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Vietnam becomes fourth most important market for Taiwanese investors

Vietnam was rated by businesses from Taiwan (China) as having great potential for development prospects, with the country’s importance increasing from 18% in 2018 to 24% by the end of 2020.

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This assessment was given at a recent seminar held by PwC Taiwan, a member firm of the PwC Global Alliance in Taiwan (China), aimed at analysing and discussing the digital transformation strategy of the six leading ASEAN countries, including Vietnam.

Despite hundreds of Taiwanese investors being unable to enter the country to survey and invest in new projects due to the nation’s entry suspension, foreign direct investment (FDI) capital from Taiwan (China) continued to pour into the country last year, with an increase of 53%.

Of which, there were many major projects in the electronics sector, such as Pegatron project in Hai Phong worth US$485 million, in addition to the Wistron project in the northern province of Ha Nam valued at approximately $300 million.

In the context the ongoing US-China trade war and potential risks, Taiwanese businesses all recognise and evaluate the country as a crucial link in Southeast Asia in terms of supply chain shifts, with a particular focus on the electronics and telecommunications sector.

Hundreds of industrial parks with attractive incentives are gradually transforming northern Vietnamese provinces into technology production ecosystems, while southern provinces still prove to be attractive for Taiwanese investors. This is the case in traditional fields such as fiber, garments and textiles, footwear, mechanics, and wood processing.

Vietnamese digital transformation promotion attracts greater investment

PwC Taiwan said that the digital transformation being promoted by the Vietnamese Government will almost be a free “incentive” policy aimed at all foreign investors in the nation. This is due to digital transformation not only boosting production and business efficiency nationwide, but also helping to reduce production costs faced by firms.

Furthermore, Vietnamese economic development indicators in 2020 were highly impressive. In addition, the market and its population of roughly 100 million people, the majority of whom are young consumers enjoying rapidly increasing incomes, will prove to be very attractive to Taiwanese businesses in the domestic consumption sector.

Taiwan (China) has so far opened branches of more than 10 banks throughout Vietnam, with the consumer payment field making use of electronic payment applications as a means of promoting future development. This is also part of digital transformation in order to develop a transparent and competitive payment environment in the country.

Due to these factors, there remains ample room for domestic and foreign banks to exploit e-commerce, especially in the context that per capita Vietnamese income is forecast to increase by between 6% and 10% annually throughout the 2021 to 2025 period.

Challenges remain ahead

According to Taiwanese digital economists, Vietnamese digital transformation is set to encounter some difficulties, with three main bottlenecks, including human resources, applied technology platforms, and the gap between large and small and medium sized enterprises. These are similar to the issues Taiwan (China) has been working hard to solve in recent years.

Despite these challenges, the implementation of commitments from many new generation free trade agreements (FTAs) will serve as a tool to prompt Vietnamese enterprises to conduct digital transformation more strongly in order to meet strict requirements set by development partners such as the EU and Japan.

Moreover, these FTAs also represent the driving force for enterprises with high technology and new technology to invest in the nation to promote production and business. According to the latest data released by the Ministry of Economic Affairs of Taiwan in 2020, the nation was among the top five countries and territories that Taiwanese enterprises invest in, after Hungary, Hong Kong (China), and the US.

In terms of the ASEAN region, Taiwanese investment in the country cumulatively accounts for roughly 55%, far exceeding second place which is Indonesia, making up about 23%.

The Ministry of Economic Affairs of Taiwan indicated that if the Vietnamese Government considers loosening permission for Taiwanese businessmen and investors to enter the nation to survey for investment in 2021, the number of new investment projects will increase above the level recorded last year.

Source: VOV

Source: https://e.nhipcaudautu.vn/economy/vietnam-becomes-fourth-most-important-market-for-taiwanese-investors-3339179/

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UK investors eye renewable energy in Vietnam

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Investors from the UK were showing significant interest in investing in renewable energy projects in Vietnam, especially wind power, 

expecting the Vietnamese Government to introduce long-term support policies as well as simplification of procedures for project implementation.

UK investors eye renewable energy in Vietnam hinh anh 1

A wind farm in Binh Thuan province (Photo: VNA)

British Ambassador to Vietnam Gareth Ward said at the UK – Vietnam Renewable Energy Dialogue on Wednesday that clean energy was becoming a global trend, adding that every 1 investment USD in clean energy would help generate from 3-8 USD.

The Vietnamese Government in 2015 approved the renewable energy development strategy to 2030 with a vision to 2050 which aimed to increase the percentage of renewable power from 35 percent in 2015 to 38 percent in 2020 and 43 percent in 2050.

The Government also introduced incentive policies to encourage the development of wind power, biomass energy, energy from waste and solar power.

Hoang Tien Dung, Director of the Ministry of Industry and Trade’s Electricity and Renewable Energy Authority, said developing renewable energy was important in the context that sources for hydropower were being exhausted, thermopower was limited due to commitments to global climate change and gas-fired power had high production costs.

According to the draft national power development planning for 2021-30 period with a vision to 2045, Vietnam had large potential for renewable energy development which was estimated to amount up to 855GW, mostly solar power (434GW), and wind power (375GW). The potential for off-shore wind power was estimated at 158GW.

Off-shore power was attracting increasing interest from foreign organisations and investors, Nguyen Ninh Hai, Head of the Renewable Energy Department under the Electricity and Renewable Energy Authority, said.

Hai said that as off-shore wind power was a new thing to Vietnam, the Ministry of Industry and Trade was cooperating with some research organisations to have a comprehensive evaluation about the off-shore wind power development potential in the country.

