VIETNAM BUSINESS NEWS MARCH 4
Imports-exports contribute $2.37 billion to State budget in Jan-Feb
State budget collection from import-export activities reached 54.76 trillion VND (2.37 billion USD) in the first two months, or 17.38 percent of the estimate and a year-on-year rise of 7.53 percent, according to the General Department of Vietnam Customs.
In February alone, the collection was 23.66 trillion VND. As Tet (Lunar New Year) holidays fell in the month, the customs department worked together with relevant agencies to combat smuggling and trade frauds while increasing inspections.
The customs force detected 967 cases in total from January 16 to February 15, seizing goods of 258.67 billion VND and contributing 8.6 billion VND to the State budget.
State budget collection was estimated at 220.5 trillion VND in total in the first two months of 2021, equivalent to 16.4 percent of the year’s estimate./.
Risky to invest in forex trading plaforms: Deputy Governor
Forex trading via investment platforms had not been licensed in Viet Nam, posing significant risks to investors, Deputy Governor of the State Bank of Viet Nam Dao Minh Tu warned.
Tu said at the Government’s meeting on Tuesday in Ha Noi that the operation of forex trading platforms was currently illegal, adding that the trading of foreign currencies and derivatives must be provided by credit institutions and commercial banks licensed by the State Bank of Viet Nam.
Until now, no forex trading platforms had been licensed for trading, he stressed, warning about risks when investing via these platforms.
Recently, some organisations like Lion Group called for investments in forex through Fx Trading Markets with attractive interest rates of up to 300 per cent per year and commissions. Lion Group attracted around 40,000 investors nationwide.
Tu urged people to be cautious with these appealing calls, adding that there were signs of in-transparencies and frauds.
“The skyrocketing profits in the current situation are impossible and investors must be cautious before deciding to pour money in forex trading platforms,” Tu said.
The Ministry of Industry and Trade also said that the business model of Lion Group or other forex trading platform was not compliant with the established regulations about multi-level marketing businesses.
Relevant management agencies must introduce regulations for the operation of these models.
Regarding payments, Tu said that there were more and more oganisations providing payment services along with the development of technologies, adding that the central bank always focused on ensuring safety and convenience in payment.
He urged attention to be paid to protecting personal data to ensure security in conducting payment transactions.
Tu stressed that bitcoin and other cryptocurrencies were not legal means of payment in Viet Nam. The trading and use of cryptocurrencies were illegal.
Cryptocurrencies were not electronic currencies, Tu said, adding that the State Bank of Viet Nam, the Ministry of Finance and the Ministry of Justice were studying the legal framework to manage cryptocurrencies and other virtual assets.
Market edges higher, fertiliser stocks surge
Viet Nam's stock market ended higher on Wednesday as the VN-Index bounced back in the afternoon session. The VN-Index on the Ho Chi Minh Stock Exchange (HoSE) reversed course to edge higher in Wednesday's trade after dropping 0.38 per cent in the morning session. The index rose slightly 0.03 per cent to 1,186.95 points.
The market breadth turned positive at the end of the session with 270 stock rising, while 168 stocks decreased. And 64 stocks stayed unchanged.
While a total of over 628.77 million shared were traded today on the southern market, worth VND15.15 trillion, an overload occurred again on HoSE in the afternoon session.
In a daily report, Bao Viet Securities Co. said that the index might face corrections earlier in the sessions before recovering at the end of the session. And the market needs more time to accumulate to break over 1,200 points level in the near future.
The market received support from the containment of COVID-19 outbreaks and the upward trends of global markets, the company added.
However, strong selling pressure still weighed on the market, with many big stocks falling.
The VN30-Index, tracking the 30 biggest stocks on HoSE, gained 0.07 per cent to finish at 1,195.6 points. The index lost 0.37 per cent in the morning session. Eleven of the 30 large-cap stocks in the VN30 basket rose, while 15 stocks dropped.
Stocks from real estate and banking sectors still influenced the market's trend.
Top five stocks contributing to the gain of the market were Investment And Industrial Development Corporation (BCM) up 5.35 per cent, Vietinbank (CTG) up 1.58 per cent, VPBank (VPB) up 2.09 per cent, No Va Land Investment Group Corporation (NVL) up 2.65 per cent and Vincom Retail JSC (VRE) up 2.31 per cent.
Fertiliser stocks also recorded big gains today with DAP - VINACHEM JSC (DDV) up 14.75 per cent, Lam Thao Fertilizers And Chemicals JSC (LAS) up 10 per cent, Petro Viet Nam Ca Mau Fertilizer JSC (DCM) up 6.69 per cent and Duc Giang Chemicals Group JSC (DGC) up 6.98 per cent.
