Vietnam is an investment destination in post-pandemic period: Bangkok Post hinh anh 1

Investment during the pandemic has proved challenging for investors across the globe. However, hopes for this top-performing Asian economy are growing as the Vietnam market has outperformed other international peers thanks to its GDP growth amid COVID-19 last year, according to the Bangkok Post.

The pandemic has indeed dampened the high growth seen in early 2021 and the GDP growth for the first nine months is less than the market forecast at 1.4 percent. Nevertheless, Maetha Peeravud, Assistant Vice President – Fund Management Group, BBL Asset Management, believed Vietnam’s economy has passed the lowest point.

“Looking three to six months ahead, the outlook for the Vietnamese economy is positive,” he was quoted by the Bangkok Post as saying.

The COVID-19 vaccination rate is increasing with large cities like Ho Chi Minh City and Hanoi already giving the first shot to over 90 percent of their population, Maetha said, adding that the country is expected to achieve herd immunity in the first or second quarter of next year.

Geographically, Vietnam has a strategic location for its high-performing export sector. With the focus on education, free trade agreement, and labour skill enhancements, the global supply chain has paid great attention to Vietnam, including Samsung, the Korean multinational manufacturing conglomerate, which allocates over half of its mobile phone manufacturing capacity to Vietnam.

Bloomberg forecasts Vietnam's GDP growth at 7 percent next year, one of the highest in the Southeast Asian region.

Maetha agreed with Bloomberg’s positive outlook, identifying three major big long-term themes.

First, urbanisation in Vietnam will lead to a demographic dividend, namely the economic growth resulting from a change in the age structure of the population.

Over half of the Vietnamese population is under 35. The number of workers in the industry and service sectors is increasing while that in agriculture is decreasing, suggesting a major shift toward higher income generation.

Secondly, Vietnam is benefiting from industrialisation growth from foreign direct investment (FDI).

Vietnam enjoyed strong support in developing more advanced technology and high-skilled labour training from global technology companies, which would in turn help produce more premium products, he said.

According to Maetha, digitalisation is the third factor contributing to Vietnam’s growth.

Along with its 5-year plan, the Vietnamese government also targets the digital economy share of GDP to grow from 5 percent in 2019 to 20 percent in 2025, he said.

In addition to economic growth, the Vietnamese equity market is bullish with many catalysts.

Jeff Suteesopon, ASEAN Equity Portfolio Manager and Vice President – Fund Management Group, BBL Asset Management, said the market capitalisation of the three stock exchanges in Vietnam is around 7 trillion baht, compared to Thailand’s 18 trillion baht, suggesting an opportunity to grow.

Another catalyst is its valuation, Jeff said. Even with the strong rise in 2020 and 2021, the valuations of Vietnam stock are not too high. The Forward P/E ratio in 2022 for the VN Index is only 13, compared to 16 on the Thai SET Index. Moreover, earnings growth is going strong. Forecast EPS growth of the VN Index in 2021, 2022, and 2023 is 25 percent, 18 percent, and 16 percent respectively, he said.

Jeff said the most important was that the Vietnamese government was working on elevating its market from “frontier” to “emerging” which will attract more investment to the country.

He emphasised that: “The politics in Vietnam is very stable, as is the Vietnamese dong, especially over the past three years, with good export growth and consequently strong foreign reserves.”/.

Da Nang to reboot tourism from October 20

The central city of Da Nang plans to reboot local tourism from October 20, as the COVID-19 pandemic has been under control.

From November, the city will embark on “travel bubble” with the central province of Quang Nam and the northern province of Quang Ninh, heard a meeting between the municipal People’s Council and local voters last week.

Director of the municipal Tourism Department Truong Thi Hong Hanh said the city will initially welcome domestic visitors and pilot the serving of foreigners with the slogan “Enjoy Da Nang”, ensuring safety of tourists and employees in the sector.

Also in November, the city will serve international visitors who come for official duty, visit relatives and return home. They will be put under quarantine for a week and follow other regulations by the Health Ministry. Others include tourists on full-package tours and those with vaccine passports, focusing on those from the Republic of Korea and Russia.

Russia plans to bring 2,000 – 4,000 visitors to Vietnam each month, Hanh said.

Chairman of the municipal People’s Committee Le Trung Chinh said between now and early 2022, the city will continue facing difficulties caused by the pandemic. In order to restore its economy, the city will suggest the State allocate more vaccines for the second jabs and those aged 12-17.

Haiphong, Quang Ninh to join hands to reopen tourism

Early next month, Haiphong City and neighboring Quang Ninh Province will coordinate to resume travel services and exchange tourists after they have brought the fourth wave of Covid-19 under control, said a Haiphong tourism official yesterday, October 18.

Under a signed cooperation deal, they will focus on offering tours for domestic tourists of the two northern localities, creating favorable conditions for tour operators to receive tourists from corporations, industrial parks, economic zones and other organizations in the localities.

To participate in those tours, visitors are required to get fully vaccinated and take a pre-departure Covid test, said Nguyen Thi Thuong Huyen, director of the Haiphong Tourism Department.

Haiphong and Quang Ninh also jointly developed a tourism promotion plan to tap the Hanoi market as well as serve tourists from industrial parks and economic zones operating in the provinces and cities that are deemed safe from Covid.

However, Huyen added that Haiphong would not set high expectations for the Quang Ninh market, as local residents would travel less as the weather gets colder in the north during the final months of the year. Further, the Covid pandemic has affected the financial situation of local tourists and traveling at a time when coronavirus fear remains widespread will be a hassle.

Draft circular to prevent banks from hiding bad debts

The State Bank of Vietnam (SBV) expects new draft regulations on debt purchase and sale of credit institutions will prevent the institutions from hiding bad debts.

The regulations are drafted in a new circular, which will revise Circular No. 09/2015 on debt purchase and sale of credit institutions. The draft circular is to be made public for comments.

Besides preventing institutions from hiding bad debts, the SBV believes the revision of Circular No. 09/2015 is necessary as credit institutions reported they faced some difficulties in implementing debt trading according to Circular No. 09/2015 due to a lack of specific guidelines to handle financial issues, debt valuation and exchange rate differences in case the debt purchaser is a credit institution.

According to SBV, it recently saw debt buyers of some credit institutions were not credit institutions themselves, and the buyers were allowed to make late payments for the debt purchase. It is concerned the trading may lead to issues granting credit for debts at credit institutions. The SBV, therefore, said it is necessary to amend Circular No. 09/2015 to prevent credit institutions from cross lending to hide bad debts.

Specifically, under the revised draft, a credit institution will not be allowed to grant credit to customers to buy their own debts at the institution or other credit institutions.

“The regulation aims to ensure that debt purchases are transparent and prevent the possibility that credit institutions can use loopholes in debt trading to hide bad debts,” the SBV noted.

Besides, according to the draft, for debts that haven’t completed trading despite having signed debt purchase and sale contracts, credit institutions will still have to manage the classification and make provisions for the debts according to the current legal regulations.

According to the SBV, though the banking industry has actively taken measures to handle bad debts worth VND78.86 trillion in the first half of this year through debt sales and provisions, as well as limiting newly arising bad debts, the debts have been on a rising trend due to the impact of the COVID-19 pandemic. By the end of June 2021, the bad debt ratio was 1.73 per cent against 1.69 per cent at the end of 2020.

According to the SBV’s statistics, banks restructured loans worth about VND350 trillion for COVID-19-affected borrowers. Industry insiders estimated if half of the loans became bad loans, the bad debt ratio of the banking system would increase to more than 3 per cent by the end of this year.

The SBV said the process of restructuring the system of credit institutions and handling the bad debt is being accelerated.

