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Textile and garment makers seek multitude of options



As the current outbreak of the pandemic remains complicated, textile and garment makers fear lasting impacts on their operations, 

 with many of them hoping for either direct support from the government or the permission to take the initiative themselves.

Textile and garment makers seek multitude of options
Production and export activities are being highly affected with current domestic and global restrictions. VIR Photo: Le Toan

Production activities at Pou Yuen Vietnam have been upset by the detection of an F1 case at the company’s factory, leading to mandatory quarantine for over 140 more workers who work at the same production line. Pou Yuen Vietnam, which belongs to Taiwanese Pou Chen Group, has been investing into Vietnam since 1996 and specialises in garments and sport shoes, with its factory in Ho Chi Minh City providing employment for around 56,000 people.

COVID-19 continues to negatively impact Pou Chen, the world’s largest sports shoe manufacturer, which has a total of eight factories in five cities and provinces of Vietnam. The current outbreak is showing no signal of stop, causing tremendous difficulties for Vietnam’s manufacturing industry, including textiles and footwear – the two most labour-intensive industries.

“We have had many orders but still make losses. The more this situation progresses, the more difficult it will become to keep the jobs for our workers,” said Phan Thi Thanh Xuan, general secretary of the Vietnam Leather, Footwear and Handbag Association (Lefaso).

Up to this point, many leather and footwear businesses have had orders until the end of Q3 of 2021, or even the end of the year. However, according to Xuan, the processing price of leather and footwear products is overall decreasing while input costs are increasing, by around 5-10 per cent.

Materials imported from China are still the cheapest, but prices there are also beginning to increase. Moreover, producers and wholesalers struggle with a lack of containers for shipping and consecutive price hikes for renting them. Among the most affected countries are primarily small and medium enterprises.

Pandemic struggles 

The latest outbreak of the pandemic exacerbated the difficulties of businesses when they had to bear additional costs of disease prevention and control. Xuan estimated, “A 900-employee enterprise, implementing pandemic prevention and control activities for two months, has to spend about $1 million buying tests and protective equipment and cover other costs.”

The problems that Xuan described affect most of the businesses in the leather, footwear, and textile industry. The situation forced the Vietnam Textile and Apparel Association (VITAS) to urgently send a dispatch requesting the government to support businesses to remove difficulties, such as reducing land rent and extending VAT payments until the end of 2021, said Vu Duc Giang, chairman of VITAS.

According to Giang, related Vietnamese enterprises have to face a downward trend in prices, especially those dealing in the textile segment. Yarn prices have increased by about 25 per cent since last December while the prices of sold fabric have not been adjusted yet, pushing many textile enterprises into the doldrums.

In the first half of 2021, the industry was not as frozen as in 2020, but businesses suffered great damage from the pandemic, especially those with infected people. Many enterprises have stopped production and had no income, with some of them not entitled for support, debt relief, and tax reduction, but still having to pay part of the basic salary for employees, while it remains possible that contract penalties from foreign buyers could be incurred.

In addition, the collection of infrastructure fees at seaports “is also putting great pressure on textile and garment exporters,” said Giang.

VITAS has also proposed to the government and related agencies to reduce road tolls and other fees. At the same time, it was suggested that the northern city of Haiphong continues reducing port fees and that Ho Chi Minh City will refrain from doing so, despite unadjusted plans to follow through with such fees.

The Ministry of Industry and Trade has acknowledged that the pandemic developments continued to severely affect production and export activities of enterprises. Nevertheless, industrial production in the first six months of 2021 increased by 8.91 per cent on-year, higher than the growth rate of 2.91 per cent in the first six months of 2020, but still lower than the growth rate of 9.13 per cent the same period 2019.

Through the first half of 2021, production of Vietnam’s industrial enterprises, particularly in the textile and footwear industry, was in the worst condition since February 2020, when the pandemic came to Vietnam. The inventory index of the entire industry increased by 24.3 per cent compared to the same period in 2020, an increase of 26.7 per cent as of June 30.

The global health crisis negatively impacted the growth target of the textile industry. In 2020, the value only reached $35 billion, down 9.82 per cent compared to 2019’s $38.9 billion and 2018’s $36.25 billion.

The total export turnover of the textile and garment industry in the first six months of this year reached $15.2 billion, up 14.9 per cent on-year, while footwear reached $10.4 billion, up 27.8 per cent on-year.

As input prices remain expensive, many businesses do not want to produce a lot of goods. At the same time, the country is struggling with securing vaccines to vaccinate 70 per cent of the population by the end of 2021.