Meanwhile, Vingroup JSC (VIC), Vinhomes JSC (VHM) and Vietcombank (VCB) extended their losses and limited the index's gain.
On the Ha Noi Stock Exchange (HNX), the HNX-Index posted an increase of 2.48 per cent to end the trading day at 254.1 points. The HNX30-Index recovered from earlier losses, up 0.56 per cent to 375.61 points.
Domestic investors poured nearly VND2 trillion into the northern bourse on Wednesday, equivalent to over 131.1 million shares.
In general, the market's liquidity was high with a total 821.9 million shared traded, including trading volume on UPCOM, worth nearly VND18.2 trillion.
Meanwhile, foreign investors were still net sellers on HoSE and HNX, with a net value of VND471.95 billion on the southern bourse and a net sell value of VND7.6 billion on the northern market.
HCM City: Two-month foreign investment stands at 337.8 million USD
Ho Chi Minh City recorded 337.8 million USD of foreign investment registered during the first two months of 2021, equivalent to 70.3 percent of the figure in the same period last year.
Real estate attracted most of the sum, 145.1 million USD or 43 percent of the total. It was followed by science - technology (57.5 million USD, 17 percent) and processing - manufacturing industry (41 million USD, 12.1 percent), the municipal Department of Planning and Investment said.
The southern economic hub lured only three new foreign investment projects worth 115 million USD in January and February, it said, citing complex developments of the COVID-19 pandemic around the world as the reason.
Up to 99.7 percent of the new capital was channeled into real estate, with 29.6 percent from Singapore and 70.1 percent from the Netherlands.
From the year’s beginning to February 20, HCM City saw 22 existing projects have 53.3 million USD added to their registered capital.
Foreign investors also spent 169.5 million USD on capital contributions to or share purchase in local firms during the time, data showed./.
Can Tho waste-to-power plant adds 113 million kWh to national grid
The Can Tho waste-to-power plant in the Mekong Delta city of Can Tho has treated over 400,000 tonnes of household waste and contributed more than 113 million kWh to the national grid since its operation in December 2018.
Can Tho is now home to four solid waste treatment sites in suburban Co Do and Thoi Lai districts, and urban O Mon and Thot Not districts.
About 70 percent of the city’s daily household waste, or nearly 350 tonnes, are burned using international-standard technology by China Everbright Group.
The plant is operated by Can Tho EB Environmental Energy Co. Ltd, a subsidiary of the investor – the China Everbright Group.
General Director of the Can Tho EB Environmental Energy Co. Ltd Chen Wei said the project is the first in Vietnam invested by the China Everbright Group to receive an environment protection certificate.
The municipal Department of Natural Resources and Environment reported that as of late 2020, 98 percent of household waste in urban areas were collected, 75 percent of them were classified in households.
Deputy Director of the department Nguyen Chi Kien said the department will continue working with the Can Tho EB Environmental Energy, and the districts of Co Do, Thoi Lai, O Mon and Thot Not to collect, transport and treat wastes. It will also periodically review and update the master plan on household solid waste transportation in the city till 2025 with a vision to 2050.
At a conference to launch the department’s tasks in 2021, Vice Chairman of the municipal People’s Committee Nguyen Thuc Hien asked the department to continue inspecting waste treatment plants to raise their sense of responsibility and deal with problems at the O Mon and Co Do landfills./.
Binh Duong secures 301.5 million USD in FDI in two months
Foreign direct investment (FDI) flows to the southern province of Binh Duong during January-February topped 301.5 million USD, a year-on-year increase of 63 percent, the provincial People’s Committee said on March 2.
Thirteen projects were granted investment registration certificates in the period, with total registered capital of 254 million USD. Meanwhile, two projects registered to add 3.5 million USD to their existing operation.
As much as 44 million USD was injected to 21 projects in the locality through capital contribution.
To date, the southern industrial hub has housed 3,948 FDI projects with total capital of 35.8 billion USD.
It is not only one of leading localities in FDI attraction but also an attractive destination for domestic investments. The province lured more than 8.65 trillion VND (377.5 million USD) from domestic investors in the first two months of the year./.
Vietnam’s tourism sales plunge over 40% in February
The latest Covid-19 resurgence put a dampener on the seven-day Tet holiday, which was expected to boost the country’s tourism sales, as it prompted tourists to cancel booked tours, leaving Vietnam’s tourism revenue last month down a whopping 40.8% month-on-month to VND915 billion and 60.8% against 2020, according to the General Statistics Office.
Local residents, too, refrained from travelling and participating in entertainment activities with mass gatherings.
Aside from the fall in tourism revenue, the country’s lodging and catering services last month saw revenue drop by 11.5% month-on-month to VND41.5 trillion and 0.1% compared to last year’s figure.