Residential area per capita to reach 27sq.m by 2025

Viet Nam’s residential area per capita is expected to reach about 27sq.m by 2025 and to surge to 30sq.m by 2030, according to the draft national housing development strategy.

The National Housing Development Strategy for the 2021-2030 period sets the goal of developing and repairing more than one billion sq.m of houses, equivalent to about 11.9 million apartments.

The housing development strategy is to create conditions for everyone to have a place to live and focus on improving the quality of housing, as well as implementing the trend of green and smart housing development.

In addition, the housing development must include urban development, urban embellishment and re-construction of old apartment buildings. The housing development in the post-COVID-19 period will be implemented according to targets on sustainable real estate market development.

At the same time, the strategy will have policies focusing on housing for workers and low-income residents in urban areas, said Deputy Minister of Construction Nguyen Van Sinh.

The Ministry of Construction is collecting comments on the draft strategy. The ministry is expected to submit the draft to the Prime Minister for consideration in the fourth quarter of 2021.

The draft of the national housing strategy aims to establish the orientation of national housing development activities and local housing development programmes, he said.

The strategy also aims to increase rental housing products and promote the development of commercial housing with medium areas and reasonable prices, meeting the needs of people. The renovation and reconstruction of old apartment buildings in urban areas will also be promoted.

The strategy focuses on renewing specific policies for each kind of housing and the target group of social housing policies including workers and low-income people in urban areas, and officers and soldiers of the people's armed forces.

Regulations on housing management and development are also amended according to housing development master plans, strategies and programmes.

Deputy Minister Sinh affirmed that building the national housing development strategy is one of the important tasks of the construction sector in implementing the 10-year socio-economic development strategy for 2021-2030, especially targets on social housing and policies on ensuring housing security. 

Reference exchange rate up 3 VND

The State Bank of Vietnam set the daily reference exchange rate at 23,167 VND/USD on October 20, up 3 VND from the previous day.

With the current trading band of +/-3 percent, the ceiling rate applicable to commercial banks during the day is 23,862 VND/USD and the floor rate 22,471 VND/USD.

The opening-hour rates at commercial banks saw only slight fluctuations.

At 8:25am, Vietcombank listed the buying rate at 22,630 VND/USD and the selling rate at 22,860 VND/USD, unchanged from October 19.

BIDV cut 5 VND from both rates, listing the buying rate at 22,655 VND/USD and the selling rate at 22,855 VND/USD.

The rates at Vietinbank are the same as on October 19 at 22,635 VND/USD (buying) and 22,855 VND/USD (selling)./.

FDI firms in Thanh Hoa hiring tens of thousands despite COVID-19

Many FDI firms in the central province of Thanh Hoa are recruiting tens of thousands of labourers as the pandemic has been brought under control.

More than 35,000 vacancies are now offered by nearly 50 FDI enterprises in the locality.

The provincial Confederation of Labour and the Department of Labour, Invalids and Social Affairs have coordinated with localities to step up the communication work, providing recruitment information for labourers.

Trieu Son district has been seen as a bright spot in Thanh Hoa in job generation. About six FDI firms based in the locality have created stable jobs for more than 10,000 people, each with a monthly wage of 5-7 million VND (220-308 USD).

Nguyen Van Hung, head of the district bureau of labour, invalids and social affairs, said four of the six firms are seeking thousands of employees.

From now till the end of this year, businesses need around 7,000 employees and the number would increase to 17,000 by the end of next year, as the companies aim to scale up their operations, the official said.

According to a survey, Trieu Son has more than 9,000 workers returning from pandemic-hit areas, and up to 4,000 need vocational training and new jobs, Hung said.

However, with the labour demand of FDI firms in the locality, the returnees would get new jobs, he said, adding that the district bureau of labour, invalids and social affairs has coordinated with townships and communes in the communication work.

Nguyen Thi Quyen, chairwoman of the trade union of Adiana Vietnam Footwear Company Limited in Trieu Son district, said her company needs some 5,500 workers. However, there are now about 4,000 employees.

The firm wants to hire 1,500 labourers by the year end, and even 17,000 once its new factory is put into operation in late 2022.

Adiana will organise a three-month training course for unskilled workers, Quyen added.

Meanwhile, Vietnam Kim Viet Footwear Co. Ltd and Dream F Vina Co. Ltd are also thirsty for about 2,000 labourers.

Le Dinh Bon, head of the bureau of labour, invalids and social affairs of Nong Cong district, said his office has contacted adjacent districts like Nhu Thanh, Trieu Son and Nghi Son to get insight into labour demand of companies based in the localities.

Vo Manh Son, Chairman of the provincial Confederation of Labour, said Thanh Hoa counts 35 FDI firms that have remained their operations, of which 34 companies have increased shifts for their labourers.

Other firms such as Roll Sport Vietnam Footwear Limited, Annora Vietnam Footwear Limited, and Sakurai Vietnam Co. Ltd also need thousands of labourers.

Despite COVID-19 impacts, FDI inflows into Vietnam during the first nine months of this year rose 4.4 percent year on year to 22.15 billion USD, reported the Foreign Investment Agency under the Ministry of Planning and Investment.

As of September 20, 12.5 billion USD was poured into 1,212 newly-licensed projects, up 20.6 percent in value but the number of projects was down 37.8 percent over the same period last year. Meanwhile, 6.6 billion USD was added into 678 underway projects, a year-on-year rise of 25.6 percent in capital but down 15.8 percent in project number.

Foreign investors also invested nearly 3.2 billion USD to share purchase deals, down 43.8 percent compared to the same period last year.

So far this year, the disbursement of FDI fell 3.5 percent year on year.

Leaders of the Foreign Investment Agency attributed the decreases in the numbers of new and expanded projects to the travel restrictions and long quarantine policy, which made it hard for foreign investors to make surveys for their planned projects. Lockdown and travel restriction measures also affected operations of FDI firms, they added./.

Medical mask exports maintain upward trend

Vietnam shipped over 322.2 million face masks of various types abroad during the opening nine months of the year, according to statistics from the General Department of Vietnam Customs.

September alone witnessed a total of 17 major local firms export approximately 16.63 million pieces overseas, representing a slight increase of 6.6% from August’s figure.

This rise marks the second consecutive month that medical mask exports has increased. Earlier, August saw local businesses export 15.64 million pieces, a rise of 24.8% compared to July.

Following the application of the export license regime in order to serve local efforts regarding COVID-19 prevention and control,

The export of medical masks has resumed normally since May 2020 following the application of the export license regime to support local COVID-19 prevention efforts.

Last year witnessed Vietnamese enterprises export over 1.37 billion medical masks of all types, in which the export volume of medical mask in June reached a peak of more than 236 million pieces.

Binh Duong draws FDI after entering new normal

The southern province of Binh Duong on October 18 held an online meeting with executives of Japan’s NTT East and Tokyu Groups to discuss measures to effectively attract investment there.

Speaking at the event, Secretary of the provincial Party Committee Nguyen Van Loi said the province strives to have all online public services levels 3 and 4 added to the national public service portal by 2025. At least 90 percent of local residents will be satisfied with the handling of administrative procedures.

Deputy General Director of the NTT East Tanabe said this year, the group is preparing to become a strategic shareholder of the Vietnam Technology and Telecommunication JSC, a member of Becamex IDC, to contribute to building infrastructure for smart city.

General Director of the Tokyu Group Takahashi said in the near future, Tokyu and Vietnam’s Becamex IDC will build a new shopping mall in Binh Duong New City, which also houses Japan’s AEON supermarket.

Loi expressed his hope that investors will pay more attention to railway projects, and believed that projects on transportation, shopping centres and public transport system will become models in Vietnam.

In the past nine months, Binh Duong’s industrial production index went up 2.93 percent, total retail of goods and services increased by 1.9 percent, and exports and imports up 26.7 percent and 34 percent, respectively. The province also drew over 1.5 billion USD in foreign direct investment.

