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Gov’t affirms FDI’s important role in Vietnamese economy

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Deputy Prime Minister Phạm Bình Minh speaks at the forum. Photo bnews.vn

HÀ NỘI — The foreign direct investment (FDI) sector continues to be an important economic driver, contributing to making Việt Nam more prosperous, Deputy Prime Minister Phạm Bình Minh said.

At the connections for development forum 2021 with the theme ‘Presenting opportunities and challenges from the movement of FDI flows in the new context’ co-organised by the Ministry of Foreign Affairs and newspaper Vietnam Economic Times on Monday in Hà Nội, Minh said since 1987, along with the process of renewing and opening up the country’s economy, the Law on Foreign Investment had been enacted. The country had seen three FDI waves, which had made the FDI sector present in many important industries and contribute significantly to the overall socio-economic development of the country.

As of December 2020, over 33 years of developing and attracting FDI, Việt Nam has 33,070 FDI projects with registered capital of more than US$384 billion, of which about $231.86 billion has been disbursed.

In order to successfully attract FDI in the new context, the Deputy PM said the Government would focus on solving four issues.

Firstly, Việt Nam would be determined to maintain a stable socio-political environment, considering it a competitive advantage of the country in the context that the world has many unpredictable uncertainties and it is difficult to forecast the COVID-19 pandemic.

Second, the country would focus on improving the quality of institutions and legal policies towards enhancing transparency, soundness, safety and efficiency as well as improving the governance and macroeconomic management of the State to attract high-quality FDI inflows and enhance the competitiveness of the economy.

In addition, the Government would encourage and support domestic enterprises to enter into joint ventures, contribute capital and purchase shares of FDI enterprises in projects using high and new technologies and supporting industries to master technology, manage and develop national products.

Third, the Government would prioritise investment in infrastructure development to create smart and efficient connections to help reduce transaction costs and enhance the competitiveness of businesses, investors and the entire economy.

In particular, the Government would encourage investment in education and science and technology, considering it an engine of growth for the country in the coming decades.

Finally, together with investment attraction, provinces and cities would organise and support investors to build their projects effectively and promptly through reforming the business environment and administrative procedures, especially in land clearance.

Minh expected the measures would help reduce investment costs for investors and strengthen their confidence besides supporting domestic enterprises to develop and participate more deeply in the global production and distribution chains. —         

Source: https://vietnamnews.vn/economy/935410/govt-affirms-fdis-important-role-in-vietnamese-economy.html

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Vietnam to protect production at industrial parks

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The fourth wave of COVID-19 has changed the routines of many people working in industrial parks (IPs) in northern Vietnam.

Vietnam to protect production at industrial parks
A worker of Samsung Company in Yen Phong IP, Bac Ninh Province, is vaccinated against COVID-19. — Photo laodong.vn 

As IPs play an important part in the country’s exports and local economic development, the re-emergence of the COVID-19 pandemic could cause disruptions to production and business activities, causing tens of thousands of workers to work alternate shifts or take temporary leave, said experts.

To deal with the situation, Bac Ninh Province, which is home to 1,120 companies including big names such as Samsung, Canon, Foxconn and Microsoft, as well as about 450,000 workers in 10 industrial parks and 26 industrial clusters, started the first ever production-residence-combined model in the country to deal with the ongoing outbreaks in the IPs.

Vu Ninh, who worked as a manager at Samsung’s vendor at the Yen Phong IP told Việt Nam News: “I was vaccinated against COVID-19 on June 2 and feel thankful and safe for that.”

Ninh said: “Now, everything is served at the factory. Instead of going back and forth between Hanoi and Bac Ninh every day like usual, we are working, eating and staying at the factory all the time.”

Other IPs in Bac Ninh Province are following similar models.

Nguyen Thi Khai, a worker at Bujeon Vietnam Electronics Company in Que Vo IP, said: “I feel peace of mind while I keep my job and income and am protected.”

Nguyen Thi Thu, a worker at Yen Phong IP, said: “We get VND100,000 per day and extra each month to call home.” 

Co-operate to protect the IPs

While Bac Ninh Province People’s Committee set up teams to inspect, supervise and guide enterprises to implement the work-stay model, local enterprises were also working hard to make sure their staff stay safe.

Bujeon Vietnam Electronics rearranged an equipment line, temporarily suspending an expansion project to take advantage of the space for accommodation. 

