VIETNAM'S BUSINESS NEWS HEADLINES JULY 7
SCIC sells shares at Khanh Hoa Seafood Export JSC
|Seafood processing at the Khanh Hoa Seafood Export Joint Stock Company. SCIC will sell its shares at this company in July. — Photo khaspexco.com.vn|
The State Capital Investment Corporation (SCIC) will sell its shares at the Khanh Hoa Seafood Export Joint Stock Company on July 22, 2020.
According to the notice issued by SCIC on June 30, this corporation will offer 132,200 common shares in blocks at the July auction, representing 8.96 per cent of the total shares at the Khanh Hoa Seafood Export Joint Stock Company.
Domestic and foreign investors can participate in the auction with an initial share price of VND32,200 (US$1.38).
The investors can register to join this auction from June 30 until July 21 at the BOS Securities Joint Stock Company.
The Khanh Hoa Seafood Export Joint Stock Company's core business activities include processing and preservation of seafood products, exploitation of fishery products at sea and inland, and wholesale of food products.
The company’s shares with code KSE traded on the Unlisted Public Company Market (UPCoM) from August 11, 2017.
At present, SCIC holds 8.96 per cent of the Khanh Hoa Seafood Export Joint Stock Company, the second largest shareholder after Tran Thi Tinh which has 134,800 shares equivalent to 9.13 per cent of the company’s charter capital. This company has no foreign shareholders.
This seafood company’s total profit after tax in 2019 reached more than VND6 billion, an increase of 1.82 per cent over the previous year.
On the stock market, KSE shares traded at VND30,900 per cent share on June 30. KSE's market capitalisation is VND35.7 billion.
June CPI in Ho Chi Minh City up 0.66 percent
The June CPI in Ho Chi Minh City was up 0.66 percent from last month, and up 2.1 percent from the same month last year.
Transport services prices surged 6.92 percent month-on-month due to petrol prices being adjusted up twice on May 28 and June 12.
The prices of food and foodstuff group rose 0.95 percent, driven by high pork prices. The group of restaurants and catering services also saw an increase of 0.53 percent.
Meanwhile, the prices of beverage and tobacco was down 0.15 percent, the group of housing, utilities, fuels and construction materials saw a decrease of 0.69 percent.
The gold price in June picked up 0.56 percent from May and 31.77 percent from the same month last year. The USD/VND exchange rate dropped 0.61 percent on a monthly basis and down 0.32 percent year on year.
The average CPI in the first half of this year was up 3.48 percent from the same period last year.
Footwear sector to improve supply chain to take advantage of EVFTA
Vietnam’s leather and footwear industry should improve its supply chain performance to take advantage of the milestone trade deal that the country has signed with the EU and to recover from the effects of the COVID-19 crisis, speakers said at a recent international footwear conference.
Diep Thanh Kiet, deputy chairman of the Vietnam Leather, Footwear and Handbag Association (Lefaso), said the domestic footwear industry has had strong performance growth in recent years with increased consumer awareness about branded products.
Vietnam, the second-largest footwear exporter in the world, has signed free trade agreements with a number of countries such as the Republic of Korea, Russia, Kazakhstan and Belarus, among others.
In addition to the Europe-Vietnam Free Trade Agreement (EVFTA), the footwear and handbag industry can benefit from many other FTAs signed by Vietnam.
However, the supply and distribution chains of the industry have suffered during the COVID-19 pandemic.
“The pandemic has left thousands of labourers in the sector jobless since orders have been either cancelled or delayed by business partners, leading to significant fall in revenues,” Kiet said.
Some businesses have reported unsold inventories piling up and are not sure if stocks will clear after the EU reopens.
“Supply chains as well as trade policies will play a major role in the recovery,” he noted.
Beginning in 2022, the industry’s average growth rate is expected to reach 10 per cent per year, he said.
Kiet said the signing of EVFTA would enhance trade and investment in the footwear industry and that businesses would enjoy enormous tax incentives.
Thirty-seven percent of Vietnam’s total footwear export volume to the EU will immediately enjoy zero percent tariff, while the remainder will see tariffs fall gradually from the current average of 12.5 percent to zero following roadmaps of three to seven years.
Vietnam’s biggest competitor in the industry is China. Its footwear products will enjoy a tax difference of between 3.5 to 4.2 percent when exported to the EU, creating a huge competitive advantage, experts said.
The EU also offers unilateral incentives for a large number of goods originating from Vietnam under the Generalised System of Preferences (GSP), which will help Vietnam’s footwear become more competitive than its rival Chinese products in the EU market.
