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VIETNAM BUSINESS NEWS FEB. 28

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Export value skyrockets over Lunar New Year

Vietnam’s export turnover during this Lunar New Year saw breakthrough growth, occupying nearly half of the total export-import turnover.

The latest data published by the General Department of Vietnam Customs showed that export volume over the seven days (February 10-16) of the Lunar New Year holiday reached $730 million, rising 79 per cent on-year and accounting for about 44 per cent of the $1.67 billion export-import turnover.

The main export articles include mobile devices and components valued at $332 million; computer and electronic products worth $251 million. The two categories accounted for 80 per cent of the total export value.

This Lunar New Year saw exports going to 80 markets, seven more than last year. China continues to be the leading export market with a value of $189 million (26 per cent). Following are the US ($152 million), South Korea ($67 million), and Hong Kong ($57 million).

According to statistics from the General Department of Vietnam Customs, there were 960 import-export businesses, up 59 per cent on-year. Nevertheless, importers still outnumbered exporters with an import turnover of $940 million, up 37 per cent on-year.

Thus, from early this year to February 16, the total export-import turnover reached $74.51 billion, up 31 per cent on-year. Of this, exports hit $38.57 billion, up 36 per cent on-year while imports reached $35.94 billion, up 26 per cent, resulting in a trade surplus of $2.63 billion.

Drug market forecast to grow by 15 per cent in 2021

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The pharmaceutical industry grew by just 2.8 per cent last year, much lower than its average 11.8 per cent growth in the last five years. 

It is expected to recover and grow by 15 per cent this year, mainly due to a rapidly ageing population and increasing incomes, analysts at SSI Securities Corporation said.

Last year there was a short supply of active pharmaceutical ingredients from China and India due to social distancing and lockdowns and higher demand for them globally, causing drug prices to rise.

According to the Ministry of Health, domestic drug production grew at 13.8 per cent per year in 2015 – 19 backed by Government policies and construction of new plants.

Vingroup fails to acquire LG Electronics smartphone business

Vingroup is unlikely to be able to realise its ambition to take over LG Electronics’ smartphone manufacturing business. 

LG Electronics’ recent discussions to sell its mobile phone factories to Vingroup fell through as the Vietnamese conglomerate’s bid did not match the South Korean company’s expectation, according to information from Korea Times.

“LG had been negotiating with Vingroup to sell its smartphone-manufacturing facilities in Vietnam and Brazil, however, the discussions recently collapsed mostly due to different price expectations,” said an industry insider familiar with the matter.

Last month, the Asian media was in a huge stir over the rumoured take-over deal between Vingroup and LG Electronics, the fourth biggest “chaebol” in South Korea.

Accordingly, Vingroup has emerged as the most potential bidder to acquire LG Electronics’ smartphone production line as an important milestone for the Vietnamese group to penetrate the US.

LG reportedly aims to withdraw from the smartphone business due to difficulties, with intentions announced around a month after CEO Kwon Bong-seok said there would be a significant change in operations. The mobile communications business has witnessed losses of around $4.5 billion since 2015.

If the negotiation process is successful, Vingroup could take advantage of LG Electronics’ reputation, innovation, and sales network.

However, with the two sides unable to agree on a mutually acceptable valuation, LG will move on to find another buyer. Also, the company’s smartphone production lines in Vietnam and Brazil can be realigned to manufacture home appliances, noted an official from LG Electronics.He also added there would be no more negotiations with Vingroup, and LG would seek a new buyer, according to Korea Times. VIR

Danang: Mega IT projects to lift up growth

Danang city aims to become an innovative startup metropolis by 2025 by capitalising on a raft of mega IT projects.

Danang is now home to a pipeline of mega IT projects by leading local players, including privately-held CMC Group’s creative space.

According to Nguyen Trung Chinh,CMC chairman, the first phase of CMC Creative Space in Hoa Xuan ward with the investment value of VND12 trillion ($521.74 million) aims to bring jobs to about 2,000 people, which will increase to 10,000 people more in the second phase.

CMC’s target is to turn Danang into an international gateway and major data centre that is part of the strategy to turn Vietnam into a digital hub in the Asia-Pacific.

Through a survey, Danang has the potential to grow into the fourth regional digital hub, following Japan, Hong Kong, and Singapore.

“I am so happy that Danang People’s Committee has quickly released the decision approving the project’s detailed 1/500 planning,” said Chinh.

In light of the approved detailed planning, CMC Creative Space will consist of an R&D space; an IT and software production space; an internet transit station; a date centre; and housing blocks and associated services for experts and employees with a full suite of high-standard utilities.

Deemed as an important pilot project, efforts were taken to ensure speedy approval, paving the way to kick-off the project’s construction in March 2021.

Meanwhile in Ngu Hanh Son district, FPT Corporation, Vietnam’s leading IT firm, has come up with a string of capital-intensive IT projects.

Besides the 5.9ha FPT Complex which has been put into operation attracting more than 3,400 labourers, the company has pumped tens of millions of US dollars into building data centres and a system of educational facilities (schools for all grades and universities).

Nguyen Tuan Phuong, chairman of FPT Software in the central region, unveiled that in the next two years, FPT Group would inject about VND6.7 trillion ($291.3 million) into FPT Technological Urban Area (FPT City Danang) of which about VND1.5 trillion ($65.2 million) will be dedicated to building residential blocks and VND1 trillion ($43.5 million) will be earmarked for the second and third phases of its existing IT service centre to accommodate 10,000 programmers.

