VIETNAM'S BUSINESS NEWS HEADLINES JULY 13
Vietnam’s public investment estimated at VND156 trillion in first half
Vietnam’s public investment disbursement in the first half of 2020 was estimated at VND156 trillion (US$6.7 billion), according to the Ministry of Planning and Investment (MPI).
Less than one third of public investment allocated for 2020 has been disbursed.
The figure is equivalent to 33.1% of the target set by the National Assembly, higher than the 28.56% recorded during the same period in 2019.
The MPI said that disbursement of domestic capital was estimated at VND142 trillion (US$6.1 billion), while foreign capital disbursement is at VND5.7 trillion (US$250,000).
Disbursed capital from national target programmes reached VND7.5 trillion (US$324,000).
Four ministries and six provincial governments reported disbursement rates of over 50% while ten ministries have spent less than 5% of the capital allocated to them.
Hanoi promotes tourism via internet, foreign television networks
Chairman of the Hanoi People's Committee Nguyen Duc Chung has approved a promotion scheme aimed at boosting investment, trade, and tourism in Hanoi during the remainder of the year.
The move comes as part of efforts to restore the local and then international tourism markets. With the reopening of cultural spots and tourist sites, Hanoi is striving to welcome between 10 to 11 million domestic tourists during the last months of the year.
The capital city has gradually lifted travel restrictions and restored socio-economic activities following efforts to properly contain the novel coronavirus. A number of shops, street businesses and some non-essential services have been granted permission to open as normally.
Hanoi signed a US$4 million tourism promotion deal with CNN in a bid to popularize the capital’s image on social media and the popular cable news network during the 2019 to 2024 period.
According to the promotion scheme, Hanoi will continue to promote tourism activities on the Internet, globally known foreign television networks, smartphone applications, and through social media applications. The capital will also move to gradually develop information technology application systems used by the state management on tourism while also implementing smart tourism systems.
The Hanoi mayor asked relevant agencies to build and implement marketing schemes, while improving the promotion of products and tourism destinations, thereby gaining traction for a new brand identity for popular sites throughout the capital.
Activities will also be implemented to promote many of the country’s key tourism markets, with a focus placed on Hanoi in particular, at major tourism fairs in Japan, Europe, North America, and Southeast Asia
The capital will also utilise new marketing methods to attract tourists, who travel to the city for MICE, a tourism model that combines meetings, incentives, conferences, and exhibitions.
Three fulcrums to promote Vietnam’s growth post-pandemic
Encouraging innovation and training human resources methodically in collaboration with improving the infrastructure should be the three fulcrums to create a basis for Vietnam’s growth in the post-pandemic period.
This was stated by Prof. Philippe Aghion, former lecturer at Harvard University at the webinar titled “Post-Covid-19 global economic growth and policy implications for Vietnam” organised at the cutting-edge integrated operating centre of the Ministry of Planning and Investment.
Philippe Aghion said that France and numerous countries in Europe as well as the US are increasing the application of digital transformation and promoting innovation to expand trade relations with new partners as the pandemic prevents transportation between countries.
“Vietnam should not pay much attention to re-positioning the production chain because Vietnam works on this mission quite well. Now, it is important to continue to promote your strengths,” Philippe Aghion said.
The COVID-19 pandemic showed that numerous countries depend on raw materials while others focus on innovation. Thus, governments should have flexible policies to train human resources so that they can adapt to many sectors.
Responding to questions about the relocation of foreign investment from China and how the country can improve its position as well as join the digital transformation, Aghion said that Vietnam has great potentials and a premise to benefit in these areas. In addition, the country has reformed its policies numerous times to match international regulations.
“In my opinion, it is necessary to train labourers methodically and proactively to approach technology and machines imported from Europe,” he said.
“In general, the training programme of Vietnam’s education system is quite complete, so the important part now is to invest in Vietnam’s leading universities to open faculties relating to innovation with support from the government. In addition, academic freedom should be guaranteed to encourage inventiveness,” he said.
Last but not least, in order to recover economic growth and attract foreign investment, it is necessary to comply with international regulations.
Phu My Hung asks $75 million for help from IFC
The International Finance Corporation (IFC), a member of the World Bank Group, is providing a financing package of $75 million to Phu My Hung Development Corporation to help sustain its property development operations after COVID-19.
This bond is the first of IFC’s COVID-19 response projects in Vietnam. It comes under the Real Sector Crisis Response Facility, which will provide $2 billion globally to IFC’s existing clients in the healthcare, infrastructure, manufacturing, agriculture, and services industries to cope with the pandemic.
This investment will allow the company to extend financial relief to clients, suppliers, and contractors along its property value chain, helping preserve jobs and contributing to a resilient local economy.
