Connect with us

Business

VIETNAM BUSINESS NEWS APRIL 12

Published

on

Fruit, vegetable sector targets export revenue of $10 billion 

browser not support iframe.

The agricultural sector has determined to improve quality to meet import market standards and achieve the export target of 10 billion USD by 2030.
 
Recently, the Prime Minister has approved a project to develop the fruit and vegetable processing industry in the 2021-2030 period with the goal that export turnover of fruits and vegetables will reach 8-10 billion USD by 2030.

Of which, the proportion of export turnover of processed fruit and vegetable products will reach 30 per cent or more; fruit and vegetable processing capacity will reach two million tonnes per year, nearly double that of last year.

To achieve these goals, the agricultural sector will boost investment in improving the capacity of fruit and vegetable processing in the future; develop establishments for preliminary processing and preservation of fresh fruits and vegetables as well as promoting key fruit and vegetable products and high value-added products.

New stocks on HoSE will temporarily trade on HNX

Companies that want to list on the Ho Chi Minh Stock Exchange (HoSE) will temporarily trade on the Ha Noi Stock Exchange (HNX) as a temporary solution to the overload issue occurring on HoSE since the end of last year.

The State Securities Commission (SSC) of Viet Nam recently instructed HOSE and HNX as well as the Viet Nam Securities Depository (VSD) to implement temporary regulations on listing and conversion processes to reduce the load on HOSE’s trading system.

Accordingly, enterprises wishing to list during this period can submit registration documents to HNX or HOSE.

For enterprises that want to list new shares or transfer their listing from HNX to HOSE, HOSE will receive and process their documents.

After assessing and issuing the listing decisions, these shares will be temporarily traded on HNX.

Once the congestion problem is solved, these companies are allowed to transfer transactions back to HOSE without reviewing their profiles.

Regulations such as trading mechanisms, transaction supervision, listing management, reporting and information disclosure for businesses whose shares are listed on HOSE and are transferred to HNX also apply for companies that listed on the HNX.

HOSE and HNX will work together to supervise the transactions of these stocks to ensure continuity in supervision.

HOSE, HNX and VSD inform enterprises and investors about the temporary suspension of trading of new shares on HOSE and the difference between the trading mechanism of these stock exchanges in the process of transferring the trading of listed shares to HNX from HOSE.

The above provisions apply from April 8 until the SSC releases a new notice and guidance. 

PV Power reports over $31.2 mln in post-tax profit in Q1

PetroVietnam Power Corporation (PV Power) reported a post-tax profit of 720 billion VND (over 31.2 million USD) the first quarter of 2021, surpassing the quarterly plan by 6 percent.

Deputy Director of PV Power Nguyen Thi Ngoc Bich attributed the firm’s strong growth profit to its finance investment activities in the period, including the successful divestment of over 19.93 million shares at Petro Vietnam machinery-technology JSC (PV MACHINO), which generated a pre-tax profit of 350 billion VND.

Dividends worth about 170 billion VND that PV Power received from Nhon Trach 2 thermal power JSC also contributed significantly to its profit in the last three months.

However, PV Power’s electricity output reached 4.64 billion kWh in the reviewed period, equal to only 90 percent of the set plan for the first quarter, and 88 percent of the same period last year.

PV Power will closely work with the Electricity of Vietnam, the National Load Dispatch Centre (A0), the Vietnam National Coal and Mineral Industries Group (Vinacomin), and the PetroVietnam Gas Joint Stock Corporation (PV GAS) in operating its power plants, towards producing 5.923 billion kWh in the second quarter.

It also plans to pour investment into Nhon Trach 3 and 4 power plants in the coming time./

LG to sell smartphone plant in Vietnam

South Korea’s LG Electronics reportedly wants to sell off its smartphone manufacturing plant in Vietnam’s Haiphong City for over 100 billion Korean won, or over US$89 million. If the deal fails, LG will liquidate the site where the plant is located to recoup its investment.

According to Business Korea, following an announcement to withdraw from the smartphone market, LG will initiate the next steps to shut down its smartphone plants in Vietnam, Brazil and China. Of them, the one in Haiphong is the biggest of its kind of LG.

The Vietnam-based plant churns out some 10 million handset devices on average per year, accounting for a half of LG’s global output of smartphones.

Business Korea said that it could be impossible for LG to sell the Vietnam-based plant at the expected price as it was too high, adding that Vietnamese phone makers have already established their own phone production chains.

A source from The Korea Herald revealed that as its efforts to sell the smartphone business failed, LG is considering all the possible measures to fully tap the potential of its existing plants, and some of the plants may switch to manufacturing other products.

The South Korean media also noted that LG exiting the smartphone market and closing its manufacturing plants could trigger a wave of unemployment at locations where it operates. In late February, following a rumor that LG sold off its plant in Brazil, a managing director and many employees there reportedly went on a strike due to concerns over their jobs.

In Vietnam, LG operates three major plants in Haiphong. The LG Electronics plant manufactures smartphones, TVs, air conditioners, vacuums, washing machines and refrigerators. The LG Innotek Vietnam specializes in making camera modules and electronic components. The LG Display plant manufactures screens.

Hanoi’s property market predicted to rebound strongly

Strong construction activities in many different types of property and areas in Hanoi signal the strong recovery of the capital’s real estate market from this year onwards, according to CBRE Hanoi Branch Director Nguyen Hoai An.

At a recent press conference looking back on the Hanoi market in the first quarter, An noted that not only residential real estate but also commercial real estate will welcome many new projects with the participation of foreign investors and domestic developers from the southern region.

A CBRE Vietnam survey showed that approximately 4,400 apartments were launched in Hanoi in Q1, down 39 percent quarter-on-quarter due to the hiatus caused by the Lunar New Year (Tet) holiday and the resurgence of COVID-19, but still up 270 percent year-on-year.

This indicates a strong recovery in the local property market compared to Q1 of 2020, when COVID-19 first broke out in Vietnam.

Do Van Anh, manager of the research and consulting division at CBRE Vietnam, said most of the new apartment supply in Q1 came from 14 projects already opened for sale, while only three projects were newly launched.

She said apartments in the mid-end segment were still the most popular in the market, accounting for up to 80 percent of total new supply in Q1. The eastern and western areas of the city were home to most new projects, with 77 percent of new supply.

The positive market sentiment in recent times has also helped bridge the gap between the number of newly-launched apartments and those already sold.

A total of 4,200 apartments were sold in Q1. In the mid-end segment, the number of sold apartments was higher than newly-launched apartments.

Anh forecast that new supply and sales in Hanoi this year will be around 24,000-26,000 apartments. Many residential real estate projects will be launched for sale in different parts of the city, both inner and outlying districts, in coming quarters, helping the market become more vibrant.

Vietnam’s seaport system has eight more terminals

Eight terminals have been added to the list of those at seaports in Vietnam, raising the total to 286.

Among the newly added terminals, four are part of Vung Tau Seaport in the southern province of Ba Ria – Vung Tau, according to the list recently released by the Ministry of Transport.

The seaports of Hai Phong, Khanh Hoa, Dong Nai, and HCM City have one new terminal each.

At present, some seaport areas accommodating many terminals include Hai Phong (50 terminals); Vung Tau (46); Ho Chi Minh City (42); Can Tho (21); Dong Nai (18); Khanh Hoa (16); Quang Ninh (13); Da Nang (eight); Nghi Son, Nghe An, and Dung Quat (seven each); and Ha Tinh and Binh Thuan (six each).

The Vietnam Maritime Administration said with a terminal system spreading from the north to the south, Vietnamese seaports have been well-functioning as goods trading hubs amid the country’s intensive integration into the world.