The company would further improve FPT City Danang’s infrastructure system with about VND800 billion ($34.8 million) set for building educational facilities.

A string of other projects are promptly in the legal setup phase, awaiting deployment such as VNPT’s IT space (Danang Bay) of more than 35,000 square metres of space in Lien Chieu district with an estimated investment value in the range of VND700 billion to VND1 trillion ($30.43-43.5 million) or the VND2 trillion ($86.96 million) high-tech and software centre of leading military-run telecom group Viettel in Hai Chau district.

These mega IT projects are anticipated to bring breakthroughs to Danang’s development in the upcoming time.

Along with this, the number of IT firms in Danang has been reportedly growing by 25 per cent annually, accounting for 20 per cent of the city’s total number of businesses.

Recent statistics show that Danang accommodates 2.1 IT firms over 1,000 residents, more than quadruple the country’s average. By the end of 2020, the city had 40,500 IT personnel, 20,000 of whom of them 20,000 have been working in the fields of software and digital content creation with per capita monthly wages averaging VND17.8 million ($770).

Nguyen Tuan Phuong from FPT Software shared that digital transmission is taking the whole world by storm, especially amid recent COVID-19 complexities.

“This movement is favourable for Vietnam’s IT industry generally and Danang in particular. The city needs to work on policies to accelerate the development of the IT sector, placing emphasis on training high-quality IT personnel. Availing itself of this opportunity effectively could bring numerous tailwinds to Danang in its digital transformation journey,” Phuong said.

Apt solutions sought for local solar power

The year 2021 will be characterised by an even bigger challenge for the authorities and developers to standardise the quality level of rooftop installations in terms of compliance to construction law, electrical standards, and fire safety, and to match grid availability and local consumption after the Vietnamese rooftop solar market skyrocketed last year.

Prime Minister Nguyen Xuan Phuc last week asked the Ministry of Industry and Trade (MoIT) and Electricity of Vietnam (EVN) to review issues related to Vietnam’s solar power development as well as avoid massive solar development without a proper plan, which could cause power grid overload.

According to the updated data, as of December 25, 2020, there were 83,000 rooftop solar power projects connected to the power system with a total installed capacity of nearly 4,700 megawatts-peak. The total power generation output to the grid from rooftop solar power has reached more than 1.13 billion kWh, contributing to ensuring power supply for the national power system.

Meanwhile, there is no new decision or guidance for implementation of the policy after Decision No.13/2020/QD-TTg issued last April on encouraging mechanisms for solar power development in Vietnam, which had its deadline set for December 31 last year for solar systems of any scale to attain a certificate of delivery and enjoy the feed-in tariff 2 (FiT2) rate, in which the price of each kilowatt-hour generated from ground-mounted, floating, and rooftop solar initiatives were 7.09, 7.69, and 8.38 US cents, respectively.

As a result, it remains uncertain which pricing mechanism will apply to grid-connected solar power projects reaching commercial operation date in 2021.

EVN announced its power companies had ceased buying rooftop solar power after December 31 to wait for further guidance from the government. It will also handle requirements for connection and signing power purchase and sales contracts from solar power systems started before the deadline.

Deputy general director of locally-invested Son Ha Group Hoang Manh Tan said the fact that there is no policy available will make it difficult for businesses to formulate strategies and implement them. Enterprises need continuous and consistent policies, and the gap issue creates difficulties for EVN, other enterprises, and their partners, Tan said.

Thus, ministries and authorities in the coming time must find the right supporting mechanism that enables an organic development of rooftop solar, and minimises loopholes and speculative projects, such as solar farms disguised as rooftop systems.

The prime minister also asked the MoIT to carry out the work of inspecting solar power development in localities and power companies, ensuring compliance with regulations.

It must promptly correct and handle any mistakes, especially operating policies that benefit outdoor voltage deployment over time as well as take measures to minimise the shutdown of renewable energy sources in operation, and minimise the economic losses of investors and waste of renewable energy sources.

At the same time, the boom in solar development also poses a question for the grid operator about how to optimise renewable electricity feeds into the grid, while considering the best interests of electricity producers.

Solar energy expert Mai Van Trung told VIR that in order to keep the average selling price there are several options, including increasing the curtailment or adding more solar power plants and rooftop solar systems with a very low FiT3 rate to compensate the subsidisation of EVN.

The former option over a wide scale could however hurt financial indicators of many projects because of leverage from bankers.

Meanwhile, the latter option could distract potential investors to put the money down. Moreover, the capacity absorption of the national grid is limited due to the intermittency of solar power, Trung said.

There is a declining trend of engineering, procurement, and construction costs of rooftop solar systems over time that can be utilised if the absorption capacity of the grid is available even with the storage added.

Vietnam has plans for solar power auctions but the qualified projects are small and located in lower solar irradiance. Green and cheap credits from international institutions are ready to enter, but the room left for additional capacity is currently being narrowed.

According to the MoIT, there are currently 16 national standards promulgated by the Ministry of Science and Technology related to solar power in the country. However, there is a lack of specific standards for the two main components of rooftop solar power projects – panels and inverters.

