vietnam economy,Vietnam business news,latest business news in vietnam

Members of the Vietnam Automobile Manufacturers’ Association (VAMA) sold 24,002 automobiles in June, up 26% compared to the previous month but down 13% year on year.

According to the association, the highest rise was seen in sales of passenger cars at 35% to 17,584 units, followed by special-use cars with 18% to 309 units, and commercial car at 5% to 6,109 units.

VAMA commented that the increase manifested signs of recovery of the automobile market after COVID-19 pandemic.

In the month, 15,874 domestically–assembled automobiles were sold, up 43%, along with 8,155 imported units, a rise of 21% over the previous month.

In the first six months of 2020, VAMA member companies sold 107,183 automobiles of all kinds, down 31% year on year, with sharpest fall recorded in sales of special use cars at 40%, while sales of passenger cars dropped by 32% and commercial cars 25%.

However, experts held that the figures do not show the whole market situation as they did not include sales of many brands that are not members of VAMA such as Audi, Jaguar Land Rover, Mercedes-Benz, Subaru, Volkswagen, Volvo and TC Motor.

In June, TC Motor sold 5,613 automobiles, while VinFast also sold 2,170 units.

Experts also predicted that the reduction of 50% of registration tax for domestically-assembled automobiles and promotion programmes in the coming months, the automobile market will further expand.

EVFTA: Customs sector pledges to facilitate clearance

The customs sector has committed to creating optimal conditions for local businesses to enjoy when conducting customs clearance procedures once the European Union-Vietnam Free Trade Agreement (EVFTA) comes into force on August 1, says Deputy General Director of the General Department of Vietnam Customs Luu Manh Tuong.

Tuong goes on to emphasize that the customs sector has been active in simplifying administrative procedures and fine-tuning legal institutions to contribute to improving the nation’s business climate, enhancing the competitiveness of businesses as well as the wider economy. 

It has deployed a number of major schemes aimed at supporting the business community, improving the cross-border trade transaction index, and boosting inspection in an effort to create favourable conditions for local enterprises, Tuong notes.

Nguyen Hai Minh, Vice President of European Chamber of Commerce in Vietnam (EuroCham), believes European financiers are currently keen on Vietnam thanks to several crucial factors in attracting investment. They include the upgrade of infrastructure, along with improvements to both the overall human resources quality and investment climate, especially the simplification of administrative procedures for customs services.

Minh states that the EuroCham has highly appreciated Vietnam’s administrative procedures reforms in recent years, particularly regarding the tax and customs sectors, which have been at the forefront of national reforms over the course of the previous five years.

Most notably, customs clearance times have been significantly reduced, therefore allowing firms to save a lot of time when applying for customs services.

According to Minh, the EuroCham has deployed numerous activities in collaboration with the General Department of Vietnam Customs, such as organising seminars, training, and dialogues with customs leaders, thereby removing hurdles that exist for enterprises.

A study carried out by the Ministry of Planning and Investment shows the EVFTA is anticipated to increase the country’s exports to the EU by about 20% during the remainder of the year, and the figure is expected to continue to see an increase of 42.7% by 2025 and 44.37% by 2030.

The trade deal is therefore poised to increase Vietnamese GDP at an average of 2.18% to 3.25% in the 2019 to 2023 period, between 4.5% and 5.3% in the 2024 to 2028 period, and between 7.07% to 7.72% in the 2029 to 2033 period.

Russian firms urged to set up pharmaceutical ventures in Vietnam: meeting

Russia’s pharmaceutical companies should consider setting up ventures in Vietnam instead of only focusing on exports, heard a virtual meeting held on July 10 on potential for the Vietnam-Russia trade and economic cooperation after the COVID-19 pandemic.

At the event, Executive Director of Russia’s Union of Professional Pharmaceutical Organisations (SPFO) Liliya Titova stressed a bright prospect for Russia’s pharmaceutical products in the Asian market, especially Vietnam.

The total imports of pharmaceutical products to the Southeast Asian nation is estimated at 7 billion USD each year. Of the figure, products of Russia account for about 9 million USD, Chief Representative of the Russian Trade Office in Vietnam Vyacheslav Kharinov noted.

He added that the two countries have devised a plan to approve an intergovernmental agreement on recognising each other’s pharmaceutical products, creating favourable conditions for Russia's pharmaceutical products to access the Vietnamese market.

Echoing Titova’s views, he urged Russian businesses in the field to pay heed to forming ventures in Vietnam and pointed out that most of the raw materials are from abroad, offering cooperation chances for the Russian firms.