Every year, seaports nationwide serve about 120,000 vessel arrivals and record growth of nearly 16 percent in cargo throughput. They handled 692 million tonnes of goods in 2020./.

Materials industry faces shortage of qualified staff, researchers

Việt Nam has advantages to develop a materials industry but has not developed in line with its potential, Trần Tuấn Anh, head of the Central Economic Commission, said at a conference held on April 10 in HCM City.

“Domestic materials still have not met the demand of main manufacturing industries, which has led to dependence on imported ones,” Anh said.

The low competitive capacity of the materials industry was because of limited technology, quality, costs, and manufacturing competence.

Lack of qualified human resources for the materials industry was also one of the causes for the limitation, he said.

“The country’s industrial development, international trade agreements, and Industry 4.0’s influence require Việt Nam to have a new mindset and approach in developing human resources for the materials industry,” he said.

“The reality is that no country can carry out industrialisation successfully without a developed materials industry because it has an important role in providing input materials for the manufacturing sector.”

Phan Bách Thắng of Việt Nam National University-HCM City noted that the materials industry major each year had about 800 students and 25-40 postgraduates.

“Compared to the human resources in the southern region, the current training scale at VNUHCM’s member universities is low,” Thẳng said.

According to the Ministry of Education and Training, the country has 116 majors at educational institutions related to the materials industry in the 2019-2020 academic year. More than 134,000 students in these majors were trained as of 2019, accounting for 11 per cent of all students.

Minister of Science and Technology Huỳnh Thành Đạt said the ministry had paid more attention to training high-quality staff in research on new materials.

“Science and technology as well as innovation are the important driving forces for industry’s development,” Đạt said.

He said the country should have more policies to attract overseas Vietnamese and foreign experts to do research in the field.

The ministry had also provided counselling to the government on policies to develop science and technologies, with priority given to the materials industry.

According to Dr Nguyễn Đình Hậu, general director of the ministry’s department of science and technology for economic technical branches, the number of scientists in this industry is low and equipment for research is limited.

Enterprises and organisations in the country, however, have mastered advanced technologies to make new kinds of materials that have the same quality as foreign ones.

But several new materials produced in the country based on research have failed to meet manufacturers’ demands.

Anh said that delegates at the conference should address the barriers and problems in policies to develop human resources and technologies for the industry.

The conference on human resources in the material industry was organised by the Central Economic Commission, Ministry of Science and Technology, and VNUHCM.

This was the first conference at which the Central Economic Commission collected ideas from domestic and foreign experts to develop policies for the country’s industrialization and modernization goals by 2030 with a vision to 2045.

Lao-Viet International Port receives first container ship

Lao-Viet International Port JSC and Tan Cang Shipping held a ceremony on April 10 to receive the first container ship at Lao-Viet International Port (Vung Ang Port).

The shipment was transported by Tan Cang – Northern Logistics JSC from Tan Cang Port in Hai Phong to Lao-Viet International Port in Ha Tinh Province.

Vung Ang Port is an international seaport serving cargo transportation to Laos, Northeastern Thailand and central provinces of Vietnam. The port can accommodate cargo ships of up to 50,000 DWT and container ships of up to 2,000 TEU.

Addressing the ceremony, Deputy Minister of Transport Nguyen Nhat appreciated the efforts by Lao-Viet International Port JSC, Tan Cang Shipping and relevant agencies in Ha Tinh to organise the reception of the first container ship at Vung Ang Port.

He noted that investment in industry with the focus on the Vung Ang economic zone and sea-based economy is necessary for Ha Tinh to make economic breakthroughs.

The transport route of Tan Cang Shipping through Vung Ang Port is the concretisation of the project on promoting logistics services in Ha Tinh Province until 2030 and the initial result of the cooperation between Saigon Newport Corporation and the People’s Committee of Ha Tinh in early 2021.

Vietnam’s beer production fell 14 per cent in 2020 

Vietnam’s beer industry produced about 4.4 billion litres of beer in 2020, down 14 per cent on-year.

The Vietnam Beer Alcohol Beverage Association (VBA) on April 8 held the 2021-2025 Congress to review the 2020 performance and discuss new tasks for 2021-2025.

Addressing the event, Deputy Minister of Industry and Trade Cao Quoc Hung said that over the past years the VBA has closely collaborated with ministries and agencies in policy recommendations, becoming a connector between businesses and state management agencies, enabling the former to operate in a more sustainable manner and the latter to better their role.

According to the VBA, over the past years, especially in 2016-2020, the association has actively connected its members with state management agencies and given policy recommendations.

Between 2016 and 2020, the growth rate of the alcoholic beverage industry was lower than in 2010-2015 period. Its annual state budget contribution was over VND60 trillion ($2.6 billion), making up over 2 per cent of the country’s total state budget collection, created jobs for tens of thousands of people.

In the 2015-2019 period, the industry’s annual average growth rate was 5 per cent. In 2020, the industry produced about 4.4 billion litres of beer, down 14 per cent on-year. Beer producers tended to focus on products with low alcohol content, non-alcoholic beer, and fermented juice to meet market demand.

2020 was a challenging year for the beverage industry due to the negative impacts of COVID-19, and the enforcement of policies like the Law for the Prevention and Control of Alcohol-related Harm and others. Many had to let employees go while cutting salaries and costs to maintain operations.

Also, the wine industry faced many difficulties in recent years partly due to some policies and fake products. It has reported no growth in recent years.

Looking towards 2025, VBA chairman Nguyen Van Viet said, “In the 2021-2025 term, the VBA will continue to reform and improve its performance to increase professionalism and contribute to the sustainable development of the industry, thus contributing more to the nation’s social-economic development.”

Mekong Delta faces shortfall of key logistics centers

The seaport system in the Mekong Delta has failed to meet the surging demand for transporting export goods, resulting in the commodities being taken to various localities and then to HCMC to be shipped overseas, it was stated at a talkshow held in Hau Giang Province on April 9.

Entitled “Levers for Agricultural Logistics in the Mekong Delta”, the event was held by Hau Giang Television in coordination with the provincial Association of Enterprises. The event was attended by local officials, experts and enterprises in the delta who discussed logistics-related obstacles facing the region for many years and measures to remove them.

Specifically, the region needs to transport tens of millions of tons of commodities for export annually. Meanwhile, it is facing a shortage of seaports, especially deep-water ports to handle container ships to transport export items. Besides this, many key ports in HCMC frequently face overloading, leading to an increase in service and storage fees as well as the waiting time.

The delta currently lacks major logistics centers, satellite center systems, empty container yards, a warehouse system at the local ports and units in charge of examing food safety and hygiene.

Consequently, the lagging logistics system has hindered the growth and competitiveness of the delta’s agricultural products.

Speaking at the event, Dong Van Thanh, chairman of the provincial government, said that the local authorities in January launched a program to develop the province’s industry and logistics sectors during the 2021-2025 period. He hoped that many optimal solutions to eliminate the logistics obstacles facing the delta and cooperation opportunities to tap the potential of the region would be discussed at the event, paving the way for the sustainable growth of regional agro products.

VIETNAM BUSINESS NEWS APRIL 12

Sea grape cultivation thrives in coastal provinces

Sea grape cultivation has become a route to prosperity for many people in the south-central province of Khanh Hoa due to increased demand for the product in Vietnam and overseas.

With productivity of 1-1.5 tonnes per hectare and a price of 35,000-40,000 VND per kilo, sea grape growers have enjoyed improved incomes.

Sea grape grower Dang Ngoc Thoai of Ninh Hai Ward, Ninh Hoa Town in Khanh Hoa said he earned a profit of 100-200 million VND per hectare from growing sea grapes.