In late 2020, the National Assembly passed the new Law on Environmental Protection, which stipulates extended producer responsibility (EPR) for businesses in Vietnam. This means that businesses and producers now bear the responsibility for the waste of their products, including solar panels.

EPR is intended to reduce the cost of managing end-of-life products by reducing waste volume and increasing recycling, thereby contributing to the prime minister’s new target of reducing the amount of waste that goes to landfills by 80 per cent by 2025.

EPR has the potential to create new economic opportunities and share the financial burden of solid waste management more fairly.

According to the new law, businesses can implement EPR in one of three ways including doing the recycle themselves, conducting recycling through a third-party product recycling organisation, and making a financial contribution to the Vietnam Environmental Fund.

According to the draft EPR decree, businesses that recycle themselves or do so via a third party will have to report through a national EPR data portal managed by the Ministry of Natural Resources and Environment.

If a business that does the recycling itself fails to reach the target over 3-5 years in a row, it will be forced to participate in one of the other two mechanisms.

A business that refuses to choose any mechanism will be fined; and if it exceeds its recycling target, it can sell credits to other businesses through a tradable credit system.

Auto imports reach nearly 12,000 units over past 1.5 months

Vietnam’s import of cars between January 1 and February 15 this year reached 11,791 units, worth US$280 million, soaring 84.7% in volume and 76.2% in value against the 2020 figures, according to the General Department of Vietnam Customs.

Of these, the country imported over 3,400 completely built-up units worth over US$66 million from February 1 to 15.

During the past 1.5 months, the number of imported cars with nine seats or less totaled 2,477 units worth US$42.5 million, while 812 trucks valued at US$15.9 million were imported in the period.

Earlier, the country imported more than 8,300 cars worth over US$212 million in January, including over 5,200 cars with nine seats or below and 2,230 trucks. These cars were mostly imported from Thailand, China and Indonesia.

SSI Research forecast that the auto consumption in Vietnam this year could rise some 16% versus last year’s figure. Specifically, SSI Research said that the country’s GDP per capita could improve 8-10% annually in the next decade, while vehicles are more affordable to many more people.

In addition, the volume of locally-made cars is on the rise and scores of companies are focusing on business expansion to lower car prices to attract more customers.

Also, many auto manufacturing and assembly plant projects are scheduled for completion in the next three years, which will add a vibrant atmosphere to the local auto market and offer more benefits to customers.

Further, taxes and surcharges on cars are being steadily reduced under free trade agreements between Vietnam and other countries. This will help cut down on auto prices and stimulate the demand for cars.

Growing concern over overload on Vietnam stock market

The problem if further persists in long-term will make investors become disillusioned on the fairness and transparency of Vietnam’s stock market.

The frequent overload of orders forcing the stock exchange to halt market trading is causing frustration among investors.

Insiders have said that the trading halts, which occurred on the Vietnamese stock exchanges recently, aim to correct an order imbalance as a result of a technical glitch or due to regulatory concerns. When a trading halt is in effect, open orders may be canceled and options still may be exercised.

“Investors want competent authorities to take responsibility for these incidents, not just an apology,” said Nguyen Bich Ngoc, an experienced investor in the stock market, adding the unstable system is putting investors at risks.

Both before and after the Tet holiday, the overload occurred multiple times on both the Ho Chi Minh City and Hanoi stock exchanges whenever liquidity in a trading session hit around VND14-17 trillion (US$608-738 million).

“The phrase of “unplug the power cord” has become a hot topic in every securities forum and social networks,” Ngoc added.

From her own experience, Ngoc said at a trading session on February 19, when she and other investors placed an order at 1pm, but until 2:48pm, the system notified their placement was expired while the transaction period had not ended.

“Orders for purchasing stocks after 1:30 pm or 2pm in the past month were often delayed in process and not submitted to the stock exchanges,” she continued.

“Investors were left to watch their stocks going up or down in values and do nothing,” Ngoc fumed, while saying a lack of solutions to resolve the matter substantially from the Ministry of Finance or the State Securities Commission of Vietnam (SSC) only makes the matter worse.

“We are now forced to live with a faulty system and bear all the risks when we could not sell or buy stocks in case of system overload,” Ngoc stressed.

Last year, the stock market has witnessed strong growth and beat a series of records in terms of the number of new investors and the amount of capital inflows. In contrast with such strong growth, the issue if further persists in long-term will make investors become disillusioned on the fairness and transparency of Vietnam’s stock market, Ngoc stated.

“Investors will not accept losing money in such way or any apology from the authorities when the situation remains unchanged,” she said.

“The SSC must give a clear deadline to resolve this issue one and for all,” Ngoc concluded.

Previously, the SSC attributed the overload issue on the Ho Chi Minh Stock Exchange to the transaction processing capacity of the stock exchange that limits the number of transactions per day, while a recent surge of orders has exceeded the expectation of the market.

To ensure the smooth operation of the stock market, the SSC requested related agencies to optimize the transaction process by increasing the minimum trading lot from 10 to 100 shares, starting from January 4, 2021.

The SSC also urged securities firms to prevent their internal errors or limit automatic transaction.

For mid-term, the HoSE is tasked with upgrading the transaction backup system to ensure the safety of the system until the new IT system for the stock market with support from the Korea Exchange (KRX), South Korea’s bourse operator, is put into operation.