“This funding will bolster Phu My Hung’s ability to cope with the challenges emerging from the COVID-19 pandemic, including demand and supply chain disruptions,” said Kyle Kelhofer, IFC country manager for Vietnam, Cambodia, and Lao.
Gary Tseng, CEO of Phu My Hung, shared that “local businesses are the primary engines of job creation, which drive the national economy. With the COVID-19 situation, IFC’s support will enable us to extend financial relief to our local clients.”
In the wake of COVID-19 impacts, IFC will provide $8 billion COVID-19 fast-track financing to support the private sector and preserve jobs across the world.
Last year, IFC provided around $75 million to Phu My Hung (by bonds) to expand its projects in Vietnam’s secondary provinces Hoa Binh, aiming to improve local residents’ access to quality housing as well as education and healthcare services.
Phu My Hung is a reputable real estate developer in Vietnam, supplying a lot of houses mainly in Ho Chi Minh City and a large number of leasing offices and retail stores for over 300 companies. The global health crisis has impacted most retailers and businesses, including renters, homebuyers, developers, and contractors.
Phu My Hung Corporation is a venture of Tan Thuan Export Processing Zone and Phu My Hung Asia Holdings [formerly Central Trading & Development (CT&D Group from Taiwan)] was established in 1993.
The corporation is the developer of Phu My Hung urban area in Ho Chi Minh City's District 7 on an area of 400ha, as well as the builder of the 18km-long Nguyen Van Linh Boulevard.
Recently, this corporation has been focusing on the real estate sector by acquiring the 212ha Sen Viet project in Long An province, the 406ha Sannam project in Hoa Binh, and the 198ha Hong Hac-Xuan Lam ecopark in Bac Ninh province.
Authorities ask LNG Bac Lieu power project to keep price at 7 US cent per kWh
The National Steering Committee for Electricity Development proposed the investor of Bac Lieu LNG-to-power project to keep the selling price of power at 7 US cent per kWh to save time in negotiating power purchase agreement (PPA).
The national steering committee asked DOE to stick to the power price at the LNG Bac Lieu project
To date, Delta Offshore Energy Pte., Ltd (DOE) was granted the investment registration certificate for the $4 billion Bac Lieu liquefied natural gas (LNG) power project with the capacity of 3,200MW. The investor started to build the feasibility report for the project and is working to complete the investment preparation within this year.
DOE selected Bechtel Group from the US as the strategic partner in charge of the engineering, procurement and construction (EPC) contract.
In addition, it had an official online working session for the first time with Electrivity of Vietnam (EVN) to discuss works related to the project in April with the target of signing the PPA before this October.
According to the investor’s plans, the first phase of the project with the capacity of 800MW is expected to start operation in 2024 and the construction of the entire project is expected to be completed in December 2027. The complex of LNG port and warehouse will be located at the coastal area of Bac Lieu, 35 kilometres from the power plant.
The investor wants EVN to issue guidance on the nation's power demand, the operation time, progress, and the connection method to the national grid, which will be the basis for technical design to serve for building the PPA contract.
Responding to DOE’s requirement, the National Steering Committee for Electricity Development proposed EVN to reach an agreement with the investor about the target and the progress of the project so that they can sign the framework agreement.
The committee noted in a report submitted to the prime minister that, “It is necessary to require the investor to keep its commitment about the selling price of 7 US cent per kWh to save time for negotiating the PPA."
At present, a series of investors expect to add their projects to the national power development plan in 2021-2030, with vision to 2045 (Power Plan VIII) but lack a framework on selling price. Thus, the National Steering Committee for Electricity Development asked the Electricity Regulatory Authority to complete the price framework for power plants using LNG in the third quarter of this year and submit it to the Ministry of Industry and Trade for consideration.
Rush of high-tech breeders expanding into Vietnam
Despite the risky nature of animal husbandry associated with diseases and other unpredictable factors, the sector continues to flourish in Vietnam even amidst the global health crisis.
A series of new breeding and processing facilities are popping up across Vietnam,Photo: Linh Le
Hung Nhon Group and Dutch group De Heus are currently developing a VND1 trillion ($44 million) high-tech agricultural complex in the Central Highlands province of Gia Lai.
Covering an area of 100 hectares, the complex will host a complete production chain, including breeding facilities for pigs, slaughter, and the manufacturing of organic feed and fertiliser meeting international standards. The entire complex will be designed using advanced agricultural technology.
Half of the facility will be used to breed around 2,500 pigs imported from the Netherlands. The remaining area is to serve the remaining components of the project.