So far, about 85 percent of local enterprises have resumed their operations.

Japan now ranks second among 65 countries and territories investing in Binh Duong with 327 projects worth 5.7 billion USD./.

Firms in Dong Nai province quickly resume operations

Nearly 1,450 enterprises in industrial parks in the southern province of Dong Nai have resumed operations with over 426,000 labourers working in the form of “three-on-site” or going home daily, said deputy head of the provincial IPs management board Le Van Danh on October 18.

The province is now home to 31 IPs with over 1,700 enterprises and 615,000 workers. Since the beginning of October, a number of enterprises have returned to production and trade, with the rate of workers amounting to 73-80 percent.

Danh said they are operating at more than half of their capacity. Between now and the year-end, they will boost production to fill export orders.

The remaining 270 businesses with around 190,000 workers are preparing conditions and waiting for full vaccinations for their employees.

The board will offer all possible support to local enterprises to stabilise production, Danh said.

He added that the province is give priority to giving second shots to workers to ensure the safe operation of local factories./. 

Digital technology projected to earn 74 billion USD for Vietnam by 2030: Seminar

Digital technology, if exploited to the maximum, can bring over 1.733 quadrillion VND (74 billion USD) to Vietnam by 2030, with the most beneficial sectors including manufacturing, agriculture and food, and education-training.

The information was unveiled in a report on potential of Vietnam’s digital economy, which was presented at a workshop held in Hanoi on October 18.

Conducted by strategic economics consultancy company AlphaBeta, the report showed that Vietnam has many opportunities to benefit from the digital economy.

Accordingly, the young, educated and tech-savvy population accounts for 70 percent of its citizens under 35 years old. The literacy rate in the 15-35 age group is over 98 percent, higher than the average global rate of 91 percent. About 70 percent of the population uses smart phones. Vietnam also has the second fastest growing Internet economy in Southeast Asia after Indonesia.

The report, meanwhile, pointed out a number of barriers in exploiting benefits from digital technology, including regulatory requirements, digital connectivity, and a shortage of digitally skilled human resources.

Co-organised by the Ministry of Planning and Investment’s Vietnam National Innovation Centre (NIC) and Google, the workshop reviewed the current situation and possible development of Vietnam's digital economy, as well as mechanisms and policies to promote its growth.

Speaking at the event, Deputy Minister of Planning and Investment Tran Duy Dong said in the context of being severely affected by the COVID-19 pandemic, Vietnam needs to accelerate the digital economy's development on the basis of science-technology and innovation to improve the quality of life, productivity, efficiency and competitiveness.

World Bank Lead Economist for Vietnam Jacques Morisset recommended that it is necessary for Vietnam to focus on upgrading digital skills for workers, encouraging businesses’ innovation, and enhancing the accessibility and quality of information.

NIC Director Vu Quoc Huy said the centre has cooperated with partners such as Google and Amazon to organise online training and capacity building programmes in technology, e-commerce application, and digital transformation for domestic businesses.

He noted the building and implementation of more programmes to support innovation for businesses will be done in the time to come./.

Binh Thuan province enhances dragon fruit exports

The Ministry of Industry and Trade, the Ministry of Agriculture and Rural Development and Binh Thuan province have implemented many solutions to promote the consumption of dragon fruit.

They have organised events on connecting local enterprises with partners at home and abroad to expand the consumption market for dragon fruit. They have also implemented solutions to speed up the clearance of goods at border gates, including priority in plant quarantine and transport for exported dragon fruit.

In August, Binh Thuan’s Department of Industry and Trade coordinated with the Vietnam Trade Promotion Department under the Ministry of Industry and Trade to hold an online conference on Vietnamese dragon fruit with potential export markets in 2021.

At the conference, dragon fruit production and trading enterprises and cooperatives in Binh Thuan connected with Indian partners, as well as businesses in Australia, Japan, China and Europe, opening up opportunities on expanding the export market for dragon fruit in the future.

Earlier this year, the Japanese Ministry of Agriculture, Forestry and Fisheries (MAFF) officially granted the Protected Geographical Indication certificate to Binh Thuan dragon fruit. This is the second agricultural product of Vietnam to receive the certificate, after Luc Ngan lychee.

This certificate has a great significance to affirm the prestige of Binh Thuan dragon fruit and create many new opportunities for exporting this product to key markets such as Europe, the Republic of Korea and New Zealand.

Binh Thuan’s Department of Industry and Trade in September issued a plan to develop production and expand the consumption market for Binh Thuan dragon fruit.

Accordingly, the plan would help expand the dragon fruit export market, besides increasing export volume to traditional export markets and enhancing trade promotion activities.

At present, Binh Thuan mainly consumes fresh dragon fruit, of which 80-85 percent are for export and about 15-20 percent for the domestic market.

Binh Thuan province now encourages farmers to increase product quality in dragon fruit production but not expanding production areas for the sustainable development of this product.

According to Phan Van Tan, Deputy Director of the provincial Department of Agriculture and Rural Development, VietGAP standards are also applied for sustainable development of dragon fruit production. That has increased the value of dragon fruit products and met demand of export markets. On the other hand, the use of pesticides is also minimised, increasing the prestige and quality of Binh Thuan dragon fruit products.

By September, the VietGAP-certified area growing dragon fruit has reached 11,500ha, accounting for more than 30 percent of the area growing dragon fruit in the province.

Besides, Binh Thuan province is forming a dragon fruit production region with high technology in two districts of Ham Thuan Nam and Ham Thuan Bac.

Binh Thuan’s Department of Agriculture and Rural Development has also requested the Sub-Department of Crop Production and Plant Protection and relevant agencies to strengthen the management and supervision of the use of planting region codes and codes of dragon fruit packing establishments that have been granted to organisations and individuals in the province.

It would also coordinate with the Market Management Department to strengthen inspection and control of the labelling at dragon fruit packaging facilities in accordance with existing regulations.

Binh Thuan has so far proposed the Plant Protection Department to grant codes to 78 dragon fruit growing regions and 268 of dragon fruit packaging facilities in the province.

This province has 33,750ha growing dragon fruit trees with a total output of 700,000 tonnes per year. China has been one of the key export markets of Binh Thuan dragon fruit./.

Bac Giang works to raise values of livestock products

The northern province of Bac Giang will restructure its animal husbandry to raise values of local products, Deputy Director of the provincial Department of Agriculture and Rural Development Le Ba Thanh has said.

In the remaining months of 2021 and the next year, local authorities will instruct districts and Bac Giang city to continue reducing small scale and dispersed farming, and at the same time bolstering biosafety models and high technology application.

Farmers are also urged to increase production in line with VietGAP standards, ensure safety and linkage of material supply, among others.

The province will work to update information on a database in tandem with the Law on Animal Husbandry for the development of the sector, together with disease prevention and consumption.

Bac Giang has suggested the Ministry of Agriculture and Rural Development reduce the import of pork and poultry because of sufficiency in domestic supplies and declining pork prices.

The State Bank of Vietnam asked commercial banks to devise policies on loan extensions for animal husbandry facilities while relevant agencies were urged to support sales of products on e-commerce platforms.

Next year, the province aims to maintain the number of pigs at 1.1 million and fowls at 20 million, producing more than 230,400 tonnes of meat.

As of September 15, it had about 19.22 million cattle and poultry. Poultry farming are mostly in the districts of Yen The, Tan Yen, Hiep Hoa and Luc Nam. The province produced some 47,300 tonnes of poultry in the first nine months, equivalent to 110.4 percent compared to the same period last year.

Bac Giang is home to 71 cooperatives and over 600 farms operating in the animal husbandry.