Data from the General Statistics Office (GSO) revealed the amount of capital poured into Vietnam stock market surged 20% in 2020 to VND383.6 trillion (US$16.64 billion). The average transaction value in the stock market is estimated at VND7.05 trillion (US$304.8 million) per session, up 51.5% year-on-year.

Meanwhile, the number of new investors soared by 109% in 2020 against the previous year.

Lam Dong to get first wind plant

GE Renewable Energy has signed a contract with the Ocean Renewable Energy Joint Stock Company to supply 15 wind turbines to its Cau Dat Wind Farm, the first in the Central Highlands province of Lam Dong.

Construction is expected to be finished by the third quarter of 2021.

Gilan Sabatier, regional leader for GE Renewable Energy’s onshore wind business in South Asia and ASEAN, said: “We thank Ocean Renewable Energy Joint Stock Company and their leadership team for selecting GE for this project. The award of the Cau Dat wind farm further validates the great work we have done in Vietnam and reaffirms our contribution to the country’s energy transition.”

Do Van Binh, General Director of Ocean, said, “We are delighted to sign this important deal with GE Renewable Energy for our first wind farm project.”

GE is the only wind original equipment manufacturer in the country./.

Bac Giang betters master plan on IPs development

The northern province of Bac Giang is improving a master plan on the development of industrial parks (IPs) and complexes, as well as land use planning, according it its provincial Party Committee.

The province is also refining a master plan on urban areas for the 2021-2030 period to attract investment.

It built a project on supporting start-ups in the locality, towards strongly developing private economy, and issued a list of projects in need of investment in the fields of agriculture and rural development.

The locality considered building mechanisms to support investment in hotel construction projects and hi-end services.

In particular, Bac Giang will step up administrative reform, improve the provincial competitiveness index, pool resources to build key socio-economic infrastructure while enhancing the quality of human resources and State management on projects.

The province will actively assist investors and businesses in tackling difficulties and accelerating projects, especially those regarding infrastructure construction and business in IPs.

From 2016 to the end of 2020, the province drew 909 projects worth over 5.88 billion USD, marking a 3.5-fold rise from 2011-2015, 616 of them were domestic ones with total registered capital of over 55.7 trillion VND (2.42 billion USD), and 3.84 billion USD were foreign direct investment.

It is now home to 1,786 valid projects, including 1,311 domestic ones worth more than 92.2 trillion VND and 475 foreign-invested ones valued at over 6.2 billion USD. Projects are mostly in industry with 54.3 percent, trade and services 40.5 percent, and agriculture 5.6 percent.

Since 2016, Bac Giang has granted licenses to over 6,000 enterprises and 705 branches and representative offices, with a combined registered capital of more than 64.3 trillion VND. Its gross regional domestic product has expanded by 14 percent annually.

Cumulatively, there have been 10,837 businesses so far in the province, including 466 foreign ones with a registered capital of 3.542 billion USD and more than 10,300 others with over 84.9 trillion VND./.

Binh Duong among world’s outstanding smart communities for three consecutive years

The southern province of Binh Duong has made itself onto the list of 21 localities worldwide having outstanding smart city development strategies (Smart21) this year, which was unveiled on February 25 by the Intelligent Community Forum (ICF).

It is the third year in a row that the province has received the recognition. Binh Duong is also the first Vietnamese locality to be named in the Smart21.

Gaining a place among the year’s Smart21 is considered a badge of honour as well as the first step toward greater recognition as an Intelligent Community positioned to prosper in the broadband economy, the ICF noted.

Workers at a factory in Bau Bang Industrial Park of Binh Duong (Photo: VNA)
Of the 2021 list, localities from nine countries were honoured, including those in the US, Russia, Australia, Canada, Brazil, the UK, New Zealand, and Vietnam.

There are currently 180 members from different countries, territories, cities and regions participating in the ICF./.

HCM City aims to build AI centres at regional level

Ho Chi Minh City plans to build at least two centres for Artificial Intelligence (AI) research and development as well as technology transfer at ASEAN level.

It is part of the city’s programme on AI research and development for the 2020-30, which was recently approved by the municipal People’s Committee, aiming to turn HCM City into a hub of Vietnam and ASEAN in the field.

In addition, the city will look for qualified personnel in the spheres of data science, big data analysis, natural language processing, computer vision, speech recognition, information security and Internet of Things, among others.

The southern economic hub has set a target to raise the number of AI research papers and patents by 20 percent in the period.

Vietnam sets a goal of being listed in Top 4 in ASEAN and Top 50 of the world in terms of AI research, development and application by 2030.

The target was set in a National Strategy on AI Research, Development and Application by 2030 recently approved by Prime Minister Nguyen Xuan Phuc.

The strategy aims at stepping up AI research, development and application to make it an important technological industry of Vietnam./.

Investment funds in Vietnam remain optimistic despite poor performance

Despite negative performance due to strong fluctuations in Vietnam’s stock market in January, big investment funds in the market remain optimistic.

Vietnam Enterprise Investments Limited (VEIL), a closed-end investment trust managed by Dragon Capital and the biggest investment fund in Vietnam’s stock market, recorded negative growth during the period.

The fund’s performance was negative 3.61 percent in January. VEIL manages assets worth 1.7 billion USD.

