashew market share in relation to the Chinese market’s total import volume increased sharply from 58.1% during the first quarter of last year to 75.3% during the reviewed period of this year, according to the Import and Export Department.
Rice exports to EU anticipated to make breakthroughs through EVFTA
The impending European Union-Vietnam Free Trade Agreement (EVFTA) is projected to act as a boost for export turnover and enhance the competitiveness of Vietnamese rice in the EU market, according to Pham Thai Binh, General Director of Trung An High-tech Agriculture Joint Stock Company.
Despite the recent outbreak of the novel coronavirus pandemic having a significant impact on exports in general, the rice industry in particular, the demand for rice consumption in European countries is predicted to increase since it is considered as an essential food item, Binh observed.
Indeed, he attributed the recent increasing demand in the company’s rice orders from countries such as Australia, Germany, and France, to the large number of overseas Vietnamese currently living in these nations.
Binh noted that Vietnamese rice exports to the EU market are subject to high taxes of up to 45%, with some EU countries even moving to impose import duties of up to 100%. It is therefore anticipated that when the EVFTA comes into force it will serve to help Vietnamese rice products enjoy a greater competitive advantage in comparison to the Cambodian rice, an item that is currently exempt from import tax in the EU market.
If the EVFTA is subsequently ratified by the Vietnamese National Assembly as expected, the trade deal is poised to come into effect in August, with the tax rate imposed on rice set to be immediately slashed to 0%. This dramatic tax cut is predicted to greatly bolster rice exports to the EU market in the near future, Binh added.
According to the executive, the EU is a highly demanding market when it comes to food hygiene and safety. Therefore, items that contain residue of pesticides or banned substances will find it very difficult to enter this market.
To make inroads into the market, Binh said local firms must obtain GlobalG.A.P certificates and swiftly move to adapt their organic farming methods in order to develop production chains that come up to international standards.
Trung An company is currently exporting its products to the EU and has subsequently met the stringent requirements set by EU importers. The firm can now immediately accelerate its exports to the European market once the trade pact comes into force.
To seize upon the benefits brought about by the EVFTA, Binh suggested that the Ministry of Industry and Trade (MoIT) organise training courses for businesses to gain a better understanding of the details of the trade pact.
Similarly, the Ministry of Agriculture and Rural Development should organise training courses to help farmers gain insights into new farming methods which will serve to meet standards set by EU importers and ultimately allow Vietnamese rice to gain entry into the EU market.
According to the Vietnam Food Association, despite the rice export quota to the EU standing at only 80,000 tonnes, Vietnamese rice exported to this market is generally of high quality. Therefore, the status of local rice will be elevated within the international market upon gaining entry into the EU.
E-commerce floor for lychee launched
An e-commerce trading floor for Vietnamese lychee products will be launched this month.
The e-commerce floor is being implemented by the northern province of Bac Giang's Luc Ngan District.
It aims to diversify the channels of marketing and trade of lychee products, as the COVID-19 pandemic makes it difficult for foreign traders to come directly in Luc Ngan to buy the fruit.
In order for the floor to operate smoothly, businesses have been given solutions such as cold storage for canned agricultural products, transportation, and potential markets including China, the European Union (EU) and Japan.
They are also equipped with general knowledge about the trading floor and management skills, as well as how to increase sales, profits, and customer confidence in the Luc Ngan lychee brand.
The total output of lychee in Bac Giang Province was estimated at 16,725 tonnes with the average selling price of VND25,000 per kilogramme by the afternoon of June 1.
Vietnam Airlines hopes to carry more visitors to Northeastern region
Vietnam Airlines is coordinating with the Vietnam Tourism Association (VITA) to launch a tourism stimulus exploring the Northeastern region as part of the bilateral cooperation agreement, a representative of the national flag carrier said at a seminar prompting tourism in the northern province of Thai Nguyen on June 4.
According to Permanent Vice Chairman of the VITA Vu The Binh, the region has large potential for tourism development. Thai Nguyen, in particular, is home to many historical and cultural relic sites.
Vietnam Airlines has resumed operations of the Ho Chi Minh City-Van Don, and Da Nang-Van Don (Quang Ninh) routes, which enables visitors from the central and southern regions to explore the world’s natural heritage site of Ha Long Bay and stunning beaches there.
From Quang Ninh, tourists could easily access other key tourism destinations by road such as Ha Giang, Cao Bang, Bac Kan, and Thai Nguyen, with popular sites like Dong Van Stone Plateau, Ban Gioc Waterfalls, Ba Be Lake, and Nui Coc Lake.
In May 2020, the airline opened five more domestic routes, and moves to launch additional 6-8 others to raise its total domestic ones to over 50.
Vietnam Airlines expects to serve 1.2 million and 1.5 million domestic passengers in June and July respectively./
Video meeting discusses Vietnam-Russia economic ties amid COVID-19
The Russian Academy of Sciences (RAN) and Vietnam’s National University of Economics (NEU) hosted a video conference on June 4 to discuss the Vietnam-Russia economic relations amid new challenges.