Now, he has about five hectares of sea grapes. In harvest time, he hires about 10 people to help collect, sort and process sea grapes.

“Sea grape cultivation does not require huge investment but can bring stable income and jobs,” he said.

Besides his own products, Thoai also buys those of other growers in his neighbourhood to supply the domestic market and to export.

However, like many other sea grape growers in the ward, Thoai is working in an area that is part of a delayed project.

“Once the project resumes, I will have to move,” Thoai said, adding that he will invest more to develop the business if he finds a different cultivation area.

Tran Thanh Tung, Vice Chairman of the Ninh Hai Ward People’s Committee, said all 27ha of sea grape cultivation area in the ward was on land slated for a heavy industry complex project by the Korean investor STX Group.

“However, since the land was transferred to the investor in 2009, no item has been developed and the area has been unused,” Tung said.

Vo Khanh Dang, Chairman of the Ninh Tho Commune People’s Committee in Ninh Hoa Township, said local farmers shifted to grow sea grapes to earn more than from traditional aquaculture products.

However, they had not found stable outputs for their sea grapes and had to accept the prices that wholesalers offered.

There was about 20ha in the ward being used for sea grape cultivation, Dang said, adding that local authorities were considering placing sea grapes on the list of key farming products to develop.

“To include sea grapes in the local farming development planning, we need more studies and assistance from expert agencies,” he said.

Le Ben, Vice President of the Vietnam Seaculture Association, who introduced sea grape cultivation to Vietnam in 2004 in Ninh Hai Ward, said the cultivation was very promising and generated economic benefits.

Besides economic benefits, sea grapes can improve the aquaculture environment quality since they develop quickly, have strong anabolism and high nutrition uptake. They can be grown while cultivating shrimps and fish – this intercropping allows two to three times higher income compared with shrimp or fish cultivation alone.

Sea grapes are a highly nutritious plant that can be used as a substitute for green vegetables. They contain high quantities of protein and minerals, such as calcium, magnesium, potassium and sodium, as well as iodine, iron and vitamin A, which help prevent malnutrition and anaemia.

Sea grape cultivation is now present in several coastal provinces in Vietnam, including Khanh Hoa, Binh Thuan, Ninh Thuan, Kien Giang and Vung Tau ,Phu Yen, Binh Dinh in the south and Quang Ninh in the north.

“Seeing high profits from sea grape cultivation, many farmers are rushing into it,” Bền said, adding that oversupply and improper farming technique could leave negative impacts on the emerging sector.

Travel firms explore tourism products in Khanh Hoa province

Representatives from nearly 130 domestic travel firms across the country has made a Famtrip to the south central coastal province of and Khanh Hoa from April 8-11 to explore the province’s tourism products.

The provincial Department of Tourism introduced many tourist destinations and products to the firms, including Truong Son craft village, Am Chua relic site, Kong Forest park, Hon Tam tourist site, and Gac Ma commemoration site.

Particularly, the department also held a meeting to connect the businesses with local firms to boost their partnerships.

Vice director of the department Nguyen Thi Le Thanh said that Khanh Hoa’s tourism sector hopes to continue expanding connectivity with travel firms nationwide, especially in Hanoi, Ho Chi Minh City, Can Tho and Da Nang, thus luring more visitors.

She said that the province has planned a culture, art, tourism and sport programme with 114 activities held throughout the year to attract visitors, especially in long holidays.

In 2021, Khanh Hoa aims to welcome over 5 million visitors, including 1.5 million foreign tourists, earning 17.5 trillion VND (760 million USD) from tourism services.

VIETNAM BUSINESS NEWS APRIL 12

Businesses advised to enhance competitive capacity to reap CPTPP benefits

A conference recently held in Hanoi shows that local firms have yet to fully benefit from the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) two years after Vietnam joined the trade pact.

Despite being severely impacted by the novel coronavirus (COVID-19) pandemic, Vietnamese exports to various CPTPP markets over the past year have made significant progress due to tariff preferences brought about by the trade pact. However, delegates attending a conference reviewing two years on from the implementation of the CPTPP said there remains challenges that must be swiftly addressed.

Addressing the conference held jointly between the Vietnam Chamber of Commerce and Industry (VCCI) and the Australian Embassy in Hanoi, Vu Tien Loc, president of the VCCI, noted that benefits from the opportunities of the pact remain limited, alongside plenty of technical matters and commitments which have so far proven to be unfavourable for domestic businesses.

Meanwhile, firms attributed these limitations to poor competitive capacity and unpredictable market fluctuations. In addition, they complained about their limited knowledge of Vietnamese commitments as part of the CPTPP, as well as the shortcomings of State agencies in terms of executing the deal and other free trade agreements (FTAs) that affect implementation of the trade pact.

A survey carried out by the VCCI indicates that 69% of businesses have heard about or have acquired rudimentary knowledge of the CPTPP, a rather high figure when compared to other FTAs. However, only one of every 20 respondents is aware of CPTPP commitments relating to their own operation, whilst one of every four enjoys benefits from the trade pact.

A total of 75% of respondents have yet to benefit from the CPTPP as they have no business related to the markets or partners who have joined the deal, explained Nguyen Thi Thu Trang, director of the World Trade Organisation and Integration under the VCCI.

Trang added that relevant State management agencies have attempted to complete the legal framework in order to fully implement the CPTPP, although when it comes to implementation the majority of documents have been issued slowly, failing to meet the necessary requirements of commitments.

David Gottlieb, counsellor for Economic and Development Cooperation at the Australian Embassy in Vietnam, underscored the importance of utilising digital technology in the context of the COVID-19 pandemic. He recommended that Vietnam seek to take advantage of the opportunities brought about by the CPTPP to increase digitalisation.

According to Gottlieb, the COVID-19 pandemic has presented a range of unprecedented challenges to the principles of free trade and market openness. Fortunately, CPTPP members such as Australia and Vietnam have responded well to the pandemic and have still been able to fulfil their commitments to rules-based trade whilst maintaining open supply chains which boast positive and transparent information.

Both Australia and Vietnam have competently controlled the spread of the pandemic due to the resilience of their economies, in addition to boosting exports, noted Gottlieb.

He took the view that the CPTPP maintains the ambitious scope and high-quality standards and rules laid out within the original Trans-Pacific Partnership. Given the current context, it remains imperative to fight protectionism whilst strengthening an open, efficient, fair, inclusive, and rules-based system built around trade that is capable of restoring global economic development.

Vietnam should therefore be commended for its resolve to fully meet CPTPP commitments, said Gottlieb. Most notably, Australia is committed to working alongside the country towards a post-COVID-19 economic recovery, this includes efforts to establish and strengthen value chains while studying ways in which the CPTPP can be utilised to promote digital trade.

Binh Phuoc to expand IP space

Binh Phuoc Province will build four new industrial parks and expand three existing ones by 2030.

Three of the new ones will come up in the Hoa Lu Border Gate Economic Zone, a 28,000ha investment magnet situated in Loc Ninh District along the Cambodia border.

They will range in size from 300ha to 425ha.

The fourth, an IP – urban area of over 6,300ha, will be built in Dong Phu District.

Minh Hung 3 IP in Chon Thanh District will be expanded by over 577ha, and the North and South Dong Phu IPs in the namesake district, by 317ha and 480ha.

The province’s IPs benefit from favourable tax policies, including waiver of tariffs on imported machinery, and financial support for infrastructure development.

Binh Phuoc, which has 14 IPs, is situated in the Southern Key Economic Zone and enjoys excellent connectivity with other key economic hubs such as Binh Duong and Dong Nai provinces and HCM City.