As of the end of January, VEIL’s biggest investments were in the banking sector, accounting for 27.13 percent of its investment value, followed by investments in real estate (26.43 percent) and food and beverage (10.17 percent). However all investing sectors had poor performance with banking and real estate sectors posting the biggest losses.

After gaining points in the first half of January, the stock market witnessed some strong corrections as profit booking dragged down the VN-Index. The profit taking was magnified by panic over margin calls.

The market benchmark VN-Index declined 4.28 percent in the first month of 2021.

Dragon Capital said that recently, the fund restructured its investment process with the number of target stocks cutting down to 28 – 32 from 35 – 40.

Finnish equity fund PYN Elite also witnessed is its net asset value (NAV) drop 5.39 percent in January, mostly due to losses in Vietnam Engine and Agricultural Machinery Corporation (VEA), Vietnam JSC Bank for Industry and Trade (CTG) and PetroVietnam Power Corporation (POW). It marked the worst performance of PYN Elite since 2017.

The fund manages total assets worth 572 million USD.

In a letter to investors in February, Petri Deryng, portfolio manager of PYN Elite, said that Vietnam’s stock market began 2021 on a negative note, but the prospects for the whole year are still very positive.

Vietnam’s economy, which has obtained some achievements, rising profits of listed companies and appealing stocks’ valuation are factors contributing to the bright prospects of the market.

The market saw strong fluctuations after the VN-Index surged quickly from 900 points to 1,200 points in just ten weeks.

During the turbulent month, PYN Elite used all of its resources to buy Vinhomes JSC (VHM) shares, making it the biggest investment of its portfolio. At the moment, VHM shares account for 9.82 percent of its portfolio, worth 1.5 trillion VND.

Another investment fund posting negative performance in January was AFC Vietnam Fund, with growth of negative 1.9 percent.

The fund assessed the plunge of the market after rising over 20 percent in the fourth quarter of 2020 and gaining 8 percent in the first seven trading sessions of 2021 was a healthy movement. And reaching the 1,200 point level by the VN-Index was really attractive, luring new strong inflows to the market.

Top five investments of AFC Vietnam Fund were Agriculture Bank Insurance JSC (ABI), accounting for 8.1 percent of its investment value, LienVietPost Joint Stock Commercial Bank (LPB), Dinh Vu Port Investment and Development JSC (DVP), VNDirect Securities Corporation (VND) and Phu Tai JSC (PTB).

As of the end of January, the fund invested most in the financial sector (35 percent of its portfolio) and industrial sector (23.5 percent)./.

Bac Giang: 771 mln USD raised for transport infrastructure development in five years

The northern province of Bac Giang has raised a total of over 17.8 trillion VND (771.54 million USD) in investment for local transport infrastructure development since 2016.

The capital has been injected into a number of key projects, notably a section of Hanoi’s Belt Road No.4 crossing Bac Giang, worth 1.23 trillion VND; upgrade of Provincial Road 295 crossing Voi – Ben Tuan and Ngoc Chau – Thang township, 245 billion VND; and a 5-km road connecting Provincial Road 293 and My An Port in Luc Nam, 115 billion VND.

Over the last five years, the province has developed 11 transport projects under Public-Private Partnership (PPP) scheme, with a total investment of more than 7.5 trillion VND. They include two Build-Operate-Transfer (BOT) projects managed by the Ministry of Transport and eight Build-Transfer (BT) by the province. A majority of the funding, 4.2 trillion VND, has been spent on developing Bac Giang – Lang Son Expressway under a BOT contract.

In addition to private funding, Bac Giang has used Official Development Assistance (ODA) loans for transport infrastructure projects. The largest among ODA-funded projects were 272-billion-VND Dong Bac Belt Road and Tran Quang Khai Bridge project in Bac Giang city financed by the Asian Development Bank (ADB) and the 135-billion-VND Local Bridge Construction and Road Asset Management (LRAMP)’s local bridge component funded by the World Bank (WB).

The province has also spent over 2.18 trillion VND from its budget and close to 1.75 trillion VND from private funding to concrete more than 4,210 km of roads, mostly rural roads.

Thanks to such efforts, Bac Giang is now home to about 153km of expressways which are more than 8m in width, accounting for over 46.4 percent of the total.

It has also concreted over 97.3 percent of district-level, 98.1 percent of commune-level and 92.3 percent of village roads.

In the coming time, Bac Giang plans to attract private investors in transport services, such as inland ports, parking, bus stations, and rest stops. The province will also jointly develop inter-provincial roads with neighbouring localities and by 2025, cooperate with the Ministry of Transport and BOT investors to expand Xuong Giang and Nhu Nguyen bridges on the Hanoi – Bac Giang Expressway./.

Vinh Long works towards sustainable export growth

The Mekong Delta province of Vinh Long is striving to boost sustainable export growth during 2021-2025.

The province has set the target to reel in 870 million USD from exports by 2025, with key export markets including ASEAN, Japan, China, China’s Taiwan, Russia, East European countries, Africa, the EU and the US.

According to Director of the provincial Department of Industry and Trade Nguyen Trung Kien, seeing rice as a key export, Vinh Long plans to ship average 100,000-200,000 tonnes of high-quality rice per year abroad until 2025, and work to increase price of local rice while diversifying rice products to branch out markets.