Many foreign footwear producers have shifted their businesses from China to Vietnam to benefit from the EVFTA.
Although the footwear industry has several advantages, its development still faces challenges such as trade protectionism, rising labour costs and low labour productivity, and lack of application of advanced technology.
According to the Import-Export Department under the Ministry of Industry and Trade, the ministry had recently signed a circular about rules of origin in the EVFTA.
The circular will come into force on August 1, the day the trade deal takes effect.
With five chapters and 42 articles, the circular is an important legal basis for granting certificates of origin (C/O) for goods exported to the EU to enjoy preferential tariffs provided by the trade deal, the department said.
The early issuance of the circular on rules of origin, just a week after the National Assembly approved the trade deal, was part of the ministry’s action plan to improve the domestic legal framework to implement the EVFTA.
Compared to other trade deals of which Vietnam is a member, the EVFTA’s rules of origin have more new and complicated provisions.
The circular is necessary for Vietnamese footwear firms to be able to take advantage of preferential tariffs from the first day the trade deal comes into force,” according to the department.
The ministry said that footwear enterprises must study the rules of origin carefully to have a proper understanding.
Each year, Vietnam posts nearly 19 billion USD from footwear exports, with sports shoes holding a big proportion in the sector’s total export value.
Vietnam’s footwear and bag exports reached 22 billion USD last year, an increase of 12 percent compared to 2018.
According to a report assessing the implications of the EVFTA from the Ministry of Planning and Investment, EVFTA ratification will increase footwear exports to the EU. The sector is expected to see a doubling of growth rate in exports to the EU by 2025, with total export value of footwear jumping by around 34 percent and that of the whole sector by 31.8 percent.
After eight years of negotiation, the EVFTA was signed on June 30 last year in Hanoi. The European Council passed the trade deal on March 30 and the Vietnamese National Assembly approved the trade deal on June 8.
Retail-service revenue increases 5.3 percent in June
Retail and service revenue amounted to some 2.38 quadrillion VND (103 billion USD) in June, up 6.2 percent on month and 5.3 percent on year.
However, between January and June, the figure saw an annual decrease of 0.8 percent.
Also in the period, the retail sector earned about 1.89 quadrillion VND, an annual increase of 3.4 percent. The rise was attributable to abundant supply of goods and thriving online shopping, particularly during the COVID-19 social distancing period.
By contrast, the accommodation and catering services earned just 234.7 trillion VND, down 18.1 percent against the same period last year.
The tourism revenue also followed suit with an annual reduction of 53.2 percent. In the first half, the sector reeled in just about 10.3 trillion VND due to a hiatus in welcoming foreign visitors to control the spread of COVID-19. Meanwhile, the summer vacation of students is yet to arrive, resulting in a less vibrant domestic travel market.
EVN to accept payment for power bills via QR code
Vietnam Electricity (EVN) is working with commercial banks and intermediary payment services institutions to offer QR code payments for power bills.
Each customer would have a QR Code. EVN has said it expects agreements with banks and intermediary payment services institutions would be completed by the end of August. In September, EVN plans to announce the list of institutions which can provide QR code payment services for power bills.
Nguyen Quoc Dung, head of EVN’s Business Department, said the move to implement QR code payments was in response to Prime Minister Nguyen Xuan Phuc's directive to promote a cashless society.
This would also help improve labour productivity and management efficiency, Dung said.
Statistics of VNPAY-QR showed the number of points of sales accepting QR code payments increased from 20,000 to 70,000 during the past year.
More than 75 tonnes of lychee sold via MoMo
More than 75 tonnes of lychee were sold via the e-wallet MoMo in the past 20 days as part of the programme 'Supporting Vietnamese Agricultural Products'.
According to the firm, the first season of the programme with Saigon Co.op got better results than expected.
Nguyen Ba Diep, vice chairman and co-founder of MoMo said: “We first expected to sell about 20 tonnes of lychee in HCM City. Then we sold 17.5 tonnes on the first day and decided to sell in Ha Noi too.”
“The sale has opened a new direction for agricultural consumption in the 4.0 era," he added.
According to statistics from Saigon Co.op, lychee sold through MoMo has accounted for 20 per cent of total lychee sales in Saigon Co.op this year.
Do Quoc Huy, Marketing Director of Saigon Co.op, said: "The programme will open up more opportunities for other agricultural products in the future."
Diep from Momo told Viet Nam News: “Farmers are often vulnerable in their agriculture production due to weather and price changes. If we can help sell their products from the beginning, it will help them be more proactive and have a more stable source of income and they will be eager to cultivate more.”