Production value of the province’s agro-forestry-fishery sector surpassed 31.5 trillion VND in 2020. In recent years, Bac Giang farmers earn over 10 trillion VND in total annually from animal husbandry.

Under its agricultural production development strategy to 2030 and on the basis of restructuring agricultural production towards improving the quality and value of products, including Yen The hill chickens, Yen The district has made efforts to promote production links and renovate breeding methods.

It also adopted mechanisms to encourage the development of enterprises, cooperatives, and cooperative groups in husbandry, thus building agricultural production value chains.

To boost consumption, Bac Giang targets both domestic and export markets but top priority is given to domestic markets, especially in Hanoi and major cities. It is also looking to export Yen The hill chickens to ASEAN and China in the near future.

The district will also continue restructuring chicken varieties in farming to improve quality, towards making inroads into more difficult markets such as Japan and Europe.

Bac Giang is to raise the contribution made by hi-tech agriculture in agricultural production value by 30 percent by 2030, according to the provincial Department of Agriculture and Rural Development.

The province is planning to develop agriculture towards improving its efficiency and sustainability and ensuring national food security.

The sector’s annual growth is expected to average 1.5-1.6 percent in the 2021-2030 period. Horticultural products meeting safety standards are to account for 70 percent of total output, while those in husbandry and fisheries are to reach 80 percent and 70 percent, respectively.

The province also aims to reduce its total farming land from 286,660 ha in 2025 to 271,690 ha in 2030, with agricultural production areas to come down from 124,450 ha in 2025 to 121,870 ha in 2030. Rice farming areas will also decline from 61,190 ha in 2025 to 51,207 ha in 2030.

Meanwhile, it will raise its livestock and poultry population from 26.46 million heads in 2025 to 35.64 million in 2030. The output of meat will then increase from nearly 260,000 tonnes in 2025 to 302,000 tonnes in 2030, while the number of eggs will grow from 250 million in 2025 to 300 million in 2030./.

Economic expansion depends on COVID-19 vaccination speed, scale: Experts

Vietnam’s economic prospects greatly depend on COVID-19 vaccination speed and scale, the efficiency of pandemic prevention and control measures and the effectiveness of supporting packages, held experts at a conference organised by the Vietnam Economic Strategy Studies Centre (VESS) on October 18.

They asserted that bad debts may continue to rise, becoming a threat for the financial system in the post-pandemic period. Therefore, they stresses the need to prepare for worst-case scenarios.

Dr. Nguyen Duc Thanh, VESS Director said that slow vaccination has held Vietnam back in recovery process in 2021, which can lead to it losing comparative advantage. Currently, Vietnam’s vaccine coverage remains low compared to the world's level, he noted.

The resurgence of COVID-19 has disrupted supply chains and affected the labour market, posing severe impacts on domestic businesses, he said, adding that the growth in the first nine months of this year did not reflect difficulties of the economy, especially the informal sector.

Assoc. Prof. Dr. Pham The Anh, chief economist of the VESS, said that due to the pandemic, demands were low and the transport of goods was difficult. However, the risk of inflation is high.

He explained that enterprises are shouldering from rises in inputs, from petrol prices to anti-pandemic costs, which will sooner or later be included in products' prices. Therefore, when social activities are resumed and demand rises, the rising costs will result in inflation.

According to Thanh, in an optimistic scenario when pandemic prevention and control measures are effective and production is resumed from the fourth quarter, and vaccination is expanded in the rest of the year, GDP growth may reach about 1.8 percent.

However, in a less optimistic scenario when COVID-19 returns in some localities, making the transport of goods difficult, while orders continue to leave Vietnam, production chain is broken, there is a lack in labourers and input cost rises, the GDP growth may only stand at 0.2 percent, said Thanh.

Thanh held that in order to ensure economic expansion is reached as predicted in the optimistic scenario, it is necessary to speed up vaccination process and expand its scale to all localities, and tackle difficulties in goods transport.

Thanh asserted that monetary policies should be designed to meet the demand for credit of the economy along with risk-managing measures./.

Volume of goods through seaports reach double-digit growth

Vietnam’s seaports handled over 587 million tonnes of goods in the first ten months of this year, representing a year-on-year rise of 2 percent, according to the Vietnam Maritime Administration (VMA).

 

Despite the effect of the COVID-19 pandemic, the total volume of container cargo going through seaports maintained a double-digit growth rate of 12 percent compared to the same period last year to nearly 20.3 million twenty-foot equivalent units (TEUs).

Of the figure, the volume of exports was estimated to hit over 6.6 million TEUs, surging 11 percent, that of imports - nearly 6.7 million TEUs, up 14 percent, and that of domestic goods - almost 7 million TEUs, up 10 percent.

According to the VMA, most of seaport areas saw positive growth in the volume of goods, such as Vung Tau with 21 percent increase and Ho Chi Minh City nearly 8 percent in the first nine months of the year. The volume of goods that went through seaports in Hai Phong expanded nearly 15 percent and in Dong Nai 7 percent year on year.

The VMA said the Government has effectively implemented disease control and set forth solutions to ensure economic development goals, which are factors that would help the seaport system maintain good growth in the coming time./.

Businesses in Quang Ninh determined to surmount pandemic

Quang Ninh’s success in protecting “green zones” from the latest COVID-19 outbreak has created an impulse for businesses based in this northeastern province to recover operations and flexibly and safely adapt to the pandemic.

Quang Ninh posted an estimated economic growth rate of 8.6 percent in the first nine months of 2021, much higher than the national average, which was mainly driven by the processing and manufacturing industry.

The province’s contribution to the State budget topped 33.5 trillion VND (1.47 billion USD), equivalent to 93 percent of the sum collected in the same period last year, while total investment in society approximated 64 trillion VND, up 7.8 percent.

Chairman of the provincial People’s Committee Nguyen Tuong Van attributed the achievements to local businesses and entrepreneurs’ proactiveness in implementing various solutions such as adopting flexible work hours, arranging on-site Tet celebrations for employees, cutting down production costs, seeking alternative material sources, expanding markets, seizing new business chances, and applying digital technology to production and business activities.

To adapt to and safely operate amid the pandemic, enterprises, including FDI firms, have exerted enormous efforts and changed their mindsets and methodologies, he noted.

Phung Ky Luan, General Director of the Tonly & Pully Vietnam company in the Dong Mai Industrial Park in Quang Yen town, said in the most intense moments of the pandemic, his company made arrangements for workers to stay at the factory so as to meet delivery deadlines. It has also moved to minimise production costs, seek new sources of material supply, and expand the market.

He thanked local authorities for accompanying enterprises, voicing his hope that the business community’s expansion of operations will contribute to local economic growth.

The Viet Long Investment and Construction JSC, headquartered in Ha Long city, specialises in construction, agriculture, and environment.

Le Quang Thang, Chairman of its Board of Directors and General Director, pointed out the difficulties facing his firm during the fourth wave of COVID-19 infections, including material and labour shortages due to travel restrictions and surging expenses.

Facing that fact, the firm has had to seek every possible way to maintain jobs and income for nearly 500 employees. It has changed its governance methodology, organised virtual meetings, and installed more cameras at the production zone to issue timely instructions, he added.

Though the nine-month GRDP growth, at 8.6 percent, is higher than the national average, it is still 1.1 percentage points lower than the target of 9.7 percent set at the start of 2021.

To achieve this year’s growth target of 10.5 percent, the rate must be 15.3 percent in the fourth quarter, which means Quang Ninh and the local business community will have to make stronger efforts.

Tourism, a major sector of the local economy, earned only more than 5 trillion VND in revenue between January and September, plunging 59 percent year on year. Given this, the industry - construction sector is expected to remain the driving force for local growth in Q4.

Authorities have pledged maximum support for industrial businesses to increase productivity and output.