Holding a huge advantage of tra and basa fish farming, the province eyes to sell some 20,000 tonnnes of frozen tra fish to foreign markets by 2025.

Kien said Vinh Long is making efforts to gain 35-40 million USD from exports of grape fruits, canned fruits, dried fruits, and vegetables by 2025, adding areas were zoned off for cultivation of vegetables and orchards such as grape fruit, orange, tangerine, longan, and mango, among others.

Additionally, the locality targets 530-600 million USD in export revenue of leather footwear and garment-textile, and 60 million USD in export revenue of handicraft products by 2025.

In a bid to realise the set goals, an array of measures were outlined, Kien said, stressing due attention will be paid to developing agricultural processing industry and finished goods to better the products’ value and their competitive edge in the market.

Kien said along with support policies for local production, the province will improve technical services to promote mechanisation of agriculture, particularly post-harvest processing and preservation.

Investment promotion will be given priority so as to attract investment in supporting industries for footwear, garment-textile, electronics and engineering sectors, helping local producers and exporters improve their products’ competitiveness.

On the other, the province encourages local businesses to develop materials zones to ensure stable input for production, apply advanced technology to better products’ quality, while building brands to gain foothold in the market.

According to the Department of Industry and Trade, the province is now housing 40 export firms, including 15 foreign-invested businesses.

During 2015-2020, the locality’s export revenue rose significantly, from 302 million USD in 2015 to 570.5 million USD five years later. The North America accounted for the lion’s share of the province’s export, accounting for 37 percent of the total shipments, followed by Europe (31 percent), and Asia (29 percent)./.

Vietnam offers numerous investment opportunities for Indian businesses

The increasing importance of Vietnam in global supply chains is great potential helping to enhance the Vietnam-India relations, particularly between small- and medium-sized enterprises (SME) that are considered the main drivers for economic growth in each country, heard an online conference on February 25.

The bilateral trade-investment promotion conference titled “Boosting trade-investment cooperation opportunities between Vietnamese and Indian SMEs” was jointly organised by the Trade Office of the Vietnamese Embassy in India, Uttar Pradesh state government, the Indian Industries Association (IIA) and the Hanoi SME Association.

IIA President Pankaj Gupta said that several major enterprises of India such as Adani Group, Mahindra, SRF and Suzlon have shown interest in investing in Vietnam.

He suggesting Indian enterprises invest in Vietnam in the fields of energy, mineral exploration, agricultural chemicals, sugar production, tea, coffee, information technology, and automobile components.

Vietnam is currently holding a lot of advantages for investors such as favourable investment policies, numerous free trade agreements, rapid economic growth, stable political situation, cheap labour costs, and young labour force, he stated.

However, participants pointed to several challenges for foreign investors in Vietnam, including high corporate tax rates of 32-50 percent for companies operating in oil and gas exploration and exploitation and other valuable natural resources, complicated administrative procedures, and dependence on cash transactions.

Meanwhile, Vietnamese Ambassador to India Pham Sanh Chau proposed the two countries’ enterprises expand cooperation in supporting industry, automobile and motorbike spare parts, garment and footwear materials and household appliances.

According to the Vietnam Foreign Investment Agency, as of December 2020, India had nearly 300 valid projects in Vietnam with total investment of nearly 900 million USD, ranking 26th among countries and territories pouring capital into the Southeast Asian nation./.HCM City keeps shutdown of certain services in place

Fruit & vegetable exporters should tap into Northern Europe’s niche market: Newspaper

Vietnamese businesses are believed to possess opportunities, especially in niche markets, when exporting fruit and vegetables to Northern Europe, according to the Cong Thuong (Industry & Trade) newspaper.

The Vietnamese trade office in Sweden said that due to unfavourable weather conditions, Northern European countries very much depend on imported fruit and vegetables, with over 90 percent of fruit and 40 percent of vegetables coming from foreign sources.

The importation of tropical fruit has been growing quickly in recent years, opening up opportunities for both existing and new exporters from developing countries, including Vietnam.

Developing countries account for more than 50 percent of the supply of fruit such as papaya, mango, pineapple, dates, tamarind, and passionfruit imported to the market, and 30 percent of avocado, figs, melons, and grapes.

The EU-Vietnam Free Trade Agreement (EVFTA), which took effect on August 1, 2020, has also generated considerable advantages for Vietnamese firms, as most tariffs on fresh fruit and vegetables have been slashed to zero percent, the trade office noted.

Despite the optimistic outlook, Cong Thuong wrote, the market is relatively small compared to others in Europe. It’s also not easy for new exporters to compete with multilateral fruit and vegetable providers, logistics firms, and packaging companies with a long presence there.

Vegetables grown in Europe now account for 90 percent of those imported into Northern Europe, while those from developing nations stand at less than 10 percent.

Off-season produce like tomatoes and bell peppers are often provided by countries near Northern Europe. Geographical distance and a lack of direct air routes to the region also pose certain difficulties for Vietnam’s fruit and vegetable exports.

The newspaper suggested Vietnamese companies consider producing organic and convenience products, pointing out European consumers’ increasing preference for healthy diets with clean and natural food, as well as those that serve their busy lifestyles.

To make use of this trend, they should ensure that product quality meets requirements, the article said.

It also noted that more attention needs to be paid to sustainable and responsible production and business practices, adding that products will be accepted by Northern European consumers if they comply with sustainability standards.