During the first two months of the year, the sales of lodging and catering services stood at VND88.4 trillion, dipping over 4% versus the same period last year, while that of tourism services contracted over 62% against last year’s figure to VND2.5 trillion.
Localities such as Hai Duong, Thua Thien-Hue, HCMC, Danang and Hanoi recorded a sharp decline in tourism sales. Of them, Hai Duong, which is one of the two provinces that reported the first Covid-19 community case during the latest coronavirus wave and is now the country’s biggest coronavirus hotbed, saw its revenue declining more than 89%. The central province of Thua Thien-Hue also recorded a 73.3% decrease.
Data from HCMC, the largest tourism hub in Vietnam, showed that eateries, hotels and travel businesses continued to be hit hard by the virus.
The southern city earned some VND6 trillion in the sales of catering and lodging services in February, declining over 27% against that of the previous month, and a mere VND501 billion in tourism sales, down nearly 30% month-on-month and over 67% versus the 2020 figure.
Loship secures investment from Skype co-founder
Loship, Vietnam’s fast-growing one-hour-delivery e-commerce startup, has announced its latest investment from Skype co-founder Jaan Tallinn.
Tallinn participated in Loship’s Series C funding through his investment vehicle MetaPlanet Holdings.
This capital injection marks Loship as the first portfolio company of MetaPlanet in Vietnam and Southeast Asia. The investment comes four months after the startup secured capital in a bridge round led by Vulpes Investment Management.
According to Loship CEO Nguyen Hoang Trung, the fresh capital will be spent on expanding the firm’s delivery network, human resources, technology and market.
“A huge portion of the funding will be poured into upgrading our app and developing technologies in Loship,” Trung said, adding that they will also ramp up their marketing strategies to cement Loship’s presence in the domestic market.
“It didn’t take me very long to realize Loship was on to something,” Loship quoted Tallinn as saying in its announcement.
“MetaPlanet is planning to pay more attention to the rapidly growing economies in Southeast Asia. So I’m delighted to be off to a strong start in Vietnam by adding Loship as our first portfolio company there.”
Founded in 2017, Loship traces its roots back to Lozi, a review app allowing users to find food, beverage, and coffee shops, before transitioning into a one-hour-delivery services platform.
Loship has closed its series A and B rounds from investors such as the Republic of Korea’s Smilegate Investment, Hana Financial Group, DTNI, and Golden Gate Ventures./.
Vinh Long presses ahead with sustainable production, consumption
The Vinh Long Provincial People’s Committee in the Mekong Delta has issued a plan to implement the national action programme on sustainable production and consumption for 2021-2030.
By 2030, 90 percent of industrial parks in the province are set to apply clean and environmentally-friendly technologies.
All supermarkets and shopping centres are to use eco-packaging instead of single-use plastics, and the use of slowly-degrading packaging at wet markets will be cut by 80 percent.
The province also hopes to have 100 percent of its enterprises joining production and distribution chains for safe farm produce and it also targets the widespread use of QR codes for product origin tracing.
Vice Chairman of the provincial People’s Committee Nguyen Van Liet said local authorities will assist businesses in boosting their production capacity and product quality, and in reducing costs to engage in a network of sustainable production and consumption.
The provincial Department of Science and Technology has been tasked with planning and launching programmes assisting companies and localities in the innovation process.
Priorities have been set for waste recycling, the sustainable use of natural resources and energy, and technological application in resources management, goods manufacturing, and consumer protection./.
Vietnam making every effort to fight IUU fishing
The Ministry of Agriculture and Rural Development (MARD) has urged localities to adopt drastic measures to fight irregular, unreported and unregulated (IUU) fishing.
All Vietnamese fishermen, businesses, and local authorities must consider this an important and urgent task to affirm the prestige of Vietnam’s fisheries sector in the world and among countries it shares territorial waters with, and be resolved to meet the standards set by the European Commission (EC).
Since the EC gave a “yellow card” warning to Vietnam’s fisheries and seafood in the European market in October 2017, the entire sector has suffered marked losses.
Tran Dinh Luan, head of the ministry’s Directorate of Fisheries, said it is necessary to prevent, deter, and eliminate IUU fishing in order to remove the “yellow card” warning, develop fisheries responsibly, and integrate into the world.
This is also the guideline of the Party and State, as reflected through the Law on Fisheries.
Since the imposition of the EC warning, Vietnam’s fishery export value to Europe has fallen by between 6 and 10 percent annually.
From being the second-largest importer of Vietnam’s seafood, with value representing 17-20 percent of Vietnam’s total export revenue, the EU now ranks fifth, after Japan, the US, the Republic of Korea (RoK), and ASEAN.