Pham Van The, Chairman of the Quang Ninh Business Association, said more than 2,000 companies were established or resumed operations during the nine months, up 19 percent from a year earlier, which is a positive figure showing the strong will and efforts by businesses and entrepreneurs in the province.

He recommended the local administration consider a particular aid package for the tourism and service industries so that they can survive the pandemic.

To realise the “twin targets” in 2021 and the following years, Van said Quang Ninh will continue striving to keep “green zones” safe and develop the province in the “new normal” status. It will step up activities of the special working groups established under the Prime Minister’s order to deal with problems facing pandemic-hit businesses and people while tackling obstacles and promoting investment projects./.

Bac Giang works to raise values of livestock products

The northern province of Bac Giang will restructure its animal husbandry to raise values of local products, Deputy Director of the provincial Department of Agriculture and Rural Development Le Ba Thanh has said.

In the remaining months of 2021 and the next year, local authorities will instruct districts and Bac Giang city to continue reducing small scale and dispersed farming, and at the same time bolstering biosafety models and high technology application.

Farmers are also urged to increase production in line with VietGAP standards, ensure safety and linkage of material supply, among others.

The province will work to update information on a database in tandem with the Law on Animal Husbandry for the development of the sector, together with disease prevention and consumption.

Bac Giang has suggested the Ministry of Agriculture and Rural Development reduce the import of pork and poultry because of sufficiency in domestic supplies and declining pork prices.

The State Bank of Vietnam asked commercial banks to devise policies on loan extensions for animal husbandry facilities while relevant agencies were urged to support sales of products on e-commerce platforms.

Next year, the province aims to maintain the number of pigs at 1.1 million and fowls at 20 million, producing more than 230,400 tonnes of meat.

As of September 15, it had about 19.22 million cattle and poultry. Poultry farming are mostly in the districts of Yen The, Tan Yen, Hiep Hoa and Luc Nam. The province produced some 47,300 tonnes of poultry in the first nine months, equivalent to 110.4 percent compared to the same period last year.

Bac Giang is home to 71 cooperatives and over 600 farms operating in the animal husbandry.

Production value of the province’s agro-forestry-fishery sector surpassed 31.5 trillion VND in 2020. In recent years, Bac Giang farmers earn over 10 trillion VND in total annually from animal husbandry.

Under its agricultural production development strategy to 2030 and on the basis of restructuring agricultural production towards improving the quality and value of products, including Yen The hill chickens, Yen The district has made efforts to promote production links and renovate breeding methods.

It also adopted mechanisms to encourage the development of enterprises, cooperatives, and cooperative groups in husbandry, thus building agricultural production value chains.

To boost consumption, Bac Giang targets both domestic and export markets but top priority is given to domestic markets, especially in Hanoi and major cities. It is also looking to export Yen The hill chickens to ASEAN and China in the near future.

The district will also continue restructuring chicken varieties in farming to improve quality, towards making inroads into more difficult markets such as Japan and Europe.

Bac Giang is to raise the contribution made by hi-tech agriculture in agricultural production value by 30 percent by 2030, according to the provincial Department of Agriculture and Rural Development.

The province is planning to develop agriculture towards improving its efficiency and sustainability and ensuring national food security.

The sector’s annual growth is expected to average 1.5-1.6 percent in the 2021-2030 period. Horticultural products meeting safety standards are to account for 70 percent of total output, while those in husbandry and fisheries are to reach 80 percent and 70 percent, respectively.

The province also aims to reduce its total farming land from 286,660 ha in 2025 to 271,690 ha in 2030, with agricultural production areas to come down from 124,450 ha in 2025 to 121,870 ha in 2030. Rice farming areas will also decline from 61,190 ha in 2025 to 51,207 ha in 2030.

Meanwhile, it will raise its livestock and poultry population from 26.46 million heads in 2025 to 35.64 million in 2030. The output of meat will then increase from nearly 260,000 tonnes in 2025 to 302,000 tonnes in 2030, while the number of eggs will grow from 250 million in 2025 to 300 million in 2030./.

Da Nang to reboot tourism from October 20

The central city of Da Nang plans to reboot local tourism from October 20, as the COVID-19 pandemic has been under control.

From November, the city will embark on “travel bubble” with the central province of Quang Nam and the northern province of Quang Ninh, heard a meeting between the municipal People’s Council and local voters last week.

Director of the municipal Tourism Department Truong Thi Hong Hanh said the city will initially welcome domestic visitors and pilot the serving of foreigners with the slogan “Enjoy Da Nang”, ensuring safety of tourists and employees in the sector.

Also in November, the city will serve international visitors who come for official duty, visit relatives and return home. They will be put under quarantine for a week and follow other regulations by the Health Ministry. Others include tourists on full-package tours and those with vaccine passports, focusing on those from the Republic of Korea and Russia.

Russia plans to bring 2,000 – 4,000 visitors to Vietnam each month, Hanh said.

Chairman of the municipal People’s Committee Le Trung Chinh said between now and early 2022, the city will continue facing difficulties caused by the pandemic. In order to restore its economy, the city will suggest the State allocate more vaccines for the second jabs and those aged 12-17.

Dak Nong Province welcomes investors, says local Party chief

 Dak Nong strives to improve its investment climate and welcome businesses and investors to the province, Ngo Thanh Danh, its Party Committee Secretary has said.

Speaking at an event held to honour local businesses’ contributions to the province’s efforts to ensure economic growth while also staying safe from the COVID-19 pandemic, he said in the year-to-date Dak Nong’s economy had grown by 7.72 per cent.

Retail sales and exports also saw growth, he said.

The province has been focusing on improving its investment and business climate and offering assistance to key projects in various fields such as solar and wind energy, industrial and agricultural products with high added value and tourism, he said.

Ho Van Muoi, chairman of the province People’s Committee, said Dak Nong possesses resources such as bauxite, from which aluminium is made.

It accounts for 60 per cent of the country’s bauxite reserves.

It also has long hours of sunshine and strong radiation, making it a good place for generating solar power.

It is focusing on improving its road infrastructure, especially connectivity with HCM City and southern provinces. The Government has recently approved an expressway spanning the Central Highlands.

Dak Nong has huge tourism potential, with historical and cultural relics and great natural beauty in the form of the Dak Nong UNESCO Global Geopark and the Krong No volcanic cave system, the longest of its kind in Southeast Asia.

But Danh said despite the province’s efforts it has been difficult to attract investments. Government agencies and the various regions in the province do not work cohesively, resulting in investors facing difficulties with administrative procedures, he said.

There are also problems related to land-, environment- and investment-related administrative procedures, he added.

Muoi said there have indeed been problems with administrative procedures for which he has “apologised to local businesses and vowed not to let it happen again.”

The province has nearly 2,400 businesses. 

Vietnam Railway propose to import 37 old carriages from Japan

Chairman of the State-owned Vietnam Railways Corporation (VNR), Vu Anh Minh has told Dantri/Dtinews that VNR carefully considered and calculated many factors including passenger and environment safety, efficiency, technology access, and convenience before proposing to import 37 old carriages from Japan.

Explaining about their proposal in an interview with Dantri/Dtinews on October 18, head of the Vietnam railway sector said that the East Japan Railway Company was a close partner of Vietnam Railways and it had offered 37 40-year-old carriages to Vietnam.

"The East Japan Railway Company has provided consultancy and technical maintenance services to us for many years and they know well our French-built 1,000 mm gauge rails," the official said. "If we accept their offer, we will only have to pay for transportation and renovation, while we can benefit from their technical support."

The official also noted that with the financial difficulties of the local railway sector, and declining demand for rail transport services, it would be good for both the railway company and local passengers to accept the old carriages.

VNR estimated the total expenditure for the transportation and renovation of these 37 carriages at about VND140 billion (USD6.10 million) including VND 40 billion in transportation costs, VND80 billion for renovation cost, and the remainder for registration and other fees.