Processing industry leads Q1 export growth

Shipments of products from the processing industry brought in about US$67.39 billion in the first quarter of this year, representing 87.13 per cent of Viet Nam’s total export value during the period.

According to the Ministry of Industry and Trade, Viet Nam’s export turnover in the first three months was estimated at $77.34 billion, up 22 per cent year-on-year.

Products posting the highest turnover included phones and components ($14.08 billion), computers, electronic devices and components ($11.96 billion), and machinery, equipment, and spare parts ($9.1 billion).

Agro-forestry-fishery exports, despite being hit hard by COVID-19, brought in approximately $5.97 billion, an annual increase of 6.6 per cent.

The growth was attributable to companies effectively taking advantage of new-generation free trade agreements.

Cao Quoc Hung, Deputy Minister of Industry and Trade, said that since the EU-Vietnam Free Trade Agreement (EVFTA) took effect in August last year, Viet Nam’s exports to the bloc had been rising and grew 18 per cent in the first quarter.

Viet Nam also posted high growth in export value to members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), such as Canada (up 13.7 per cent), Australia (17 per cent), Chile (25.6 per cent), and Mexico (12.7 per cent).

Optimising the advantages from FTAs would be a key factor in stimulating Vietnam’s exports in the time to come, he said.

Trade surplus over 2 billion USD

Viet Nam’s imports in the first quarter, meanwhile, stood at $75.31 billion, a year-on-year increase of 26.3 per cent.

Of the total import value, $66.1 billion came from purchasing raw materials and accessories for domestic production. This showed that firms were preparing for a new post-pandemic business cycle.

Ho Le Tung, general director of the Hanoi Textile & Garment JSC (Hanosimex), said that yarn had sold well in the market since the fourth quarter of last year.

Hanosimex’s yarn factories were working at full capacity, as the company had contracts until May, he added.

Viet Nam posted a trade surplus of $2.03 billion in the first quarter, supporting its current and overall payment balance.

But its exports are forecast to face continued difficulties due to COVID-19, which may cause further interruptions to supply chains.

To accomplish the target set for the year, the Ministry of Industry and Trade is intensifying export promotion activities, including those online, to support businesses. 

Vietnam, RoK share experience in distribution, logistics

The “Policy Dialogue Meeting on the Distribution and Logistics Industry between Viet Nam and the Republic of Korea” (RoK) was held via videoconference last Friday by the Ministry of Industry and Trade (MoIT) and the RoK’s Ministry of Trade, Industry and Energy (MOTIE).

Tran Duy Dong, head of the MoIT’s Domestic Market Department, said the dialogue had been organised biennially by the two sides since 2013.

According to Dong, Viet Nam’s distribution and logistics sector has developed rapidly in recent years, but its legal framework still needs to catch up with the sector’s pace of development.

During the talks, the two sides discussed the RoK’s policies, laws, and management experience to identify measures to help Viet Nam management agencies complete the legal framework, encourage the engagement of both domestic and foreign investors, help promote the development of the distribution sector in a civilised and modern manner, and ensure the harmony of interests between large-scale retail groups and small and medium-sized enterprises (SMEs) in Viet Nam and between traditional and modern retail channels.

The two sides also exchanged views on how to introduce the “Korea Product Scan (KPS)” app to Vietnamese consumers and importers, the current situation and development policies of outlets in the RoK, criteria to classify logistics centres in the RoK, and its regulations and policies on the development of logistics centres.

The Vietnamese side also shared the current situation of Viet Nam’s distribution and logistics sector and its development orientations for the future.

To develop the sector in a civilised, modern, and sustainable manner, it would be important to increase the role of e-commerce and pay due regard to soft infrastructure, particularly the training of human resources in the sector, the videoconference was told. 

VNPT and HCA co-operate in digital transformation

The Viet Nam Posts and Telecommunications Group (VNPT) and the Ho Chi Minh City Computer Association (HCA) signed a co-operation agreement on training and consulting on digital transformation this week.

The two organisations also committed to promote co-operation between VNPT and information technology enterprises in the city in providing digital transformation products and solutions for enterprises, especially the set of solutions for SME customers.

Speaking at the event, VNPT acting general director Huynh Quang Liem said that as a leading provider of ICT infrastructure and technology in Viet Nam, recently, VNPT has achieved a great deal of success in supporting the Government, ministries, sectors and localities in digital transformation.

Following this, the group expected to continue promoting support for enterprises, especially SMEs.

To do that, VNPT wished to co-operate more with digital technology enterprises. The group would provide these businesses with the best infrastructure to develop solutions for digital transformation.

HCA Chairman Lam Nguyen Hai Long said that the co-operation with VNPT was one of the important solutions of the association to promote its members to expand new sales channels and have the opportunity to reach more potential customers.

The chairman expressed hope that through this activity, VNPT and other large enterprises would have more similar programmes to support Vietnamese small and medium technology enterprises to develop rapidly and sustainably.

Digitising long-distance transportation in Vietnam 

In line with digital transformation, technology application is an inevitable trend in long-distance transportation – and the establishment of Vietnamese digital platforms will enable this journey.

The Ministry of Information and Communications (MIC) on April 9 introducedAn Vui, a smart transportation management software solution, making it the first digital platform of the Vietnam Digital Technology Forum. 

The forum is the continuation of the activities to introduce “Make in Vietnam” digital products and platforms launched in 2020 to implement the prime minister’s recently-approved National Digital Transformation Programme by 2025 with a vision to 2030.

Vietnam’s long-distance passenger transport market remains fragmented and fiercely competitive, and reluctant to change. The market is dominated by 2,000 large-scale businesses, accounting for 90 per cent of the market, while the rest are small-scale household operators.

Phan Ba Manh, director of An Vui Technology JSC, said the software solution aims to digitise the long-distance transportation industry, helping operators manage their businesses more efficiently. The An Vui software solution includes backend management tools for ticket sales, parcel shipments, and fuel usage management.

Addressing the event, Deputy Minister of Information and Communications Nguyen Huy Dung said that the An Vui software solution facilitates workers and students working and studying away from home in buying tickets. It is also a solution to meet the transport demand of firms and passengers.

Interbuslines, one of the famous passenger car operators on Hanoi-Sapa-Hanoi, is one of the first customers of An Vui. Only six months after operating on the An Vui platform, the profit of Interbuslines rose by 300 per cent.

Thus far, more than 1,000 bus operators use An Vui’s services and products. In 2019, Vietnam-based venture capital (VC) firm VinaCapital Ventures made an investment into An Vui for an undisclosed sum.

Promoting human resources in material industry to meet demand of industrialisation

Vietnam should take a new mindset and approach to developing human resources in the material industry amid the new requirements of the country’s industrialisation and fiercer international competitiveness in the new context.

Politburo member and Chairman of the Party Central Committee’s Economic Commission Tran Tuan Anh made the remarks at an international conference on human resources in the material industry held in Ho Chi Minh on April 10.

The conference, entitled “Developing human resources in the material industry to meet the requirements of the country industrialisation and modernisation by 2030, with a vision to 2045”, was held by the Party Central Committee’s Economic Commission, the Ministry of Science and Technology and Vietnam National University Ho Chi Minh City.

Politburo member Tran Tuan Anh said that Vietnam has many potentials and advantages for the development of the material industry, but the development of Vietnam’s material industry is not commensurate with its potential. Domestic raw materials have yet to meet the needs of many important sectors, leading to a dependence on imported raw materials and reduction in the resilience and competitiveness of the economy.

He emphasised that Vietnam needs new thinking and approaches to human resources in the material industry in the context of increasing international competition and the implementation of new-generation free trade agreements.