Statistics from Russia showed that the country’s exports to Vietnam doubled to 150 million USD in the first four months of 2020 compared to the same period last year. Of the number, pharmaceutical products to Vietnam made up for 15 percent of Russia's exports in the chemical industry.

Mutual support needed to help Vietnamese firms in Laos remove hurdles

Laos and Vietnam are set to permit the resumption of an air route between the two countries while simultaneously offering support for enterprises that have been affected by the novel coronavirus (COVID-19) epidemic and attempting to iron out snags that occur in production and business.

Vietnamese Ambassador to Laos Nguyen Ba Hung chaired a seminar on July 12 for the Vietnamese business community based in Laos with the aim of devising solutions aimed at removing challenges and obstacles that epidemic-hit firms suffer from as a means of helping them stabilise their production and business. 

During the seminar, Ambassador Hung offered insights on a range of important information regarding the impact of the COVID-19 epidemic in terms of both the regional and global economic situation. Indeed, he provided specific information concerning the economies of the two nations, as well as economic, trade, and investment relations between the pair.

The Vietnamese diplomat presented a number of major proposals that could be implemented in the near future upon the two governments easing regulations on epidemic prevention and control. This includes the resumption of an air route between the two countries and reopening international border gates to allow both Vietnamese and Laotian citizens to commute for the purpose of doing business.

He also touched upon some of the difficulties facing local businesses that are in the process of investing and operating within Laos in the context of negligible support provided by the Laotian Government.

This includes the slow-paced implementation of post-epidemic economic recovery policies, along with a range of mechanisms and schemes that have failed to encourage foreign investors, including Vietnamese enterprises.

Ambassador Hung highlighted the importance of offering mutual support, sharing various information, and detailing experience among the business community in this challenging period. These efforts must be initiated to change the way business activities are managed, to take full advantage of Industry 4.0 developments, as well as recognising shifts towards a digital economy. 

With regard to the medium and long term, when Laos finishes its transportation infrastructure along its North-South and East-West corridors to connect China, Laos, Vietnam, and Thailand, it will open up an array of new investment opportunities, meaning it is the responsibility of firms to be fully prepared.

Business representatives present at the seminar raised a number of difficulties and concerns relating to production and business activities in Laos, especially with regard to the period of being adversely affected by the epidemic. They underlined the necessity of being flexible and adaptable to overcome difficulties through appropriate labour assignment, improving corporate governance efficiency, maintaining production activities, in addition to ensuring jobs and income for workers.

Despite this, labour-intensive agriculture, rubber plantation, and processing enterprises must remain flexible when it comes to applying regulations on epidemic prevention and control measures, with both Vietnam and Laos recording no new COVID-19 cases within their respective communities for approximately three months.

Duong Dinh Bang, head of the Representative Office of the Vietnam Rubber Industry Group in Laos, suggested the two governments move to allow employees from firms to enter Laos and subsequently undergo quarantine at their businesses, providing they fully comply with epidemic prevention regulations as a way of saving costs. This will create favourable conditions for the import of equipment used in construction projects and exports activities.

Tea businesses need restructuring to add value

The Government should build corporations with financial resources to help the domestic tea industry add value, branding and sales, said Chairman of Vietnam Tea Association Nguyen Huu Tai.

Tea is one of the agricultural commodities greatly affected by the COVID-19 pandemic. In the first five months of this year, tea exports reached about 46,000 tonnes, worth about US$72 million, down more than 10% in value compared to the same period in 2019.

Tai said traditional markets of Vietnam such as Taiwan (China), Pakistan and Russia were closed. In other markets, businesses could not sign new contracts, while previously signed contracts now would require deep discounts, delays to delivery times or had been cancelled.

“The global COVID-19 pandemic has put many domestic tea producers in a tough situation as they have to choose between restructuring or leaving the industry,” Tai said.

According to the prediction of the East Africa Tea Trade Association, world tea prices will fall in the near future, while restrictions on shipping of goods will reduce demand for tea in many countries. This will cause difficulties for the export of Vietnamese tea.

Long Dinh Joint Stock Company in the Central Highland province of Lam Dong has 50 hectares of high-quality tea certified for export. Each year, more than 90% of the company's products are exported to Taiwan as raw materials at low prices.

But Tran Phuong Uyen, the company’s Deputy Director, told nhipcaudautu.vn that the company’s export volume of raw tea decreased by 30% in March compared to previous months.

“To make a change, we are stepping up the restructuring of markets, targeting more premium products through the production of organic tea (True Organic) for domestic consumption,” Uyen said.