Meanwhile, with the price of over VND30 billion for a new carriage, VNR would have to spend about VND 1.1 trillion (USD48 million) to buy 37 new carriages. "This isn't a wise investment in Vietnam now because we won't be able to sell any tickets if the prices are high." 

The official stressed that the carriages were suitable for many short train routes in Vietnam.

"Each carriage has its own engine and we can adjust the number of carriages for each train based on the number of bookings," he said. "At present the demand for some short routes in Vietnam is falling so we are facing losses operating our current long trains with just one engine. Now if we receive the Japanese carriages, we can use just one or two carriages for each train on some routes which are under 300 kilometres such as the Hanoi-Haiphong route."

When being asked about the public concerns that these carriages could end up with a short operational lifespan, Minh said that being made mostly from steel, train carriages produce the least amount of waste compared with other transportation vehicles.

The official also said that while the Vietnam railway sector is learning to produce its own trains, importing a new model of carriage and operating it would provide the opportunity to learn.

"With support from Japanese experts in operating these carriages, Vietnamese engineers will have opportunities to learn a lot from them, which I think is a good step in our production and maintenance work in the future."

Covid-19 infections continue to fall in Vietnam

Vietnam continued to report falling number of new Covid-19 infections with just 3,168 cases confirmed on Monday, according to a report from the Ministry of Health.

According to the ministry's report, 3,159 of the new patients are locally-transmitted cases confirmed in 45 localities including HCM City (968), Binh Duong (439), Dong Nai (393), Soc Trang (174), An Giang (109), Kien Giang (99), and Tien Giang (94). There were nine imported patients confirmed today.

The new infections showed a decrease of 16 cases compared to yesterday's figure. There were 1,261 infections found in the community.

As of Monday evening, 862,531 infections have been reported since the new outbreak occurred in the country in late April. Some localities that have recorded the highest number of patients include HCM City (418,692), Binh Duong (225,853), Dong Nai (59,015), Long An (33,806), and Tien Giang (15,105). The outbreak has so far spread to 62 out of 63 cities and provinces nationwide.

With these new infection cases, the number of Covid-19 patients in Vietnam has increased to 867,221. The country now stands 40th among 223 countries and territories worldwide in the number of infections.

On October 18, an additional 1,136 more patients recovered from the disease, raising the number of recoveries in the country to 792,980.

On Monday evening, a further 75 deaths related to Covid-19 were announced, bringing the total number of fatalities in Vietnam to 21,269. The deaths were reported in some localities including HCM City (51), Binh Duong (14), Dong Nai (3), Soc Trang (1), Lam Dong (1), Ca Mau (1), Danang (1), Tay Ninh (1), Tien Giang (1), and An Giang (1).

Vietnam today administered more than 1.31 million doses of Covid-19 vaccines. The country has so far conducted over 63.43 million Covid-19 vaccine shots, with over 18.15 million people having received two doses.

VND15.9 trillion HCM City-Moc Bai expressway project proposed

HCM City People’s Committee has proposed to spend VND15.9 trillion (USD691.31 million) on the first phase of an expressway linking the city and Moc Bai Border Gate in Tay Ninh Province.

The 50-kilometre route starting from Belt Road 3 in Cu Chi District in HCM City will connect to National Highway 22 at the Moc Bai Border Gate area.

The 23.7-kilometre section which runs through HCM City will have eight lanes, with the Tay Ninh stretch using six lanes.

The first phase of the project, which will be carried out under the form of public-private partnership (PPP), is scheduled for completion in 2025.

Of the investment capital, VND7.43 trillion will be for site clearance and resettlement.

The committee recommended the funding of VND5.9 trillion for the project’s site clearance and compensation settlement.

The project is expected to ease traffic congestion and improve connectivity between Tay Ninh and the Southern Key Economic Zone.

The expressway will require site clearance of around 231 hectares in Tay Ninh and 208 hectares in Ho Chi Minh City, affecting over 570 households.

Oil and gas firms suffer drop in Q3 profit due to COVID-19 impacts

Despite the recovery of petrol prices, profits of many businesses in the oil and gas sector dropped in the third quarter of this year due to impacts of the COVID-19 pandemic.

Hano – Despite the recovery of petrol prices, profits of many businesses in the oil and gas sector dropped in the third quarter of this year due to impacts of the COVID-19 pandemic.

The Petrovietnam Gas Joint Stock Corporation (PV Gas) suffered a drop of 11.5 percent and 7 percent in pre-tax and after-tax profit in the third quarter of this year to 2.29 trillion VND and 1.86 trillion VND, respectively.

A representative from the firm said that in the first nine months of this year, demand for gas of its customers decreased. Particularly, demand for gas for power generation was equal to only 72 percent of that in the same period last year.

Meanwhile, due to stagnant production situation, the domestic demand fell 35-40 percent year for liquefied petroleum gas (LPG), 30 percent for low-pressure gas and compressed natural gas compared to that before COVID-19 broke out.

The firm predicted that in the time to come, the number of customers cutting and reducing their gas consumption will continue to rise, leading to a drop of 40-50 percent in sales of gas. At the same time, difficulties in transport and workforce have pushed its production cost up.

Production of the Binh Son Refining and Petrochemical Joint Stock Company also hit the floor in the third quarter of this year. Securities firm Mirae Asset Vietnam predicted that the firm will recover from the fourth quarter of 2021.

In October, BRS production reached 100 percent of its capacity from 85 percent recorded on September 22.

A sharp drop of 29 percent year on year was seen in pre-tax profit of the PetroVietnam Technical Services Corporation (PVS) in the third quarter of this year due to reduction in productivity and product prices caused by social distancing measures.

However, recently, positive signs have been seen in the prices of shares of oil and gas firms thanks to investor’s high hope for rise in oil prices in the time to come.

Notably, the prices of many codes rose strongly, including OIL (23 percent), GAS (26 percent), PVD (43 percent), PVD (43.6 percent), PVS (52.6 percent), and BRS (125.4 percent).

Foreign businesses urge government to approve thermal power plants having enough capital

Vietnam Business Forum (VBF), representing 13 associations of foreign-invested enterprises, requested the government to only approve coal-fired thermal power plants where the investors have enough capital.

Foreign-invested enterprises are urging the government to facilitate the green energy revolution
The requirement was made as a comment for completing the draft Power Development Plan VIII. According to the VBF, numerous credit and financial organisations and international commercial banks announced withdrawing financing from thermal power plant projects after receiving protests over their environmental impact.

The VBF added that numerous thermal power plants, which are expected to be kicked off in 2022, are now in financial difficulties and the investors will only implement the projects with government support.

Thus, the VBF proposed the government to only approve thermal power plants where the investors have enough capital on their own.

It also requested more solutions to promote low-emission alternatives such as offshore gas and imported liquefied natural gas (LNG). Besides, it urged the government to encourage the development of offshore wind farms with a scale of 1-3GW.

Mizuho Financial Group Inc., Japan's third-largest bank by assets, announced that it would stop financing new coal mining projects from June 1 as global investors and environmental groups urge banks to unload coal-related exposure.

The Asian Development Bank (ADB), which financed several coal-fired electricity projects, also stopped lending for new coal power plants. Instead, it would provide funds for natural gas projects and hybrid electricity solutions involving fossil fuels as backup systems.

Besides, financial firms like British insurer Prudential, Citi, HSBC, and BlackRock Real Assets are devising plans to speed up the closure of Asia’s coal-fired power plants to reduce the biggest source of carbon emissions.

Banks report healthy three-quarter profit picture

Many banks have published business reports for the first three quarters, depicting a generally bright profit picture.