In May 2019, both investors signed an MoU with Daklak People’s Committee to develop the DHN Daklak high-tech agricultural complex. The construction has been implemented on schedule and is expected to be completed in the fourth quarter of 2025. The planned complex in Gia Lai is similar to another one already based in Daklak.
The complex in Daklak includes an 80ha farm for breeding 2,400 imported from the Netherlands; a 30ha chicken breed area; and a 15ha plant for slaughtering and organic fertiliser production.
Asked about the wastewater treatment system, Dao Duy Bien, general director of DHN Daklak High Tech Agriculture Development JSC, told VIR, “We spent 5-10 per cent of the total investment capital building this system. The entire machine line and technology will be imported from Germany, Denmark, and the Netherlands.”
“Fertiliser manufacturing plants can help limit the discharge of waste into the environment. In addition, the treated water will be recycled thoroughly,” Bien said.
Following establishment of the Gia Lai complex, the two groups plan to develop further breeding facilities in Daklak, Kon Tum, and Lam Dong provinces.
Bien, who is also a member of Hung Nhon Group, told VIR that the products of these farms are expected to be exported to all of Southeast Asia. “De Heus and Hung Nhon aim to expand pig farming across five Central Highlands provinces over the next 5-10 years. These projects are hoped to turn the Central Highlands into a hub of pig farming in Southeast Asia,” Bien said.
In early June, one investment promotion and consultancy company began to survey possible investment destinations for a foreign partner to develop pig breeding and processing plants for export with a total investment capital of $1.5 billion.
According to its plan, the project would cover an area of over 1,200ha with six components, including a 30ha genetic centre, three breeding centres over 90ha, a cattle feed plant (10ha), three mixed processing plants (127ha), three pork processing factories (127 ha), and 43 pig breeding farms (860ha).
Meanwhile, C.P. Vietnam, Japfa, and Group JSC also plan to expand operations here. The groups confirmed that husbandry is one of the most risky sectors due to the possible impact of diseases. However, the continuous expansion of these groups in spite of all risks is showing that the cattle and poultry breeding sector offers huge profit. In recent times, these companies reported both strong revenue and profit despite the pandemic.
Dabaco, a multi-field group specialising in animal feed, cattle, and poultry breeding, is an example for the sector’s speed of growth. In the first half of the year, the group gained VND744 billion ($32.35 million) in profit, 27 times as much as in the year before and surpassing the annual plan by 63 per cent.
This year, the company targets to earn VND13.2 trillion ($574 million) in revenue and VND512 billion ($22.26 million) in after-tax profit. At the 2020 shareholders’ meeting two months ago, Nguyen Nhu So, chairman of the Board of Directors, stated that the group’s profit could well reach its charter capital of VND911 billion ($39.6 million) in the current market, and it is firmly on track to reaching the targets.
New ventures more pronounced in first half
The new investment wave from abroad caused by COVID-19 and US-China trade tensions has become more visible, with outstanding ventures funded from overseas being expanded in the first half of the year.
Multinational corporation Techtronic Industries (TTI), which is developing a $650 million plant complex in Saigon High-tech Park, recently met with more than 100 domestic suppliers to find a vendor for its project, which will focus on manufacturing hand-held cordless power tools and outdoor power equipment while being at the forefront of lithium-ion batteries, digitally-controlled motors and tools, and wireless applications.
Vietnam is very attractive for TTI due to its deep integration into the global market with its recent free trade agreements signed, especially the ASEAN-Hong Kong Free Trade Agreement which came into effect a year ago, and the new EU-Vietnam Free Trade Agreement.
According to Nate Easter, executive vice president of Global Sourcing and Outdoor Product Operations from TTI, domestic vendors would be an essential factor to ensure the success of its incoming complex, which is the second-largest plant of TTI’s global network, combined with a research and development (R&D) centre.
TTI expects to have an annual production value of $1.5 billion by the third year and achieve up to $3 billion by the sixth year. It also targets $1 billion in annual localised supply and expects to increase local suppliers from 80 now to 150 over the next few years. TTI was not the only company which has processed operationsin Vietnam in the first half of the year.
In February, HEINEKEN Vietnam also poured an additional $68.8 million into its factory in the southern coastal province of Ba Ria-Vung Tau.
The beer producer was green-lit by the local authorities to raise its investment capital from $312.5 million to $381.3 million.
With the additional funding, HEINEKEN Vietnam expects to increase the annual capacity of its factory in Ba Ria-Vung Tau from 610 million to 1.1 billion litres in 2020.
Meanwhile, in March, America’s Universal Alloys Corporation (UAC) held the inauguration ceremony for the first phase of an aerospace component factory in the central city of Danang. With registered investment of $170 million, the factory aims to manufacture and install aerospace components from aluminium alloys and composite.