She said the company had so far sold three tonnes of finished organic tea. It currently suffers losses but still maintains its product prices so that consumers gradually get used to organic products.

About 90% of domestic tea consumption comes from small establishments with unstable quality. Vietnamese tea businesses have created brands, such as Cozy, Phuc Long, Cau Tre, Cau Dat and Vinatea. Although there have been many more attractive product lines, Vietnamese tea businesses are still struggling to find ways to bring products to consumers.

Chairman Tai said the Government’s policies have only focused on tea production development rather than consumption, so many producers have sold raw tea to businesses, and are not interested in selling directly to customers.

“Meanwhile, it is not easy for Vietnamese businesses because the cost to open a tea distribution network is three times higher than that of a production factory,” Tai said.

Tea production in Vietnam has returned to normal, so output will not be affected by the pandemic. The major tea exporting countries such as India, Kenya and Sri Lanka are still in the stage of disease control, so their harvesting and cultivation activities are restricted, affecting tea production.

Insiders have said that the coronavirus pandemic is an opportunity for many tea companies to change and improve product value instead of chasing output. Most Vietnamese tea has been exported as raw materials, which are then processed and packaged for consumption in the local market or exported to a third country. Vietnamese tea only accounts for about 5-20% of the finished product value, while brands usually account for 40-60%. This is why Vietnam is among the countries with the lowest tea export prices in the world.

Domestic enterprises need to focus on investment in improving quality, raising export prices, and especially increasing price for tea growers to help them improve living standards.

Dong Nai Province to expand industrial zones

Despite COVID-19, foreign direct investment has continued pouring into Dong Nai Province, which plans to expand its industrial zones as space in existing IZs is nearly full.

Cao Tien Sy, head of the Dong Nai Industrial Zones Authority, said that as of the end of June, the authority had granted investment certification for 40 new FDI projects worth a total of US$168 million. Fifty-three existing projects also registered more capital of $479 million.

The province this year has attracted FDI totally worth $647 million, which is 60 per cent of the year’s target, Sy said.

More FDI and domestic businesses have been increasing investment and expanding their projects year-on-year at the province's industrial parks, he said, adding that many FDI companies are focusing on Viet Nam because of its membership at many free trade agreements.

Most of the new projects in the province operate in sectors in which Dong Nai is encouraging more investment. Twenty-two of them are from the supporting industry, and have their capital investment accounting for 72,63 per cent of the total new investment.

The province has 32 industrial zones covering over 10,240ha, with one zone not yet in operation.

Twenty out of 31 industrial zones are nearly full, Sy said. The province is planning to expand three of its industrial zones namely Dau Giay by 75ha, Long Khanh by 500, and Tan Phu by 170.

Cities and regions are also proposing building eight more industrial zones, which would increase the amount of land for the zones by more than 5,000ha.

The province has over 1,100 FDI projects with a total of $954 million of registered capital, making it among the top six provinces in terms of FDI.

Numerous ongoing national infrastructure projects such as Long Thanh international airport and the Vung Tau - Bien Hoa railway and expressway are contributing to Dong Nai's attractiveness as an investment destination.

State needs solutions to reduce logistics cost for farm produce

The State should develop solutions to reduce high logistics costs in trading agricultural products to improve the competitiveness of Vietnamese farm produce on the market, according to experts.

The logistics costs have accounted for 12.2 per cent of seafood product value, 19.8 per cent of rice product value and 29.5 per cent of fruit and vegetable value, Nguyen Duy Minh, vice chairman and general secretary of the Viet Nam Logistics Business Association (VLA), said.

Especially, Minh said the transportation cost has accounted for 61 per cent of total logistics cost for fruit and vegetable products, followed by handling costs with nearly 20 per cent of the logistics costs.

At an online conference on the logistics costs in the value chain of Vietnamese agricultural products held on Thursday in Ha Noi, the experts said that the factors behind the high logistics cost included high transportation cost, high fees and charges of foreign shipping companies and restrictions on ports and infrastructure.

Besides that, new rates of infrastructure fees set by localities and the implementation of special inspection or quarantine quality inspection were also reasons for the high logistics costs, they said.

Le Van Quang, chairman of the Minh Phu Group Joint Stock Company, said that the transportation cost of a shrimp container was only VND41 million from Viet Nam to the US and VND16 million from Viet Nam to Japan but this cost was VND80 million from HCM City to Ha Noi.

Similarly, the transportation cost for a shrimp container from HCM City to a border gate with China in the northern region was VND100 million, while a shrimp container shipped from Ecuador to China was just half, even though the distance between Ecuador and China is far greater than from Viet Nam.