Diep said selling local agricultural products on the digital platform brought a new buying experience for modern consumers.
“Saigon Co.op is a trusted buying destination while MoMo, with more than 20 million users, has helped the programme create a large-scale buying of the products," he said.
Diep also welcomed the use of MoMo as a platform for other agriculture products.
The sales of the programme’s agricultural products reached more than VND2.2 billion (US$95,300) and they also collected more than VND86 million of donations to school the farmers' children.
Japanese-imported pork sells well despite high prices
Japanese-imported pork products are proving popular in the Vietnamese market despite costing 4-5 times more than local products.
Over the past six months, African Swine Fever has ravaged many localities in Vietnam, affecting local pork supply. At markets and supermarkets in Vietnam, pork prices range between VND150,000-320,000 (USD6.52-13.91) per kilo, depending on different kinds.
In the first five months of this year, Vietnam imported more than 70,000 tonnes of pork from abroad.
Most imported pork products are cheaper than local alternatives. However, Japanese-imported pork products are around 4-5 times higher than domestic options.
At many shops, a kilo of Japanese-originated pork is priced at between VND950,000-1.1 million (USD41.32-47.82) per kilo, depending on different kinds.
The majority of Japanese-imported pork is belly parts.
Hoang Thi Chung, who works at a shop which specialises in selling Japanese pork, said that her shop has been supplying this kind of meat for nearly one year. Each day, the shop sells around 40-50 kilos.
Bui Manh Tuan, a Japanese pork trader, said that the product is even sold better than Spain’s Iberico pork. Every day, he can receive online orders of nearly 100 kilos in total with most of the customers from HCM City.
The Japanese pork is often cut into small pieces of around 250-300 grammes for customers to buy conveniently.
Vietnam has also imported a large number of pigs from Thailand to increase the number of livestock and domestic supply.
With these measures, the country is expected to ensure pork demand in the local market by the end of the third quarter of this year.
Kido Group blasts back on local confectionery scene
Local manufacturers are upping the ante in Vietnam’s lucrative snack and confectionery market to gain the market share from foreign brands.
Confectionary specialists KIDO Group (KDC) recently announced its comeback to the market five years after selling its snack business to Mondelez International. The move is part of KDC’s strategy to resurrect its core business and develop local brands for Vietnamese people.
The company will launch its new snack and brand confectionery brand Kingdom in the third quarter of 2020. Tran Le Nguyen, vice chair and CEO of KDC, said that the company will change its development strategy for this comeback. Instead of diversifying its product portfolio, the company will research and develop new products in high demand and large market scale to quickly achieve efficiency.
With 20 years of experience in the snack industry, the company has gained a deep understanding of local consumers. This, coupled with production capability and distribution networks, will facilitate the company to become the second-biggest player in the market trailing behind Mondelez in the next two years.
According to Nguyen, the snack and confectionery market has undergone massive changes in the past five years with a rapid development of the gift segment and an apparent rising demand for snack consumption from the middle-aged to elderly people. Therefore, KDC wants to focus on developing key product lines such as gifts for Mid-Autumn Festival and the Lunar New Year.
Another player, The PAN Group, was also vying for a controlling stake of Bibica to retain the long-standing Vietnamese confectionery brand amid the aggressive expansion of foreign confectionery products. The move was aimed to solve a dispute between Vietnam’s Bibica Corporation and its major shareholder, South Korea’s Lotte Group.
According to Euromonitor International, local producers are striving to keep their market share. Vietnam One One Food JSC maintained its dominance in the popular rice snacks category, which saw the fastest value growth over the year. Meanwhile, Tan Tan Food & Foodstuff Company saw strong value growth in nuts, seeds, and trail mixes for the fourth consecutive year in 2019.
In fact, Vietnam is among the most developed snack markets in the ASEAN, joining Thailand, Indonesia, and Malaysia in the $3.5-billion club, according to a recent report from Japanese consultant Corporate Directions. This has attracted many foreign brands to capitalise on the market growth. Among them, snacking heavyweight Mondelez Kinh Do is taking the lead in the market. Other foreign snack brands such as Oishi (Liwayway), Poca (PepsiCo), and Choco Pies (Orion) have also stepped up their game to tap into Vietnam’s snack boom.
Most recently, Japanese confectionary company Morinaga has joined forces with DKSH’s Business Unit Consumer Goods, a market expansion services provider to expand their existing partnership in Asia to Vietnam. Specifically, DKSH will be the enabler to further unlock Morinaga’s potential in Vietnam and ensure regional coverage through the strategic expertise of the local teams.