The Government and the National Steering Committee on IUU Fishing Prevention have issued a range of documents instructing ministries, agencies, and People’s Committees in 28 coastal cities and provinces to drastically take preventive measures. The MARD has conducted regular inspections in localities.
The EC has highly valued Vietnam’s political determination to implement its recommendations in this regard.
Vietnam has openly and transparently announced the results of inspections of seafood exports to the EU and has completed a legal framework that serves as a foundation to materialise relevant tasks, including the enforcement of the Law on Fisheries, two decrees adopted by the Government, a decision by the Prime Minister, and a circular from the MARD.
The country has joined and realised the Food and Agriculture Organisation (FAO)’s Agreement on Port State Measures, whose main objective is to prevent, deter, and eliminate IUU fishing, and also the UN Fish Stocks Agreement.
The EC has lauded Vietnam’s efforts in installing fishing vessel monitoring equipment and enhancing the management of seafood exploitation.
One of 28 coastal localities in Vietnam, the Mekong Delta province of Soc Trang has posted significant achievements in fighting IUU fishing.
With 366 fishing vessels of 15 metres in length or more operating at sea, the province has stepped up communications work so that captains, sailors, and ship-owners seriously observe relevant regulations.
According to Duong Tan Truong, head of the provincial Department of Fisheries, Soc Trang has developed a plan to conduct tasks in fighting IUU fishing and established a working group to lead the fight.
It carried out 10 patrols at sea last year and inspected 146 fishing vessels inside and outside of the province.
Soc Trang also granted 381 seafood certificates to 11 processing and export firms in the locality during 2020, with more than 6,000 tonnes of seafood, according to Truong.
Southernmost Ca Mau province, meanwhile, has also made substantial efforts in disseminating relevant legal documents to raise public awareness about IUU fishing, and enhancing coordination between relevant agencies.
The province will work harder in the time ahead to prevent fishing vessels that deliberately operate in foreign waters./.
Ministry helps businesses tackle trade remedies
The Ministry of Industry and Trade (MoIT) will continue to support domestic enterprises, especially small and medium-sized firms, to improve their awareness of trade remedies.
It will provide practical lessons on handling trade defence lawsuits for local enterprises.
The ministry will also focus on training State officials, commodity associations and industries on trade remedies, especially for commodities that are regularly investigated by foreign countries such as steel, fisheries, wood and chemicals.
According to the ministry's Trade Remedies Authority of Viet Nam (TRAV), local export products have faced more anti-dumping investigations and tax evasion cases in foreign countries in recent years. Vietnamese businesses have become aware of trade remedies.
Many Vietnamese enterprises have been adapting to trade defence cases. Some have legal departments that specialise in dealing with trade remedies at foreign markets, especially in sectors producing key export products such as steel, seafood and garments.
However, according to the authority, there are still some firms, especially smaller companies, that are unaware of the importance of trade remedies and how they would affect their production and business activities.
It said in the results of trade lawsuits, local enterprises that work with foreign investigative authorities by providing information enjoy low tax rates. If local enterprises do not co-operate, they will face a high tax rate due to foreign investigative authorities using available data only, creating a disadvantage for them.
Therefore, the level of co-operation can be considered a prerequisite for achieving a positive result in trade remedies cases, according to the TRAV.
In the case of the antidumping duty (AD) and countervailing duty (CVD) investigations of imports of utility-scale wind towers from Canada, Indonesia, South Korea (AD only), and Viet Nam to the US, Viet Nam received countervailable subsidies at a rate of 2.84 per cent while Indonesia received a rate of 5.9 per cent.
Meanwhile, in the case of the anti-dumping and anti-subsidy investigation into corrosion-resistant steel sheets imported from several countries, including Viet Nam, Canada concluded Viet Nam does not subsidise enterprises producing and exporting the steel, based on information provided by the Government of Viet Nam.
According to the US Customs and Border Protection (CBP)’s announcement on February 11, 2021, there is a lack of evidence to conclude Minh Phu Corporation has illegally evaded anti-dumping duties levied on Indian shrimps.
Therefore, CBP will consider the conclusion issued on October 13, 2020, to not apply anti-dumping tax on exported shrimp of Minh Phu Seafood.
The MoIT also said that the US’s conclusion on dumping and subsidies for car tyres from Viet Nam and some other economies, which was released on December 30, declared tyre exporters of Viet Nam free from anti-dumping measures.
Other countries and territories were alleged to have dumped in the market and face tariffs of 14.24 per cent to 38.07 per cent for South Korea, 52.42 per cent to 98.44 per cent for Taiwan (China) and from 13.25 per cent to 22.21 per cent for Thailand.