Quang said that the cause of this was too many toll stations on land. Therefore, the State needs to have solutions to cut domestic transportation costs.

Tran Thanh Hai, deputy director of the Import and Export Department under the Ministry of Industry and Trade, said that value of agricultural products is low while transportation costs are high. Besides that, agricultural products need cold storage and professional transport vehicles. These two factors have also put great pressure on logistics activities for agricultural products.

He said the high logistics cost has caused weak transportation infrastructure and uneven distribution of ports. The central region has low demand for transporting goods but has many ports while the Mekong Delta region has high demand for goods transport but lacks ports.

In addition, there are many problems in the connection between transport vehicles and logistics centres and between seaports.

To solve those problems, Hai said an important solution is investment in developing large agricultural logistics centres to ensure the quality of farm produce in storage.

Besides that, the State needs to put more investment in improving transport infrastructure on waterways, including ports, because transportation is cheap, he said.

Minh said the State should plan regional logistics centres to create favourable conditions for production and trading of farming products. Technology also has an important role in traceability, monitoring the quality of goods and connecting transport companies online.

Director of the Department of Agricultural Product Processing and Market Development Nguyen Quoc Toan said the planning of developing logistics centres according to regions would promote linkages between localities. 

Binh Duong first half trade surplus hits $2.6b

The southern province of Binh Duong recorded a trade surplus of US$2.6 billion in the first half of the year, according to its Department of Statistics.

Its exports topped US$11.9 billion, marginally up year-on-year, while imports rose 4.2 per cent to $9.4 billion.

Wood products topped the export list, increasing by 0.6 per cent to $1.7 billion.

According to the Binh Duong Wood Processing Association, the global COVID-19 outbreak has affected the wood industry in the form of lack of timber supply and sharp fall in demand for furniture.

But the industry has managed to overcome these problems thanks to the increased domestic supply of raw materials and diverse, unique and innovative products and improved quality that sustained exports.

The garment and textile sector saw exports increase by 0.6 per cent to $ 1.2 billion.

Footwear exports to the US and Japanese markets are projected to bounce back in the post-pandemic period.

Companies need to seize the opportunities to bolster production and exports once the pandemic is fully controlled, experts said.

Other industries have gradually recovered, though many factories still face difficulties like lack of funds and new export orders due to the slow recovery of export markets.

Binh Duong’s GDP grew by 6.73 per cent in the first half, while its industrial production was up 6.4 per cent. 

MoIT aims for production growth in second half of year

The Ministry of Industry and Trade (MoIT) will focus on removing difficulties in industrial sectors in the second half of this year, especially the processing and manufacturing industry, to expand production and business.

It plans to work closely with foreign-invested firms such as Samsung and Toyota and search for local producers to make raw materials and components to replace imports.

The ministry has suggested localities develop material production regions, industrial parks and economic zones to ensure they have raw materials for domestic production.

It will also propose preferential policies for the textile and footwear industries as well as other sectors that have suffered greatly from the COVID-19 pandemic. It will build incentive mechanisms for the production of materials for those sectors.

The MoIT predicts that in the second half of the year, the domestic electronics industry will still be greatly affected by the pandemic that could reduce demand for electronic products in the US and Europe.

Samsung Vietnam is expected to reduce its export target to about US$45.5 billion, lower than the export value of $51.38 billion in 2019.

However, the ministry observes that many countries worldwide have highly appreciated Viet Nam's disease control. This is considered an important factor to attract more foreign investment into Viet Nam after the pandemic ends. That will help Viet Nam boost growth in production and exports in the future.

The MoIT reported the index of industrial production (IIP) in June increased by 10.3 per cent compared to the previous month. Of which, the IIP rose by 13 per cent in the processing and manufacturing sector, 6.5 per cent in the electricity production and distribution, and 4.4 per cent in water supply and wastewater treatment compared to the same period in 2019.

Meanwhile, the index of the mining industry in June decreased by 3.7 per cent from a year prior.

During the first six months of this year, the national IIP increased by 2.8 per cent compared to the same period last year. The index surged by 4.6 per cent for the processing and manufacturing industry and 2 per cent for the electricity production and distribution.

There were many difficulties in importing material from China in the first six months, especially in the electronic sector, the ministry said, but with a reasonable balance of production and business, the electronic sector gained growth in the IIP and exports compared to the same period of 2019.

The IIP for electronic products, computers and optical products in June increased by 29.3 per cent over the previous month and by 21.7 per cent over the same period last year.