Brand building and product storytelling are also tools necessary for marketing new products, particularly those for niche markets, according to the paper./.

VIETNAM BUSINESS NEWS FEB. 28

Vietnam lures 5.46 billion USD in foreign investment

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As much as 5.46 billion USD worth of foreign direct investment (FDI) was injected into Vietnam as of February 20, equivalent to 84.4 percent of the figure recorded in the same time last year, according to the Ministry of Planning and Investment. 

As many as 126 foreign projects were granted investment licences with total registered capital of 3.31 billion USD, a year-on-year fall of 33.9 percent.

Meanwhile, 115 existing projects adjusted their investment capital with a total additional sum of 1.61 billion USD, or 2.5 times higher than the same time last year.

Capital contributions and shares purchases by foreign investors stood at 543.1 million USD, down 34.4 percent.

Japan topped the list of 46 countries and territories landing investment in Vietnam, with 1.64 billion USD, equivalent to nearly 30 percent of the total. Singapore came second with 1.07 billion USD, and the Republic of Korea third with 1.05 billion USD.

The ministry said the southern province of Can Tho lured the lion’s share of FDI with 1.31 billion USD, accounting for 24.2 percent of the total. Hai Phong city was the runner-up since it attracted nearly 918 million USD, or 16.8 percent. Bac Giang came third with nearly 573 million USD (10.5 percent)./.

An Giang boasts strengths in hi-tech agricultural development: Deputy PM

The Mekong Delta province of An Giang boasts strengths in economic development, especially high tech agriculture, Deputy Prime Minister Truong Hoa Binh said while attending a ground-breaking ceremony for a high tech dairy farm project of TH Group in Tri Ton district of the province on February 27.
 
The development of hi-tech agriculture is an inevitable trend of modern agricultural production, Binh said, adding that room remains huge for the province and other Mekong Delta localities to bolster animal husbandry, including dairy cow farming.  

The dairy cow farming model of TH Group, the largest scale in the region, is expected to become an exemplary model to be multiplied, he said.

The farm is hoped to help fulfil the target of having 500,000 milch cows across the country five years ahead of the deadline set in the master plan on agricultural development to 2020, vision to 2030, he noted.

Spanning 178.4 ha across Tri Ton district’s Vinh Gia and Vinh Phuoc communes, the project is carried out with an investment of nearly 2.66 trillion VND (115.2 million USD), making it the largest closed-loop system dairy project in Mekong Delta.

 It includes a fresh milk factory capable of producing 135 tonnes daily.

On the same day, Deputy PM Binh paid a visit to a hi-tech hog farming project of the Truong Hai Auto Corporation (THACO)’s agricultural arm in Tinh Bien district. 

The 50-ha project has been basically completed after nine months of construction. Its first phase will become operational by June while the construction of the second one is set to begin later this year, raising its capacity to 11,200 pigs in total.

On the occasion, a New Year tree-planting festival was held in the province in response to a campaign to grow 1 billion green trees between 2021 and 2025 launched by the Prime Minister./.

Deputy PM asks Thai Binh to facilitate Lien Ha Thai IP development

Deputy Prime Minister Trinh Dinh Dung has asked the northern province of Thai Binh and investors to create favourable conditions to draw projects to the Lien Ha Thai industrial park (GREEN iP-1).

During a conference announcing the Prime Minister and the provincial People’s Committee’s Decisions on the GREEN iP-1 on February 27, the Deputy PM instructed Thai Binh authorities and the IP investor to complete procedures in line with the law, including those regarding site clearance, compensation for resettlement, and social housing for workers.

He suggested Thai Binh review its economic structure with a view to adjusting it based on its strength as a coastal province and market demand at home and abroad, select priority projects regarding transportation, urban and rural infrastructure while stepping up administrative reform and creating a pro-business environment.

Deputy Prime Minister Trinh Dinh Dung hands over the PM’s Decision on GREEN iP-1 development (Photo: VNA)
The Deputy PM expressed his belief that with seven IPs in operation and the development of GREEN iP-1, Thai Binh will further prosper and become a rich province in the Red River Delta.

Invested by Green i-Park JSC, the GREEN iP-1 is located in Thuy Lien commune and Diem Dien township of Thai Thuy district. It has a total investment of over 3.88 trillion VND (168.3 million USD).

Once operational, the 50-year project is expected to contribute to the development of the nation as well as Thai Binh and the Red River in particular.

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

Source: https://vietnamnet.vn/en/business/vietnam-business-news-feb-28-715468.html

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Vietnam’s Bamboo Airways plans to raise $200 million in U.S. IPO: chairman

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HANOI — Vietnam’s Bamboo Airways plans to raise up to $200 million in an initial public offering in the United States, potentially securing a market capitalisation of up to $4 billion, its chairman Trinh Van Quyet said on Wednesday.

Bamboo Airways, owned by property and leisure company FLC Group, plans to offer a 5%-7% stake in the IPO, which it expects in the third quarter of this year, Quyet told Reuters in an interview.

“The IPO will be part of our efforts to expand our services globally,” Quyet said, adding that Bamboo Airways has been working with an international auditing firm for the potential offering on the New York Stock Exchange.

The company said last month it planned to list its shares on a local stock exchange in the third quarter, but Quyet said on Wednesday that was now “a backup plan, depending on market conditions”.