Reports, discussions and speeches by both domestic and international experts have also outlined the situation of training in Vietnam and the necessity to make further investment, review policies and change human resources training in the field.

Ford Vietnam’s sales surge 52 percent in Q1

Ford Vietnam’s sales in the first quarter of 2021 rose 52 percent against the same period last year, equivalent to 5,914 vehicles delivered to customers.

The company’s General Director Pham Van Dung said the automaker’s sales maintained its growth thanks to leading products, particularly sport utility vehicles (SUVs) and commercial ones, despite a period of business stagnation in the domestic auto market and adverse impacts of the COVID-19 pandemic.

In Q1, Ford Vietnam’s sales of Everest SUVs recorded a year-on-year surge of 49 percent, with 1,459 vehicles sold. In March alone, the number of delivered vehicles hit 817, leading the mid-size SUV segment with more than 50 percent of the market share.

In addition, Ford Ranger maintained its lead among the country’s pickups, accounting for nearly 75 percent of the market. Some 2,170 cars sold in March brought the total count to 3,873 in Q1, doubling the figure of the same period last year.

The sales of Ford Transit continued to come first among commercial vehicles, posting a year-on-year rise of 33 percent in March and bringing the figure since the start of the year to 184./.

Honda Vietnam posts increases in motorbike, auto sales in March

Honda Vietnam reported increases of 17.3 percent and 94.1 percent in its sales of motorbikes and automobiles in March compared to the previous month.

Accordingly, it sold 150,068 motorbikes during the month.

Wave Alpha was the bestseller, with 17,685 units sold, or 11.8 percent of the total, while Vision was its most popular scooter, with 36,679 units delivered to customers, or 24.4 percent.

Honda Vietnam also exported 28,318 motorbikes to different markets.

A total of 2,486 automobiles, meanwhile, were handed over to customers.

Honda City was the most sought-after model, with 1,182 vehicles delivered in the month, accounting for 47.5 percent of the total sales.

In the first quarter of 2021, the company sold 25,910 cars of different types, an annual drop of 12.8 percent./.

Ninh Thuan co-operatives link up with companies to sell farm produce

Agriculture co-operatives in the south-central province of Ninh Thuận have linked up with companies to increase product value and guarantee outlets, the province’s Department of Agriculture and Rural Development has said.

Up to 24 of the province’s 63 agriculture co-operatives have linkages with companies to develop value chains for their products like rice, corn, grapes, asparagus and organic cashew nuts.

The 24 co-operatives produce agricultural products on large-scale fields that use advanced farming techniques.

Many products of the co-operatives have been granted international standard certificates from the EU and the US Department of Agriculture (USDA) and Vietnamese good agricultural practices (VietGAP).

The Tuấn Tú General Service Co-operative in Ninh Phước District’s An Hải Commune grows asparagus on a large-scale field to VietGAP standards and has a farm contract with Tiên Tiến Organic Agriculture Farm to guarantee outlets for its members.

Hùng Ky, director of Tuấn Tú, said: “The co-operative supplies loans and fertilisers to its members to grow asparagus and teaches them techniques to produce safe, quality products.”

The agriculture co-operatives’ products have been included in the country’s “one commune – one product” (OCOP) programme in the province.

OCOP products are commercial products and services such as food and beverages, handicrafts and rural tourism services. They are classified at five levels, with a five – star being the highest level.

Đặng Kim Cương, director of the province’s Department of Agriculture and Rural Development and deputy chairman of the appraisal board for the province’s OCOP programme, said that seven co-operatives participated in the province’s OCOP programme last year.

The co-operative’s products like red onion, fresh jujube, dried jujube and asparagus are rated three or four-star OCOP products.

The province is promoting OCOP products in combination with tourism services via co-operatives, companies and households.

The Thái An General Agriculture Service Co-operative in Ninh Hải District’s Vĩnh Hải Commune had its NH01 – 152 grape recognised as a four-star OCOP product last year, and its NH01 – 152 grape growing area has become a tourism destination.

Nguyễn Khắc Phòng, director of Thái An, said the province had assigned the co-operative to expand the cultivation of its NH01 – 152 grape to serve tourism services.

Besides its NH01 – 152 grape, Thái An has other seven products, including dried jujube, dried grape, and fresh red grape and grape wine, granted as three-star OCOP products.

“The co-operative’s OCOP products have created motivation for the co-operative to promote production and expand its market,” he said.

With their effective operation, the provinces’ agriculture co-operatives had an average revenue of VNĐ2.1 billion (US$90,000) and average profit of VNĐ250 million ($10,800) last year, up 9.4 per cent and 13.6 per cent, respectively, against 2019, according to the province’s Co-operative Alliance.

Collective economy 

Ninh Thuận targets that its collective economy will contribute 8.8 – 9 per cent of its gross regional domestic product (GRDP) this year, according to the provincial People’s Committee.

The province aims to establish 10 – 12 new co-operatives and 10 – 15 new co-operative groups, with a total of 200 – 300 members, this year.

Its goal is to have an average revenue of VNĐ 2.2 – 2.25 billion ($95,000 – 97,200) this year for co-operatives and an average revenue of VNĐ260 – 270 million for co-operative groups.

It also plans to have 50 – 60 per cent of co-operatives operating effectively by 2025, and for the collective economy to contribute 10 – 11 per cent of its gross regional domestic product (GRDP) in 2025.

The province will encourage the development of co-operatives in agriculture, small industry, commerce and services, and promote effective new-style co-operatives, and co-operatives that link up with companies to produce agricultural products on large-scale fields with value chains.

Trần Quốc Nam, chairman of the provincial People’s Committee, said: “The province will help co-operatives to access the central and local governments’ preferential policies on land, loans, infrastructure, human resource training, and advanced techniques for production.”

It will also arrange trade promotions at home and abroad to expand markets for products of co-operatives.

Ninh Thuận, which has the least rainfall in the country, has developed 12 specifically identified products, including grape, jujube, asparagus, sheep, goat, Cà Ná fish sauce, Mỹ Nghiệp brocade products and Bàu Trúc pottery products. 

Mobile transactions in Vietnam to grow by three times by 2025

Mobile transactions in Vietnam are expected to increase by 300 per cent between 2021 and 2025, led by strong growth in mobile payments, as revealed in the second edition of the Fintech and Digital Banking 2025 (Asia-Pacific) IDC InfoBrief, commissioned by Backbase. 

Incumbents and new entrants alike will be jockeying for market share, and will look to compete on the basis of being digital-first. While the Asia-Pacific banking landscape saw the departure of some neo banks and fintechs due to COVID-19 challenges, incumbent banks in Vietnam benefited from the chance to build loyal customer bases and re-energise their businesses for the long-term.

However, we will still see 100 new challengers across the region by 2025, according to IDC. With new challengers presenting stronger post-pandemic propositions, there will be at least two digital banks in every Asia-Pacific market that will pose a significant challenge to incumbents. 30 per cent of the business of Vietnamese banks are predicted to be under threat from new digital challengers.

Some fintechs that had gained sufficient size by 2019 also found success, gaining more market share than expected. Fintech categories that have typically shown success include payments, wealth advisory, alternative data, lending platforms, and account origination.

Meanwhile, traditional banks are increasingly focused on responding to changing consumer behaviour. Digital banks across the Asia-Pacific saw three times the growth in their customer bases compared to traditional banks in 2020/2019.

One result of the economic downturn is a more humanistic type of customer centricity, as banks needed to communicate with customers in empathetic, trustworthy, and reliable ways that are complemented by digital innovations. There has been an increased integration of human agents into customer engagement strategies, as contact centres saw surges in usage.