This index for the first six months rose by 9.8 per cent year-on-year. It was higher than the growth rate of 3.5 per cent in the first six months of 2019. 

HCM City manufacturing grows by 1.18 per cent in 1st half

HCM City’s industrial production in the first six months likely grew by 1.18 per cent year-on-year, according to its Department of Industry and Trade.

The four key industries of electronics, food and beverages, chemicals – rubber – plastic, and mechanics are likely to expand by 2 per cent.

The electronics industry is expected to grow at 17.7 per cent, the chemical industry by more than 9 per cent and food and beverages at 0.44 per cent.

 

The mechanical industry seems set to shrink by 12.1 per cent.

The electronics industry is seen to benefit from a strong and steady increase in domestic demand.

According to a report by the HCM City Computer Association, during the social distancing campaign, the demand for computer products and internet services increased sharply to serve the needs of people studying and working from home.

Exports of food and beverages decreased, but domestic demand increased sharply.

The department's statistics show that retail sales of food and beverage in the first half topped VND68.55 trillion, up 11.2 per cent.

A survey by the HCM City Statistics Department of more than 16,300 enterprises in various industries found half of those affected by the pandemic saying the consumer market had shrunk.

More than half of State-owned enterprises and 48.45 per cent of foreign enterprises that regularly export said they have been unable to do so this year. 

VPI and IDT to develop new products for petroleum projects

The Viet Nam Petroleum Institute (VPI) and the Institute of Drilling Technology (IDT) on Thursday signed an agreement to cooperate in manufacturing and using products from scientific and technological research for oil and gas projects in Viet Nam.

According to the agreement, VPI will provide testing equipment and consulting services on developing products and technological solutions, and send experts to IDT to produce and commercialise those products and services.

VPI and IDT will enhance exchange of experience, product information and technology to control the quality of those products and services.

The two sides will prioritise research and application of products and services for the oil and gas exploitation field and solutions to increase exploitation output.

A VPI representative said that IDT is one of its domestic and foreign partners to develop new technology products and solutions in the 2020-25 period for improving the operational efficiency and competitiveness of Viet Nam's oil and gas industry. 

Indonesia’s retail sales plunge to lowest point since 2008

Indonesia’s retail sales index shrank by 20.6 percent in May, the biggest reduction since 2008, mostly due to plunging clothes sales and cultural and recreational spending, according to a survey by the Bank Indonesia (BI).

The contraction was deeper than the 16.9 percent recorded in April, following the introduction of large-scale social restrictions (PSBB) in April and May to curb the spread of COVID-19.

The central bank projected the drop to slow to 14.4 percent in June thanks to higher sales of food and beverage, as well as vehicle fuels, as the country gradually reopened its economy.

According to the survey, spending on clothes and recreational services in May fell by 74 percent and 53.7 percent on year, respectively.

The Indonesian government expects full-year growth to reach only 1 percent under a baseline scenario or to contract 0.4 percent under a worst-case scenario.

Indonesia recorded its lowest GDP growth in 19 years in the first quarter at 2.97 percent, with the COVID-19 outbreak pressuring people to stay at home, thereby disrupting economic activity.

The central bank projected the retail sales index in the second quarter to contract 17.3 percent annually, compared to the contraction of 1.9 percent in the first quarter.

Motorbike sales drop 30.7 percent in Q2

The Vietnam Association of Motorcycle Manufacturers (VAMM) has said its five members, namely Honda, Piaggio, Suzuki, SYM, and Yamaha, sold 518,920 motorbikes in the second quarter of 2020, a year-on-year drop of 30.77 percent.

Honda Vietnam is making up 80 percent of the sector’s market share with the most diverse range of products.

Honda said in June alone, it sold 174,755 motorbikes, down 3 percent compared to the previous month and 4 percent year-on-year.

The five VAMM members are manufacturing and distributing about 100 models of motorcycles with prices ranging from tens of millions of VND to over one billion VND each.

Other domestic brands present in Vietnam’s motorcycle market are VinFast and Pega, as well as foreign brands such as Ducacti, Kawasaki, BMW, KTM, Benelli, Harley Davidson, Triumph, Royal Enfield, and Motorrad. However, they are not members of VAMM, so no sales information is available

Insiders said besides the impact of the COVID-19 pandemic and social distancing regulations on the purchasing power in the quarter, VAMM’s members must share the market share with those are not members of the association.

Additionally, the local market has become saturated, with people switching to environmentally friendly electric motorcycles and cars, or public transport, causing the dropping motorbike sales.