Bui Vinh Thang, Director of Mainstream Renewable Power Vietnam, said that the Government’s planning and policies played a very important role for renewable energy investors, especially in wind power and off-shore wind power.

Benjamin Dubas, a representative from Lightsource BP, said that renewable energy investors expected the transparency and stability of policies in the long term to invest in Vietnam, especially feed-in tariffs (FIT).

According to Dung, FIT pricing was applied to accelerate investment in renewable energy in the first stage in Vietnam but this mechanism would not be maintained for a long period and be replaced by competitive bidding when the technology development helped push down prices of solar and wind power.

He added that the national power development planning which was being completed would give priority to renewable energy on the basis of ensuring balance of power sources and the power transmission between regions.

The ministry expected to continue receiving support from the UK in renewable energy, especially off-shore wind power which the UK had experience in and Vietnam had large potential.

By the end of 2020, the total renewable energy output accounted for around 25 percent of the total output worth 69,000MW of the Vietnam’s power system. There were 148 solar power projects with a total capacity of more than 8,800MW, 100,000 rooftop solar power projects with a total capacity of 9,300MW, and 11 wind power projects with a total capacity of 511MW./.VNS

Source: https://vietnamnet.vn/en/business/uk-investors-eye-renewable-energy-in-vietnam-715833.html

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Mitsubishi pulls out of central Vietnam coal plant

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Mitsubishi pulls out of central Vietnam coal plant

The logo of Mitsubishi Corporation is displayed at the entrance of the company headquarters building in Tokyo, Japan, April 26, 2016. Photo by Reuters/Issei Kato.


Japan’s Mitsubishi Corp has decided to pull out of a coal-fired power plant in central Vietnam amid growing international concern about environmental impacts.

The Japanese trading house will pull out of the 2-gigawatt Vinh Tan 3 project, planned to be located in the southern province of Binh Thuan, because of climate change targets, Reuters reported, citing two anonymous sources.

Without mentioning Vinh Tan 3 specifically, Mitsubishi said in a statement that it was committed to reducing its investment in coal power in line with international climate goals.

The 2-gigawatt plant was originally scheduled to come online in 2024.

OneEnergy, a joint venture of Mitsubishi and Hong Kong’s CLP group, holds a 49 percent interest in the $2 billion project. State-owned utility Vietnam Electricity owns another 29 percent. Chinese companies are handling materials procurement, construction and equipment delivery.

This marks Mitsubishi’s first withdrawal from a coal plant project. The trading house has said it will not build any new facilities of this type after Vung Ang 2, a Nikkei report said.

Mitsubishi still has a stake in the Vung Ang 2 coal power plant being built in the central province of Ha Tinh, which is more widely known after being subject to critical scrutiny by environmental and other groups as well as investors.

Source: https://e.vnexpress.net/news/business/companies/mitsubishi-pulls-out-of-central-vietnam-coal-plant-4240625.html

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Unable to cover expenses during Covid-19, owners sell hotels at cheap prices

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Many offers to sell coastal hotels in Da Nang have appeared on real estate forums these days. Most of them are located in districts Son Tra and Ngu Hanh Son.

Unable to cover expenses during Covid-19, owners sell hotels at cheap prices

A hotel put up on sale

On just one real estate website on February 22 many ads were listed.

A 4-star hotel on Vo Nguyen Giap street, 600 square meters, with 19 stories, 125 rooms and 2 conference rooms is offered at VND440 billion.

Hotels on the major streets of Ha Bong, Tran Bach Dang, Ho Nghinh, Vo Nguyen Giap and Ho Xuan Huong are offered at tens or hundreds of billions of dong.

Hoang Lam, the owner of a hotel on Tran Bach Dang street, said accommodation service providers have been hit hard by Covid-19.

“We have been struggling to survive by cutting costs. However, as capital is getting exhausted, hotel owners have to liquidate assets to pay bank debts,” he said.

“Selling hotels is unavoidable as there is no source of revenue, and the operation cost is high,” he said.

Do Van Hien from Dana Hotel, a broker, said a lot of hotels in Da Nang have been put up for sale since the second Covid-19 outbreak.

“The hotels for sale are 2-4-star. The prices have fallen by 20 percent and buyers are mostly from northern provinces,” Hien said.

According to Hien, 3-star hotels are priced at VND20-100 billion, while 4-star hotels are at least VND280 billion. The value of hotels depends on the locations, area, quality, numbers of rooms and brands.

The transactions of 4-5-star hotels, which have strong brands, are confidential. Hotel owners only work with prestigious brokers, and buyers have to prove their financial capability.

Hien said no one wanted to sell hotels in 2016-2019 because they could make a high profit from the business. But since 2020, guests are coming in dribs and drabs, and operation costs and loan interest rates are high.

Cao Tri Dung, chair of the Da Nang Tourism Association, admitted that tourism services have become nearly frozen and many hotels have been put up on sale.

“The pandemic resurgence before Tet blocked sources of guests. Ninety percent of clients cancelled or postponed plans to come to Da Nang,” he said.

He said this is common in a market economy, and that it is time to restructure the accommodation segment.

According to Da Nang People’s Committee, the total number of guests staying at accommodation facilities in the city in January 2021 was 251,094, a 65.6 percent decrease compared with the same period last year. 

Ho Giap

Source: https://vietnamnet.vn/en/business/unable-to-cover-expenses-during-covid-19-owners-sell-hotels-at-cheap-prices-715493.html

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