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Leather, footwear companies need deeper participation in global supply chains: conference

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At a conference in HCM City yesterday about the leather and footwear industry, experts said that companies could deepen their participation in global supply chains by improving their production. – Photo Việt Dũng

HCM CITY – Leather and footwear companies need to develop a better supporting industry for the sector and focus more on fashion and design to deepen their participation in global supply chains, experts said at a conference in HCM City yesterday.

Phan Thị Thanh Xuân, a consultant for USAID’s Linkages for Small and Medium Enterprises Programme, said the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the European Union–Vietnam Free Trade Agreement (EVFTA), were providing great opportunities for Việt Nam’s leather and footwear industry, as the two trade agreements have reduced tariffs and will further do so in the future.

Last year, total export turnover of the industry reached US19.5 billion, about 11 per cent lower year-on-year due to the COVID-19 pandemic affecting supplies of production materials as well as exports of leather and footwear products to foreign markets.

Xuân noted that there was a rising trend of customers preferring long-lasting products over “fast fashion” goods. Businesses in the field of fashion needed to respond quickly to market demands and pay more attention to improving quality and reducing delivery time.

Nguyễn Thị Xuân Thủy, deputy director of the Industry Development Assistance Centre, said there were too few businesses in the supporting industry in Việt Nam for leather and footwear production, and their usage of automation was limited.

Production is mostly limited to Cut, Make, Trim manufacturing, and exports were mostly done via intermediaries rather than directly with importing brands, Thủy said.

There was also a lack of skilled staff in sales, marketing and merchandising who have a deep understanding of foreign markets.

“Not enough attention is being paid to the fashion industry, which is not linked with the leather and footwear industry,” Thuy said.

Xuân said that for businesses to recover and develop after COVID-19, “we need to focus on improving our value in supply chains by partaking deeper inside the chains and having more stages done within Việt Nam, such as material and auxiliary material production. We have to improve our design capability and partake more in logistic chains”.

As labour costs have risen over the years, to maintain production of leather and footwear, businesses need to invest more in automation and digital technology to improve productivity, make high-value products that require complex technologies, and improve production scale.

They also need to pay attention to sustainable development by ensuring environmental protection and good working conditions.

By 2025, the industry aims to satisfy most of the country’s demand and maintain its position as a key export industry of the country. And by 2030, it aims to reach sustainable development through modern technologies and management systems that adhere to global standards.

The Việt Nam Leather, Footwear and Handbag Association will continue to work with State authorities on policies to help businesses recover production and exports, as COVID-19 is expected to be more controlled thanks to widespread vaccination. The association will also seek more investment in the supporting industry in an effort to increase the use of domestic materials. –

The leather and footwear industry suffers from a number of problems, including an underdeveloped supporting industry and design and fashion sector. – Photo

Source: https://vietnamnews.vn/economy/856342/leather-footwear-companies-need-deeper-participation-in-global-supply-chains-conference.html

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U.S. says Vietnam’s currency actions ‘unreasonable’ but holds off on tariffs

The US administration on Friday said Vietnam’s actions to push down the value of its currency are “unreasonable” and restrict U.S. commerce, but did not take immediate action to impose punitive tariffs.

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Releasing the results of its so-called Section 301 investigation into Vietnam’s currency practices, the U.S. Trade Representative’s (USTR) office said it would continue to evaluate all available options to correct the situation. That process will pass to the administration of Democratic President-elect Joe Biden, who is due to take office on Wednesday.

The U.S. Treasury Department in December labeled Vietnam a “currency manipulator” due to its growing trade surplus with the United States, its large global current account surplus and heavy foreign exchange market intervention to hold down the value of its dong currency.

Business groups and trade experts had feared this would lead to tariffs in the USTR investigation opened last October as a parting shot from the Republican Trump, who aggressively imposed tariffs during his four years in office.

The USTR said it consulted the Treasury Department on Vietnam’s exchange-rate policies.

“Unfair acts, policies and practices that contribute to currency undervaluation harm U.S. workers and businesses, and need to be addressed,” U.S. Trade Representative Robert Lighthizer said in a statement. “I hope that the United States and Vietnam can find a path for addressing our concerns.”

The Section 301 investigation – named after a provision in a U.S. trade law – was the same tool that Lighthizer used to launch a sweeping tariff war against China, which has left punitive U.S. tariffs on $370 billion worth of annual Chinese imports and prompted many companies to shift supply chains out of China. Vietnam has been a major beneficiary of investment from those companies seeking to avoid U.S. tariffs on China.