Damien Morot, vice president of DKSH’s Consumer Goods in Indochina told VIR that Vietnam offers a unique combination to snacks and confectionary brands craving to expend outside of their core markets, and the country has the most dynamic convenience stores network across the region.
“Though we may see some players like key chains rationalise their number of stores in the next few weeks and months as a consequence of the pandemic situation, the consensus is built around strong, long-term double-digit growth for this channel in Vietnam. This obviously stimulates the appetite of foreign brands not yet present here,” he added.
While gum and sugar confectionary have already reached high penetration in Vietnamese households and broad distribution across the market, there is still huge potential for the chocolate category. The improving logistics infrastructure will continue supporting these categories growth in the near future and festive periods like Lunar New Year celebrations allow introduction of a more diverse offering to consumers.
Compared to region peers, Morot stressed that Vietnam has an insatiable appetite for consumers and retailers for high quality innovations, a segment where Japanese brands are particularly doing well. Affordability remains a must in Vietnam but those who manage to combine price points and high-perceived quality will continue grabbing market share. The great successes of Kit Kat and Fisherman’s Friend are a testament to this winning recipe.
On the same note, Hemant Rupani, managing director of Mondelez Kinh Do Vietnam stated that the country is a vibrant and competitive market as part of the ASEAN. In Vietnam there are a large number of contenders in every industry, ensuring a great deal of competition. In most sectors there are no dominant players, and even those with a large market share are only operating at around the 20-30 per cent level.
“In addition, Vietnam’s snack market will become even more competitive with the upcoming implementation of the EU-Vietnam Free Trade Agreement. More foreign producers and imported fast-moving consumer goods will flood the market,” he added.
First-of-its-kind clean energy investment initiative for Southeast Asia
Major global philanthropic organisations are this week launching a first-of-its-kind high-risk philanthropic funding initiative aimed at crowding in more than $2.5 billion of private investments for clean energy projects in Southeast Asia.
With traditional investors hesitant since the COVID-19 pandemic, the timely intervention will provide the high-risk, early-stage venture capital-type funding critical to getting transformational new clean energy projects off the ground.
With an initial focus on Vietnam, Indonesia, and the Philippines and managed by Singapore-based Clime Capital, the Southeast Asia Clean Energy Facility (SEACEF) has been supported by leading international climate foundations including Sea Change Foundation International, Wellspring Climate Initiative, High Tide Foundation, Grantham Foundation, Bloomberg Philanthropies, Packard Foundation, and Children’s Investment Fund Foundation (CIFF).
“The launch of this new fund comes at a critical moment, with the COVID-19 crisis shrinking traditional sources of finance, dedicated towards bending the curve of climate change,” said Imraan Mohammed, head of Impact Investing at CIFF. “Impact investors and foundations are stepping up to bridge the gap, catalyse other sources of funding and ensure that the transition to clean energy in Southeast Asia continues to accelerate.”
Clime Capital’s managing director Mason Wallick said, “Even in times of stability, the first 1-2 per cent of development finance for clean energy projects is the hardest to find, given it carries the highest risk. However, the opportunities for renewable energy investment remain significant, so this high-risk capital is a cornerstone at a time of great uncertainty, which can catalyse the significant funding required to turn proposals into major clean energy projects.”
According to Bloomberg New Energy Finance, solar PV (Solar Photovoltaic panels) and onshore wind are now the cheapest sources of new-build generation for at least two-thirds of the global population. However, many potentially viable projects in Vietnam, Indonesia, the Philippines, and other parts of Southeast Asia would not happen without such early-stage funding, as most private sector investors are unwilling to get involved until early-stage development risks are successfully mitigated.
This is the gap SEACEF’s investment aims to bridge. SEACEF's early-stage funding will target globally proven technologies and business models such as solar, wind, and energy storage, plus other business models that accelerate the low carbon transition – such as electric mobility, demand-side management technology, energy efficiency in buildings, and clean energy transmission infrastructure.
The supporting global philanthropies have invested an initial $10 million into SEACEF, and are seeking to attract up to $40 million in additional capital. It is expected that every dollar of high-risk venture capital-type funding deployed by SEACEF will leverage up to 50 times more in follow-on investment into the clean energy portfolio across Southeast Asia – reaching more than $2.5 billion of assets – while cultivating the local ecosystem of developers to grow the market.