Song Yu Hoon, director of the company’s Administration and Human Resources Department, said: “We always ensure the best conditions for workers’ accommodation as they need to be safe to maintain stable production.”

Choi Joo Ho, general director of Samsung Vietnam, said: “In a short time, equipment has been installed for workers to stay at the factories and at 51 schools in Yen Phong district.”

To ensure peace of mind for tens of thousands of employees, the company provides free accommodation, as well as three meals and a snack a day.

Bui Hoang Mai, Head of the Provincial IP Management Board, told local media: “The policy of the province has received the consent of enterprises as it is the most practical solution to fulfil the “dual goal” of both economic development and fighting the COVID-19 pandemic.” 

Other IPs to be protected

There are 3.8 million people working in 369 industrial zones and border areas nationwide, while some 600,000 people work at industrial clusters. 

Hanoi, HCM City and Bac Giang Province also suffered from the fourth wave of COVID-19. In the top ten exporting localities, valued at US$213 billion, the top four accounted for 51.2 per cent of the volume. HCM City and Hanoi accounted for 40 per cent of the country’s GDP.

In the fourth wave of the virus since April 29 to June 16 afternoon, Bac Giang reported 4,590 cases, Bac Ninh followed with 1,432, while HCM City and Hanoi reported 1,015 and 464 cases, respectively.

With more positive cases reported, HCM City’s factories implemented measures to deal with the pandemic and ensure production.

Head of Viet Thang Jean Co. with thousands of workers and vice president of the HCM City Textile, Embroidery and Knitting Association, Pham Van Viet, said: “The textile and garment industry is labour-intensive and works on a chain, so if a worker is isolated for 14-21 days, the enterprise’s production plan and the production chain are interrupted.”

Viet said: “We are very worried because if we cancel orders, we have to compensate customers, while thousands of workers have to quit or lose their jobs.”

As in Bac Ninh, the city’s businesses have prepared plans for on-site production and accommodation. On June 11, the management board of the city’s Hi-Tech Park organised an online scenario when workers stay and work in the factories.

Economist Ngo Tri Long said that the fourth wave poses other problems. The first priority was to fight the pandemic, but at the same time keep production chains intact. 

“In the planning and development strategy of IPs, it is necessary to prepare and respond to the pandemic and limit the spread of the disease. The construction of concentrated accommodation and catering for workers in a closed chain in industrial parks and factories will be a long-term solution. Thus, it is easy for us to stamp out the pandemic, not to spread it in the community.”

Long said it was necessary to urgently trace, localise and stamp out new infection clusters, especially outbreaks that have spread to industrial parks and export processing zones, adding that foreign experts working in the IPs need to undergo mandatory isolation.

Economist Nguyen Tri Hieu told Việt Nam News: “The local economy has spent the first five months relatively optimistic. Exports grew over the same period last year, foreign trade maintained growth, jobs were restored, and GDP continued to grow. However, from now until the end of the year the situation will be very unpredictable.”

He added: “We still have strength in exports. Many markets around the world are being strongly affected by the pandemic, but there is a lot of demand for goods, especially agricultural products. However, the pandemic must be controlled and the production must be maintained.”

Source: Vietnam News

Source: https://vietnamnet.vn/en/business/vietnam-to-protect-production-at-industrial-parks-747013.html

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Japanese investors secure foothold in leading Vietnamese brands through M&A

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Japanese investors have poured billions of dollars to purchase stakes at Vietnamese businesses over the past decade.

Japanese investors secure foothold in leading Vietnamese brands through M&A
After a decade of M&A, Japanese investors now own several leading brands in Vietnam.

As of May 2021, Japan was the second-largest foreign investor in Vietnam with the total registered capital of $63 billion. Japanese investors have also been actively contributing capital and share purchases to Vietnamese firms in various fields such as retail, food and beverage, pharmaceutical, real estate, and finance.

Many well-known Vietnamese brands are now owned by Japanese investors. In 2011, Unicharm acquired local company Diana. In 2015, Unicharm expanded its factory in Bac Ninh Province, targeting a bigger slice of the market.

Also in the same year, brewery group Kirin Holdings acquired major Vietnamese soft drink producer Interfood Shareholding Co. as part of its plans to capitalise on the Vietnamese market. Kirin purchased 57.25 per cent of the total outstanding shares in Interfood for an undisclosed sum and also bought out Wonderfarm Biscuits & Confectionery Sdn. Bhd., a Malaysia-based firm that manages the intellectual property rights of Interfood.