TPBank was one of the many banks to have posted healthy profit in the first three quarters despite COVID-19
Accordingly, in the first nine months of 2021 Saigon-Hanoi Commercial Joint Stock Bank (SHB) counted VND5.055 trillion ($219.8 million) in profit, reaching 82.5 per cent of its 2021 target of VND6.128 trillion ($266.43 million). With this, SHB reported return-on-asset (ROA) and return-on-equity (ROE) ratios of 1.5 and 25.6 per cent, respectively, following constant quarterly improvements.

During the same period, National Citizen Bank (NCB) saw a 45 per cent jump in net profit from business activities, reaching VND531 billion ($23.1 million).

As a result, the bank reaped more than VND206 billion ($8.96 million) in pre-tax profit, 7.2 times as much as last year. This year, NCB aims to reach around VND1 trillion ($43.5 million) in net profit. However, during the period, the bank has put nearly VND146 billion ($6.35 million) into its provisioning fund, a sharp jump compared to the VND38 billion ($1.65 million) sum from a year ago.

Meanwhile, Tien Phong Bank (TPBank) reached VND4.4 trillion ($191.3 million) in pre-tax profit, up 45 per cent on-year and equal to 75.76 per cent of its full-year plan. The bank’s ROA and ROE stood at 2.01 and 22.59 per cent, respectively.

Despite its slowing profit growth in Q3, Vietcombank is forecast to be the champion in profitability with VND24.3 trillion ($1.06 billion), closely followed by Techcombank at VND22.3 trillion ($969.57 million) for the full-year.

Kienlongbank reached 87.85 per cent of its full-year consolidated profit target of VND1 trillion in the first nine months.

Also, by the end of Q3, the bank’s total asset value and outstanding loan balance reached 113 and 80.08 per cent of the full-year targets.

Meanwhile, SeABank has also retained its growth momentum, reaching 99.7 per cent of its full-year plan in terms of total asset value, an 18 per cent jump on-year.

Although SeABank has yet to publish its profit figures in Q3 and the first three quarters, it reached 115 per cent of its fully-ear pre-tax profit target of VND2.41 trillion ($104.8 million) in the first half already.

Ho Chi Minh City-based commercial lender HDBank, in the interim, has reached more than 82 per cent of its full-year profit target in the first three quarters, while its outstanding loan balance rose 16.1 per cent on-year. Its ROE ratio reached 24 per cent, a sharp jump compared to the 21.1 per cent in the same period last year.

Based on estimations by SSI Research, a leading domestic financial institution, HDBank counted VND1.7 trillion ($73.9 million) in Q3 pre-tax profit, up 15 per cent on-year.

SSI Research also estimated that for the full-year, HDBank would reap VND7.7 trillion ($334.8 million) in pre-tax profit, compared to its set target of VND7.281 trillion ($316.57 million), a 25 per cent jump on-year. It also estimated Q3 business results for nine listed banks. Accordingly, Techcombank (TCB) is expected to have the highest results with VND5.2 trillion ($226.1 million) in pre-tax profit, up more than 30 per cent on-year.

Meanwhile, Vietcombank's (VCB) profit remained level at VND5 trillion ($217.4 million) while other leading performers like MB, ACB, and VPB also showed double-digit growth on-year.

Despite its slowing profit growth in Q3, Vietcombank is forecast to be the champion in profitability with VND24.3 trillion ($1.06 billion), closely followed by Techcombank at VND22.3 trillion ($969.57 million) for the full-year.

MB is also forecast to reach VND3.3-3.4 trillion ($143.5-147.83 million) in Q3 profit, a 10-12 per cent jump on-year. For the whole year, SSI Research expects MB to report a 42.2 per cent jump in 2021 profit, as well as a 21 per cent hike in 2022 profit.

According to the State Bank of Vietnam, as of October 7, the banking sector’s credit expanded 7.42 per cent, higher than in the same period last year (5.48 per cent), but remained level compared to late August 2021.

The central bank expects credit to resume strong growth in October and in Q4 this year to reach 12 per cent for the whole year.

Enterprises both prevent epidemics, stabilize production

The Management Board of Saigon High-Tech Park (SHTP), the Department of Information and Communications of Ho Chi Minh City, the Hi-tech Enterprise Association, and FPT Software yesterday jointly organized a virtual seminar "Safe adaptation and effective solutions in the new normal."

At the seminar, Deputy Director of the city Department of Information and Communications Vo Thi Trung Trinh said that the prevention of the Covid-19 epidemic in Ho Chi Minh City has so far achieved positive results. From October 1, Ho Chi Minh City implemented Directive 18 with many regulations to expand production and business activities; therefore, the application of QR codes for businesses and organizations is one of the necessary solutions.

HCMC authorities are about to issue a set of business safety assessment criteria, through which businesses can make a plan to handle the epidemic if their employees contract the disease. Moreover, based on the Department of Information and Communications’ database, businesses can develop specialized applications for their epidemic prevention and control.

Businesses have proposed that SHTP should soon put Covid-19 treatment facility in SHTP into operation as well as plan how to treat infected employees to help enterprises be flexible in epidemic prevention and stabilize production.

Furthermore, the Department of Information and Communications should soon publish a shared medical database for businesses to develop disease prevention plans close to reality or propose a treatment plan for infected workers at enterprises.

Speaking at the workshop, Head of SHTP Management Board Nguyen Anh Thi suggested that businesses must proactively apply appropriate technologies to make an important contribution to safe production. 

Enterprises strive to maintain garment and textile export growth momentum

Since the beginning of the fourth outbreak of COVID-19, many garment and textile enterprises have faced difficulties, even the risk of bankruptcy, due to the temporary suspension of production to ensure the pandemic prevention and control.

This caused an increase of inventories, halted production activities, and a lack of labour supply as many workers returned to their hometowns.

With orders since the first months of the year, the need for production and business activity from now until the end of the year is very high. However, if localities do not soon ease the blockade and restrictions in terms of travelling as well as implementing measures to boost economic development, it will be difficult for the textile and garment industry to achieve its export target of US$39 billion this year.

According to a survey conducted by the Research Centre for Employment Relations, 65.3% of Vietnamese enterprises in localities applying Directive No.16 stopped operating in September. Textiles has been one of industries most heavily affected as over 60% of migrant workers wanted to return or did return to their hometowns. The majority of workers determined they would only return to their hometowns for a short time to recover their health and take care of their lives and children.

Since the beginning of the fourth outbreak, the garment and textile enterprises have been greatly affected. Deputy General Director of the Garment 10 Corporation – Joint Stock Company (Garco10), Bach Thang Long, said that around 20% of workers could not come to work due to living in blockaded areas. The company’s shops were "paralysed" due to closure and many uniform contracts could not be fulfilled due to the inability to move. Despite the large quantity of goods, the company has been facing the risk of slow delivery and high costs from delivery by plane.

However, thanks to many flexible adaptation measures, Garco10’s total revenue in the past nine months remained equal to that of the same period last year. The company also strived to increase its year-end profit through efforts to cut costs while promoting epidemic prevention and control measures.

Sharing the same opinion, Chairman of the Board of Directors of the Hung Yen Garment Corporation (Hugaco), Nguyen Xuan Duong, noted that Hung Yen has been one of the provinces preventing and controlling the epidemic most effectively, so the company’s branches did not have to stop production, even raising productivity by 20% thanks to investment in modern technology and equipment. As a result, the corporation’s total revenue increased by about 10% in the first nine months of the year.

However, Hugaco’s profit during the first ninth months saw a year-on-year decline of 5% due to the impacts of the pandemic and high expenses. The company signed orders from now until the end of January 2022 and is continuing to negotiate orders for the next few months. However, several customers are waiting to see if Vietnam's anti-epidemic measures are effective, only then will they sign orders with the company and vice versa.