The event, which marked the Vietnam Year in Russia and Russia Year in Vietnam, was attended by Chairman of the Vietnam National Committee for the Pacific Economic Cooperation Council (PECC) Vo Tri Thanh and experts from ministries and governmental agencies as well as leading universities and academies from both sides.
In her opening remarks, Dr. Elena Lenchuk, head of the RAN’s institute of economy, said the event aims to mark the 70th anniversary of the two nations’ diplomatic ties.
She spoke highly of the close cooperation between Vietnam and Russia, saying against the backdrop of globlisation and new global challenges, Russia is interested in strengthening relations with the Asia-Pacific, particularly Vietnam which has seen robust economic growths in recent years.
A total of 14 presentations were delivered throughout three sessions of the event. The first session reviewed the main trends in the trade and investment cooperation between Vietnam and Russia over the last decade (2010 – 2020), the second discussed the bilateral relations which are being challenged by the COVID-19 pandemic, and the third was on declining global oil prices and the energy cooperation between the two sides.
JICA inspects progress of HCMC’s first metro line
The Japan International Cooperation Agency (JICA), which is funding HCMC’s first metro line, held a meeting with the HCMC Management Authority for Urban Railways (MAUR) on June 3 to discuss the progress of the project.
The JICA delegation, led by Junko Takahashi, senior representative at the JICA Vietnam Office, and MAUR leaders also discussed the difficulties caused by the Covid-19 pandemic, capital disbursement, the financial situation and the implementation of contracts for major packages of the metro line that will link Ben Thanh Market in District 1 and Suoi Tien Theme Park in District 9.
Addressing the meeting, Bui Xuan Cuong, director of MAUR, thanked JICA for its support and asked the agency to continue cooperating with the authority over major tasks for 2020 including capital disbursement, refunding advanced payments and dealing with the challenges caused by the Covid-19 outbreak.
Cuong also requested the Japanese Government to assist Vietnam in importing trains for the metro line and the travel of Japanese experts to the country.
Work on the 19.7-kilometer metro line began in August 2012. The line has 2.6 kilometers of underground track and over 17 kilometers of elevated track as well as three underground and 11 elevated stations.
The metro line is more than 70% complete, and MAUR said it is accelerating the progress of components such as the installation of the tracks, lighting and signal systems and equipment at the stations. It expects to complete 85% of the metro line by the end of this year and put it into service in late 2021.
Investors keen on Danang’s US$2-billion casino complex project
Two local investors and a foreign-involved joint venture have expressed interest in joining an auction for the rights to use the land of a premium casino complex project worth US$2 billion in Danang City, according to the Danang Department of Natural Resources and Environment.
They are the T&T Group, the Imex Pan Pacific Co.,Ltd and the joint venture of three businesses including Newtechco Import-Export JSC and two Singapore-based businesses Sakae Holding Ltd and Fission Holdings Pte. Ltd.
The municipal People’s Council on June 4 asked the city’s government to consider and approve the zoning adjustment of the trade-finance-casino complex project in Son Tra District, before carrying out procedures calling for an investment.
Covering an area of 8.4 hectares, the project will include premium apartments, hotels, a financial center, a casino, a convention center and a twin tower. It is part of the district’s land use plan that had been approved by the municipal government.
The Natural Resources and Environment Department will submit an auction plan for the project’s land use rights to the city’s government once the zoning adjustment has been approved.
HCMC seeks to develop eight key transport projects
The HCMC People’s Committee will present eight key transport infrastructure projects at a total investment of over VND33 trillion to the HCMC People’s Council for consideration and study at the mid-year meeting scheduled for July.
Addressing a meeting between the municipal People’s Committee and People’s Council on June 4, Luong Minh Phuc, director of the management board for construction and investment of urban traffic, said these are important and urgent projects that will contribute to reducing traffic congestion in the city.
They include the 50-kilometer HCMC-Moc Bai Expressway (over VND13.6 trillion), two bridges on N2 and N4 streets in Thu Thiem new urban area (VND198 billion), two sections of Belt Road No. 2 (over VND13.3 trillion), the An Phu intersection (over VND1 trillion), the expansion of National Highway No. 50 (some VND1.5 trillion), the renovation of National Highway No. 22 (VND935 billion) and the Nguyen Khoai Bridge connecting districts 1, 4 and 7 (over VND2.5 trillion).
Chairwoman of the HCMC People’s Council Nguyen Thi Le asked the management board for construction and investment of urban traffic to comprehensively assess the impact of the projects on the environment and people’s livelihoods and their efficiency before submitting them to the council.
According to Le, careful and comprehensive evaluation will help avoid delays, which could seriously affect the lives and livelihood of the people.
She said a number of transport infrastructure projects in the city have been delayed for years, such as Long Kieng Bridge in Nha Be District, which remains unfinished 20 years after it was kicked off, and Bung Bridge in Tan Phu District that has seen little progress over the past three years.
Delegate Nguyen Tan Tuyen proposed that the management board carefully estimate each project’s investment to avoid capital adjustments later, citing My Thuy intersection as an example after its investment was adjusted three times from the initial VND838 billion to nearly VND2 trillion.