It is a very positive result for Viet Nam's tyre manufacturing and exporting enterprises, said TRAV director Le Trieu Dung. However, this is only a preliminary result, the ministry and the Vietnamese manufacturing and export enterprises will continue to work with the US towards a positive final conclusion.
Processing and manufacturing industry needs better way to develop: experts
Viet Nam’s capacity for the processing and manufacturing industry remains limited and heavily relies on foreign supply chains for imported components and accessories, leading to difficulties for local businesses, particularly amid the COVID-19 pandemic.
Trinh Thi Thanh Thuy, Deputy Director of the Institute of Industry and Trade Policy and Strategy under the Ministry of Industry and Trade, said last year countries with leading manufacturing and processing industries faced many difficulties, while Viet Nam was a bright spot with positive economic growth.
“The country’s positive growth is based on key manufacturing sectors, particularly those with high technology content and value such as electronics, electronic components, computers, and components for the automobile industry. Furthermore, agricultural processing and garment sectors have also obtained remarkable results,” Thuy said.
Pham Tuan Anh, Deputy Director of the Industry Department under the Ministry of Industry and Trade, said in 2016-19 domestic industries made a contribution of 30 per cent of the country’s gross domestic product (GDP), the largest contribution to State coffers.
Notably, the proportion of processing and manufacturing industries had increased rapidly without relying much on the mining industry.
In recent years, many industries have seen rapid development, such as electronics, textiles, and footwear with high export value.
Tuan Anh said the processing and manufacturing industry contributed the highest to GDP in terms of added value, creating a foundation for industrial development and modernisation of the country. The growth rate of the industry’s added value was much higher than the GDP growth in the last five years.
Despite some success, experts have said that the Vietnamese processing and manufacturing industry has failed to meet its potential.
Thuy said the most difficult problem was the lack of raw materials. Domestic manufacturers still rely greatly on foreign markets, particularly raw materials imported from China and South Korea. Thuy noted that business process outsourcing has been common in Viet Nam depending much on foreign direct investment (FDI) enterprises.
Tuan Anh said the problem was the development of strategies and policy planning were not suitable for economic development. Credit policies for businesses failed to meet their needs.
He noted that FDI enterprises in Viet Nam had been offered much preferential treatment from foreign credit institutions and parent companies with low interest rates. Meanwhile, loan interest rates offered by local banks were high, putting local firms at a disadvantage.
In addition, Viet Nam faces a lack of large-scale conglomerates to push the country’s economic development.
Tuan Anh added that the industrial sector needed a large amount of capital and a long period for investment capital retrieval. Therefore, it was urgent to call on domestic businesses to participate in the industrial sector.
To promote processing and manufacturing businesses to participate in the global supply chain, the department had worked with corporations such as Samsung and Toyota to create opportunities for local companies to work with foreign companies, said Tuan Anh.
ETFs net attracts $130 million so far this year
Exchange-traded funds (ETFs) on Viet Nam's stock market have attracted a net total of US$130 million so far this year.
Capital inflows into ETFs from the beginning of the year have made an important contribution to help offset the net selling from foreign investors, valued at more than VND2.7 trillion ($117.1 million).
Among the ETFs, VFMVN Diamond ETF attracted the largest capital since the beginning of the year with $113.7 million. With a current portfolio size of nearly VND9 trillion, VFMVN Diamond ETF has surpassed VFMVN30 ETF to become the largest domestic fund in the market.
Besides VFMVN Diamond ETF, the pair of foreign ETF funds VNM ETF and FTSE Vietnam ETF also attracted a total net value of about $30 million.
On the other side, KIM Kindex VN30 ETF saw a strong net recession of nearly $52 million, equivalent to VND1.2 trillion and was the only ETF witnessing net withdrawal in the first two months of the year.
In the last trading week of February, ETFs on Viet Nam's stock market saw strong net withdrawal.
VFMVN30 ETF was the fund seeing the strongest withdrawal, with VND345 billion.
Another ETF that also saw withdrawal was KIM Kindex VN30 ETF, with a value of $4.53 million in the past week.
In the opposite direction, VFMVN Diamond ETF net attracted VND112 billion in the past week. Besides, SSIAM VNFinLead ETF also net attracted VND7.6 billion, S&P Select Frontier ETF net attracted nearly $1 million.
Digital strategies to the fore as e-commerce assumes increasing importance: experts
Companies are expected to implement digital strategies to continue to reach customers, experts said while alluding to trends in the e-commerce market this year.
Shopee, a leading e-commerce player in the country, in a note predicting trends this year, said: “The pandemic pushed businesses, from premium brands to micro-entrepreneurs, to quickly adopt digital strategies if they sought to reach customers amidst the lockdowns.”