Vietnam – preferred destination of foreign capital: US website

The US website Seeking Alpha has described Vietnam as the preferred destination of foreign capital in recent years with annual economic growth of 7 percent, twice as much as the world average.

While agriculture continues to be a dominant source of employment, much of Vietnam’s economic growth in the recent past has been driven by the services and industrial segments, according to the website.

One of the reasons that make Vietnam more attractive than other countries is its labour costs, which are half that of China and also considerably lower than its other manufacturing competitor – Mexico.

Seeking Alpha said Vietnam’s dominance lies in the electronics manufacturing (36 percent) followed by footwear. Some notable US names that have recently made inroads into Vietnam include Sourcify, Cooper Tyres, and Key Tronic.

The website cited a survey conducted by the US Chamber of Commerce which showed the rate of respondents selecting Vietnam as the primary choice for relocation grew from 17 percent in 2018 to 36 percent in 2019.

Vietnam’s export to the European Union (EU) is predicted to hit 60 billion USD by 2025. In the long run, it would be healthy for the Southeast Asian country to have a more diversified source of export customers and not rely on the US and China alone, according to Seeking Alpha.

The EU-Vietnam Free Trade Agreement is expected to open up a market for Vietnam with a combined GDP of close to 2.2 trillion USD. According to the deal, tariff on Vietnamese products such as garments, computers, phones, apparel, footwear, textiles, general electronics, and farm devices will decline from 9.7 percent to 2 percent in 2025.

The website also mentioned the successful prevention of COVID-19 in Vietnam, which has had a limited impact on the local tourism compared to other destinations. It cited data from Vietnam as showing that in July 2020 more than 26,000 flights are expected to transport over 5 million people, representing annual growth of 16 percent and 24 percent, respectively.

Forestry exports reach 5.3 billion USD in six months

Export revenue of forestry products hit over 5.3 billion USD in the first six months of 2020, up 2.7 percent over the same period last year, reported the Vietnam Administration of Forestry.

The administration predicted that in the whole year, total exports of the products will reach between 11.75 to 12 billion USD.

In the first half of this year, Vietnam imported 1.12 billion US worth of wood and wood products, down 8.8 percent year on year. The agency estimated the yearly figure at around 2.55 billion USD, the same as in 2019.

In the first six months, 106,300 hectares of forest were planted, fulfilling 48.3 percent of the yearly target of 220,000 hectares.

Talk discusses COVID-19 impact on Vietnamese firms in Laos

Vietnamese businesses in Lao sat down together to discuss their operation during the COVID-19 pandemic at a talk in the capital Vientiane on July 12.

A focus of attention at the event was the Lao Government’s financial and banking policies to support pandemic-hit enterprises and workers.

Speaking at the function, Vietnamese Ambassador to Laos Nguyen Ba Hung said the Lao Government has carried out drastic measures to prevent and control the pandemic and mitigate its influences on the local socio-economy.

Vietnamese businesses here have faced various difficulties, he said, adding that their operations were stalled with unstable human resources and material sources.

The number of Vietnamese projects in Laos remains at 413 with total value at 4.22 billion USD.

Hung recommended Vietnamese firms proactively seek ways to adapt to the new conditions and prepare for post-pandemic production and investment, suggesting they change management styles, apply new technologies, and seize opportunities from the host country’s major infrastructure projects, which are about to be completed.

Nguyen Van Binh, General Director of LaoVietBank and head of BIDV’s representative office in Laos, said Laos has issued various financial and banking policies and run a number of preferential loan packages to help enterprises during this difficult time.

Participating firms proposed the Lao Government allow entry of Vietnamese workers and clear hurdles to goods transport.

The talk was jointly held by the Vietnamese Embassy and the Vietnam Business Association for Cooperation and Investment in Laos (Viet-Lao BACI).

Tea businesses need restructuring to add value

The Government should build corporations with financial resources to help the domestic tea industry add value, branding and sales, said Chairman of Vietnam Tea Association Nguyen Huu Tai.

Tea is one of the agricultural commodities greatly affected by the COVID-19 pandemic. In the first five months of this year, tea exports reached about 46,000 tonnes, worth about 72 million USD, down more than 10 percent in value compared to the same period in 2019.

Tai said traditional markets of Vietnam such as Taiwan (China), Pakistan and Russia were closed. In other markets, businesses could not sign new contracts, while previously signed contracts now would require deep discounts, delays to delivery times or had been cancelled.

“The global COVID-19 pandemic has put many domestic tea producers in a tough situation as they have to choose between restructuring or leaving the industry,” Tai said.