“On behalf of the philanthropic funders of SEACEF, we are pleased to support this innovative and catalytic climate investment programme that will fill a gap left by traditional financial investors and help accelerate the market for clean energy in Southeast Asia,” said Bill Weil, who led the design of SEACEF at Tempest Advisors, the advisors to Sea Change Foundation International.
LNG project illustrates new interest
Chan May LNG JSC will sign agreements involving American equipment, engineering, procurement, and construction, with equity and financing worth $6.2 billion of both United States and Vietnamese investment.
Chan May LNG JSC is a US-Vietnam joint-stock company for the development and operation of a $6.2 billion new gas-fired power plant in the central province of Thua Thien-Hue. The plant is the development of a liquefied natural gas (LNG) port for loading and off-loading, an on-shore LNG terminal, and a storage plant.
With power generation capacity of 4000MW, the project will commercially supply LNG and regular gas to the region and Thua Thien-Hue’s industrial and economic zones.
Chan May-Lang Co economic zone (EZ) is at the focal point of two major zones with the closest route to the East-West Economic Corridor. The private investment developed in the strategic Indo-Pacific region supports the Enhancing Development and Growth through Energy (EDGE) programme for Vietnam.
Vietnam’s power demand has risen sharply in line with rapid economic growth, constituting 12 per cent of GDP. As a result, resolving the power shortages expected in the future has become a pressing issue and top priority. Under the revised National Power Plan VII, the Vietnamese government strives to meet the annual power demand growth of 10 per cent by stepping up its power generation capacity to 95,500MW by 2025 and 129,000MW by 2030 through projects like Chan May LNG.
The project is divided into two phases. The first of 2,400MW is targeted to be completed and delivered in 2024; and the second of 1,600MW is to be delivered by 2028. The company expects the project to be integrated into the national power development plan within the next few months and meet all government regulatory requirements. About 3.5 billion cubic metres of gas per year will be imported from the US.
The United States is currently the world’s largest producer of natural gas. The gas supplies nearly a third of US primary energy usage and is the primary heating fuel for approximately half of US households. While the majority of natural gas is delivered in its gaseous form via pipelines in the US, the growth in the international market for natural gas has given rise to the use of natural gas in a liquefied form.
Data from 2017 shows that the US exported over 700 billion cubic feet of natural gas in the form of LNG in large tanker ships, along with small quantities shipped by container or trucks. In total the following year, US LNG had been delivered to 27 countries on five continents and the list of destinations has continued to grow since, especially to countries like Vietnam.
The consortium team for the Thua Thien-Hue power plant consists of international environmental firms with a combined experience of over 80 years in Vietnam, while the US investors and developers have a combined total of 60 years of development experience in the country.
Development of an LNG power plant in the Chan May-Lang Co EZ will likely generate positive economic impacts in a variety of ways on the local economy from the construction to the operational phase. A project of this nature and scale generally increases local GDP by 7-15 per cent during construction and 5-7 per cent during operations, according to experts. This increase in GDP over the life of the project will have significant benefits to families, local businesses, and the ability of the province to meet master plan objectives.
“Chan May LNG is pleased to support delivery of a world-class project in Thua Thien-Hue. We aim to achieve this by bringing together experienced professionals with first-hand knowledge regarding financing, supply, construction, and operation of LNG power development,” said John Rockhold, CEO and vice chairman of Chan May LNG. “Our US and Vietnamese consortium have a successful track record working with proponents of LNG and power plant developments, provincial governments, and local consultants to design and construct world-class operating assets.”
Chan May LNG will attend the Vietnam Energy Summit 2020 in Hanoi next month. The summit, originally scheduled for March but inevitably postponed due to the coronavirus crisis, will take place on July 22 at the capital’s International Convention Centre.
Co-organised by the government and the Central Economic Committee, various ministries and institutions such as the EU, the German Development Cooperation (GIZ), and the Embassy of Finland will be represented. Held with the aim of being timed with the Politburo’s resolution on Vietnam’s national energy development strategy orientation to 2030 and with a vision to 2045, the event is considered to be the most prestigious event in the country’s energy industry this year.
Agriculture, forestry, and fishery must prepare for EVFTA bounties
The upcoming implementation of the EU-Vietnam Free Trade Agreement (EVFTA) will help Vietnam's agriculture, forestry, and fishery sector to step onto a larger playground and join the global supply chain.
The information was stressed at the conference on facilitating agriculture, forestry, and fishery companies to enter the EU market and implementing the EVFTA efficiently held by the Ministry of Industry and Trade in collaboration with the Ministry of Agriculture and Rural Development and Ho Chi Minh City People’s Committee on June 30.