It will be capable of manufacturing and assembling around 4,000 aircraft components, all for export. Once put into operation, it is estimated that annual export revenues will reach $25 million by 2021, $85 million by 2022, and $180 million after 2026.
UAC is a leading global manufacturer of aircraft components for aerospace companies such as Boeing, Airbus, Embraer, Bombardier, and their associated supply chains. This is its first facility in Vietnam and Asia as a whole to serve the global aerospace industry.
Last month Qualcomm Vietnam, a subsidiary of Qualcomm Technologies, Inc., officially opened an interoperability testing laboratory located in Hanoi, the company’s first R&D lab in Southeast Asia.
With these new facilities, Qualcomm Vietnam is further strengthening its commitment to the country and further enables local enterprises to innovate and deliver Vietnamese-made products.
In addition to that, Ba Ria-Vung Tau also granted approval decisions and investment licences to several projects, including those of Japan-based Seiko PMC Corporation ($28 million), SeAH M&H Vietnam ($35.3 million), and Arakawa Chemical Industries ($45.6 million).
According to Michael Kokalari, chief economist from Vinacapital, a new wave of foreign direct investment (FDI) into Vietnam is imminent. “This is being driven by global events, including the US-China trade war, the ongoing pandemic, and other factors,” Kokalari said in his latest statement released in June.
The amount and quality of this new wave of FDI are largely up to local policymakers, he added, because there are few countries in the world as intrinsically attractive to multinational manufacturers as Vietnam.
Kokalari cited that this next wave of FDI will have a bigger impact on Vietnam’s economy than previous inflows because multinationals now have an incentive to help local firms “move up the value chain”, in order to build supply chains in Vietnam capable of supporting those foreign-invested companies.
The EuroCham Whitebook 2020 released at the end of June stated that Vietnam’s stable macro-economic climate and single digits of inflation are increasing the confidence of investors in this country.
“Since becoming a member of the World Trade Organization in 2007, Vietnam has continued to reform its legal framework so that it is better aligned with global standards. As a result, the country has become more attractive to foreign enterprises and international investors,” stated the Whitebook.
In particular, Vietnam’s low cost of doing business, strong economic growth, and business-friendly economic environment make it an attractive destination for FDI, it added.
Nghe An conquers hearts of South Korean investors
Preparing complete industrial infrastructure in collaboration with offering particular incentives, the central province of Nghe An is rising as an attractive investment destination for foreign investors, especially those from South Korea.
In the framework of a conference themed on co-operation and development between the province and South Korea – which was part of a wider “Meet Korea 2020” event organised last week in Hanoi – numerous South Korean investors were highly appreciative of the investment environment in Nghe An.
Jun Hyunsoo, general director of export garment maker Sangwoo Vietnam Co., Ltd. said, “We studied the investment opportunities in the northern provinces of Phu Tho and Vinh Phuc. However, we selected Nghe An as the final destination because of its advantages in technical infrastructure and the licensing procedures, as well as the support from local authorities.”
Under the initial plan, Hyunsoo determined that it would take three years to complete the procedures for licensing and to move the plant into stable operation. “However, in reality it only took 10 months. The procedure is simple and clear, based on complying with government regulations, and the staff are professional. Especially, the province is willing to accompany Sangwoo Vietnam to deal with difficulties on time,” he said.
Nguyen Duc Trung, Chairman of the provincial People’s Committee, affirmed, “The province considers the South Korean business community an important partner and the backbone of the integration strategy of Nghe An. The province has made an effort to improve management quality, expand industrial infrastructure, and accompany investors.”
The provincial People’s Committee will urge localities to implement synchronised solutions to deal with investor difficulties by removing administrative bottlenecks for newly-registered projects, and supporting enterprises investing in infrastructure at industrial parks and clusters by accelerating land clearance and compensation in order to speed up the process.
Trung emphasised the important role of the conference, which is a bridge to connect provinces and enterprises and help the latter look for partners.
“Nghe An organises investment promotion events every February. However, this year’s event was cancelled due to the pandemic. Thus, this may be the first official investment promotion event held in the first half of 2020,” Trung said.
Aware of the importance of incentives in calling for investment, Nghe An offered massive incentives in terms of tariffs for enterprises when they invested in Dong Nam Nghe An Economic Zone.
Notably, the investor will enjoy a corporate income tax (CIT) exemption in the first four years and a 50 per cent CIT reduction will apply for the subsequent nine years.
A tax holiday and tax reduction will start at the first profit-making year or the fourth revenue-generating year, whichever comes first.