According to the prediction of the East Africa Tea Trade Association, world tea prices will fall in the near future, while restrictions on shipping of goods will reduce demand for tea in many countries. This will cause difficulties for the export of Vietnamese tea.

Long Dinh Joint Stock Company in the Central Highland province of Lam Dong has 50 hectares of high-quality tea certified for export. Each year, more than 90 percent of the company's products are exported to Taiwan as raw materials at low prices.

But Tran Phuong Uyen, the company’s Deputy Director, told nhipcaudautu.vn that the company’s export volume of raw tea decreased by 30 percent in March compared to previous months.

“To make a change, we are stepping up the restructuring of markets, targeting more premium products through the production of organic tea (True Organic) for domestic consumption,” Uyen said.

She said the company had so far sold three tonnes of finished organic tea. It currently suffers losses but still maintains its product prices so that consumers gradually get used to organic products.

About 90 percent of domestic tea consumption comes from small establishments with unstable quality. Vietnamese tea businesses have created brands, such as Cozy, Phuc Long, Cau Tre, Cau Dat and Vinatea. Although there have been many more attractive product lines, Vietnamese tea businesses are still struggling to find ways to bring products to consumers.

Chairman Tai said the Government’s policies have only focused on tea production development rather than consumption, so many producers have sold raw tea to businesses, and are not interested in selling directly to customers.

“Meanwhile, it is not easy for Vietnamese businesses because the cost to open a tea distribution network is three times higher than that of a production factory,” Tai said.

Tea production in Vietnam has returned to normal, so output will not be affected by the pandemic. The major tea exporting countries such as India, Kenya and Sri Lanka are still in the stage of disease control, so their harvesting and cultivation activities are restricted, affecting tea production.

Insiders have said that the coronavirus pandemic is an opportunity for many tea companies to change and improve product value instead of chasing output. Most Vietnamese tea has been exported as raw materials, which are then processed and packaged for consumption in the local market or exported to a third country. Vietnamese tea only accounts for about 5-20 percent of the finished product value, while brands usually account for 40-60 percent. This is why Vietnam is among the countries with the lowest tea export prices in the world.

Domestic enterprises need to focus on investment in improving quality, raising export prices, and especially increasing price for tea growers to help them improve living standards.

Thailand’s border trade down 9.7 percent in five months

Thailand's cross-border trade was down by 9.7 percent year-on-year in the first five months of 2020 due to the impacts of COVID-19 pandemic on the global economy, and neighbours’ closure of nearly all border checkpoints.

Statistics releases by the Foreign Trade Department showed the country's overall cross-border trade, including transit trade, totalled 524.35 billion THB (16.74 billion USD) from January to May, with Malaysia remaining the biggest partner by value.

Of the total figures, exports from Thailand were 305.72 billion THB, down 9 percent from the first five months of last year, while imports were 218.63 billion THB, down 10.7 percent, resulting in a trade surplus of 87.09 billion THB

Two-way trade with Malaysia totalled 87.85 billion THB (down 32.4 percent), followed by trade with Laos (77.17 billion THB, down 6.6 percent), Myanmar (73.74 billion THB, down 11 percent) and Cambodia (70.87 billion THB, up 5.2 percent).

Transit trade, mainly with Singapore, Vietnam and southern China, fell 1.5 percent in the first five months to 214.71 billion THB.

Transit trade with southern China and Singapore was up, by 15.7 percent and 20.8 percent respectively. Transit trade value was 90.74 billion THB with southern China and 36.10 billion THB with Singapore.

Transit trade value with Vietnam and other countries fell by 26.7 percent and 16.9 percent to 24.69 billion and 63.18 billion THB respectively.

Keerati Rushchano, director-general of the Foreign Trade Department, said cross-border and transit trade remains bearish because of the pandemic, leading Thailand to close 69 border checkpoints out of the total of 97.

The hope is that the situation will improve in the second half of the year, he said, given that demand for Thai goods from nearby countries remains strong.

Nonetheless, gauged by the performance in the first five months, the border trade target of 1.5 trillion THB for 2020 is unlikely to be achieved, Keerati said, adding that viable figures are likely 1-1.1 trillion THB this year because of COVID-19.

Cần Giờ tourism project to create 25,000 jobs, add significant revenue to HCM City budget

The Cần Giờ Sea Encroachment Project, also known as the Cần Giờ Tourism Urban Area Project, is expected to contribute to HCM City's development by creating 25,000 jobs and adding a significant amount of revenue to the city budget.