Eath Chemical also took over A My Gia, which is known for the Gift brand household detergent and Ami brand air fresheners. Sojitz Corporation spent around $91 million on acquiring a 95 per cent stake in Saigon Paper Corporation, which is the largest tissue paper and industrial paper producer nationwide. Japanese drugmaker Taisho Pharmaceutical Co., Ltd. also takes control of Hau Giang Pharmaceutical JSC. Other M&A deals involving Japanese investors include NTTData’s acquisition of Payoo, AEON Group’s acquisition of Citimart, and Line’s acquisition of Webtretho.

In 2021, Maruha Nichiro decided to acquire Saigon Food in order to secure a new marine product processing base and to acquire a platform for the development, processing, and sales of processed foods. Meanwhile, Japanese mega financial institution Sumitomo Mitsui Financial Group (SMFG) has just acquired 49 per cent stake in Vietnam’s largest consumer finance company FE Credit. The Japanese bank will invest more than $1.4 billion in FE Credit as early as October.

Speaking at the Vietnam M&A Forum 2020, Masataka “Sam” Yoshida, head of the Cross-border Division of RECOF Corporation and CEO of RECOF Vietnam Co., Ltd. said that M&A investments in Vietnam will be a trend for Japanese companies which will last for the years to come.

The first trigger is the destiny for Japanese companies to find new markets to expand outside Japan. The fact is that most of the sectors in Japan are already mature. For instance, almost one-third of the Japanese population is over 65 years old. This makes the average age of Japanese people 48.4 years, almost 20 years older than the figure for Vietnam. Also, around 276,000 people (more than a quarter of a million) are disappearing every year.

“The second trigger is ‘M&A as a growth strategy’ which is backed up by the abundant accumulated cash during the last 20 years which is reaching $2.34 trillion as bank deposits with almost zero interest rate. Pushed by shareholders’ requirements to make use of the money, these funds have started to flow into the M&A market which made its highest record in 2019 by 4,088 deals. This means there were more than 4,000 active and successful Japanese investors,” he said.

Source: VIR 

Source: https://vietnamnet.vn/en/business/japanese-investors-secure-foothold-in-leading-vietnamese-brands-through-m-a-747031.html

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VN-Index hits new peak on strong cash flow

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An investor watches stock information on the computer. Strong cash flow into bank and steel stocks pushed the VN-Index of the Hochiminh Stock Exchange up today, June 18, to its record of 1,377.77 points – PHOTO: VNA

HCMC – Strong cash flow into bank and steel stocks pushed the VN-Index of the Hochiminh Stock Exchange up today, June 18, to a new record of 1,377.77 points.

At the close, the main index jumped by 17.85 points, or 1.31%, against the day earlier, with 249 winners and 138 losers. Trade volume totaled over 809 million shares worth VND23.7 trillion, up over 5% in both volume and value from the previous session.

Over 58 million shares valued at VND2.8 trillion were traded in block deals.

In the group of bank stocks, HDB, EIB, BID, MBB and TCB were in positive territory, while lender VCB made a strong rise and reported a matching volume of over 3.2 million shares.

Housing developer VHM was among key drivers of the southern bourse, improving 3.2% at the close.

Among the steel stocks, TLH and SMC shot up to their ceiling prices, while NKG, POM and HSG soared by 2.9%-5.2%.

Many small and medium stocks also became cash magnets and moved up at the end, with property group FLC maintaining its growth momentum and closing up 3.1%. FLC became the most actively traded stock on the southern market with 53 million shares traded.

Financial firm FIT was also one of biggest gainers, rising by 2% and reporting a matching volume of 30 million shares.

With 109 gainers and 84 decliners, the HNX-Index of the Hanoi Stock Exchange stood at 318.73 points at the close, inching up a slight 0.52% from the session earlier.

Among the bank stocks, NVB ended at the reference price, while SHB and BAB made a mild rise. Lender SHB also took the lead on the northern bourse by liquidity, with 16.7 million shares changing hands.

Other largecaps such as securities companies SHS and MBS and service company THD finished the day up and contributed to the growth of the index, while many steel stocks were among the best performers.

Source: https://english.thesaigontimes.vn/82629/vn-index-hits-new-peak-on-strong-cash-flow.html

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