As online selling becomes a growing revenue channel for brands and sellers, e-commerce platforms need to work with them to help engage their customers in a differentiated manner and grow their online presence, it said.
It cited its own example of working with POND's to integrate its AI-powered beauty tech solution, Skin Advisor Live into the online shopping experience, offering shoppers free personalised skincare analysis online to help them make a more informed buying decision.
POND's was also able to tap into Shopee’s engagement tools such as livestreaming to interact with its target audience.
There are more than 20,000 global and local brands on Shopee Mall, offering a wide selection of products ranging from everyday to premium items.
The company works closely with these brands to create new and unique shopping experiences.
The e-commerce market is expected to see more changes this year as the COVID-19 pandemic has brought about a broad, deep and irreversible shift to online for businesses and consumers.
Tran Tuan Anh, managing director, Shopee Vietnam, said: “2020 was an especially transformative year for e-commerce. As consumers adhered to social distancing measures and stayed home, they turned to online platforms not just for their daily needs but also for entertainment and interaction.
“This led to online shopping evolving from a purely transactional experience to a more social experience, with e-commerce platforms integrating more interactive elements such as games and livestreaming to engage users. With advancements in technology, increasing internet penetration and a fast-growing population of young, tech-savvy youths and middle-income families, we expect e-commerce to play an integral role in the way we live, connect and do business.”
This year adoption of digital payments is expected to increase.
Digital payment is the preferred mode online, and as more people become accustomed to e-commerce, it will also drive the offline cashless movement.
While local governments’ have been moving towards a cashless society, the pandemic has greatly accelerated this need in a region where the majority of consumer transactions are made in cash. In line with movement restrictions and continued social distancing efforts, consumers and businesses have increasingly embraced digital payments for greater convenience and security.
For example, in addition to greater usage of AirPay in-app, the number of offline merchants in Viet Nam using AirPay also doubled in 2020, including like 7-Eleven, MyKingdom and Guardian.
The logistics sector is also expected to see changes.
Shopee predicted logistics would become even more important as consumers increasingly rely on e-commerce and have greater expectation of efficient delivery.
The increase in demand is particularly significant in the case of daily necessities and household essentials.
In Viet Nam, Shopee, which operates in several countries, saw a two-fold increase in food, health and home-related items shipped from the warehouse.
Brands and sellers need to make use of technology to ensure that parcels are delivered in a timely and cost-effective manner, and one way to achieve this could be to tap into the extensive and integrated networks of e-commerce platforms.
Shopee said it saw more brands tapping its logistics infrastructure with the result that the branded items shipped from its warehouses tripled last year.
Export prices of Vietnamese bananas to EU market sees upturn
The export prices of Vietnamese bananas to the EU market last year witnessed a sharp increase in comparison to those from other supply sources, according to data compiled by the European Statistical Office (Eurostat).
According to Eurostat’s figures, the EU's imports of bananas during the opening 11 months of last year reached 7.7 million tonnes with a value of EUR5.26 billion, representing an increase of 3% in volume and 1.3% in value compared to the same period from 2019. However, the EU’s average import price saw an annual fall of 1.6% to EUR683 per tonne.
Despite making up a modest share in the export proportion of bananas in the EU market, the export price of Vietnamese bananas skyrocketed throughout the reviewed period at an average of EUR3,192.9 per tonne, representing a rise of 16.4% against the same period from 2019, far higher than other importers such as Ecuador, Colombia, and Costa Rica.
Although export prices have witnessed an upturn, the export volume of Vietnamese bananas to the EU market suffered a decline of 26.7% to only 14 tonnes compared to the same period from the year before.
By recording such a small export volume, the country ranked only 55th among dominant suppliers of fresh bananas to the EU.
Experts believe that there remains plenty of room for the export of Vietnamese bananas to the EU to grow in the time ahead due to the items being a popular fruit among EU consumers and typically imported into the market at a huge volume each year.
In addition, the enforcement of the EU-Vietnam Free Trade Agreement (EVFTA) in August 2020 is poised to offer a wealth of opportunities for Vietnamese businesses to increase the export of their fruits, including banana, to the EU market.
Local supermarket chain Big C changes name to Tops Market
First three Big C supermarkets in Vietnam officially changed their names to Tops Market on March 1 as part of Central Retail Group’s efforts to popularize its new brand in the country.
A representative of Central Retail Group that owns the Big C supermarket chain in Vietnam, revealed that the Tops Market supermarket chain is designed to meet three key criteria, namely provision of fresh organic food; products with clear origin; and better customer service.
All four Big C supermarkets in Hanoi are anticipated to convert and upgrade to Tops Market during the course of the third quarter of the year, the group’s representative stated.
Tops Market is also a major retail brand that falls under the Central Retail Group and has dozens of supermarket branches throughout Thailand.