Sustainable solutions 

Effective government measures have had a great impact in protecting the economy from the pandemic. The prime minister signed and promulgated Resolution No.09/NQ-CP dated May 18 on the purchase of vaccines against COVID-19. However, purchases have been forcing the government to use short-term solutions in pandemic prevention.

Xuan of Lefaso found that the supply chain of vaccines has many gaps at the moment. “Letting businesses take the initiative in funding as well as finding sources to import vaccines will bring greater efficiency and reduce the burden on the state,” suggested Xuan.

Many textile enterprises have already begun buying and injecting vaccines for workers. However according to Le Tien Truong, general director of Vietnam National Textile and Garment Group (Vinatex), about 300,000 doses of vaccine are needed for all those working at Vinatex and its member companies.

“Vinatex proposes that the government pays attention to prioritising vaccine sources for textile workers, and businesses like us are willing to bear all costs to vaccinate their workers,” said Truong.

According to him, global herd immunity would be required to help Vietnam’s textile and garment industry achieve a 10-per-cent growth in 2021. Despite this, Truong believed that the market will be more optimistic in the last six months of the year, when consumption of high-value items usually increases.

But businesses also have other options. VitaJean Co., Ltd. in Ho Chi Minh City is one of the country’s largest garment manufacturers. The company decided to expand its factory area to meet the social distancing requirements and continue its production largely unaffected. In addition, VietJean has had more than 1,000 workers already vaccinated.

Pham Van Viet, general director of VitaJean, said that the production gap and around 20 per cent of missing workers are the main reasons for the reduction in the company’s output. Because of this, VitaJean could not meet its target of producing 20,000 items per day, which are usually delivered to Japanese, American, and European buyers.

Nevertheless, Viet sees the fact that the United States and European countries are gradually or completely lifting order blockades as an important driving force to increase export value in the coming months.

According to Lefaso, businesses in the garment and textile industry like Pou Yuen Vietnam are now in critical need from the state for them to stay afloat. Slow-paced vaccinations can cause further disruptions in the production and supply chains and Vietnam’s textile and garment exports from now until the end of the year.

Source: VIR



Businesses dig deep to make sure they come out on other side of pandemic intact




A customer tries to book a quarantine hotel service on Traveloka app. Traveloka and many businesses in Việt Nam are making efforts to survive the forth wave of COVID-19 pandemic. — Photo

Thu Ngân

HCM CITY — Businesses in Việt Nam are making all efforts to survive the fourth wave of COVID-19 which is battering the country.

Giant food producer KIDO Group said in a recent press release it has adopted a number of solutions to adapt to the new situation and keep production going while also ensuring safety.

A spokesperson told Việt Nam News that to ensure uninterrupted production, the company has adopted the “3 on-site” model, which involves on-site production, dining and rest, for over a month.

It unfailingly complies with the provisions of the Government’s circular No 16 and 5K message, he said.

It is also preparing for life after the pandemic, he said.

“We are ready to bring new products and segments into the market immediately after COVID-19 is controlled.”

It plans to introduce the Vibev brand of products made in collaboration with Vinamilk.

Another plan is to introduce Chuk Chuk, a new food and beverage brand, opening 1,000 stores by 2025.

The company’s general director, Trần Lệ Nguyên, said the first market for Chuk Chuk would be HCM City, and stores would open in Hà Nội and some northern provinces by September if the pandemic is controlled by then, adding it would be present across the country by 2025.

Ride-hailing and delivery company Grab has rolled out a number of programmes to help customers buy foodstuffs.

To ensure the safety of its drivers and customers, it has tied up with the General Department of Vocational Education and Training to fully equip its drivers with the necessary skills and competencies.

They have also jointly built and standardised the training materials, and drawn up communication plans for raising awareness about vocational skills development for drivers.

Trương Anh Dũng, director general of the department, said: “The COVID-19 pandemic has had a great impact on the Vietnamese economy, and drivers cannot be immune to it. This partnership helps resolve long-term problems for technological drivers, equipping them with the necessary skills to sustain and improve not only their livelihoods but also the quality of life of themselves and their families.”

Grab also has a programme to support disadvantaged people in HCM City in co-operation with Golden Lotus Foundation. It provides free meals to people economically affected by the pandemic or living in locked-down areas.

To start with, around 11,500 meals would be provided, it said.

Tourism is one of the many sectors badly hit by the pandemic, and many businesses in it have been striving to overcome the challenges they face. 

For instance, before the semi-lockdown began weeks ago some hotels had begun to offer co-working space to provide customers with a safe working environment.