Meanwhile, General Director of the Vietnam National Textile and Garment Group (Vinatex), Cao Huu Hieu, said most of the units under the group have orders until the end of the fourth quarter of 2021, even the first quarter of 2022. However, enterprises in the southern provinces and cities have only worked moderately or have closed many factories due to the complicated development of the pandemic. Many others have had to apply the 3-on-site” models to complete orders, causing increased costs and losses.

The increase in input material prices in the coming time will be a big challenge for businesses, especially those that have signed contracts at low prices with customers since last year. In addition, about 20-30% of workers left the city to return home, causing difficulties in human resources for businesses in the south.

Vinatex’s General Director, Cao Huu Hieu, shared that the group has taken many measures to limit the negative impacts of the epidemic and the rising price of input materials. Regarding the disruption of the supply chain that has caused the slow delivery of raw materials or the sharp increase in the prices of raw materials and logistics fees over the recent time, production units must work closely with customers and encourage them to share difficulties in the implementation of orders to seek the most optimal solutions. Moreover, they should proactively discuss with suppliers to avoid excessive increases in prices, and improve market forecasting to make plans for importing raw materials for reserves. Enterprises need to develop response scenarios for 2022 when the market recovers and production activities are normalised.

On the other hand, businesses should utilise the advantages of new-generation free trade agreements (FTAs) to boost exports. To achieve this, they must promote a complete supply chain to satisfy the rules of origin in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Europe - Vietnam Union Free Trade Agreement (EVFTA). The focused target in the next period will be forming “a package supply point” with the development of a comprehensive chain including yarn, textile, finishing, accessories, garment and supporting (such as logistics, training, research and development). Enterprises should improve their positions in the value chain, develop the design of their products and supply a package of products (from designing and launching their own brands).

According to Director of the Centre for the WTO and Integration under the Vietnam Chamber of Commerce and Industry (VCCI), Dr. Nguyen Thi Thu Trang, during the complicated development of the epidemic, many businesses faced broken production chains, causing order shifting. This has led to concerns about the export future of these products.

However, for large textile and garment brands, order shifting to areas with effective measures of epidemic prevention towards meeting the needs of the year-end shopping season in European and American markets is to be expected. Therefore, if businesses quickly restore production and smoothly complete the remaining orders in the coming months, there is no need to worry too much about the future. Compared to many competitors, Vietnam's textile and garment industry still has certain advantages in terms of products’ quality, techniques, the ability to meet strict requirements on labour, the environment, and notably tariff preferences under various FTAs.

It is crucial to have supporting policies such as financial support, exemptions or reductions of taxes and fees, and timely credit preferential packages to help businesses quickly restore full production. In addition, the State needs to set out policies to support enterprises making effective use of existing labour resources, and loosen or remove restrictions on the maximum number of overtime hours so that they can attract workers to return to work. A unified green channel mechanism for the transportation of raw materials, goods, machinery and equipment for production and export should be established nationwide.

Around 150,000 employees come back to HCMC

Director of the Ho Chi Minh City Department of Labor, Invalid and Social Affairs Le Minh Tan yesterday said that around 150,000 employees had come back to the city, bringing the total number of workers at 1,400 enterprises to 210,000 ones, mostly in fields of trading and services, tourism, transport, processing and garment, leather and footwear.

From now to the end of 2021, the city needs around 60,000 workers and at the beginning of 2022 and after the Lunar New Year, HCMC will need 120,000 more employees. The city is promoting the connection between labor supply and demand, opening job exchange floors for both employers and employees. Many businesses have sent text messages to call for workers to return to Ho Chi Minh City for working.
Regarding social welfares for needy people in the city, Mr. Tan informed that by 5 p.m. of October 18, over five million residents had received the third financial support package, accounting for 77 percent of the 6.6 million people subject to the support package. The disbursement of the third financial support package continues to October 22.

Brands go green

More than 90 percent of domestic enterprises have had activities to convert to the circular economy model in various degrees, according to the result of a survey by the Vietnam Business Council for Sustainable Development (VBCSD) announced in early October this year, showing a positive signal in Vietnam's roadmap towards a circular economy.

The survey by the VBCSD under the Vietnam Chamber of Commerce and Industry (VCCI) was conducted from May to September on 100 medium and large-sized enterprises in the food and non-alcoholic beverage industry.

The representative of the VBCSD said that the circular economy is becoming an inevitable trend to meet the requirements of sustainable development in the context of increasingly degraded and depleted resources, polluted environment, and severe climate change. The circular economy contributes to minimizing the risks of overproduction crisis and resource scarcity, lowering production costs, and increasing the supply chain for businesses.

Mr. Fausto Tazzi, General Director of La Vie Company, Vice President of PRO Vietnam, said that La Vie Company and Nestlé Group members had committed to implementing plans to reduce the amount of virgin plastic in packaging, cut plastic waste at the source, and contribute initiatives to collect the same amount of packaging the company put on the market by 2025. This is one of the company's efforts to aim at a zero-waste future. At present, most of La Vie's products are fully recyclable. In early 2021, La Vie became the first mineral water brand in Vietnam to use bottles made from recycled plastic (rPET) that meets food packaging standards.

Similarly, Ms. Nguyen Thi Thu Hang, Chief of Public Affairs, Communications, and Sustainability for Coca-Cola Vietnam, said that the company targeted to collect and recycle each plastic bottle or soft drink can that is sold and use at least 50 percent recyclable material in the packaging by 2030.

Previously, within the framework of the "World Without Waste" strategy, many enterprises in Vietnam joined hands to establish the Packaging Recycling Organization Vietnam (PRO Vietnam). Enterprises also cooperated with the Centre for Supporting Green Development (GreenHub) to carry out the action network project to reduce, reuse, or recycle plastic waste to improve local recycling activities, ensuring three safety and practical criteria. This model can be replicated for domestic waste-collecting units and individuals. The project was implemented in Ha Long City in Quang Ninh Province and lately, in Can Gio District in HCMC.

Mr. Huynh Minh Nhut, Director of HCMC Urban Environment Company Limited, shared that the company and PRO Vietnam signed a memorandum of understanding on building a network for the collection and process of recycled waste from the domestic solid waste sorting program at the source. Accordingly, the network built by the two parties will collect and process recyclable waste to create new resources from trash, helping to reduce the volume of waste going to landfills, as well as carbon emissions, improving efficiency in environmental protection. The implementation of the above project is the foundation for establishing a market for waste recovery and recycling to make use of resources from waste to serve economic development and the construction of a circular economy. More importantly, it also shows the responsibility of the business community in joining hands to protect the environment with HCMC in particular and the country in general.

Currently, only 8.6 percent of output participates in the cycle. With this ratio, the demand for resource consumption in 2060 will double that of 2015, putting pressure on the environmental ecology. “Therefore, enterprises need to build a roadmap for circular strategy from a senior management perspective, following steps such as improvement in the production process, product, and business model, to bring many benefits not only in saving resources and protecting the environment but also in promoting economic growth and social benefits”, affirmed Mr. Brendan Edgerton, Director of Circular Economy at the World Business Council for Sustainable Development.

The economy will achieve a closed cycle with the overall and comprehensive participation of industries, professions, and production fields through information sharing, application of new business models, and combination of the supply chain to achieve scientifically calculated goals with the support from the legal system and management regulations from the Government. At that time, enterprises no longer have to consume a large amount of resources to achieve positive economic growth figures. At the same time, they will gain positive environmental and social benefits to comprehensively transform the production and consumption system to a new orientation, helping to minimize climate change, natural resource degradation, and escalating inequality.

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

VIETNAM BUSINESS NEWS OCTOBER 19

VIETNAM BUSINESS NEWS OCTOBER 19

Trade surplus expected to soar sharply in the last months of the year