In relation to the Vietnamese market, a fan page on Facebook called Tops Market has officially been launched to run alongside Big C’s Vietnamese fan page.
Alongside the Tops Market brand, Big C supermarkets located in shopping malls in Nha Trang, Di An, Can Tho, Ha Long, and Vinh Phuc cities were all renamed GO! supermarkets between the end of December 2020, and early January of this year.
Last year witnessed Central Retail, a sub-unit of Thailand-based conglomerate Central Group, also built new GO! supermarkets at shopping centres in the cities of My Tho, Ben Tre, Tra Vinh, Buon Ma Thuot, and Quang Ngai.
A number of other Big C hypermarkets are poised to be renamed GO! supermarkets this year, a representative of Central Retail Vietnam revealed.
Central Group originally purchased Big C from France’s Casino Group in 2016 at a cost of US$1.05 billion. In addition, it also owns a large stake in electronics retail chain Nguyen Kim.
VinFast plans to build electric car factory in US
Vietnamese electric-vehicle startup VinFast has initiated plans to open a factory in the United States after setting up a 50-member San Francisco research office in preparation for putting its vehicles on sale in the California market ahead in 2022, according to the US newswire Bloomberg.
Engineers are working inside the assembly workshop at the VinFast factory in the northern city of Hai Phong, Vietnam. (Photo: Yen Duong / Bloomberg)
Billionaire Pham Nhat Vuong, who is chairman of parent company Vingroup JSC, said late last year that he would support the company’s ambitions in the US market with US$2 billion of his own fortune.
The company therefore plans to establish an automobile factory in the US, according to Thai Thanh Hai, chief executive officer of VinFast, declining to provide additional details regarding timing or possible factory locations.
Hai went on to reveal that the company is also planning sales in both Canada and Europe next year, adding that VinFast’s vision is to become a global smart electric car company, with the US market set to be the firm’s first international market. Indeed, priority will be given to developing high-end models for use in the US during the initial stage.
VinFast sold approximately 30,000 vehicles throughout last year, with the company forecasting sales of more than 45,000 units in the year ahead. In line with its own schedule, it will begin delivery of electric vehicle (EVs) produced at its factory in the northern port city of Hai Phong to domestic customers by December.
Hai noted that VinFast believes that it can win over the US and other overseas customers who are cautious about buying an automobile from a Vietnamese company they know little or nothing about by offering top-quality vehicles featuring high-safety standards and advanced technology.
VinFast, which also produces electric motorbikes and electric buses, has started plans to open 35 California showrooms and service centres this year, Hai said.
California regulators have granted VinFast a license in order to test autonomous vehicles on public streets, with the local company aiming to deliver its first electric vehicles to US customers next year.
At present, Hai is unsure over how much money the company will invest in the US market. VinFast still expects to be profitable after five years of operation, though the global pandemic has “made things more difficult,” she added.
Rising demand of international market sends new manufacturing orders up
Business activities in the Vietnamese manufacturing sector improved, as the number of new orders jumped in February due to the rising demand from the global market, which, in turn, saw firms raising output, staffing levels and purchasing activity.
A report released by IHS Markit on March 1 indicated that Vietnam’s Manufacturing Purchasing Managers’ Index (PMI) rose to 51.6 in February from 51.3 in January, indicating an improvement in business conditions. The health of the manufacturing sector has been strong for three straight months.
The number of new orders has risen for the sixth consecutive month as a result of the expansion and improvement in the export business, according to the report.
Due to higher new orders and output requirements, manufacturers have increased their staffing levels and the rate of job creation rose for the second time in three months.
Purchasing activity continued rising in February, while backlogs of inputs reduced as they were used for production. Difficulties in purchasing material such as the lack of containers and supply capacity also contributed to the reduction in backlogs.
The imbalance sent the cost of inputs up in February, forcing manufacturers to revise up the prices of products. However, this was a mild increase in prices.
The report also showed that the business confidence continued to decrease to the lowest level since August last year due to fears over the impact of the ongoing coronavirus pandemic.
Andrew Harker, economics director at IHS Markit, said that if Vietnam successfully brings the coronavirus outbreak of this wave under control, the country’s manufacturing sector will grow.
IHS Markit also forecasts that Vietnam’s industrial production will rise 6.8% this year.
Domestic plastics sector set to capitalise on opportunities from EVFTA
The EU-Vietnam Free Trade Agreement (EVFTA) has created a wealth of opportunities that the local plastics industry can make use of to expand export markets and attract additional foreign investment, according to insiders.
Statistics compiled by the General Department of Vietnam Customs indicate that plastic export turnover has consistently recorded increases in recent years, with the average growth rate reaching between 14% and 15% annually. Indeed, the EU market accounts for approximately 18.2% of the nation’s overall plastic export turnover.