Now, with stricter social distancing regulations, they have changed their strategy and offer quarantine facilities, and this has received strong support from customers.

Recently a Southeast Asian travel and lifestyle superapp, Traveloka, announced that it is working with the HCM City Department of Tourism to help the city’s residents find and book hotels and transportation to enable quarantine. 

Demand for quarantine facilities has increased along with the developments of COVID-19 in HCM City, and its quarantine hotel and transportation online booking and payment solutions are expected to help curb the spread of the pandemic by limiting direct contact between people, Traveloka said. 

They have been available since the start of August. 

Lê Trương Hiền Hoà, director of the HCM City Tourism Promotion Centre, hailed the partnership, saying: “With support from Traveloka, HCM City is the first city in Việt Nam to digitise the quarantine hotel booking process … and will extend it to international arrivals in the near future. 

“It also helps hoteliers switch their business model to survive amidst the COVID-19 pandemic.”

With the aid of the app’s advanced technologies, customers can easily access complete information about room types, prices and transportation options in real-time, and pay for it via Traveloka. 

Traveloka said it is partnering with more than 80 hotels and selected transportation partners across HCM City, including private cars and shuttle buses. 

MVV Academy, a pioneer organisation for comprehensive, on-site and advanced resource development solutions in Việt Nam, decided to organise training programmes to make its staff sales consultants and brand ambassadors to introduce its products to the public. 

It also recently launched MVV Uni, an advanced training platform that offers working professionals an interactive and flexible experience to support their various learning needs, and acts as a one-stop-shop with courses in all essential business skill sets such as leadership, sales, marketing, management, soft skills, and digital transformation.

“The COVID epidemic has disrupted many human resource training activities at Vietnamese enterprises,” Bùi Đức Quân, CEO of MVV Academy told Việt Nam News.

“Taking advantage of the strength of technology, combined with experience in content building and understanding of learner experience through operating platforms such as TopClass and Everlearn, we quickly built a solution, MVV Uni, to offer enterprises training programmes for their employees during Covid.

“Our ambition is to build a university community on the cloud.” —





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COVID-19 forces banks to accelerate digital transformation



The COVID-19 pandemic not only creates challenges for banks, but also pushes them to foster digital transformation to survive, experts have said.

COVID-19 forces banks to accelerate digital transformation
A customer makes payment via a QR code. The COVID-19 pandemic pushes bank to foster digital transformation to survive. — Photo

A recent survey by the State Bank of Vietnam found that 95 per cent of credit institutions in Vietnam have either implemented digital transformation strategies or are in the process of formulating them.

It is expected that in the next three to five years digital-only banks will have revenue growth of at least 10 per cent, while regular lenders will have more than 60 per cent of customers using digital transaction channels.

State-owned banks seek to digitise their entire system, while smaller banks have identified certain areas to improve service quality and the customer experience.

Commenting on digital banking development in Vietnam at an online talkshow IDG TekTalk on Tuesday, Phan Viet Hai, director of information technology and also the digital banking centre at Viet Capital Bank, said digital banks must create a superior customer experience by changing the way services are provided using technology.

Nguyen Quang Minh, deputy CEO, partnerships, Timo Digital Bank, said, “In addition to offering perfect and up-to-date financial products and services, we also have to really understand the market, customers’ needs and expectations and more importantly, identify the problems and difficulties they are facing every day in each transaction.”

Pham Quang Minh, general director of Mambu Vietnam, said banking services have changed greatly in the past few years. In Asia, including Vietnam, rising customer expectations for online and mobile banking services are the driving force behind the digital transformation of financial service providers.

Nguyen Van Tuan, deputy general director of VCCorp & founder of Bizfly Digital Transformation, said currently banks are not only competing with each other but also with rapidly growing fintech companies, which have created “amazing” services and experiences through digital technology and transformation.

For succeeding at the digital transformation, the determination shown by a bank’s bosses plays an important role, he said.

“Technology contributes only around 30 per cent to the success with the remaining 70 per cent being owed to other factors like the mindset of businesses’ leaders and digital transformation,” he added.

According to experts, banks still face challenges in digital transformation related to regulations on electronic transactions, data sharing, network security, and an inadequate legal framework among others.

They said completing a comprehensive legal framework would provide a fillip to digital transformation.

The standardisation of technical infrastructure is also very important to facilitate interconnection and seamless integration between the banking industry and others to form a digital eco-system, they added.