The latest edition of Fintech and Digital Banking 2025 (APAC) found that 60 per cent of banks in the Asia-Pacific will leverage AI or machine learning technologies for data-driven decisions, compared to 48 per cent from the previous year. In Vietnam, core banking and payments system modernisation are the top 2 priorities among the top 8 banks in Vietnam in anticipation of rising consumer demands by 2025.

A back-to-basics trend has also overtaken the need for new revenue sources. Banks across the Asia-Pacific region will be focusing on digitalising their core business of lending with some focus, subsequently, on deposits. This is particularly evident in Vietnam, with 80 per cent of banks having re-invested in credit risk and asset-liability management, as well as building up capabilities in lending. Vietnam will see double-digit growth for lending every year from 2021. New capabilities will be acquired from fintech partners: IDC predicts by the middle of 2021, 50 per cent of lending decisions in retail banking across the Asia-Pacific will be supported by fintech propositions, underscoring accelerating bank-fintech collaboration.

Riddhi Dutta, regional director for ASEAN and South Asia at Backbase, said that, “COVID-19 has brought about significant changes in Vietnam and the Asia-Pacific’s banking landscape, and banking and fintech players will need to quickly act on their digital strategies to capture market share. The report highlights key areas for Vietnamese banks, including massive growth in mobile as well as opportunities in lending. Backbase is committed to helping Vietnam’s financial institutions stay ahead in the digital race and develop the innovative banking models and experiences that Vietnamese customers now expect.”

VITA proposes opening doors to tourists with vaccine passports

The Vietnam Tourism Association (VITA) has proposed that the Government allow it to collaborate with the Vietnam National Administration of Tourism to welcome back international tourists holding vaccine passports, digital proof of Covid-19 vaccination.

According to VITA, since the Covid-19 pandemic forced the country to close its doors to international tourists, many travel companies have turned to domestic tourism. The number of local tourists at some attractions has even been higher than pre-pandemic levels.

However, as revenues from domestic tourism account for only 30% of the total, resuming international tourism is still a priority.

VITA said Vietnam can begin resuming international tourism as Vietnamese travel companies have effectively implemented anti-Covid-19 measures. Moreover, the spread of Covid-19 has eased in parts of the world thanks to massive vaccination campaigns.

Covid-19 vaccine passports will be an effective tool to resume tourism services. Some countries in the region have decided to use digital health passes to help the tourism sector recover.

Therefore, VITA suggested the Government allow it and the Vietnam National Administration of Tourism to receive tourists from certain countries that have seen steady declines in Covid-19 cases.

Speaking to The Saigon Times, VITA chairman Nguyen Huu Tho said Vietnam should prioritize opening the market to tourists from the Asia-Pacific region, which account for 75% of the country’s total international arrivals. Many countries in this region have also effectively fought the pandemic.

Besides, VITA said the Government should introduce more incentives and supporting policies for travel companies. In addition to incentives on taxes, fees and electricity payment, the association suggested the Government allow travel companies to change their inbound certificates into domestic tourism certificates because since the pandemic broke out until now, travel companies have only been able to serve local tourists.

Data of the Vietnam National Administration of Tourism showed that as of late 2020, there were more than 2,500 inbound travel companies in the country. To obtain an inbound certificate, travel companies have to deposit VND500 million, while it is just VND100 million for a domestic tourism certificate.

VITA once again suggested offering accommodation facilities the same electricity prices as production facilities in line with the Politburo’s Resolution No. 08/NQ-TW and the Government’s Resolution No. 103/NQ-CP.

The association also proposed halving value added tax and reducing land tax for tourism companies in 2021. Excise tax for golf courses should also be cut by half.

After hearing these suggestions, Deputy Prime Minister Vu Duc Dam asked the Ministry of Planning and Investment to work with the Ministry of Culture, Sports and Tourism and other ministries and departments to conduct research on appropriate policies to support businesses in the tourism sector. The proposals will be submitted to the prime minister for review and approval in the second quarter of this year.

Nearly VND10 trillion needed to upgrade National Highway 13 section in HCMC

A project to upgrade and expand a 5.5-kilometer section from the Binh Phuoc Intersection to Binh Trieu Bridge of National Highway 13 in Thu Duc City will need an investment of nearly VND10 trillion, according to the HCMC Department of Transport.

The department on April 9 said the investment plan for the project, set to be executed in the 2021-2025 period, is being drawn up, Lao Dong newspaper reported.

The investment for the project will be sourced from the city’s budget. Of the total, VND1.3 trillion will be used for construction, VND8.1 trillion for site clearance and the remainder for consulting, management, infrastructure relocation and backup.

National Highway 13 is a backbone to connect HCMC and Binh Duong Province. The section in Binh Duong has been expanded to six lanes and may be eight lanes in the upcoming period, while the section in HCMC, that sees traffic congestion on a daily basis, has yet to be upgraded.

The project to expand the section from the Binh Phuoc Intersection to the Binh Trieu Bridge is part of the Binh Trieu 2 project, which was kicked off 20 years ago.

The HCMC government initially planned to expand the section to 32 meters and later increased it to 53 and 60 meters with an investment of more than VND4.7 trillion. Due to a lack of capital, the city decided to expand the section to 43 meters at a cost of nearly VND3.2 trillion. However, the project has yet to be executed.

In 2017, the National Assembly’s Standing Committee issued Resolution 437/2017 requiring a suspension of the build-operate-transfer (BOT) format on the road.

As a result, many projects which were proposed to be developed under the BOT and build-transfer models, including the National Highway 13 section expansion project, would use the city’s budget, according to the municipal Department of Transport.

Source: VNA/VNS/VOV/VIR/SGT/Nhan Dan/Hanoitimes  

Source: https://vietnamnet.vn/en/business/vietnam-business-news-april-12-727008.html

Business

Great opportunity for Vietnam’s semiconductor industry

Published

on

The scarcity of chip supply that began in late 2020 has affected most manufacturing industries.

In 1970-1980, late professor Tran Dai Nghia cherished a plan to build a semiconductor industry in Vietnam. He ordered a production line of Thomson-CFS (the predecessor of Thales Group, France), but due to poor infrastructure, supporting industries and logistics at that time, his efforts were unable to deliver the desired results.

Later, Dr. Dang Luong Mo (a reputable Vietnamese scientist in the microchip field in the world) also gave many enthusiastic proposals and projects with the desire to build a foundation for the microchip industry in Vietnam, but the results were modest. However, his research works have contributed to opening a new direction for the fledgling microchip industry in Vietnam.

From the constantly increasing demand of the global supply chain, the semiconductor sector has become more exciting and has become a field that receives a lot of favor. When manufacturing industries slowed down due to the current shortage of microchip supply, new opportunities for Vietnam opened up, and the semiconductor industry is now forecast to enter a new “golden time”.

Semiconductors account for a large proportion in export turnover of high-tech goods.

In recent years, the Vietnamese electronics industry has grown into the country’s most important industry. The total export turnover of these commodity groups in 2020 amounted to US$95.8 billion, equal to one third of the total export turnover of Vietnam.

Currently, Vietnam ranks 9th globally in the field of electronics exports.

Statistics from the General Department of Customs show that, for 2020, exports of telephones and components reached $51.18 billion, a slight decrease of 0.4% compared to 2019. Of which, export revenue from China was $12.34 billion, up by 48.8%; the EU – $10.06 billion, down 18.6%; the US – $8.79 billion, down 1.2%; South Korea – $4.58 billion, down 11% from the previous year.

For computers, electronic products and components, the export value reached $44.58 billion last year, up 24.1% compared to 2019. Specifically, the Chinese market accounted for $11.09 billion, 16% increase compared to 2019; the US market with $10.39 billion, up by 71.7%; the EU with $6.51 billion, up 28.7%; Hong Kong – $4.19 billion, up 38.2%.