According to Minister of Industry and Trade Tran Tuan Anh, the EU is Vietnam’s second-largest export market but Vietnam only accounts for 2 per cent of its total imports. Once the EVFTA come into force, Vietnam’s agriculture, forestry, and fishery sector can access a potential market with 500 million people and a GDP of $15 trillion. The export turnover of agriculture, forestry, and fishery products to the EU has been around $5 billion per year between 2017 and 2019.
He added that the EVFTA is an ambitious pact eliminating almost 99 per cent of customs duties between the EU and Vietnam. The official entry of this FTA is expected to create a driving force for Vietnam to recover from COVID-19. With several advantages, Vietnam’s agriculture, forestry, and fishery sector is positioned as a major beneficiary of the EVFTA.
The agreement covers all rice varieties most commonly exported from Vietnam to the EU, including milled rice, husked rice, broken rice, and fragrant rice. These will see mostly duty-free tariffs as soon as the FTA is implemented, except for broken rice which will see a 50 per cent tariff cut when the FTA comes into force, followed by a linear reduction over five years.
Meanwhile, Vietnamese seafood that will see improved market access via duty-free tariff rates or full liberalisation include surimi (seafood paste, most commonly fake crabmeat), canned, fresh and chilled tuna, and non-processed shrimps and catfish.
Minister of Agriculture and Rural Development Nguyen Xuan Cuong said that companies should carefully prepare to meet the EU requirements and avail of opportunities from the EVFTA. In the case of Trung An Hi-Tech Farming JSC, which is looking to increase rice exports to the EU, the ministry will provide further guidance about the potential seeds, production processes, and requirements. The ministry can even seek special mechanism for some exporters to help Vietnam fulfill the EVFTA requirements as well as ensure product quality.
Vinh Phuc invests technical infrastructure to lure investors
Vinh Phuc province is making an effort to complete technical infrastructure while simultaneously accelerating investment promotion programmes in order to attract potential investors, especially foreign-invested enterprises after the pandemic.
Vinh Phuc is building out technical infrastructure to become a more welcoming investment destination
Located close to Hanoi and owning 18 IZs (IZs) and 32 industrial clusters, Vinh Phuc is improving its investment and trade environment, enhancing its competitive capabilities to attract investment.
The COVID-19 pandemic has had a marked impact on socio-economic development in the province, disrupting the operations of enterprises as well as foreign investors’ plans. Numerous companies had to lay off employees due to a lack of orders, which caused a plunge in revenue and profit. Other businesses had to deal with a lack of experts and skilled employees due to Vietnam’s policy suspending foreign entry.
In the first six months of the year, the pandemic has caused a decrease in foreign-invested capital in the province. Notably, investors registered only $135.6 million, only a third of last year’s figure, in 14 newly-registered and 19 existing projects.
In order to help enterprises overcome their difficulties and prepare to welcome new investment after the pandemic, the province’s leaders assigned departments and relevant authorities to implement solutions to support businesses. Notably, the province organised numerous meetings, seminars, and working sessions with investors and enterprises to discover their difficulties. In addition, the province entered into a co-operation with the State Bank of Vietnam to build supporting policies for businesses, including decreasing loan interest and extend debt payment deadlines. Besides, the Department of Taxation supported enterprises to extend the deadline for tax payments and the fee for land rental.
Furthermore, the provincial People’s Committee asked localities to implement synchronised solutions to deal with investors’ difficulties by removing administrative bottlenecks for newly-registered projects, supporting enterprises investing in infrastructure at industrial parks and clusters by accelerating land clearance and compensation in order to accelerate the construction progress.
The province has also completed a report on the investment planning for a series of IZs, including Tam Duong I, Lap Thach I and II, and Nam Binh Xuyen. It is also building dossiers to submit the construction plan of Song Lo 2 IZ to the Ministry of Planning and Investment for appraisal and then submit it to the prime minister for approval.
Vinh Phuc Industrial Park Authority has built the detailed planning of Khai Quang IZ while urging investors to complete procedures to accelerate the development of Son Loi IZ and sign a management contract with partners in Ba Thien IZ.
“The province is actively trying to accompany investors to overcome difficulties and will create favourable conditions in administration procedures as well as technical and transport infrastructure, assuring investors looking to set up or expand operations in Vinh Phuc,” said Nguyen Van Tri, chairman of Vinh Phuc People’s Committee.