The chairman of Cần Giờ District People’s Committee, Lê Minh Dũng, said the HCM City People’s Committee and local authorities had collaborated on urban planning for the project.

The project is located in the coastal area of Long Hòa Commune and Cần Thạnh Town in Cần Giờ District, covering 2,870ha of land, according to the investor, Cần Giờ Tourism Urban Area Joint Stock Company.

The project is 18km from the Cần Giờ Mangrove Biosphere Reserve Area; 2.7km from the navigation channel of Xoài Rạp RIver; 4.5km from Lòng Tàu River; 17km from Vàm Sát Eco-Tourism Area; and 4km from Monkey Island.

About 228,506 people are expected to live in the area, and nine million tourists would visit every year, Dũng said, adding that it would create 25,000 jobs.

“Considering the available resources of Cần Giờ, the new tourism urban area would help Cần Giờ become a significant regional and international tourism spot,” a member of the district People’s Committee told Người Lao Động (Labourer) newspaper.

Investors said the project would generate revenue from rents from business activities, provide locals with a green space to relax, and improve the competitive advantage of HCM City.

When it is completed, it would contribute about VNĐ2.9 trillion (US$124.7 million) per year to the city budget and about 2-3 per cent of the total retail and commodity revenue for HCM City.

Trần Thanh Long, a resident of Cần Thạnh Town, said that locals’ quality of life would improve because of better infrastructure built as a result of the project. 

Some environmental experts however said that urbanization of Cần Giờ District should be considered carefully since this area is under frequent impact of rising sea levels. In addition, the low bulk density of the soil here makes it vulnerable to future erosions and collapses.

They also warned that the Cần Giờ biosphere reserve, a UNESCO-listed site southeast of the city, was a crucial shield and should be spared from development. “This forest has a natural capacity to prevent coastal erosion and storm-induced coastal flooding.”

Architect Ngô Viết Nam Sơn shared views with the environmental experts, stressing the importance of preserving nature in the area, especially the Cần Giờ Mangrove Biosphere.

Binh Duong first half trade surplus hits $2.6b

The southern province of Binh Duong recorded a trade surplus of US$2.6 billion in the first half of the year, according to its Department of Statistics.

Its exports topped US$11.9 billion, marginally up year-on-year, while imports rose 4.2 per cent to $9.4 billion.

Wood products topped the export list, increasing by 0.6 per cent to $1.7 billion.

According to the Binh Duong Wood Processing Association, the global COVID-19 outbreak has affected the wood industry in the form of lack of timber supply and sharp fall in demand for furniture.

But the industry has managed to overcome these problems thanks to the increased domestic supply of raw materials and diverse, unique and innovative products and improved quality that sustained exports.

The garment and textile sector saw exports increase by 0.6 per cent to $ 1.2 billion.

Footwear exports to the US and Japanese markets are projected to bounce back in the post-pandemic period.

Companies need to seize the opportunities to bolster production and exports once the pandemic is fully controlled, experts said.

Other industries have gradually recovered, though many factories still face difficulties like lack of funds and new export orders due to the slow recovery of export markets.

Binh Duong’s GDP grew by 6.73 per cent in the first half, while its industrial production was up 6.4 per cent.

The Philippines urged to remove Vietnamese steel investigation

The import turnover of Vietnamese steel products to the Philippines accounts for a small proportion of overall revenue and therefore the products should be excluded from the safeguard measures imposed by the island state, according to the Trade Remedies Authority of Vietnam. 

The Trade Remedies Authority of Vietnam under the Ministry of Industry and Trade on July 13 sent a letter to the Philippine Department of Trade and Industry in which they expressed their concerns over the department’s initiation of a safeguard investigation. These measures relate to several imported steel products, including galvanised steel, aluminum and zinc-coated steel, along with colour-coated steel sheets.

The Trade Remedies Authority of Vietnam has therefore asked the investigation agency of the Philippines to strictly abide by conditions as they initiate their investigation and apply safeguard measures that fall in line with the Agreement on Safeguards set by the World Trade Organization.

According to the latest import figures released, the Trade Remedies Authority of Vietnam has stated that the import turnover of Vietnamese steel products to the South East Asian nation makes up only a small proportion and the products are therefore eligible to be excluded from safeguard measures imposed by the Philippines.

The Trade Remedies Authority of Vietnam said it will work closely with the Vietnamese Embassy, the country’s Trade Office in the Philippines, the Vietnam Steel Association, and local firms in the near future in order to closely monitor developments in the case. It will also be prepared to conduct necessary activities aimed at protecting the legitimate rights and interests of domestic businesses.