The USTR’s decision to hold off on ordering tariffs against Vietnamese goods gives Biden’s nominee as trade representative, Katherine Tai, some breathing room in deciding how to approach Vietnam.

A spokesman for Biden’s transition team declined to comment on the USTR decision.

The move has paralleled other decisions by the trade office in recent days against imposing tariffs on France, Austria, Britain, Italy, Spain, India and Turkey in retaliation for their digital services taxes.

President Donald Trump’s administration on Friday said Vietnam’s actions to push down the value of its currency are “unreasonable” and restrict U.S. commerce, but did not take immediate action to impose punitive tariffs.

Releasing the results of its so-called Section 301 investigation into Vietnam’s currency practices, the U.S. Trade Representative’s (USTR) office said it would continue to evaluate all available options to correct the situation. That process will pass to the administration of Democratic President-elect Joe Biden, who is due to take office on Wednesday.

The U.S. Treasury Department in December labeled Vietnam a “currency manipulator” due to its growing trade surplus with the United States, its large global current account surplus and heavy foreign exchange market intervention to hold down the value of its dong currency.

Business groups and trade experts had feared this would lead to tariffs in the USTR investigation opened last October as a parting shot from the Republican Trump, who aggressively imposed tariffs during his four years in office.

The USTR said it consulted the Treasury Department on Vietnam’s exchange-rate policies.

“Unfair acts, policies and practices that contribute to currency undervaluation harm U.S. workers and businesses, and need to be addressed,” U.S. Trade Representative Robert Lighthizer said in a statement. “I hope that the United States and Vietnam can find a path for addressing our concerns.”

The Section 301 investigation – named after a provision in a U.S. trade law – was the same tool that Lighthizer used to launch a sweeping tariff war against China, which has left punitive U.S. tariffs on $370 billion worth of annual Chinese imports and prompted many companies to shift supply chains out of China. Vietnam has been a major beneficiary of investment from those companies seeking to avoid U.S. tariffs on China.

The USTR’s decision to hold off on ordering tariffs against Vietnamese goods gives Biden’s nominee as trade representative, Katherine Tai, some breathing room in deciding how to approach Vietnam.

A spokesman for Biden’s transition team declined to comment on the USTR decision.

The move has paralleled other decisions by the trade office in recent days against imposing tariffs on France, Austria, Britain, Italy, Spain, India and Turkey in retaliation for their digital services taxes.

Source: Reuters

Source: https://e.nhipcaudautu.vn/economy/us-says-vietnams-currency-actions-unreasonable-but-holds-off-on-tariffs-3339124/

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Cement exports unlikely to enjoy robust growth in 2021

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Vietnam’s cement export volume in the year ahead will remain stable, although export growth is not projected to see vigorous growth similar to 2020 as a result of the Chinese market enjoying a gradual stable supply, according to insiders.

Cement exports unlikely to enjoy robust growth in 2021

While domestic demand for cement in 2021 is forecast to increase due to increased public investment, the export segment is largely anticipated to enjoy no breakthrough due to low demand from importing countries.

With regard to growth prospects for the local cement industry ahead in 2021 as provided by SSI Research, the demand for cement consumption amid the domestic market is anticipated to reach a growth rate of between 5% and 7%.

This increase in consumption demand can largely be attributed to investment in infrastructure and FDI inflows into the country, in addition to the recovery of real estate construction through major infrastructure projects being implemented, including the North-South expressway project and the Long Thanh airport project.

According to figures released by the Vietnam Cement Association, despite recording a low growth rate in the local market due to the impact of the novel coronavirus (COVID-19) pandemic during 2020, the Vietnamese cement industry enjoyed robust growth in terms of export volume during the 11-month period with an annual increase of 15%.

Most notably, the strongest growth period was recorded between May and September, with a rate of 47% compared to the period from 2019, largely due to increasing demand from the Chinese market.

A representative of SSI believes that although the sector will not achieve robust growth like in 2020, the total consumption of cement and clinker will rise by approximately 2% in 2021.

Despite achieving strong growth, the cement industry has revealed a number of inadequacies that exist, including a heavy reliance on the Chinese market and the limited production capacity of cement plants, experts noted.