“The province is also paying attention to developing urban and apartment projects to create stable accommodation for workers and experts, including affordable apartment projects,” Tri said.
Vinh Phuc People’s Committee also assigned the Department of Planning and Investment as well as the Investment Promotion Agency to organise investment promotion programmes. Notably, the province issued the investment promotion programme for this year and organised a conference to analyse the component indices of the province’s Provincial Competitiveness Index 2019 and discuss improvements during this year and upcoming ones.
In addition, during social distancing, representatives of departments made suggestions and supported investors via social networks like Zalo to both comply with the isolation policy and implement online investment promotion activities. Furthermore, the province continues to reduce the time it takes for investors to complete procedures to set up business, register business online, and publish administrative procedures as well as the province’s planning to ensure full transparency.
In general, the province has received particular praise for its workforce training, the safety of its legal institutions, and the pioneering role of local governance, all of which are drawing attention from long-term investors. This explains why local and global giants, especially Europe and America, are keen on the province. One of the outstanding success stories is Piaggio which has two plants in the province. The other is De Heus, a high-quality European animal feed producer, one of the five largest animal feed manufacturers in Vietnam that is making extensive contributions to the agricultural development of not only Vinh Phuc but the whole country.
In addition, many global corporations such as Toyota, Honda, Daewoo, and Sumitomo have invested in Vinh Phuc, focusing mainly on the fields of processing technology, manufacturing, electronic assembling and industrial zones infrastructure.
Vinh Phuc currently has 392 foreign-invested projects with the total registered capital of $5.57 billion, from 18 countries and territories in the province.
CPI likely to increase by 3.5- 4 percent this year: experts
The consumer price index (CPI) is projected to increase by between 3.5 percent and 4 percent this year, according to experts at a seminar held in Hanoi on July 2, which focused on national market and price movements in H1 and forecasts for the whole year.
Assoc. Prof., Dr Nguyen Ba Minh, Director of the Institute of Economics-Finance at the Academy of Finance said there are two factors pushing the CPI up in the second half, which are recovering prices of materials and fuels after the pandemic is put under control, and the resumption of production and international trade and exchanges.
Meanwhile, factors that could restrain the CPI include slow economic recovery due to pandemic, trade wars and political instabilities in many areas in the world.
Besides, the prices of pork in the country are expected to subside thanks to efforts to improve the supply of the food.
Vietnam has carried out preventive measures against the COVID-19 pandemic, stabilised market prices, regulated currency policies for macroeconomic stabilisation and inflation control, thereby keeping the CPI stable, he added.
According to Dr Nguyen Duc Do, as inflation stood at 3.17 percent compared to the same period last year, the target of keeping inflation under 4 percent in 2020 will be possible.
He pointed out that the oil prices would not rise much as the recovery prospect for the world economy is gloomy, while domestic pork prices are unlikely to surge in the coming time as the Government allows imports of pigs. Therefore, he maintained the 3.5-percent projection for this year’s inflation.
Indonesia listed among upper-middle income countries by WB
Indonesia is now an upper-middle income country, an upgrade from its previous status as lower-middle income, according to the World Bank’s latest country classifications by income level published on July 1.
The classifications are based on gross national income (GNI) per capita. Upper-middle income status categorises countries with a GNI per capita of 4,046 USD to 12,535 USD, while lower-middle income status categorises countries with a GNI per capita of 1,036 USD to 4,045 USD. Countries with a GNI per capita of below 1,036 USD are considered low income and those with a GNI per capita of 12,535 USD are considered high income.
Indonesia saw its GNI per capita rise to 4,050 USD in 2019, surpassing the income threshold for upper-middle income, from 3,840 USD in 2018.
Indonesia’s improved status is a proof of economic resiliency and maintained economic growth over the last few years, the Finance Ministry said in its statement.
According to the statement, the Indonesian government will continue to push for structural reforms to boost competitiveness, improve industry capabilities and reduce the current account deficit to empower the economy.
Regional small firms prioritising investment in technology
Investment in technology is the top investment priority for small enterprises in Southeast Asia this year, according to a survey.
This priority applies even to small businesses that face cash flow concerns, the United Overseas Bank (UOB) and Dun & Bradstreet said in a joint release on July 1.
The release cited findings from a survey by the UOB, Accenture and Dun & Bradstreet in the third quarter of 2019 and in May 2020, which polled 1,000 small businesses with an annual turnover of 20 million USD and below in five countries - Indonesia, Malaysia, Singapore, Thailand and Vietnam.