In December 2020 alone, the export value of mobile phones and components hit $4.61 billion, up 4.6% over the previous month. With an impressive growth rate of 11.9%, computers, electronic products and components reached $2.31 billion of export turnover in the same period.

It is said that in the era of IoT (Internet of Things), market demand for products in the semiconductor industry will be very high.

Cơ hội lớn cho công nghiệp bán dẫn Việt Nam-1

The era of IoT opens new opportunities for Vietnam’s semiconductor industry.

According to Research and Markets forecasts, the global Industrial IoT (IoT) market is expected to reach $263.4 billion by 2027, with at an annual growth rate of 16.7% in the period 2019-2027. With about 7 billion devices connected via the Internet in the next 2 years, this number could increase many times by 2025, according to Dr. David Bray, CEO of People Centered Internet (USA).

Dr. Bray also said that this is an opportunity for Vietnam to leapfrog not only in Southeast Asia but also in the world in the field of IoT. semiconductor industry will be an important platform because all IoT devices are chip-dependent. In the current global chip crisis, semiconductor factories are seeking an “escape” from China, and Vietnam can become an ideal destination for technological eagles to “nest”.

Is Vietnam the ideal destination for semiconductor investors?

In Vietnam, the semiconductor industry is considered a platform to support and promote the development of other industries, contributing to economic development in depth. This is an economic sector determined by the Government to have products in the list of 9 national products and is an important way to convert scientific and technological achievements into high value-added commercial goods.

Currently, with the influence of the 4.0 industrial revolution, the semiconductor market in developing countries is also growing strongly. In particular, Vietnam is known as an emerging market in Asia, highly appreciated by analysts and foreign enterprises with great potential for development. The increase in consumption demand is the direct cause of the strong growth of Vietnam’s semiconductor factories, attracting investment from many foreign corporations in recent years.

In the Government’s Action Program to implement the Politburo’s Resolution No. 23-NQ/TW dated March 22, 2018 on a national industrial development policy to 2020, with a vision to 2045, the Ministry of Information and Communications was assigned to submit to the Prime Minister for approval a program to develop the information technology, electronics – telecommunications industry to 2025, with a vision to 2030.

In particular, the Ministry is assigned to propose mechanisms and policies to prioritize development of a number of areas: software, digital content, hardware, and electronics – telecommunications at the world’s advanced level, meeting the requirements of the 4. 0 Industrial Revolution; and mechanisms and policies to increase the added value of domestic enterprises in the global value chain.

Will the semiconductor industry enter a new “golden age”?

Cơ hội lớn cho công nghiệp bán dẫn Việt Nam-2

Thanks to the policy and legal corridors that facilitate the investment and development of high-tech products, the semiconductor chip sector has become a top priority. Industrial parks and high-tech parks in Hanoi, Ho Chi Minh City, Da Nang, Thai Nguyen, Bac Ninh and Bac Giang… with favorable geographical location and abundant human resources have become attractive destinations for investors.

Most recently, Intel Products Vietnam Company (IPV, under Intel Corporation, USA) received a project adjustment investment certificate with an additional investment of $475 million to build the most modern chip test and assembling facility in the Ho Chi Minh City Hi-Tech Park (SHTP), bringing the total investment capital of Intel in Vietnam to $1.5 billion.

Samsung HCMC CE Complex (SEHC) has just been approved to shift from a high-tech enterprise to an export processing firm, which creates favorable conditions for supporting businesses in the supply chain of Samsung, especially those in the semiconductor industry.

The project of SNST & Finger Vina (South Korea), with the goal of designing integrated electronic circuits, with total investment of nearly $1 million, was put in operation in the first quarter of 2021.

Thus, the semiconductor industry in Vietnam has strong momentum to become a spearhead economic industry, in line with the global digital transformation trend today.

Diep Luu

Source: https://vietnamnet.vn/en/feature/great-opportunity-for-vietnam-s-semiconductor-industry-726566.html

Continue Reading

Business

Is interbank rate climb worrisome?

Published

on

Interest rates are the most important focus of attention this year as many believe after a year implementing the loose monetary policy, the authorities concerned are going to tighten them.

 Will the recent surge in interest rates on the interbank money market (Market 2) exert adverse effects on the market between banks and their corporate and individual clients (Market 1)?

Is interbank rate climb worrisome?
When it comes to capital inflows, banks have considerably built up their charter capital in recent years and set out plans for drastic capital hike this year. – SGT Photo: Tran Ngoc Linh

Interest rates on the Interbank market, the channel allowing banks to lend and borrow money among them, suddenly surged in late April. More precisely, the overnight rate climbed to 1.2% per annum, the highest during this past year. Such a level is also nearly three times higher than in the preceding week, 4.5 times higher than in the beginning of the month and 100 basis points higher than in early this year.

Similarly, the interest rates for the one-week, two-week and one-month terms picked up 100-120 basis points against the beginning of the year, and 2.5-3.5 times greater than in early April. The hike worries quite a few people as they fear the liquidity pressure in the banking system is returning and the interest rate rise may send its ripple effect to Market 1, which means that banks may start to revise up their deposit rates again.

According to analysts, interest rates are the most important focus of attention this year, as many believe after a year implementing the loose monetary policy, the authorities concerned are going to tighten it. Recent reports by several institutions also forecast interest rates may start to rise again in the second half of this year, as a number of countries are showing signs of beginning their tightening monetary policy.

As per statistics of the General Statistics Office, credit growth in the banking industry as of March 19 was 1.47%, 2.7 times higher than the rate of only 0.54% in capital mobilization. The most up-to-date credit growth figure was 3.34% in mid-April, which might mean the demand for loans has further risen and the growth in deposits until now has probably failed to keep pace with the credit growth rate.

If this trend continues, it is inevitable that the system’s liquidity will further decline. If this is the case, one cannot rule out the possibility of banks competing for deposits once again. However, there are still factors that help stabilize interest rates, while the recent rise of interbank interest rates is probably just temporary.

Prior to any long holiday, interest rates on Market 1 often grow rapidly as banks are in need of capital to meet their liquidity safety and short-term solvency ratios. They will later slide back.

For example, in the latest surge, although the lending rates in Market 2 increased sharply for the shorter terms, there was hardly any change in the rates for the three-month, six-month and nine-month terms compared to the beginning of the month. Moreover, they even significantly went down against the beginning of the year. Therefore, if this demand for liquidity is only temporary, it will probably not exert any pressure onto the bank-to-customer market. 

Interest rates supporters

Meanwhile, at present and in the immediate future, there are factors that help interest rates remain stable as mentioned above. The first is inflation is still at a low level, evidenced by the fact that the consumer price index (CPI) in April recorded the second consecutive month of reduction compared to the preceding month, with a slight decrease of 0.04%. So far, the CPI has only picked up 1.27% against the beginning of the year and 2.7% year-on-year, far from the target of 4% for the whole year.

Notably, from the third quarter onward, a handsome sum of the dong will possibly be pumped out from the six-month foreign currency sales contracts that commercial banks signed with the State Bank of Vietnam (SBV) early this year. That amount of money may help stabilize the liquidity of the dong in the system. In recent years, the volume of the dong pumped out via the foreign currency buying activities carried out by the SBV has played a key role in supporting the liquidity of the system.

Faced with accusations of currency manipulation by the U.S. Department of the Treasury in late 2020, the SBV has switched to buying foreign currencies in a six-month term early this year, but basically this policy may be supportive to the liquidity of the system. In addition, the United States has lately removed Vietnam from her list of currency manipulators. This indicates the intervention in the market for foreign exchange spot transactions may no longer have to bear great pressure. In other words, the central bank may resume the policy on buying foreign currencies via both spot and forward contracts.