Regarding import tax, an exemption will be applied to machines and equipment which are used to create fixed assets. In addition, investors will enjoy a five-year exemption for materials and components of production that cannot be produced domestically.
Nghe An is a prime location for integrated logistics and transport in the country. It hosts Vinh International Airport with capacity of three million passengers, in collaboration with synchronous road infrastructure such as Highway No.1, National Road No.15, and Ho Chi Minh Highway.
One of Nghe An’s great benefits is the proximity to waterways. There are three existing ports and two deep seaports under development, namely Loc An International Port, Cua Lo International Deep Seaport, and Dong Hoi Deep Seaport.
Nghe An has recently become a top investment destination for both international and local groups. Among them are large ventures including a $1.2 billion dairy farm from TH Milk Food JSC, high-tech pig-breeding Nutri-Farm from Masan Group worth VND1 trillion ($43.47 million), some key hydropower plants, and four projects invested by FLC Group valued at VND11 trillion ($480 million).
Husbandry group Mavin, which committed to invest $80 million in four projects in the province, said that Nghe An has an ideal geographical position to develop agricultural projects, and also offers more incentives than other provinces.
Nghe An boasts 28 projects invested in by South Koreans with $176 million registered in sectors such as garments and textiles, and electronic components and parts assembly. According to the Korean Chamber of Commerce and Industry in Vietnam, an additional 30 South Korean enterprises are set to establish facilities in the province.
The province will prioritise investment into clean and green agriculture employing intensive farming while improving pharmaceutical products, coffee, rubber, and tea.
In addition, priority will also be given to projects on meat processing and animal feed production; investment in high-tech industries; supporting industries and mechanical manufacturing; and the production of new materials.
Vietnam is taking drastic action to fast-track Metro Line 1 in Ho Chi Minh City
Vietnam is ramping up efforts to uncork the bottleneck of slow capital disbursement in a bid to put Ho Chi Minh City’s Metro Line 1 into commercial operation by 2021.
Last Monday, Deputy Prime Minister and Minister of Foreign Affairs Pham Binh Minh chaired a meeting with municipal authorities to resolve obstacles around the disbursement of official development assistance (ODA) and concessional loans (CLs) in the city. At the meeting, the deputy prime minister has ordered ministries and agencies to speed up capital disbursement for Ho Chi Minh City’s first metro line, the Ben Thanh-Suoi Tien line.
Minh stated that it is crucial to remove the disbursement bottleneck for Metro Line 1 so that the project can be put into commercial operation in 2021. This can also help the municipal city to increase public capital disbursement.
Nguyen Thanh Phong, Chairman of Ho Chi Minh City People's Committee, pointed out some obstacles for the first metro line, especially the controversy in choosing between Japanese Yen and Vietnamese Dong to make payments. The city has sent three documents to the Ministry of Finance (MoF) and the Ministry of Planning and Investment (MPI) without receiving a response.
Another issue is related to advanced payment for construction contractors from the state budget. Due to slow responses from the ministries, the city has used its own budget to pay VND4.15 trillion ($180.43 million) to the contractors. If the amount is refunded to the city, it will help the city to boost its public investment disbursement.
On the same note, Bui Xuan Cuong, head of Ho Chi Minh City’s Management Authority for Urban Railways (MAUR) said that the 19.7km Ben Thanh-Suoi Tien line has reached 73.5 per cent completion, and the figure will reach 85 per cent by the end of this year. A total of 84.3 per cent of the work for the line’s Component 2 – the elevated sections and depots – has been finished.
To fast-track the progress, he proposed the MoF and MPI to define the value of ODA allocated to the project from the state budget in Japanese Yen. The government considers approving the remaining ODA capital for the project around ¥17.81 billion ($165.37 million). At the same time, MPI continues to disburse VND3.6 trillion ($155.5 million) allocated for the project as part of the 2016-2020 ODA budget for the mid-term.
In response to Ho Chi Minh City’s requests, Deputy Prime Minister Pham Binh Minh said that Ho Chi Minh City is home to many ODA-fund projects in Vietnam. Therefore, the slow disbursement of ODA loans in the city will affect the country’s overall disbursement progress. Among them, if we can remove the obstacles for Metro Line 1, it will help increase public investment disbursement in the city.
In 2019, the Government Office issued a letter of confirmation while the Ministry of Finance also agreed that loans will be paid in Japanese Yen. With regard to the advanced payment for contractors, the Ministry of Finance is expected to complete the refund for the municipal city in July.
“If the city does not make advanced payments, it will make project performance sluggish. Therefore, the city’s move is necessary to ensure the first line begins test runs in October last year and slated to be operational by the end of 2021,” said the deputy prime minister.