Technology was ranked the top investment priority for 2020 by 64 percent of businesses surveyed, followed by investments in developing employees' skills (51 percent), and in machinery or equipment (40 percent).
Among the five countries polled, Thailand had the highest proportion (71 percent) of respondents prioritising technology investments this year, followed by Indonesia (65 percent), Vietnam (63 percent), Singapore (60 percent) and Malaysia (59 percent).
Besides, small businesses from the food and beverage, information and communications technology and healthcare sectors (50 percent) indicated the strongest desire to boost their technology investments, followed by those in construction (48 percent) and retail trade (46 percent).
Although 88 percent of businesses had lowered their revenue expectations in 2020, 44 percent said they still planned to increase their overall technology budget.
This suggests that small businesses in Southeast Asia are looking beyond the present challenges and are set on adopting technology to improve their competitiveness and sustainability, according to the release.
Recruitment demands drop 20 percent in Q2
Recruitment demands in Quarter 2 have dropped 20 percent from the previous quarter, according to Adecco Vietnam.
The recruitment and staffing company’s report on the labour market released on July 2 cited a survey among 330 HR experts in May this year, in which 93 percent of the respondents said their companies were affected by COVID-19. Up to 43 percent of the companies saw their revenues reduce by 21-40 percent.
As a result, 58 percent of the companies chose to postpone all recruitment activities. Companies also had to suspend payment rise and promotion, or cut working hours.
However, there were increases by 10-15 percent in demands for technical experts and sales persons in companies operating in technology, health care and consumer goods.
Nguyen Thu Ha, head of Adecco Vietnam’s Hanoi office, said local experts were more sought after in Q2 than foreign counterparts, which is attributable to cuts in recruitment budget and travel restrictions. The salary on offer was also lower that the average last year.
Ha said recruitment demands will improve in Q3 when some countries begin to re-open its border and companies rush to implement their business plans which have been delayed.
Thailand: COVID-19 may cost tourism sector 47 billion USD
Thailand’s tourism sector would lose 47 billion USD due to the impact of the COVID-19 pandemic, according to the UN Conference on Trade and Development (UNCTAD).
The country’s Ministry of Tourism and Sports said Thailand may receive only 9 million international visitors this year, compared to the record 39.8 million in 2019. Plummeting revenues from tourism is also a reason for the Bank of Thailand (BoT) to forecast a minus 8 percent growth for the country in 2020.
The tourism sector has drafted a travel bubble plan for foreign travellers to make up for the losses. The three-phase plan is slated to start in August, with 1,000 tourists per day across five provinces.
Minister of Tourism and Sports Phiphat Ratchakitprakarn said the ministry already asked the Association of Thai Travel Agents (ATTA) and the Tourism Council of Thailand (TCT) to design 6-7 day tour packages in five areas that are ready to join the pilot project, comprising Chiang Mai, Koh Samui, Krabi, Phuket and Pattaya.
On June 30, the Thai cabinet approved two stimulus packages worth 22.4 billion THB (723 million USD) to revitalise domestic tourism.
In the first five months of this year, the total number of domestic flights in Thailand dropped 58.2 percent, reaching 40.2 million trips, with revenues falling 57.9 percent to 191 billion THB.
Data from the Tourism Authority of Thailand (TAT) showed that international arrivals to the country plunged 60 percent in the period to 6.69 million and revenues from them decreased 59.6 percent to 332 billion THB.
Indonesia to cut diesel subsidy by half next year
The House of Representatives of Indonesia has approved the Government’s plan to cut diesel subsidy by 50 percent to 500 RP (0.35 USD) per litre next year, on the back of expectations that crude oil prices will remain low in the aftermath of the COVID-19 pandemic.
According to the Indonesian Ministry of Energy and Mineral Resources, the Indonesian Crude Price (ICP) is projected to hover between 42 USD and 45 USD per barrel in 2021, lower than the 2019 ICP average of 63 USD per barrel.
Speaking at a meeting on June 29, Minister of Energy and Mineral Resources Arifin Tasrif said the lower house also gave its nod to a plan to increase the quota for liquefied petroleum gas (LPG) while maintaining the quota for subsidised fuel in the 2021 draft state budget (RAPBN).
The Cabinet and the House are currently drafting the 2021 state budget, with President Joko Widodo scheduled to announce the finalised RAPBN during the state of the nation address in August.
Alloysius Joko Purwanto, an energy economist at the Economic Research Institute for ASEAN and East Asia (ERIA), estimated that slashing the diesel subsidy by half could save the government about 12.4 trillion RP.