Yeo Siang Tiong, cybersecurity company Kaspersky’s general manager for Southeast Asia, said: “Digital transformation, in any sector, always presents new challenges, but especially for banks and for financial services. To put it simply, revolutionising banks’ way of doing transactions means overhauling their legacy systems including people, processes and technologies.”

Humans remain the weakest link, especially those who lack proper awareness of the simplest risks like phishing and spam, while employees require new training and third-party services should be assessed comprehensively, he said.

“When it comes to security, the endpoint should be the foundation and banks should have known this by now. Financial services should be looking at an adaptive approach in security, which should be proactive rather than reactive – ready before an attack happens.” 

Online transaction increases

Due to social distancing restrictions amid the pandemic, online payment has become more convenient than cash, and, with just a smartphone and banking application, users can save, borrow money, pay for electricity, water, television, and internet bills, buy movie and airplane tickets, make hotel reservations, or even buy vegetables or meat online.

Pham Tien Dung, head of the State Bank of Vietnam’s payment department, said online transactions in the first four months of the year jumped by 66 per cent in terms of numbers and 31.2 per cent in value year-on-year, including 86.3 per cent and 123.1 per cent on mobile phones and 95.7 per cent and 181.5 per cent using QR codes.

Statistics from the National Payment Corporation of Vietnam, show that in the first five months its automatic clearing house processed over 800 million transactions worth over VND8 quadrillion ($347.7 billion), an increase of 113 per cent and 169 per cent.

A recent survey by Visa also revealed strong increases in the use of e-wallets, contactless payment via cards and smartphones and QR Code. The year-on-year growth rate of the total e-commerce transaction value in the first quarter of 2021 rose by 5.5 times compared to the fourth quarter of 2020.

Source: Vietnam News


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COVID-19 affects progress of power transmission projects



Workers at a construction site of a power transmission project. — VNA/ Illustrative Photo

Bùi Văn Kiên, deputy general director of the National Power Transmission Corporation (EVNNPT) talked to about solutions to remove difficulties and promote the disbursement of public investment as well as production and business amid the pandemic.

The COVID-19 pandemic is spreading in many parts of the country. How does this affect the progress of power transmission projects?

Many provinces and cities are now under social distancing. The pandemic has greatly affected the management, administration and implementation of power projects.

EVNNPT units can not work with the local government to implement the projects due to social distancing.

Consulting units face difficulties in travelling, conducting field surveys, measurements and applying for forest conversion to other purposes.

Localities can also hardly implement compensation for site clearance projects.

Isolation regulations has also affected the purchasing, supply of materials and construction. While goods transportation services from abroad to Việt Nam are not available due to the pandemic. 

In addition, the price of construction materials is still increasing due to the impact of the pandemic, affecting the selection of contractors and the performance of related contracts. 

What has EVNNPT done to ensure the dual goals of both construction investment and pandemic prevention?

In order to ensure the dual goals, EVNNPT has sent many documents to the People’s Committees of provinces and cities, requesting continued coordination in implementing compensation for site clearance, creating favourable conditions for employees and  contractors in travelling, transporting materials and equipment and construction. So many difficulties and obstacles have been removed.

The units have also applied information technology in management, administration as well as handling problems arising during the implementation of projects by online meetings.

EVNNPT has requested consulting contractors to have appropriate solutions to reduce the impact on project progress such as hiring qualified subcontractors, and cooperating with other units.

Thanks to those efforts, EVNNPT has completed many power projects in Pleiku, Đắk Nông, Lai Châu, Thanh Hóa and Ninh Thuận.

For urgent power projects to be completed in 2021, especially renewable energy projects, what has EVNNPT done to ensure the projects are completed on time?

For key and urgent projects, EVNNPT has established a steering committee to run these projects smoothly, minimising the time to deal with related works. We regularly review the progress of projects to promptly solve problems that arise during implementation.

What recommendations does the corporation have for the Government to deal with difficulties?

The negative impact of the pandemic on the progress of power transmission projects is huge.

In order to help EVNNPT soon remove difficulties and complete projects on time, we expect the Government, ministries and local authorities to identify the electricity industry as an essential service, related to national energy security, socio-economy and people’s lives.

We hope that the travelling of workers and the transportation of equipment and materials for construction will be facilitated when meeting pandemic prevention regulations.

Ministries and agencies should soon have support policies due to the increased prices of supplies and materials as well as consider exempting responsibility for EVNNPT when it fails to meet the progress of projects due to the pandemic.

The People’s Committees of provinces and cities should also direct local departments, agencies and units to closely coordinate with EVNNPT and the project management boards to implement works related to power line routing, forest conversion and compensation for ground clearance. —


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