Despite Vietnam is the world’s fifth largest manufacturer and largest one in Southeast Asia, the country’s production capacity per factory is less than half of factories from neighbouring countries such as Thailand and Indonesia, with only 2.1 million tonnes produced annually per factory.

Industry experts therefore emphasized the need to ramp up the production capacity of local cement plants to between five and 10 million tonnes per year in a bid to ensure effectiveness in the long term whilst simultaneously reducing costs moving forward.  VOV

Source: https://vietnamnet.vn/en/business/cement-exports-unlikely-to-enjoy-robust-growth-in-2021-705907.html

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Vietnam to launch competitive retail electricity market in 2023

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Vietnam Electricity will conduct price marketization to encourage investment in electricity industry and follow the State-regulated market mechanism.

Vietnam will officially run the competitive retail electricity market in 2023 as part of efforts to make the power sector more transparent and effective in comparison with the regional peers.

 Deputy Prime Minister Trinh Dinh Dung at the meeting on January 12. Photo: VGP

Vietnam Electricity (EVN), the country’s sole power distributor, needs to facilitate the investment in infrastructure of the power industry to better connect power plants with the national grid, Deputy Prime Minister Trinh Dinh Dung said at a meeting on January 12.

EVN needs to prioritize energy efficiency together with reasonable import and export of power in national programs, Mr. Dung said, adding that the group should be active in recommending plans for electricity generation and transmission to ensure sufficient energy for socio-economic development, defense and security.

The solutions will aim to keep electricity prices stable. “High power prices will make Vietnamese goods uncompetitive,” the deputy PM said.

Competitive retail electricity market

Vietnam’s 2004 Electricity Law has provided the framework to develop a competitive power market, helping promote private investment, and establish a regulatory authority, according to the World Bank.

Under which, the private sector is encouraged to participate in each distribution company.

Whereas the power market is partially competitive, improved operational efficiency and financial performance of generators in this market has contributed to keeping generation costs relatively low.

Plans are broadly on track for further extensive reforms, including a clean energy transition, Alan David Lee and Franz Gerner said in “Learning from Power Sector Reform Experiences” policy research working paper published in March 2020.

Vietnam has seen significant changes to its market structure, gradually moving from a vertically integrated structure to a more competitive power market, the paper showed.

In less than two decades, the country’s power sector evolved from fragmented companies with high technical and financial losses to an integrated power system, and then to an unbundled group of stated-owned corporations with sizeable participation of domestic and international private sector actors in power generation.

 Vietnam expects to run competitive retail electricity market by 2023. Photo: monre.gov.vn

2021 targets

Representatives of EVN said at the meeting that one of the group’s tasks for 2021 is to conduct price marketization to encourage investment in electricity industry and follow the State-regulated market mechanism.

Duong Quang Thanh, chairman of the Board of Directors at EVN, said the group will prioritize sufficient power supply in a stable manner in 2021 for the socio-economic targets.

EVN targets to increase output by 5.16% on-year to more than 228 billion kWh in 2021, System Average Interruption Duration Index (SAIDI) of less than 349 minutes, electricity loss rate less that 6.35%.

The group will boost the development of renewable energy to reduce imported materials and ensure stable supply.

In addition, it requires efforts to complete regulatory framework for the electricity industry, especially regulations on credit guarantee schemes as the sector needs huge amount of money for power generation and transmission.

Requirements on environmental protection become strict, demanding investors to develop clean energy sources.

Accordingly, applying advanced technology and using updated equipment will be a must in upcoming power projects.

“The last but not least is digital transformation that should be applied for the group’s operations and customer services to save cost,” EVN’s Deputy General Director Nguyen Tai Anh said at the meeting.

Currently, the group is running 16 software programs including ERP, CMIS 3.0, IMIS, PMIS, HRMS, E-OFFICE and EVNHES, for all its members.

2020 performance 

EVN said one of its achievements in 2020 is lowering electricity loss rate to 6.42%, the third in ASEAN.

In 2020, the group offered electricity price reduction worth VND12.3 trillion (US$525 million) to customers as part of efforts to support them in the Covid-19 pandemic.

EVN’s members have so far operated a network of 29,638 megawatts (MW), accounting for roughly 43% of the national installed capacity.

In the year, the consumed power volume reached 216.95 billion kWh, up 3.42% on-year. Hanoitimes

Linh Pham

Source: https://vietnamnet.vn/en/feature/vietnam-to-launch-competitive-retail-electricity-market-in-2023-705234.html

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