Vu Dai Thang, Deputy Minister of Planning and Investment, said that many ODA-funded projects have transformed the façade of the city, contributing to socio-economic development in the past years. Between 2016 and 2020, there are some obstacles in the disbursement and allocation of ODA fund due to the changes in legislation. Between 2018 and 2020, the new fund is limited.
However, he noted that MPI has developed a five-year development scenario and implemented the socio-economic development strategy 2021-2030, in which ODA and CLs play a very important role. In particular, MPI is determined to keep the first metro line on track without a shortage of capital like before. The ministry is proposing the prime minister to solve the issues to fast-track the disbursement of the first metro line project in the coming time to commence the commercial operation of the project soon.
Webinar seeks ways for firms of Vietnam, France to capitalise on EVFTA
A webinar on chances brought by the EU-Vietnam Free Trade Agreement (EVFTA) for Vietnamese and French businesses took place on July 8.
It was jointly held by the Ministry of Industry and Trade and France’s Ministry of Europe and Foreign Affairs.
As the EVFTA is due to take effect on August 1, the event aimed to provide French businesses with information on Vietnam’s trade and investment policies following the deal, as well as on the potential market with a population of nearly 100 million and the gateway to ASEAN.
Speaking at the event, Minister of Industry and Trade Tran Tuan Anh underlined that the Vietnam-France trade and investment ties have enjoyed favourable conditions after 50 years of the diplomatic relations and seven years of the strategic partnership, with economic ties as a pillar.
France is among leading partners of Vietnam as the fourth largest export market of the Southeast Asian country. The Vietnam-France trade and investment ties will turn over a new promising page to overcome challenges after the EVFTA take effects, he added.
He hoped to further cooperate with French partners in the fields of clean and renewable energy, high technology, agriculture, processing and manufacturing, among others.
The minister pledged that Vietnam will create optimal conditions in terms of investment climate and infrastructure for French companies to capitalise on benefits brought by the EVFTA.
Vietnamese firms are urged to improve business models and management to meet requirements and trends of the European market.
Statistics showed that two-way trade tripled to 5.3 billion USD in 2019 from roughly 1.6 billion USD 10 years ago, making France the third largest trade partner of Vietnam in Europe, only after Germany and the Netherlands.
As of May 2020, France had invested in 588 projects in Vietnam with a combined capital of 3.56 billion USD, ranking second among the European investors in Vietnam.
In the first five months of this year, export-import value of the two nations slipped 18.66 percent year-on-year to 1.77 billion USD due to the impact of COVID-19. Vietnam shipped products worth 1.2 billion USD to France in the period.
Adjustments to eastern section of North-South Expressway discussed
Prime Minister Nguyen Xuan Phuc chaired a meeting of the Cabinet on July 8 to discuss the implementation of the National Assembly (NA)’s resolution on adjustments to the plan for investment in the construction of three sections of the North-South Expressway in the 2017-2020 period.
Under NA Resolution No 117/2020/QH14 issued on June 19, 2020, the legislature decided on the public-private partnership (PPP) investment form for three component projects of the North-South Expressway: Mai Son - National Highway No 45, Vinh Hai - Phan Thiet, and Phan Thiet - Dau Day.
Attendees at the meeting agreed on the principle of authorising the Minister of Transport to decide upon investment-related issues for the three projects.
PM Phuc asked the Ministry of Transport to coordinate with other ministries and sectors to promptly complete and gather opinions for a draft decision on the realisation of Resolution 117, so the document can be issued on July 9.
He underscored that the ministry should work harder so that the first bidding package of the three projects can be launched in late August.
According to a report from the Ministry of Transport, 81.3 percent of site clearance has been completed in the Mai Son-Highway 45 project, 95 percent in the Vinh Hai - Phan Thiet project, and 76.8 percent in the Phan Thiet - Dau Day project.
The eastern section of the North-South Expressway runs through 13 cities and provinces, starting from Nam Dinh in the north and ending in Vinh Long in the Mekong Delta. Total investment for the 654-km route is expected to top 118.7 trillion VND (5.1 billion USD).
The North-South Expressway is a key national project carried out under Resolution No 52/2017/QH14 dated November 22, 2017.
On the same day, meeting participants discussed issues relating to the Ben Luc - Long Thanh Highway.
Northern Power Corporation reports production rise amid difficulties
Despite the difficulties posed by extreme weather such as hailstorm, whirlwinds and storm as well as and the COVID-19 pandemic, the Northern Power Corporation (EVNNPC) enjoyed a year-on-year rise of 4.86 percent rise in commercial power production in the first half of 2020, reaching 34.5 billion kWh.The figures were reported to a meeting the company held in the northern province of Quang Ninh on July 8 to review its operations in the first half and sketch out plans for the remainder of the year.