Another supporting factor is considering the fact that prices in the real estate market are on the constant rise in an unhealthy way in some localities, which means probably a certain volume of bank loans has been spent on swing trading in this investment channel, the agencies in charge will tighten their grip to cool down the steep housing prices. The SBV, meanwhile, will probably formulate other policies in a bid to limit the volume of credit poured into risky industries, such as real estate or securities, thereby curbing credit growth in the process.

When it comes to capital inflows, banks have considerably built up their charter capital in recent years and set out plans for drastic capital hike this year. Also, they have successfully issued long-term bonds and valuable papers, which helps reduce the dependence on deposits from individual customers, who often come only when offered high interest rates.

As per deposit rates, in April, whereas several banks lifted their deposit rates (up 0.6 percentage point for terms of six months or longer at GPBank, up 0.2 percentage point also for terms of six-month or more at VPBank, and up 0.2 percentage point for terms of 1-3 months at PGBank), some others further lowered such rates: down 0.1 percentage point for terms of six months or longer at Kienlongbank, down 0.2-0.3 percentage point for terms of 6-11 months at VIB, down 0.2 percentage point for 3-5 month terms and 0.1 percentage point for terms of 12 months or more at Techcombank, down 0.2-0.4 percentage point for all terms at MBBank, etc.

SGT

Source: https://vietnamnet.vn/en/business/is-interbank-rate-climb-worrisome-737677.html

Continue Reading

Business

Enterprises and the healthcare front

Published

on

 

A medical worker prepares AstraZeneca’s Covid-19 vaccine for injection – PHOTO: VNA

For enterprises, protecting the people’s health does not look like their mandate, but hundreds of local businesses have rolled up their sleeves for the common cause in the midst of the raging Covid-19 pandemic. Aware of their corporate social responsibility, enterprises across the country have opened their coffers, pouring out hundreds of billions of Vietnamese dong to finance the national vaccination drive.

Just three weeks ago, the Vietnam Fatherland Front Committee of HCMC organized a function to receive donations from enterprises for the city’s program to buy vaccines for fighting the Covid-19 pandemic, and the enthusiasm from enterprises amazed many attendees.

“As of April 23 this year, the city had received more than VND200 billion from 31 organizations and individuals,” said To Thi Bich Chau, head of the Vietnam Fatherland Front Committee of HCMC, at the function. That is not to mention donations in kind worth nearly VND70 billion contributed to the city’s vaccination drive.

Wholehearted donations

At the event, Hung Thinh Corporation donated a huge sum of VND50 billion to buy vaccines. Nguyen Nam Hien, deputy general director of Hung Thinh Corporation, noted that the corporation has responded to the call from the Vietnam Fatherland Front Committee of HCMC, contributing VND50 billion for HCMC and other localities to buy vaccines. “Apart from this donation, we will continue to support other activities of HCMC and the country to fight the Covid-19 pandemic,” he promised.

In fact, this huge donation is just a part of the corporation’s CSR program to support the community in tough times. When the pandemic surfaced last year, Hung Thinh already donated nearly VND50 billion in cash and in kind, including Covid-19 diagnosis machines, portable X-ray machines, protective gears for medical personnel, and other essential items for frontline workers.

Numerous other enterprises in the country have since early this year also given big bugs for the vaccination program.

On February 25, An Phat Holdings handed over VND20 billion to help the northern province of Hai Duong acquire vaccines for the local people who were then struggling with the third wave of Covid-19 outbreaks. Pham Van Tuan, a senior executive of An Phat Holdings, remarked that the company wished to join forces with the provincial government and other entities to quickly contain outbreaks. Earlier that same month, An Phat Holdings had already donated VND10 billion plus medical supplies worth VND3.5 billion to the provincial government to help with the fight against Covid-19.

In similar gestures, Thaiholdings and LienVietPostBank on February 5 donated a combined VND21 billion to the Ministry of Health to acquire Covid-19 vaccines. Minister of Health Nguyen Thanh Long, speaking at the donation ceremony, highly regarded the generosity of the two companies, stressing “access to Covid-19 vaccines is a top priority of the healthcare sector.”

The minister also reckoned the development of domestic vaccine candidates, saying initial but encouraging results have been achieved. Nanogen has surpassed the first-stage clinical trial and is ready for the second-stage trial, said the minister, referring to the local vaccine candidate. Meanwhile, two other locally-developed candidates by IVAX and VABIOTEC have yielded highly-prospective pre-clinical results.

The development of local Covid-19 vaccines has also earned strong support from local enterprises. Besides giving financial support to buy vaccines, the multi-sector business corporation Vingroup on February 27 handed VND20 billion to the Ministry of Health to support the clinical trial of Covivac vaccine by IVAX. This support, said Minister Long at the donation ceremony, would help speed up the clinical trial of the local vaccine candidate, helping the country launch a Made-in-Vietnam Covid-19 vaccine in the coming time.

According to the health ministry’s website, Vingroup is a strong pioneer in backing the fight against Covid-19. Last year, the group provided over VND1,270 billion, or more than US$50 million, to fund activities against the pandemic, including manufacturing ventilators, acquiring medical machines, and financing projects to respond to Covid-19 outbreaks.

The list of donors for the fight against Covid-19 has been extending over the past year since the pandemic hit the country. These include Nestle Vietnam and Lavie – the latter being a member of Nestle Group – donating nearly VND40 billion, and Vietcombank giving VND4.2 billion to Hai Duong Province to buy a Covid-19 diagnosis machine, among others.

Vaccines for own workers

Before giving their helping hand to the community, many enterprises have earlier pledged to protect their own workers by seeking approval from health authorities to vaccinate their employees against Covid-19.

Kim Oanh Group, for example, in early March unveiled its plan to acquire over 5,000 vaccine doses for its employees and their relatives who will be given the shot all free of charge upon approval from the health ministry, according to Tuoi Tre. Hung Thinh Corporation has also announced its plan to buy over 14,000 doses of Covid-19 vaccines for all its staff and their familities. This similar move has also been announced by other enterprises, including Dat Xanh, An Gia, Hi-Kool Vietnam, and Gotec Land among others.

Nguyen Dinh Trung, chairman of Hung Thinh, said the corporation as well as many other enterprises are willing to finance inoculation against Covid-19 for all their employees and their relatives. “Such a move is not only a necessary response to protect the workforce as the most valuable asset of enterprises, but also a corporate responsibility to share the burden with the State, the community and the entire society,” Trung was quoted in Giadinh.net. He furthered that with vaccines as a shield, the war against Covid-19 will certainly come to success.

In a recent meeting, Minister of Health Nguyen Thanh Long rallied the participation of the business community in the vaccination drive, saying their support would help the country realize the program to safeguard all the people from the pandemic. According to the ministry, Vietnam needs to import some 150 million doses of Covid-19 vaccines this year, which will require huge financial resources and exert great pressure on the State budget.

Although protecting the people’s health is not a mandate of the business community, their active participation, either via direct donations to the relevant State agencies or through vaccination plans for their own workers, is also a great contribution to the common cause of the nation to ward off the pandemic for the good of the economy and the community. Such contribution is all the more urgent now that the fourth wave of Covid-19 has attacked the country, with hundreds of infections confirmed each day, which requires not only efforts by State agencies, healthcare authorities and other frontline workers, but also the participation of enterprises. To some extent, enterprises joining the drive can also be considered as frontline forces.

 

Source: https://english.thesaigontimes.vn/82002/enterprises-and-the-healthcare-front.html

Continue Reading

Trending