Quyet said the airline will increase its fleet to 40 aircraft by the end of this year, from the current 30, adding two Boeing 787-9 Dreamliners would be among the new planes.

He said the airline wanted to launch flights to new destinations including the U.S., Australia, Germany, Japan and the United Kingdom this year if the COVID-19 pandemic situation improved.

“We will start conducting chartered flights to the U.S. in July and target the launch of non-stop commercial flights between Ho Chi Minh City and San Francisco in September, with an initial frequency of three flights per week,” Quyet said.

Bamboo Airways, which made its maiden flight in January 2019, is targeting a 25% rise in pretax profit to 500 billion dong this year he added.

Source: https://tuoitrenews.vn/news/business/20210415/exclusive-vietnam-s-bamboo-airways-plans-to-raise-200-million-in-us-ipo-chairman/60370.html

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Efforts to stimulate domestic consumer market continue as pandemic threatens exports

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Consumers shop at Co.opmart supermarket on HCM City’s Nguyễn Đình Chiểu street. Cities and provinces across the country are seeking ways to promote domestic consumption of goods and services. VNA/ Photo Mỹ Phương

HCM CITY – Many provinces and cities have launched programmes this year to promote local consumer demand to support businesses as the COVID-19 pandemic continues to affect exports.

The Ministry of Industry and Trade will organise conferences to connect producers, suppliers and retailers, and events for producers and traders, especially small traders, to help take goods to residential areas, industrial parks and rural and mountainous regions, the Sài Gòn Giải Phóng (Liberated Sài Gòn) newspaper reported.

It will help encourage consumption by fostering the evening economy and holding fairs and exhibitions of products and services. It continues to implement the ‘Vietnamese people give priority to using Vietnamese goods’ programme.

It will also promote the adoption of IT and foster e-commerce.

The Hà Nội Department of Industry and Trade will organise five Vietnamese Goods Weeks this year to stimulate demand.

To be held in the districts of Hà Đông, Hai Bà Trưng, Nam Từ Liêm, Quốc Oai, and Ba Vì, they will have around 100 standard booths each.

Companies and co-operatives will exhibit food products, textiles, footwear, consumer goods from One Product One Commune programmes from Hà Nội and other cities and provinces.

The department will subsidise booth costs by 50 per cent.

The city will also support localities and businesses in Hà Nội and elsewhere in selling agricultural and aquatic produce that face difficulties in selling due to the pandemic.

It will strengthen communications and promotions, create the best conditions for businesses to reach consumers and expand their market.

Products displayed and sold at the events will all be Vietnamese products with quality, food safety and traceability guaranteed.

To effectively implement the programme, the department has called on people’s committees of districts and towns to review all businesses and co-operatives to participate in the 2021 Vietnamese Goods Week of Hà Nội, especially agricultural produce that are difficult to sell and the One Product One Commune programme.

According to the newspaper, the Cần Thơ City Department of Industry and Trade also plans to organise a promotional month programme, possibly from April 10 to May 10.

It will seek the participation of businesses, supermarkets, commercial centers, convenience stores, restaurants, hotels and entertainment venues.

HCM City plans to focus on digitisation of industry and promotion of domestic tourism.

Deputy director of the city Department of Tourism, Bùi Thị Ngọc Hiếu, said her agency is stepping up digitisation, and the sector would continue its efforts to boost domestic tourism to drive the recovery of the industry.

Tourism co-operation and linkages between HCM City and the north-east, north-west and the central regions would also serve to boost domestic travel, she added. –

 

 

Source: https://vietnamnews.vn/economy/926004/efforts-to-stimulate-domestic-consumer-market-continue-as-pandemic-threatens-exports.html

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​Bamboo Airways plans US IPO in Q3

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​Bamboo Airways plans US IPO in Q3

A Bamboo Airways aircraft lands at Da Nang International Airport in March. Photo by Shutterstock/Jeffry Surianto.


Private carrier Bamboo Airways is considering an initial public offering of shares in the U.S. this year to raise $200 million.

The IPO is expected to take place in the third quarter, with the company likely to offer a 5-7 percent stake to secure a market capitalization of up to $4 billion, Reuters quoted its chairman, Trinh Van Quyet, as saying on Wednesday.

It is preparing for the issuance together with an international auditing firm and plans to list on the New York Stock Exchange.

Last month, Quyet had announced the airlines plans to list 105 million shares on either the Ho Chi Minh Stock Exchange or Hanoi Stock Exchange at an initial price of VND60,000 ($2.61), but on Wednesday he said that has now become “a backup plan”.

“The US IPO will be part of our efforts to expand our services globally.”

It expected to operate charter flights to the U.S. from July this year and thrice-weekly commercial flights from HCMC to San Francisco from September.

The airline has received a permit from the U.S. Department of Transportation to carry passengers and cargo to that country.

This year it also plans to expand its fleet from 30 aircraft to 40, and launch flights to other new destinations like Australia, Germany, Japan, and the U.K. if the Covid-19 pandemic is under control.

It currently flies on 60 domestic routes.

Last year, it carried over seven million passengers to account for a 20 percent market share, and hopes to increase it to 30 percent this year.

Source: https://e.vnexpress.net/news/business/companies/bamboo-airways-plans-us-ipo-in-q3-4263154.html

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