According to EVNNPC General Director Do Thi Nguyet Anh, it led other Electricity of Vietnam (EVN) corporations in power production during the period, but the result was still below its target.
Since the beginning of this year it has provided middle-voltage power to 909 customers, with an average time for processing procedures of 4.65 days; 2.35 days less than in EVN regulations and 0.35 days less than what the corporation itself targeted.
In February alone, its commercial power output picked up 11.04 percent year-on-year to more than 5.15 billion kWh, despite rampant COVID-19 outbreak.
In the month, EVNNPC began supplying medium-voltage power to 123 new customers. It took the firm an average 5.15 days to handle relevant procedures, down 1.85 days as stipulated.
By simplifying procedures, companies under the corporation also improved their power access index. Procedures and process were made public via many online channels, making it easier for customers to request middle-voltage power services.
In the past six months the EVNNPC received 197,038 requests for power services, including 16,194 sent through the national public service portal. It also met all 14 customer service requirements set by EVN.
The ratio of customers paying power bills via non-cash methods reached 52.11 percent - higher than the target assigned by EVN by 2.11 percent.
As of June 30, the corporation had seen 2,700 customers installing rooftop power with a total capacity of 40.3 MWp. In the first six months combined, about 7.10 million kWh of power was generated for the national grid from this source.
At the same time, up to 9.89 million customers enjoyed the firm’s power price and power bill reduction with a total pre-tax amount of 2.34 trillion VND.
Meanwhile, in June, the corporation launched 12 projects, and put into operation nine others. In the first half it began construction of 37 of 65 works, or 56.9 percent of the annual target. It put 31 of 81 works into operation, fulfilling just 38.2 percent of the goal for the year as a whole due to difficulties in site clearance and the COVID-19 pandemic.
According to EVNNPC General Director Do Thi Nguyet Anh, over the remainder of the year the firm will prepare capital to invest in the power grid, along with a list of items for investment, in order to be prepared for the foreign investment wave predicted to flow into Vietnam.
It will also speed up projects and ensure commitments between the sector and localities and customers are met.
As a subsidiary of the state power utility EVN, the Northern Power Corporation was founded in October 1969 as the Power Company and is now managing the power systems in 27 provinces and cities in the northern and north central regions.
The company is operating the largest power system among EVN’s five power distribution corporations with 254 110-kV substations with a total power of 19,000 MVA and nearly 9,000 kilometres of 110-kV transmission lines.
The company is supplying over 70 billion kWh annually to over 11 million households.
With its significant contributions to socio-economic development, EVNNPC has been awarded the Labour Order, first class./
Long An speeds up public investment projects
The Mekong Delta province of Long An is speeding up the disbursement of public funds to ensure the construction progress of infrastructure projects.
Tran Van Can, Chairman of the provincial People's Committee, said the total public investment capital disbursed for projects in the first six months was nearly 2.55 trillion VND (109 million USD), or 41.7 percent of the plan.
The province has faced difficulties in the disbursement of public funds for projects. Its budget is limited but the investment need is huge, which has led to a shortage of capital.
The province has called for more funds from the private sector and more public-private partnerships to invest in infrastructure projects.
According to the Ministry of Planning and Investment, in the January-June period, disbursement of public investment amounted to nearly 156 trillion VND (6.73 billion USD), fulfilling 33.1 percent of the plan set by the National Assembly and the Prime Minister, higher than the 28.56 percent recorded in the same period last year.
Four ministries and central agencies, and six localities recorded over 50 percent of disbursement.
Meanwhile, disbursement of under 5 percent was seen in 10 ministries and central agencies.
Binh Duong posts 2.6bn USD trade surplus in H1
The southern province of Binh Duong enjoyed a trade surplus of 2.6 billion USD in the first half of 2020, according to the provincial statistics office.
Its export turnover hit 11.9 billion USD, a year-on-year increase of 0.4 percent, while it purchased 9.4 million USD worth of imports, up 4.2 percent.
The export of wooden products, deemed among the spearhead sectors in Binh Duong, surpassed 1.7 billion USD in the period, up a mere 0.6 percent year-on-year but representing the lion’s share of the province’s export revenues.
Its garment sector earned 1.2 billion USD from exports in the first six months, for a year-on-year increase of 0.6 percent.
Meanwhile, footwear exports to the US and Japanese markets are projected to bounce back in the post-pandemic period.
Companies are therefore urged to seize the opportunities to win over more customers and bolster production and exports once the pandemic is fully controlled.
Most local businesses have resumed operations, even though many factories face material and order shortages.