Vietnamese plastic products also have a presence in over 150 markets globally. According to the International Trade Center, the country’s plastic packaging products in the EU market now enjoy a competitive advantage compared to that of regional peers such as Thailand and China due to not being subject to anti-dumping duties of between 4% and 30%.
According to the European-American Market Department under the Ministry of Industry and Trade, the majority of plastic products that have been subject to a basic tax rate of 6.5% have been slashed to 0% immediately after the EVFTA came into effect, with no quotas being applied.
Experts therefore believe that the EVFTA has implemented flexible regulations regarding the rule of origin for plastic products. This will serve to create competitive advantages for Vietnamese enterprises as they are largely dependent on imports of raw material sources.
As a means of meeting the demand for both domestic and export markets, the nation’s plastic industry is forced to import millions of tonnes of raw materials each year, with domestic capacity only meeting between 15% and 35% of the demand for raw materials.
Furthermore, experts also note that the trend of switching to use eco-friendly and self-destructing plastic packaging made from polyethylene terephthalate (P.E.T) has become increasingly popular within the EU. This therefore poses challenges to the local plastics industry due to traditional packaging products still making up a large proportion.
Economists have stated that a number of firms have actively turned to producing P.E.T materials and exporting to several major markets around the world, including the EU.
Moving forward, there will be bright prospects for the plastics sector providing that Vietnamese enterprises meet the high technical standards set by the fastidious market.
Upbeat export prospects for 2021
Vietnam has posted impressive export-import performance despite the health crisis, with Ho Chi Minh City, the northern province of Thai Nguyen, and the southern province of Binh Duong heralded as the top performers thanks to the inputs of both local and foreign businesses.
According to the General Department of Vietnam Customs, the total value of import and export by February 15 reached $74.15 billion, up 31.1 per cent – equivalent to an increase of $17.58 billion in absolute numbers compared to the same period in 2020. In which, the total import and export value of foreign-invested enterprises (FIEs) reached $53.03 billion, up 39.6 per cent on-year, and the figure for domestic enterprises was $21.13 billion, up 13.6 per cent on-year. Vietnam also witnessed a trade surplus of $2.76 billion from the beginning of this year to February 15
Mobile phones and spare parts held the first position ($7.84 billion) in the group of key export items of Vietnam, followed by computers, other electronic products, and components ($5.5 billion), and machinery and equipment ($4.4 billion). The export turnover of industrial products is mainly brought by well-known groups such as Samsung, Panasonic, and Formosa.
Ho Chi Minh City still claimed the top position of the list of the 10 localities with the highest export and import values. Meanwhile, thanks to the heavy investment of Samsung, Thai Nguyen province ranked the second, followed by Binh Duong and Dong Nai provinces, an industrial hub in southern Vietnam as the third and fourth position.
All well-performing provinces reported that although the COVID-19 pandemic has affected a number of industries, the industrial production value in February was still high compared to the same period last year. Some main industrial products have seen high output over the same period such as computers, electronic products, and components, packaging, clinker consumption, animal feed, apparel, and frozen seafood
According to the Ministry of Industry and Trade (MoIT), Vietnam has risen to become one of the leading countries with high global competitiveness. The country has formed a number of key industries for the economy in the form of oil and gas exploitation and processing; electronics, telecommunications, and IT; metallurgy, iron and steel; and textiles, garments, and footwear, which have created an important foundation for long-term growth, as well as promote the modernisation and industrialisation of the country.
Meanwhile, the country’s export of agro-forestry-fishery products has also encouraged bright spots despite the pandemic.
Tran Thanh Hai, deputy director of the MoIT’s Agency of Foreign Trade, said that achieving good export results in the context of COVID-19 has been possible partly because of free trade agreements (FTAs) and businesses making good use of them.
For instance, in 2020, the number of preferential C/O sets granted saw an increase of 9 per cent on-year, showing that enterprises and exported goods from Vietnam are gradually improving the rate of using preferential tariffs in markets with FTAs.
According to Hai, Vietnamese exports to some traditional markets have faced inevitable difficulties, but exports still maintain positive growth due to enterprises have taken advantage of the opportunity to boost exports to alternative markets.
The key solution deployed to promote import and export in 2021 typically gives priority to export promotion activities and export markets that are recovering as well as expanding export markets, according to Hai. Other strategies include making the most of the FTAs, and grasping market information and early warning signs of arising problems affecting Vietnam’s exports such as changes in policies of importing countries, technical barriers, and payment risks.
Source: VNA/VNS/VOV/VIR/SGT/Nhan Dan/Hanoitimes