Binh Duong’s gross regional domestic product (GDRP) rose 6.73 percent in the first half, while its index of industrial production was up 6.4 percent year-on-year.
First Vietnamese company receives HSBC green loan
The Duy Tan Plastics Corporation and HSBC Vietnam on July 8 signed a green credit deal to build a factory producing renewable plastics.
Some 60 million USD will be allocated in the first phase of the project.
This is the first green credit from HSBC to a Vietnamese company, sourced from 100 billion USD the bank has committed to sustainable investment around the world to 2025.
Stephanie Betant, Country Head of Wholesale Banking at HSBC Vietnam, said the deal between HSBC and Duy Tan aims to reach the shared goal of sustainable financial growth in Vietnam.
Le Anh, Marketing Director at Duy Tan, said the factory, which will have an estimated capacity of producing 100,000 tonnes of products per year, will be the first in Vietnam to apply “bottles to bottles” renewable technology.
The green loan is being implemented in tandem with the national strategy on green growth of the Vietnamese Government and the green bank development plan of the State Bank of Vietnam.
PVEP’s oil & gas output surpasses six-month target
The PetroVietnam Exploration Production Corporation (PVEP) has reported an oil equivalent output of 2.01 million tonnes in the first half of 2020, 4 percent higher than its target.
The yield fulfilled 53 percent of the goal set for the entire year.
Of the total, the production of crude oil/condensate and natural gas stood at 1.42 million tonnes and 589 million cubic metres, 4 and 1 percent higher than targeted, respectively.
According to PVEP President & CEO Tran Quoc Viet, despite the high output, falling global oil prices coupled with the COVID-19 pandemic have hindered the company from achieving its financial targets for the period.
To meet the yearly goal, PVEP said it will continue optimising exploitation output, cutting cost, enhancing resources’ quality, and applying technologies in production, among others.
EVFTA enhances price competitiveness for Vietnamese goods
With strong commitments aimed at opening up new markets, the European Union-Vietnam Free Trade Agreement (EVFTA) is expected to increase the price competitiveness faced by many Vietnamese goods when attempting to make inroads into the demanding EU market.
The EVFTA is anticipated to provide a boost to the country’s economic growth, in addition to opening up opportunities for local businesses to penetrate the EU, a potential market of 508 million consumers with a GDP of US$18,000 billion.
Ha Duy Tung, Director of the Department of International Cooperation under the Ministry of Finance, said the country has implemented a series of FTAs with a range of markets since the 1990s. The EU alone is a huge market for key Vietnamese export products as it will be eliminating more than 85% of tariff lines as soon as the trade deal comes into effect.
Tung noted that the EVFTA represents a very high level of commitment in comparison to other trade deals as the majority of key Vietnamese export items such as leather, footwear and garments have a tariff reduction roadmap implemented within a seven-year period.
Ngo Chung Khanh, Deputy Director of Multilateral Trade Policy Department under the Ministry of Industry and Trade, said that the trade pact is predicted to help raise the country’s export turnover to the EU by 42.7% in 2025, growing to 44.37% by 2030.
Moreover, the EVFTA is poised to contribute to raising the country’s GDP by an average of between 2.18% and 3.25% annually in the 2019 to 2023 period, 4.57% and 5.30% in the 2024 to 2028 period, and 7.07% and 7.72% in the 2029 to 2033 period.
Khanh went on to emphasis that, although the EU is currently one of the largest export markets for local goods, the country’s market share in the bloc remains modest. Explaining the reason, Khanh said the competitive capacity of Vietnamese goods, especially their prices, is still limited.
With strong commitments to the EU market set to come into effect, the trade deal is expected to increase the price competitiveness for domestic goods, helping to boost mutual trade relations and expand markets for Vietnamese products.
In addition, Khanh said Vietnam is forecast to attract foreign direct investment (FDI) from the EU thanks to the former’s commitment to creating a more conducive investment climate.
The EU is predicted to pour investment into a number of areas that are its strengths, such as services, finance, automobiles, manufacturing and processing, information technology, high technology, processed agricultural products, and foodstuffs in the near future, Khanh added.
Sharing the view, Nguyen Hai Minh, Vice President of the European Chamber of Commerce in Vietnam (EuroCham), stated that FDI will keep pouring in, but the shifting of investment flows, especially among EU businesses, is unlikely to take place as fast as expected.
“I have met many EU businesses, who are both operating and not operating in Vietnam, and found that they are exploring investment opportunities in Southeast Asia and beyond,” said Hai. “The problem is that they have yet to decide on which market to invest in. I think Vietnam is one of the primary options, but the investment shifting process will take time.”